Medicare Program; CY 2022 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Provider Enrollment Regulation Updates; and Provider and Supplier Prepayment and Post-Payment Medical Review Requirements

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This major final rule addresses: Changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; Medicare coverage of opioid use disorder services furnished by opioid treatment programs; updates to certain Medicare provider enrollment policies; requirements for prepayment and post-payment medical review activities; requirement for electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan, or a Medicare Advantage Prescription Drug (MA-PD) plan; updates to the Medicare Ground Ambulance Data Collection System; changes to the Medicare Diabetes Prevention Program (MDPP) expanded model; and amendments to the physician self-referral law regulations.

DATES:

These regulations are effective on January 1, 2022.

FOR FURTHER INFORMATION CONTACT:

DivisionofPractitionerServices@cms.hhs.gov, for any issues not identified below.

Michael Soracoe, (410) 786-6312, or DivisionofPractitionerServices@cms.hhs.gov, for issues related to practice expense, work RVUs, conversion factor, and PFS specialty-specific impacts.

Larry Chan, (410) 786-6864, for issues related to potentially misvalued services under the PFS.

Patrick Sartini, (410) 786-9252, and Larry Chan, (410) 786-6864, for issues related to telehealth services and other services involving communications technology.

Julie Adams, (410) 786-8932, for issues related to payment for anesthesia services.

Sarah Leipnik, (410) 786-3933, or DivisionofPractitionerServices@cms.hhs.gov, for issues related to split (or shared) services.

Michelle Cruse, (410) 786-7540, and Michael Konieczny, (410) 786-0825, for issues related to payment for vaccine administration services.

Regina Walker-Wren, (410) 786-9160, for issues related to billing for services of physician assistants and PFS payment for teaching physician services.

Pamela West, (410) 786-2302, for issues related to PFS payment for therapy services, medical nutrition therapy services, and services of registered dietitians and nutrition professionals.

Liane Grayson, (410) 786-6583, for issues related to coinsurance for certain colorectal cancer screening services and PFS payment for critical care services.

Lisa Parker, (410) 786-4949, and Michele Franklin, (410) 786-9226, for issues related to RHCs and FQHCs.

Laura Kennedy, (410) 786-3377, for issues related to drugs payable under Part B.

Heather Hostetler, (410) 786-4515, and Elizabeth Truong, 410-786-6005, for issues related to removal of selected national coverage determinations.

Sarah Fulton, (410) 786-2749, for issues related to Appropriate Use Criteria for Advanced Diagnostic Imaging (AUC); and Pulmonary Rehabilitation, Cardiac Rehabilitation and Intensive Cardiac Rehabilitation.

Rachel Katonak, (410) 786-8564, for issues related to Medical Nutrition Therapy.

Sabrina Ahmed, (410) 786-7499, for issues related to the Medicare Shared Savings Program (Shared Savings Program) quality reporting requirements and quality performance standard.

Janae James, (410) 786-0801, Elizabeth November, (410) 786-4518, or SharedSavingsProgram@cms.hhs.gov, for issues related to Shared Savings Program beneficiary assignment, repayment mechanism requirements, and benchmarking methodology.

Naseem Tarmohamed, (410) 786-0814, or SharedSavingsProgram@cms.hhs.gov, for inquiries related to Shared Savings Program application, compliance and beneficiary notification requirements.

Amy Gruber, AmbulanceDataCollection@cms.hhs.gov, for issues related to the Medicare Ground Ambulance Data Collection System.

Juliana Tiongson, (410) 786-0342, for issues related to the Medicare Diabetes Prevention Program (MDPP).

Laura Ashbaugh, (410) 786-1113, for issues related to Clinical Laboratory Fee Schedule: Laboratory Specimen Collection and Travel Allowance and Use of Electronic Travel Logs.

Frank Whelan, (410) 786-1302, for issues related to Medicare provider enrollment regulation updates.

Katie Mucklow, (410) 786-0537, for issues related to provider and supplier prepayment and post-payment medical review requirements.

Lindsey Baldwin, (410) 786-1694, and Michele Franklin, (410) 786-9226, for issues related to Medicare coverage of opioid use disorder treatment services furnished by opioid treatment programs.

Lisa O. Wilson, (410) 786-8852, or Meredith Larson, (410) 786-7923, for inquiries related to the physician self-referral law.

Joella Roland, (410) 786-7638, for issues related to requirement for electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan or an MA-PD plan.

Kathleen Ott, (410) 786-4246, for issues related to open payments.

Molly MacHarris, (410) 786-4461, for inquiries related to Merit-based Incentive Payment System (MIPS).

Brittany LaCouture, (410) 786-0481, for inquiries related to Alternative Payment Models (APMs).

SUPPLEMENTARY INFORMATION:

Addenda Available Only Through the Internet on the CMS Website: The PFS Addenda along with other supporting documents and tables referenced in this final rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/index.html. Click on the link on the left side of the screen titled, “PFS Federal Regulations Notices” for a chronological list of PFS Federal Register and other related documents. For the CY 2022 PFS final rule, refer to item CMS-1751-F. Readers with questions related to accessing any of the Addenda or other supporting documents referenced in this final rule and posted on the CMS website identified above should contact DivisionofPractitionerServices@cms.hhs.gov.

CPT (Current Procedural Terminology) Copyright Notice: Throughout this final rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2020 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply.

I. Executive Summary

This major final rule revises payment polices under the Medicare PFS and makes other policy changes, including to the implementation of certain provisions of the Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260, December 27, 2020), Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123, February 9, 2018) and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018), related to Medicare Part B payment. In addition, this major final rule includes revisions to other Medicare payment policies described in sections III. and IV.

B. Summary of the Major Provisions

The statute requires us to establish payments under the PFS based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. The statute requires that RVUs be established for three categories of resources: Work, practice expense (PE), and malpractice (MP) expense. In addition, the statute requires that we establish each year by regulation the payment amounts for physicians' services paid under the PFS, including geographic adjustments to reflect the variations in the costs of furnishing services in different geographic areas.

In this major final rule, we are establishing RVUs for CY 2022 for the PFS to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes discussions and provisions regarding several other Medicare Part B payment policies.

Specifically, this final rule addresses:

• Practice Expense RVUs (section II.B.)
• Potentially Misvalued Services Under the PFS (section II.C.)
• Telehealth and Other Services Involving Communications Technology (section II.D.)
• Valuation of Specific Codes (section II.E.)
• Evaluation and Management Visits (section II.F.)
• Billing for Physician Assistant Services (section II.G.)
• Therapy Services (section II.H.)
• Changes to Beneficiary Coinsurance for Additional Procedures Furnished During the Same Clinical Encounter as Certain Colorectal Cancer Screening Tests (section II.I.)
• Vaccine Administration Services (section II.J.)
• Payment for Medical Nutrition Therapy Services and Related Services (section II.K.)
• Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) (sections III.A., III.B., and III.C.)
• Requiring Certain Manufacturers to Report Drug Pricing Information for Part B and Determination of ASP for Certain Self-administered Drug Products (sections III.D.1. and 2.)
• Medicare Part B Drug Payment for Drugs Approved under Section 505(b)(2) of the Federal Food, Drug, & Cosmetic Act (section III.E.)
• Appropriate Use Criteria for Advanced Diagnostic Imaging (section III.F.)
• Removal of Selected National Coverage Determinations (section III.G.)
• Pulmonary Rehabilitation, Cardiac Rehabilitation and Intensive Cardiac Rehabilitation (section III.H.)
• Medical Nutrition Therapy (section III.I.)
• Medicare Shared Savings Program (section III.J.)
• Medicare Ground Ambulance Data Collection System (section III.K.)
• Medicare Diabetes Prevention Program (MDPP) (section III.L.)
• Clinical Laboratory Fee Schedule: Laboratory Specimen Collection and Travel Allowance for Clinical Diagnostic Laboratory Tests and Use of Electronic Travel Logs (section III.M.)
• Medicare Provider and Supplier Enrollment Changes (section III.N.1.)
• Provider/Supplier Medical Review Requirements: Addition of Provider/Supplier Requirements related to Prepayment and Post-payment Reviews (section III.N.2.)
• Modifications Related to Medicare Coverage for Opioid Use Disorder (OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs) (section III.O.)
• Updates to the Physician Self-Referral Regulations (section III.P.)
• Requirement for Electronic Prescribing for Controlled Substances for a Covered Part D Drug under a Prescription Drug Plan or an MA-PD Plan (section 2003 of the SUPPORT Act) (section III.Q.)
• Open Payments (section III.R.)
• Updates to the Quality Payment Program (section IV.)
• Collection of Information Requirements (section V.)
• Regulatory Impact Analysis (section VI.)

3. Summary of Costs and Benefits

We have determined that this final rule is economically significant. For a detailed discussion of the economic impacts, see section VI., Regulatory Impact Analysis, of this final rule.

II. Summary of the Proposed Provisions, Analysis of and Response to Public Comments, and the Provisions of the Final Rule for the PFS

A. Background

Since January 1, 1992, Medicare has paid for physicians' services under section 1848 of the Social Security Act (the Act), “Payment for Physicians' Services.” The PFS relies on national relative values that are established for work, practice expense (PE), and malpractice (MP), which are adjusted for geographic cost variations. These values are multiplied by a conversion factor (CF) to convert the RVUs into payment rates. The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act of 1989 (OBRA '89) (Pub. L. 101-239, December 19, 1989), and the Omnibus Budget Reconciliation Act of 1990 (OBRA '90) (Pub. L. 101-508, November 5, 1990). The final rule published in the November 25, 1991 Federal Register (56 FR 59502) set forth the first fee schedule used for payment for physicians' services.

We note that throughout this final rule, unless otherwise noted, the term “practitioner” is used to describe both physicians and nonphysician practitioners (NPPs) who are permitted to bill Medicare under the PFS for the services they furnish to Medicare beneficiaries.

1. Development of the RVUs

a. Work RVUs

The work RVUs established for the initial fee schedule, which was implemented on January 1, 1992, were developed with extensive input from the physician community. A research team at the Harvard School of Public Health developed the original work RVUs for most codes under a cooperative agreement with the Department of Health and Human Services (HHS). In constructing the code-specific vignettes used in determining the original physician work RVUs, Harvard worked with panels of experts, both inside and outside the Federal Government, and obtained input from numerous physician specialty groups.

As specified in section 1848(c)(1)(A) of the Act, the work component of physicians' services means the portion of the resources used in furnishing the service that reflects physician time and intensity. We establish work RVUs for new, revised and potentially misvalued codes based on our review of information that generally includes, but is not limited to, recommendations received from the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC), the Health Care Professionals Advisory Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC), and other public commenters; medical literature and comparative databases; as well as a comparison of the work for other codes within the Medicare PFS, and consultation with other physicians and health care professionals within CMS and the Federal Government. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters, and the rationale for their recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalk to key reference or similar codes, and magnitude estimation. More information on these issues is available in that rule.

b. Practice Expense RVUs

Initially, only the work RVUs were resource-based, and the PE and MP RVUs were based on average allowable charges. Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103-432, October 31, 1994), amended by section 1848(c)(2)(C)(ii) of the Act and required us to develop resource-based PE RVUs for each physicians' service beginning in 1998. We were required to consider general categories of expenses (such as office rent and wages of personnel, but excluding MP expenses) comprising PEs. The PE RVUs continue to represent the portion of these resources involved in furnishing PFS services.

Originally, the resource-based method was to be used beginning in 1998, but section 4505(a) of the Balanced Budget Act of 1997 (BBA `97) (Pub. L. 105-33, August 5, 1997) delayed implementation of the resource-based PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA `97 provided for a 4-year transition period from the charge-based PE RVUs to the resource-based PE RVUs.

We established the resource-based PE RVUs for each physicians' service in the November 2, 1998 final rule (63 FR 58814), effective for services furnished in CY 1999. Based on the requirement to transition to a resource-based system for PE over a 4-year period, payment rates were not fully based upon resource-based PE RVUs until CY 2002. This resource-based system was based on two significant sources of actual PE data: The Clinical Practice Expert Panel (CPEP) data; and the AMA's Socioeconomic Monitoring System (SMS) data. These data sources are described in greater detail in the CY 2012 PFS final rule with comment period (76 FR 73033).

Separate PE RVUs are established for services furnished in facility settings, such as a hospital outpatient department (HOPD) or an ambulatory surgical center (ASC), and in nonfacility settings, such as a physician's office. The nonfacility RVUs reflect all of the direct and indirect PEs involved in furnishing a service described by a particular HCPCS code. The difference, if any, in these PE RVUs generally results in a higher payment in the nonfacility setting because in the facility settings some resource costs are borne by the facility. Medicare's payment to the facility (such as the outpatient prospective payment system (OPPS) payment to the HOPD) would reflect costs typically incurred by the facility. Thus, payment associated with those specific facility resource costs is not made under the PFS.

Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113, November 29, 1999) directed the Secretary of Health and Human Services (the Secretary) to establish a process under which we accept and use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations to supplement the data we normally collect in determining the PE component. On May 3, 2000, we published the interim final rule (65 FR 25664) that set forth the criteria for the submission of these supplemental PE survey data. The criteria were modified in response to comments received, and published in the Federal Register (65 FR 65376) as part of a November 1, 2000 final rule. The PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended the period during which we would accept these supplemental data through March 1, 2005.

In the CY 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology for calculating direct PE RVUs from the top-down to the bottom-up methodology beginning in CY 2007. We adopted a 4-year transition to the new PE RVUs. This transition was completed for CY 2010. In the CY 2010 PFS final rule with comment period, we updated the practice expense per hour (PE/HR) data that are used in the calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, we began a 4-year transition to the new PE RVUs using the updated PE/HR data, which was completed for CY 2013.

c. Malpractice RVUs

Section 4505(f) of the BBA `97 amended section 1848(c) of the Act to require that we implement resource-based MP RVUs for services furnished on or after CY 2000. The resource-based MP RVUs were implemented in the PFS final rule with comment period published November 2, 1999 (64 FR 59380). The MP RVUs are based on commercial and physician-owned insurers' MP insurance premium data from all the States, the District of Columbia, and Puerto Rico.

d. Refinements to the RVUs

Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no less often than every 5 years. Prior to CY 2013, we conducted periodic reviews of work RVUs and PE RVUs independently from one another. We completed 5-year reviews of work RVUs that were effective for calendar years 1997, 2002, 2007, and 2012.

Although refinements to the direct PE inputs initially relied heavily on input from the RUC Practice Expense Advisory Committee (PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to the use of the updated PE/HR data in CY 2010 have resulted in significant refinements to the PE RVUs in recent years.

In the CY 2012 PFS final rule with comment period (76 FR 73057), we finalized a proposal to consolidate reviews of work and PE RVUs under section 1848(c)(2)(B) of the Act and reviews of potentially misvalued codes under section 1848(c)(2)(K) of the Act into one annual process.

In addition to the 5-year reviews, beginning for CY 2009, CMS and the RUC identified and reviewed a number of potentially misvalued codes on an annual basis based on various identification screens. This annual review of work and PE RVUs for potentially misvalued codes was supplemented by the amendments to section 1848 of the Act, as enacted by section 3134 of the Affordable Care Act, that require the agency to periodically identify, review and adjust values for potentially misvalued codes.

e. Application of BN to Adjustments of RVUs

As described in section VI. of this final rule, the Regulatory Impact Analysis, in accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs cause expenditures for the year to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million.

2. Calculation of Payments Based on RVUs

To calculate the payment for each service, the components of the fee schedule (work, PE, and MP RVUs) are adjusted by geographic practice cost indices (GPCIs) to reflect the variations in the costs of furnishing the services. The GPCIs reflect the relative costs of work, PE, and MP in an area compared to the national average costs for each component. Please refer to the CY 2020 PFS final rule for a discussion of the last GPCI update (84 FR 62615 through 62623).

RVUs are converted to dollar amounts through the application of a CF, which is calculated based on a statutory formula by CMS' Office of the Actuary (OACT). The formula for calculating the Medicare PFS payment amount for a given service and fee schedule area can be expressed as:

Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU MP × GPCI MP)] × CF

3. Separate Fee Schedule Methodology for Anesthesia Services

Section 1848(b)(2)(B) of the Act specifies that the fee schedule amounts for anesthesia services are to be based on a uniform relative value guide, with appropriate adjustment of an anesthesia CF, in a manner to ensure that fee schedule amounts for anesthesia services are consistent with those for other services of comparable value. Therefore, there is a separate fee schedule methodology for anesthesia services. Specifically, we establish a separate CF for anesthesia services and we utilize the uniform relative value guide, or base units, as well as time units, to calculate the fee schedule amounts for anesthesia services. Since anesthesia services are not valued using RVUs, a separate methodology for locality adjustments is also necessary. This involves an adjustment to the national anesthesia CF for each payment locality.

B. Determination of PE RVUs

1. Overview

Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding MP expenses, as specified in section 1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a resource-based system for determining PE RVUs for each physicians' service. We develop PE RVUs by considering the direct and indirect practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. We refer readers to the CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) for a more detailed explanation of the PE methodology.

2. Practice Expense Methodology

a. Direct Practice Expense

We determine the direct PE for a specific service by adding the costs of the direct resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing that service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are generally based on our review of recommendations received from the RUC and those provided in response to public comment periods. For a detailed explanation of the direct PE methodology, including examples, we refer readers to the 5-year review of work RVUs under the PFS and proposed changes to the PE methodology CY 2007 PFS proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).

b. Indirect Practice Expense per Hour Data

We use survey data on indirect PEs incurred per hour worked, in developing the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the PE/HR by specialty that was obtained from the AMA's SMS. The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Expense Information Survey (PPIS). The PPIS is a multispecialty, nationally representative, PE survey of both physicians and NPPs paid under the PFS using a survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 physician specialty and health care professional groups. We believe the PPIS is the most comprehensive source of PE survey information available. We used the PPIS data to update the PE/HR data for the CY 2010 PFS for almost all of the Medicare-recognized specialties that participated in the survey.

When we began using the PPIS data in CY 2010, we did not change the PE RVU methodology itself or the manner in which the PE/HR data are used in that methodology. We only updated the PE/HR data based on the new survey. Furthermore, as we explained in the CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of payment reductions for some specialties resulting from the use of the PPIS data, we transitioned its use over a 4-year period from the previous PE RVUs to the PE RVUs developed using the new PPIS data. As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), the transition to the PPIS data was complete for CY 2013. Therefore, PE RVUs from CY 2013 forward are developed based entirely on the PPIS data, except as noted in this section.

Section 1848(c)(2)(H)(i) of the Act requires us to use the medical oncology supplemental survey data submitted in 2003 for oncology drug administration services. Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the continued use of these supplemental survey data.

Supplemental survey data on independent labs from the College of American Pathologists were implemented for payments beginning in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing independent diagnostic testing facilities (IDTFs), were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments beginning in CY 2007. Neither IDTFs, nor independent labs, participated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data.

Consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for these specialties were updated to CY 2006 using the Medicare Economic Index (MEI) to put them on a comparable basis with the PPIS data.

We also do not use the PPIS data for reproductive endocrinology and spine surgery since these specialties currently are not separately recognized by Medicare, nor do we have a method to blend the PPIS data with Medicare-recognized specialty data.

Previously, we established PE/HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead used the PPIS-based PE/HR. We use crosswalks for specialties that did not participate in the PPIS. These crosswalks have been generally established through notice and comment rulemaking and are available in the file titled “CY 2022 PFS final rule PE/HR” on the CMS website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

For CY 2022, we have incorporated the available utilization data for two new specialties, each of which became a recognized Medicare specialty during 2020. These specialties are Micrographic Dermatologic Surgery (MDS) and Adult Congenital Heart Disease (ACHD). We proposed to use proxy PE/HR values for these new specialties, as there are no PPIS data for these specialties, by crosswalking the PE/HR as follows from specialties that furnish similar services in the Medicare claims data:

• Micrographic Dermatologic Surgery (MDS) from Dermatology; and
• Adult Congenital Heart Disease (ACHD) from Cardiology

These updates are reflected in the “CY 2022 PFS final rule PE/HR” file available on the CMS website under the supporting data files for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

We received public comments on our proposal to use proxy PE/HR values for MDS and ACHD. The following is a summary of the comments we received and our responses.

Comment: One commenter stated that they appreciated and supported the proposal incorporating the available utilization data for MDS to establish an indirect PE/HR for their newly designated specialty. The commenter stated that they also agreed with the proposal to use a proxy PE/HR value by crosswalking to the PE/HR for Dermatology and urged CMS to finalize this policy.

Response: We appreciate the support from the commenter for our proposed PE/HR crosswalk.

Comment: Several commenters questioned the assigned specialty crosswalk to use for indirect PE when it comes to home PT/INR monitoring services. Commenters stated that they appreciated that CMS acknowledged their concerns last year and agreed to update the indirect factors for home PT/INR monitoring by crosswalking to the General Practice specialty which helped address the on-going substantial reductions in payment for home PT/INR monitoring. However, the commenters stated that the predominant code for PT/INR monitoring (HCPCS code G0249) will again be significantly and negatively impacted by the proposed changes in the clinical labor rates which will completely negate any benefit from the crosswalk to General Practice. The commenters requested CMS change the crosswalk for home PT/INR monitoring services to All Physicians which would partially offset the proposed reduction that HCPCS code G0249 is facing due to changes in the clinical labor rates.

Response: We finalized a crosswalk to the General Practice specialty for home PT/INR monitoring services (HCPCS codes G0248, G0249, and G0250) in the CY 2021 PFS final rule (85 FR 84477-84478). The data submitted by the commenters indicated that the direct-to-indirect cost percentages to furnish home PT/INR monitoring are in the range of 31:69, similar to the ratio associated with the General Practice specialty. We disagree that these home PT/INR monitoring services should now be reassigned to a different specialty that is less reflective of the cost structure for these services to offset reductions in payment for the services that result from an unrelated policy proposal (the clinical labor pricing update). Additionally, we did not propose to change the assigned specialty for PT/INR services. As such, this comment is outside the scope of the proposed rule. Therefore, we are not finalizing any changes to the assigned specialty for PT/INR services. We note however that, recognizing the changing practice of medicine and increasing use of innovative technologies and supplies to furnish certain services, we are reviewing our underlying data as part of a comprehensive review of our PE inputs and overall methodology. We continue to engage with stakeholders on this crucial topic of updating the PE data, for example, at our recent PE town hall this year.

After consideration of the comments, we are finalizing our proposed PE/HR crosswalks for the new MDS and ACHD specialties.

c. Allocation of PE to Services

To establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service.

(1) Direct Costs

The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing each of the services. The costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first service would be twice as much as the direct portion of the PE RVUs for the second service.

(2) Indirect Costs

We allocate the indirect costs at the code level based on the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. We also incorporate the survey data described earlier in the PE/HR discussion. The general approach to developing the indirect portion of the PE RVUs is as follows:

• For a given service, we use the direct portion of the PE RVUs calculated as previously described and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that furnish the service to determine an initial indirect allocator. That is, the initial indirect allocator is calculated so that the direct costs equal the average percentage of direct costs of those specialties furnishing the service. For example, if the direct portion of the PE RVUs for a given service is 2.00 and direct costs, on average, represent 25 percent of total costs for the specialties that furnish the service, the initial indirect allocator would be calculated so that it equals 75 percent of the total PE RVUs. Thus, in this example, the initial indirect allocator would equal 6.00, resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 percent of 8.00).

• Next, we add the greater of the work RVUs or clinical labor portion of the direct portion of the PE RVUs to this initial indirect allocator. In our example, if this service had a work RVU of 4.00 and the clinical labor portion of the direct PE RVU was 1.50, we would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to the initial indirect allocator of 6.00 to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if one service had an indirect cost allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs for the second service.
• Then, we incorporate the specialty-specific indirect PE/HR data into the calculation. In our example, if, based on the survey data, the average indirect cost of the specialties furnishing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties furnishing the second service with an indirect allocator of 5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the second service.

(3) Facility and Nonfacility Costs

For procedures that can be furnished in a physician's office, as well as in a facility setting, where Medicare makes a separate payment to the facility for its costs in furnishing a service, we establish two PE RVUs: Facility and nonfacility. The methodology for calculating PE RVUs is the same for both the facility and nonfacility RVUs, but is applied independently to yield two separate PE RVUs. In calculating the PE RVUs for services furnished in a facility, we do not include resources that would generally not be provided by physicians when furnishing the service. For this reason, the facility PE RVUs are generally lower than the nonfacility PE RVUs.

(4) Services With Technical Components and Professional Components

Diagnostic services are generally comprised of two components: A professional component (PC); and a technical component (TC). The PC and TC may be furnished independently or by different providers, or they may be furnished together as a global service. When services have separately billable PC and TC components, the payment for the global service equals the sum of the payment for the TC and PC. To achieve this, we use a weighted average of the ratio of indirect to direct costs across all the specialties that furnish the global service, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global service, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global.)

(5) PE RVU Methodology

For a more detailed description of the PE RVU methodology, we refer readers to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). We also direct readers to the file titled “Calculation of PE RVUs under Methodology for Selected Codes” which is available on our website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html. This file contains a table that illustrates the calculation of PE RVUs as described in this final rule for individual codes.

(a) Setup File

First, we create a setup file for the PE methodology. The setup file contains the direct cost inputs, the utilization for each procedure code at the specialty and facility/nonfacility place of service level, and the specialty-specific PE/HR data calculated from the surveys.

(b) Calculate the Direct Cost PE RVUs

Sum the costs of each direct input.

Step 1: Sum the direct costs of the inputs for each service.

Step 2: Calculate the aggregate pool of direct PE costs for the current year. We set the aggregate pool of PE costs equal to the product of the ratio of the current aggregate PE RVUs to current aggregate work RVUs and the projected aggregate work RVUs.

Step 3: Calculate the aggregate pool of direct PE costs for use in ratesetting. This is the product of the aggregate direct costs for all services from Step 1 and the utilization data for that service.

Step 4: Using the results of Step 2 and Step 3, use the CF to calculate a direct PE scaling adjustment to ensure that the aggregate pool of direct PE costs calculated in Step 3 does not vary from the aggregate pool of direct PE costs for the current year. Apply the scaling adjustment to the direct costs for each service (as calculated in Step 1).

Step 5: Convert the results of Step 4 to an RVU scale for each service. To do this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in this calculation does not influence the final direct cost PE RVUs as long as the same CF is used in Step 4 and Step 5. Different CFs would result in different direct PE scaling adjustments, but this has no effect on the final direct cost PE RVUs since changes in the CFs and changes in the associated direct scaling adjustments offset one another.

(c) Create the Indirect Cost PE RVUs

Create indirect allocators.

Step 6: Based on the survey data, calculate direct and indirect PE percentages for each physician specialty.

Step 7: Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish the service. Note that for services with TCs and PCs, the direct and indirect percentages for a given service do not vary by the PC, TC, and global service.

We generally use an average of the 3 most recent years of available Medicare claims data to determine the specialty mix assigned to each code. Codes with low Medicare service volume require special attention since billing or enrollment irregularities for a given year can result in significant changes in specialty mix assignment. We finalized a policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use the most recent year of claims data to determine which codes are low volume for the coming year (those that have fewer than 100 allowed services in the Medicare claims data). For codes that fall into this category, instead of assigning specialty mix based on the specialties of the practitioners reporting the services in the claims data, we use the expected specialty that we identify on a list developed based on medical review and input from expert stakeholders. We display this list of expected specialty assignments as part of the annual set of data files we make available as part of notice and comment rulemaking and consider recommendations from the RUC and other stakeholders on changes to this list on an annual basis. Services for which the specialty is automatically assigned based on previously finalized policies under our established methodology (for example, “always therapy” services) are unaffected by the list of expected specialty assignments. We also finalized in the CY 2018 PFS final rule (82 FR 52982 through 52983) a policy to apply these service-level overrides for both PE and MP, rather than one or the other category.

We did not make any proposals associated with the list of expected specialty assignments for low volume services, however we received public comments on this topic from stakeholders. The following is a summary of the comments we received and our responses.

Comment: Several commenters stated that they had performed an analysis to identify all codes that meet the criteria to receive a specialty override under this CMS policy and drafted updated recommendations for CY 2022. Commenters stated that the purpose of assigning a specialty to these codes was to avoid the major adverse impact on MP RVUs that result from errors in specialty utilization data magnified in representation (percentage) by small sample size. These commenters submitted a lengthy list of low volume HCPCS codes with recommended expected specialty assignments. One commenter requested changing the override specialty for a series of codes from thoracic surgery to cardiac surgery based on whether the procedures in question are performed on the heart and surrounding structures versus performed on the lungs, esophagus, chest wall and mediastinum.

Response: We appreciate the submission of expected specialty assignments for additional low volume HCPCS codes. After reviewing the information provided by the commenters to determine that the submitted specialty assignments were appropriate for the service in question, we are finalizing the additions in Table 1 to the list of expected specialty assignments for low volume services.

Commenters recommended an expected specialty assignment of interventional cardiology for CPT codes 33018, 33741, 33745, 33746, 92975, and 93565 and an expected specialty assignment of cardiac electrophysiology for CPT code 33275. However, we do not have PE/HR data for the interventional cardiology and cardiac electrophysiology specialties as they were not part of the PPIS when it was conducted in 2007. These specialties both use the cardiology specialty for their PE/HR data, and therefore, we have also crosswalked the CPT codes in question to the cardiology specialty on the list of expected specialty assignments for low volume services.

Based on the information provided by the commenters, we are finalizing the changes in expected specialty assignment for the five CPT codes in Table 2 which were already included on the list.

We are not finalizing the recommended changes in expected specialty assignment for the CPT codes in Table 3 associated with the thoracic surgery specialty.

Commenters requested that the expected specialty assignment for the CPT codes in this group be changed from the thoracic surgery specialty to the cardiac surgery specialty. We did not finalize this same request in previous rulemaking cycles in both CY 2020 (84 FR 62576) and CY 2021 (85 FR 84479) for the same group of CPT codes. We finalized a proposal in CY 2020 to update the expected specialty list to accurately reflect a previously finalized crosswalk to thoracic surgery for the services in question. As we stated at the time, we did not finalize a proposal to assign the codes in question to the cardiac surgery specialty. Instead, we finalized a proposal to update the incorrect documentation in our expected specialty list to accurately reflect a previously finalized crosswalk to thoracic surgery for these services. The previously finalized assignment of the cardiac surgery specialty to these services has been in place since the CY 2012 rule cycle, and we believe that the expected specialty list should be updated to reflect the correct specialty assignment. We have previously considered and declined to make the changes suggested by commenters, and we are not finalizing such changes in this CY 2022 PFS final rule. We direct readers to the discussion of this topic in the CY 2020 PFS final rule (84 FR 62574 through 62578) and we reiterate that we do not anticipate this finalized proposal from CY 2020 having a discernible effect on the valuation of the affected codes due to the similarity between the cardiac surgery and thoracic surgery specialties.

We also note for commenters that each HCPCS code that appears on the list of expected specialty assignments for low volume services remains on the list from year to year, even if the volume for the code in question rises to over 100 services for an individual calendar year. The HCPCS codes and expected specialty assignment remain on the list, and will be applied should the volume fall below 100 services in any calendar year; there is no need to “reactivate” individual codes as some commenters indicated in their submissions.

Comment: Several commenters stated that in previous years, CMS has applied the expected specialty override to services with fewer than 100 allowed services in a 3-year average of Medicare claims data without adjusting the utilization to interpret any CPT modifiers. Although commenters agreed with the use of a 3-year average to identify low volume services for expected specialty assignment, commenters stated that not adjusting for certain modifiers will result in undercounting or overcounting of certain services. For example, commenters stated that if a single procedure is performed by both a primary surgeon and an assistant at surgery, this service should only be counted once even though each of the practitioners would report the service on a separate claim. Commenters recommended that CMS should set the frequency to zero for post-operative only (modifier '55') and assistant at surgery (modifier '80') records, multiply the frequency by 2 for bilateral surgery records (modifier '50'), and divide the frequency by 2 for co-surgery records (modifier '62').

Response: We do not agree that it would be more appropriate to make the adjustments to utilization as described by the commenters to determine low volume status. As we stated in the CY 2020 PFS final rule (84 FR 62576), we finalized a policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use claims data to determine which codes are low volume for the coming year, defining “low volume” as those that had fewer than 100 allowed services in the Medicare claims data. We did not finalize a policy to discount this utilization based on modifiers that identify certain circumstances, and we do not believe that it would be more appropriate to do so, as a service is still furnished and billed in each case, even if payment is discounted. Additionally, we did not make any proposals concerning the methodology used to identify low volume services in the proposed rule, and therefore, we are not finalizing any changes to this methodology.

After consideration of the public comments, we are finalizing the updates to the list of expected specialty assignments for low volume services as detailed above.

Step 8: Calculate the service level allocators for the indirect PEs based on the percentages calculated in Step 7. The indirect PEs are allocated based on the three components: The direct PE RVUs; the clinical labor PE RVUs; and the work RVUs.

For most services the indirect allocator is: Indirect PE percentage * (direct PE RVUs/direct percentage) + work RVUs.

There are two situations where this formula is modified:

• If the service is a global service (that is, a service with global, professional, and technical components), then the indirect PE allocator is: indirect percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs + work RVUs.
• If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: indirect PE percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs.

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

For presentation purposes, in the examples in the download file titled “Calculation of PE RVUs under Methodology for Selected Codes”, the formulas were divided into two parts for each service.

• The first part does not vary by service and is the indirect percentage (direct PE RVUs/direct percentage).
• The second part is either the work RVU, clinical labor PE RVU, or both depending on whether the service is a global service and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step).

Apply a scaling adjustment to the indirect allocators.

Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the result of step 8 by the average indirect PE percentage from the survey data.

Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and the utilization data for that service.

Step 11: Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8.

Calculate the indirect practice cost index.

Step 12: Using the results of Step 11, calculate aggregate pools of specialty-specific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service.

Step 13: Using the specialty-specific indirect PE/HR data, calculate specialty-specific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/HR for the specialty, the work time for the service, and the specialty's utilization for the service across all services furnished by the specialty.

Step 14: Using the results of Step 12 and Step 13, calculate the specialty-specific indirect PE scaling factors.

Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty-specific indirect scaling factor by the average indirect scaling factor for the entire PFS.

Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. (Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global service, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global service.)

Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs.

(d) Calculate the Final PE RVUs

Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment. The final PE BN adjustment is calculated by comparing the sum of steps 5 and 17 to the aggregate work RVUs scaled by the ratio of current aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in the PFS account for the fact that certain specialties are excluded from the calculation of PE RVUs but included in maintaining overall PFS BN. (See “Specialties excluded from ratesetting calculation” later in this final rule.)

Step 19: Apply the phase-in of significant RVU reductions and its associated adjustment. Section 1848(c)(7) of the Act specifies that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2-year period. In implementing the phase-in, we consider a 19 percent reduction as the maximum 1-year reduction for any service not described by a new or revised code. This approach limits the year one reduction for the service to the maximum allowed amount (that is, 19 percent), and then phases in the remainder of the reduction. To comply with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure that the total RVUs for all services that are not new or revised codes decrease by no more than 19 percent, and then apply a relativity adjustment to ensure that the total pool of aggregate PE RVUs remains relative to the pool of work and MP RVUs. For a more detailed description of the methodology for the phase-in of significant RVU changes, we refer readers to the CY 2016 PFS final rule with comment period (80 FR 70927 through 70931).

(e) Setup File Information

• Specialties excluded from ratesetting calculation: For the purposes of calculating the PE and MP RVUs, we exclude certain specialties, such as certain NPPs paid at a percentage of the PFS and low-volume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 4.

• Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties.

• Physical therapy utilization: Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy.

• Identify professional and technical services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 ( Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only ), is associated with the global service, CPT code 93000 ( Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report ).

• Payment modifiers: Payment modifiers are accounted for in the creation of the file consistent with current payment policy as implemented in claims processing. For example, services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any service that contains the assistant at surgery modifier. Similarly, for those services to which volume adjustments are made to account for the payment modifiers, time adjustments are applied as well. For time adjustments to surgical services, the intraoperative portion in the work time file is used; where it is not present, the intraoperative percentage from the payment files used by contractors to process Medicare claims is used instead. Where neither is available, we use the payment adjustment ratio to adjust the time accordingly. Table 5 details the manner in which the modifiers are applied.

We also make adjustments to volume and time that correspond to other payment rules, including special multiple procedure endoscopy rules and multiple procedure payment reductions (MPPRs). We note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments for multiple imaging procedures and multiple therapy services from the BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the development of the RVUs.

Beginning in CY 2022, section 1834(v)(1) of the Act requires that we apply a 15 percent payment reduction for outpatient occupational therapy services and outpatient physical therapy services that are provided, in whole or in part, by a physical therapist assistant (PTA) or occupational therapy assistant (OTA). Section 1834(v)(2)(A) of the Act required CMS to establish modifiers to identify these services, which we did in the CY 2019 PFS final rule (83 FR 59654 through 59661), creating the CQ and CO payment modifiers for services provided in whole or in part by PTAs and OTAs, respectively. These payment modifiers are required to be used on claims for services with dates of service beginning January 1, 2020, as specified in the CY 2020 PFS final rule (84 FR 62702 through 62708). We will apply the 15 percent payment reduction to therapy services provided by PTAs (using the CQ modifier) or OTAs (using the CO modifier), as required by statute. Under sections 1834(k) and 1848 of the Act, payment is made for outpatient therapy services at 80 percent of the lesser of the actual charge or applicable fee schedule amount (the allowed charge). The remaining 20 percent is the beneficiary copayment. For therapy services to which the new discount applies, payment will be made at 85 percent of the 80 percent of allowed charges. Therefore, the volume discount factor for therapy services to which the CQ and CO modifiers apply is: (0.20 + (0.80* 0.85), which equals 88 percent.

For anesthesia services, we do not apply adjustments to volume since we use the average allowed charge when simulating RVUs; therefore, the RVUs as calculated already reflect the payments as adjusted by modifiers, and no volume adjustments are necessary. However, a time adjustment of 33 percent is made only for medical direction of two to four cases since that is the only situation where a single practitioner is involved with multiple beneficiaries concurrently, so that counting each service without regard to the overlap with other services would overstate the amount of time spent by the practitioner furnishing these services.

• Work RVUs: The setup file contains the work RVUs from this final rule.

(6) Equipment Cost per Minute

The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1−(1/((1 + interest rate) ⁁ life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); generally, 150,000 minutes

usage = variable, see discussion below in this final rule

price = price of the particular piece of equipment

life of equipment = useful life of the particular piece of equipment

maintenance = factor for maintenance; 0.05.

interest rate = variable, see discussion below in this final rule

Usage: We currently use an equipment utilization rate assumption of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment, for which we use a 90 percent assumption as required by section 1848(b)(4)(C) of the Act.

Useful Life: In the CY 2005 PFS final rule we stated that we updated the useful life for equipment items primarily based on the AHA's “Estimated Useful Lives of Depreciable Hospital Assets” guidelines (69 FR 66246). The most recent edition of these guidelines was published in 2018. This reference material provides an estimated useful life for hundreds of different types of equipment, the vast majority of which fall in the range of 5 to 10 years, and none of which are lower than 2 years in duration. We believe that the updated editions of this reference material remain the most accurate source for estimating the useful life of depreciable medical equipment.

In the CY 2021 PFS final rule, we finalized a proposal to treat equipment life durations of less than 1 year as having a duration of 1 year for the purpose of our equipment price per minute formula. In the rare cases where items are replaced every few months, we noted that we believe it is more accurate to treat these items as disposable supplies with a fractional supply quantity as opposed to equipment items with very short equipment life durations. For a more detailed discussion of the methodology associated with very short equipment life durations, we refer readers to the CY 2021 PFS final rule (85 FR 84482 through 84483).

• Maintenance: We finalized the 5 percent factor for annual maintenance in the CY 1998 PFS final rule with comment period (62 FR 33164). As we previously stated in the CY 2016 PFS final rule with comment period (80 FR 70897), we do not believe the annual maintenance factor for all equipment is precisely 5 percent, and we concur that the current rate likely understates the true cost of maintaining some equipment. We also noted that we believe it likely overstates the maintenance costs for other equipment. When we solicited comments regarding sources of data containing equipment maintenance rates, commenters were unable to identify an auditable, robust data source that could be used by CMS on a wide scale. We noted that we did not believe voluntary submissions regarding the maintenance costs of individual equipment items would be an appropriate methodology for determining costs. As a result, in the absence of publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining a different maintenance factor, we did not propose a variable maintenance factor for equipment cost per minute pricing as we did not believe that we have sufficient information at present. We noted that we would continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items.

• Interest Rate: In the CY 2013 PFS final rule with comment period (77 FR 68902), we updated the interest rates used in developing an equipment cost per minute calculation (see 77 FR 68902 for a thorough discussion of this issue). The interest rate was based on the Small Business Administration (SBA) maximum interest rates for different categories of loan size (equipment cost) and maturity (useful life). The Interest rates are listed in Table 6.

We did not propose any changes to the equipment interest rates for CY 2022.

3. Changes to Direct PE Inputs for Specific Services

This section focuses on specific PE inputs. The direct PE inputs are included in the CY 2022 direct PE input public use files, which are available on the CMS website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

a. Standardization of Clinical Labor Tasks

As we noted in the CY 2015 PFS final rule with comment period (79 FR 67640 through 67641), we continue to make improvements to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of clinical labor minutes for the preservice, service, and post service periods for each code. In addition to increasing the transparency of the information used to set PE RVUs, this level of detail would allow us to compare clinical labor times for activities associated with services across the PFS, which we believe is important to maintaining the relativity of the direct PE inputs. This information would facilitate the identification of the usual numbers of minutes for clinical labor tasks and the identification of exceptions to the usual values. It would also allow for greater transparency and consistency in the assignment of equipment minutes based on clinical labor times. Finally, we believe that the detailed information can be useful in maintaining standard times for particular clinical labor tasks that can be applied consistently to many codes as they are valued over several years, similar in principle to the use of physician preservice time packages. We believe that setting and maintaining such standards would provide greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes. For example, as medical practice and technologies change over time, changes in the standards could be updated simultaneously for all codes with the applicable clinical labor tasks, instead of waiting for individual codes to be reviewed.

In the CY 2016 PFS final rule with comment period (80 FR 70901), we solicited comments on the appropriate standard minutes for the clinical labor tasks associated with services that use digital technology. After consideration of comments received, we finalized standard times for clinical labor tasks associated with digital imaging at 2 minutes for “Availability of prior images confirmed”, 2 minutes for “Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist”, 2 minutes for “Review examination with interpreting MD”, and 1 minute for “Exam documents scanned into PACS” and “Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue.” In the CY 2017 PFS final rule (81 FR 80184 through 80186), we finalized a policy to establish a range of appropriate standard minutes for the clinical labor activity, “Technologist QCs images in PACS, checking for all images, reformats, and dose page.” These standard minutes will be applied to new and revised codes that make use of this clinical labor activity when they are reviewed by us for valuation. We finalized a policy to establish 2 minutes as the standard for the simple case, 3 minutes as the standard for the intermediate case, 4 minutes as the standard for the complex case, and 5 minutes as the standard for the highly complex case. These values were based upon a review of the existing minutes assigned for this clinical labor activity; we determined that 2 minutes is the duration for most services and a small number of codes with more complex forms of digital imaging have higher values. We also finalized standard times for a series of clinical labor tasks associated with pathology services in the CY 2016 PFS final rule with comment period (80 FR 70902). We do not believe these activities would be dependent on number of blocks or batch size, and we believe that the finalized standard values accurately reflect the typical time it takes to perform these clinical labor tasks.

In reviewing the RUC-recommended direct PE inputs for CY 2019, we noticed that the 3 minutes of clinical labor time traditionally assigned to the “Prepare room, equipment and supplies” (CA013) clinical labor activity were split into 2 minutes for the “Prepare room, equipment and supplies” activity and 1 minute for the “Confirm order, protocol exam” (CA014) activity. We proposed to maintain the 3 minutes of clinical labor time for the “Prepare room, equipment and supplies” activity and remove the clinical labor time for the “Confirm order, protocol exam” activity wherever we observed this pattern in the RUC-recommended direct PE inputs. Commenters explained in response that when the new version of the PE worksheet introduced the activity codes for clinical labor, there was a need to translate old clinical labor tasks into the new activity codes, and that a prior clinical labor task was split into two of the new clinical labor activity codes: CA007 ( Review patient clinical extant information and questionnaire ) in the preservice period, and CA014 ( Confirm order, protocol exam ) in the service period. Commenters stated that the same clinical labor from the old PE worksheet was now divided into the CA007 and CA014 activity codes, with a standard of 1 minute for each activity. We agreed with commenters that we would finalize the RUC-recommended 2 minutes of clinical labor time for the CA007 activity code and 1 minute for the CA014 activity code in situations where this was the case. However, when reviewing the clinical labor for the reviewed codes affected by this issue, we found that several of the codes did not include this old clinical labor task, and we also noted that several of the reviewed codes that contained the CA014 clinical labor activity code did not contain any clinical labor for the CA007 activity. In these situations, we continue to believe that in these cases, the 3 total minutes of clinical staff time would be more accurately described by the CA013 “Prepare room, equipment and supplies” activity code, and we finalized these clinical labor refinements. For additional details, we direct readers to the discussion in the CY 2019 PFS final rule (83 FR 59463 and 59464).

Following the publication of the CY 2020 PFS proposed rule, one commenter expressed concern with the published list of common refinements to equipment time. The commenter stated that these refinements were the formulaic result of the applying refinements to the clinical labor time and did not constitute separate refinements; the commenter requested that CMS no longer include these refinements in the table published each year. In the CY 2020 PFS final rule, we agreed with the commenter that these equipment time refinements did not reflect errors in the equipment recommendations or policy discrepancies with the RUC's equipment time recommendations. However, we believed that it was important to publish the specific equipment times that we were proposing (or finalizing in the case of the final rule) when they differed from the recommended values due to the effect that these changes can have on the direct costs associated with equipment time. Therefore, we finalized the separation of the equipment time refinements associated with changes in clinical labor into a separate table of refinements. For additional details, we direct readers to the discussion in the CY 2020 PFS final rule (84 FR 62584).

Historically, the RUC has submitted a “PE worksheet” that details the recommended direct PE inputs for our use in developing PE RVUs. The format of the PE worksheet has varied over time and among the medical specialties developing the recommendations. These variations have made it difficult for both the RUC's development and our review of code values for individual codes. Beginning with its recommendations for CY 2019, the RUC has mandated the use of a new PE worksheet for purposes of their recommendation development process that standardizes the clinical labor tasks and assigns them a clinical labor activity code. We believe the RUC's use of the new PE worksheet in developing and submitting recommendations will help us to simplify and standardize the hundreds of different clinical labor tasks currently listed in our direct PE database. As we did in previous calendar years, to facilitate rulemaking for CY 2022, we are continuing to display two versions of the Labor Task Detail public use file: One version with the old listing of clinical labor tasks, and one with the same tasks crosswalked to the new listing of clinical labor activity codes. These lists are available on the CMS website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

b. Technical Corrections to Direct PE Input Database and Supporting Files

For CY 2022, we proposed to address the following:

• Following the publication of the CY 2021 PFS proposed rule, several commenters questioned the proposed RVUs associated with several occupational therapy evaluation procedures (CPT codes 97165 through 97167). Commenters stated that the PE valuation for these codes appeared to be illogical as it was counterintuitive for the PE RVU to go down as the level of complexity increased. Commenters stated that the distribution of code usage has not changed in any manner to justify a reduction in the code values and that all three evaluation codes should reimburse at the same rate. In response to the commenters, we noted that although the three codes in question shared the same work RVU and the same direct PE inputs, they did not share the same specialty distribution in the claims data, and therefore, would not necessarily receive the same allocation of indirect PE. In the CY 2021 PFS final rule (85 FR 84490), we finalized the implementation of a technical change intended to ensure that these three services received the same allocation of indirect PE. We agreed with commenters that it was important to avoid a potential rank order anomaly in which the simple case for a service was valued higher than the complex case.

After the publication of the CY 2021 PFS final rule, stakeholders stated their appreciation for the technical change made in the final rule to ensure that the indirect PE allocation was the same for all three levels of occupational therapy evaluation codes. However, stakeholders expressed concern that the PE RVUs we finalized for CPT codes 97165-97167 decreased as compared to the PE RVUs we proposed for CY 2021. Stakeholders stated that nothing had occurred in the past year that would account for a reduction to the proposed PE for these codes, especially in a year where the proposed PE increased for the corresponding physical therapy evaluation procedures (CPT codes 97161-97163), and stakeholders questioned whether there had been an error in applying the indirect PE methodology.

We reviewed the indirect PE allocation for CPT codes 97165-97167 in response to the stakeholder inquiry and we do not agree that there was an error in applying the indirect PE methodology. We finalized a technical change in the CY 2021 PFS final rule intended to ensure that these three services received the same allocation of indirect PE, which achieved its desired goal of assigning equivalent indirect PE to these three services. However, by forcing CPT codes 97165-97167 to have the same indirect PE allocation, the indirect PE values for these codes no longer relied on the claims data, which ended up affecting the indirect practice cost index for the wider occupational therapy specialty. Because CPT codes 97165-97167 are high volume services, this resulted in a lower indirect practice cost index for the occupational therapy specialty and a smaller allocation of indirect PE for CY 2021 than initially proposed.

We proposed to address this issue for CY 2022 by assigning all claims data associated with CPT codes 97165-97167 to the occupational therapy specialty. This should ensure that CPT codes 97165-97167 will always receive the same indirect PE allocation, as well as prevent any fluctuations to the indirect practice cost index for the wider occupational therapy specialty. This is intended to avoid a potential rank order anomaly in which the simple case for a service is valued higher than the complex case. As the utilization for CPT codes 97165-97167 is overwhelmingly identified as performed by occupational therapists, we do not anticipate that assigning all of the claims data for these codes to the occupational therapy specialty will have a noticeable effect on their valuation. We solicited public comments regarding this proposal, and specifically on what commenters suggest as the most appropriate method of assigning indirect PE allocation for these services.

The following is a summary of the comments we received on our proposal and our responses.

Comment: Several commenters stated that they appreciated CMS taking steps to review the PE calculations and make the correction to maintain the PE values equally for CPT codes 97165, 97166 and 97167. The commenters stated that they appreciated and agreed with the correction in calculation. The commenters also urged CMS to review this policy again if and when the evaluation codes are stratified because the current rank order anomaly caused by indirect PE when the codes are paid the same will not exist in the future when the code values are stratified based on complexity level.

Response: We appreciate the support for our proposal from the commenters.

After consideration of the public comments, we are finalizing our proposal to assign all claims data associated with CPT codes 97165-97167 to the occupational therapy specialty.

In the CY 2020 PFS final rule (84 FR 63102 through 63104), we created two new HCPCS G codes, G2082 and G2083, effective January 1, 2020 on an interim final basis for the provision of self-administered esketamine. In the CY 2021 PFS final rule, we finalized a proposal to refine the values for HCPCS codes G2082 and G2083 using a building block methodology that summed the values associated with several codes (85 FR 84641 through 84642). Following the publication of the CY 2021 PFS final rule, stakeholders expressed concerns that the finalized PE RVU had decreased for HCPCS codes G2082 and G2083 as compared to the proposed valuation and as compared to the previous CY 2020 interim final valuation. Stakeholders questioned whether there had been an error in the PE allocation since CMS had finalized increases in the direct PE inputs for the services.

We reviewed the indirect PE allocation for HCPCS codes G2082 and G2083 in response to the stakeholder inquiry and discovered a technical change that was applied in error. Specifically, we inadvertently assigned a different physician specialty than we intended (“All Physicians”) to HCPCS codes G2082 and G2083 for indirect PE allocation in our ratesetting process during valuation of these codes in the CY 2020 PFS final rule, and continued that assignment into the CY 2021 PFS proposed rule. This specialty assignment caused the PE value for these services to be higher than anticipated for CY 2020. We intended to revise the assigned physician specialty for these codes to “General Practice” in the CY 2021 PFS final rule; however, we neglected to discuss this change in the course of PFS rulemaking for CY 2021. Since we initially applied this technical change in the CY 2021 PFS final rule without providing an explanation, we issued a correction notice (86 FR 14690) to remove this change from the CY 2021 PFS final rule, and to instead maintain the All Physicians specialty assignment through CY 2021. We apologize for any confusion this may have caused.

For CY 2022, we proposed to maintain the currently assigned physician specialty for indirect PE allocation for HCPCS codes G2082 and G2083. We proposed to assign these two services to the All Physicians specialty for indirect PE allocation which will maintain payment consistency with the rates published in the CY 2020 PFS final rule and the CY 2021 PFS proposed rule. Although we had previously intended to assign the General Practice specialty to these codes, stakeholders have provided additional information about these services suggesting that maintaining the All Physicians specialty assignment for these codes will help maintain payment stability and preserve access to this care for beneficiaries. We solicited public comments to help us discern which specialty would be the most appropriate to use for indirect PE allocation for HCPCS codes G2082 and G2083. We note that the PE methodology, which relies on the allocation of indirect costs based on the magnitude of direct costs, should appropriately reflect the typical costs for the specialty the commenters suggest. For example, we do not believe it would be appropriate to assign the Psychiatry specialty for these services given that HCPCS codes G2082 and G2083 include the high direct costs associated with esketamine supplies. The Psychiatry specialty is an outlier compared to most other specialties, allocating indirect costs at a 15:1 ratio based on direct costs because psychiatry services typically have very low direct costs. Assignment of most other specialties would result in allocation of direct costs at roughly a 3:1 ratio. We requested that commenters explain in their comments how the indirect PE allocation would affect the payment for these services. Specifically, to ensure appropriate payment for HCPCS codes G2082 and G2083, we would like to get a better understanding of the indirect costs associated with these services, relative to other services furnished by the suggested specialty.

The following is a summary of the comments we received on our proposal and our responses.

Comment: Several commenters supported the proposal to maintain the currently assigned physician specialty (All Physicians) for indirect PE allocation for HCPCS codes G2082 and G2083. Commenters thanked CMS for making technical corrections to restore the payment levels for services related to self-administered esketamine to their CY 2020 amounts. One commenter encouraged CMS to maintain the current rates to ensure payment stability and beneficiary access to this evidence- based treatment option. Another commenter urged CMS either to maintain its current approach by allowing continued use of the all-physician specialty designation or to provide a blend of the Psychiatry ( 2/3 ) and All Physicians ( 1/3 ) designations.

Response: We appreciate the support for our proposed policies from the commenters.

Comment: Several commenters stated that esketamine services were best identified as procedures assigned to the specialty of Psychiatry. Commenters stated that approximately 95 percent of the providers administering esketamine are psychiatric professionals and that utilization data from CMS demonstrated that nearly 75 percent of providers in the non-facility setting fall within the Psychiatry specialty for both codes. Commenters stressed the high costs to the provider of administering esketamine which result in more risk due to up-front supply costs, and several commenters requested assigning HCPCS codes G2082 and G2083 to the Psychiatry specialty to offset potential decreases in valuation resulting from the proposed clinical labor pricing update. One commenter requested a specialty blend of three-fourths Psychiatry and one-fourth “All Physicians” which the commenter stated was clinically coherent, consistent with the data available, and would result in the total non-facility national average reimbursement amount that most closely approximates CY 2021 levels.

Response: We appreciate the feedback from the commenters regarding the costs associated with administering esketamine. However, we continue to believe that the All Physicians specialty most accurately captures the indirect PE allocation associated with these services. We do not assign a blended combination of specialties for any other services and the commenters did not provide new data to support a change in specialty assignment aside from noting that many providers in the non-facility setting fall within the Psychiatry specialty for both codes. We continue to believe that it would not be accurate to assign the Psychiatry specialty for HCPCS codes G2082 and G2083 due to its outlier status amongst specialties, whereby Psychiatry allocates indirect costs at a 15:1 ratio based on direct costs as compared to most other specialties having approximately a 3:1 ratio. We do not believe that this would be an accurate specialty designation for HCPCS codes G2082 and G2083 given the high direct costs associated with esketamine (which would translate into disproportionately high indirect PE allocation at said 15:1 ratio).

As we noted in the CY 2021 PFS final rule (85 FR 84498 through 84499) and again in this rule, the RAND Corporation is currently studying potential improvements to our PE allocation methodology and the data that underlie it. We are interested in exploring ways that the PE methodology can be updated, which could include improvements to the indirect PE methodology to address unusual codes like G2082 and G2083 which have a direct to indirect ratio that does not match their most commonly billed specialties. Under the current PE methodology, however, we agree with the commenters who supported the proposal to maintain the currently assigned physician specialty (All Physicians) for indirect PE allocation.

After consideration of the public comments, we are finalizing our proposal to maintain the All Physicians specialty for indirect PE allocation for HCPCS codes G2082 and G2083.

A stakeholder contacted us regarding a potential error involving the intraservice work time for CPT code 35860 (Exploration for postoperative hemorrhage, thrombosis or infection; extremity). The stakeholder stated that the RUC recommended an intraservice work time of 90 minutes for this code when it was last reviewed in the CY 2012 PFS final rule and we finalized the work time without refinement at 60 minutes (76 FR 73131). The stakeholder requested that the intraservice work time for CPT code 35860 should be updated to 90 minutes.

We reviewed the intraservice work time for CPT code 35860 and found that the RUC inadvertently recommended a time of 60 minutes for the code, which we proposed and finalized without comment in rulemaking for the CY 2012 PFS. As a result, we do not believe that this is a technical error on our part. However, since the stakeholder has clarified that the RUC intended to recommend 90 minutes of intraservice work time for CPT code 35860 based on the surveyed median time, we proposed to update the intraservice work time to 90 minutes to match the survey results.

We did not receive public comments on our proposal to update the intraservice work time for CPT code 35860, and we are finalizing as proposed.

We did not make any proposals specifically associated with the utilization crosswalk file or public use file as described below, however we received a public comment on these topics from one stakeholder. The following is a summary of the comments we received and our responses.

Comment: One stakeholder contacted CMS identifying what appeared to be duplicate data in the utilization crosswalk file. The stakeholder stated that the first 15,875 rows of the file appeared to almost exclusively contain duplicate lines in sets of two, and requested clarification on whether the utilization file was in error.

Response: Due to a technical error, the utilization for anesthesia services was unintentionally duplicated in the files associated with the proposed rule. We have corrected this error for the final rule and we apologize for any confusion which may have resulted from this inadvertent mistake in the utilization crosswalk file.

Comment: One commenter stated that they believed the public use files contain an error in the clinical labor portion of the PE RVU calculation. The commenter stated that the CY 2022 PE RVU summary file provided the pre-, intra-, and post-service costs for CPT codes 65778 and 65779. The commenter stated that this file showed no cost for pre-service activities or post-service activities, however the accompanying Clinical Labor New Activity Detail public use file showed a series of staff activities associated with CPT codes 65778 and 65779. The commenter requested that CMS review the pre-service and post-service costs and correct or update the clinical labor values for these codes accordingly. The commenter also stated that the patient contact time reflected in the public use file is understated by approximately 50 percent for CPT codes 65778 and 65779 and encouraged CMS to evaluate whether the public use file values should be updated prior to implementation of the PFS for CY 2022.

Response: We reviewed the public use files described by the commenter and we can confirm that there was no error in the calculation of the rates for these services. The clinical labor tasks described by the commenter for CPT codes 65778 and 65779 all take place during the intra-service period, not the pre-service or post-service period, and the Clinical Labor New Activity Detail public use file correctly lists the clinical labor for these services. If the commenter has reason to believe that the clinical labor is undervalued for these services, we encourage them to nominate CPT codes 65778 and 65779 as potentially misvalued for additional review.

c. Updates to Prices for Existing Direct PE Inputs

In the CY 2011 PFS final rule with comment period (75 FR 73205), we finalized a process to act on public requests to update equipment and supply price and equipment useful life inputs through annual rulemaking, beginning with the CY 2012 PFS proposed rule. For CY 2022, we proposed to update the price of six supplies and two equipment items in response to the public submission of invoices. Since this is the final year of the supply and equipment pricing update, the new pricing for each of these supply and equipment items will take effect for CY 2022 as there are no remaining years of the transition. The six supply and equipment items with proposed updated prices are listed in the valuation of specific codes section of the preamble under Table 23, CY 2022 Invoices Received for Existing Direct PE Inputs.

(1) Market-Based Supply and Equipment Pricing Update

Section 220(a) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93, April 1, 2014) provides that the Secretary may collect or obtain information from any eligible professional or any other source on the resources directly or indirectly related to furnishing services for which payment is made under the PFS, and that such information may be used in the determination of relative values for services under the PFS. Such information may include the time involved in furnishing services; the amounts, types and prices of PE inputs; overhead and accounting information for practices of physicians and other suppliers, and any other elements that would improve the valuation of services under the PFS.

As part of our authority under section 1848(c)(2)(M) of the Act, we initiated a market research contract with StrategyGen to conduct an in-depth and robust market research study to update the PFS direct PE inputs (DPEI) for supply and equipment pricing for CY 2019. These supply and equipment prices were last systematically developed in 2004-2005. StrategyGen submitted a report with updated pricing recommendations for approximately 1300 supplies and 750 equipment items currently used as direct PE inputs. This report is available as a public use file displayed on the CMS website under downloads for the CY 2019 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

The StrategyGen team of researchers, attorneys, physicians, and health policy experts conducted a market research study of the supply and equipment items currently used in the PFS direct PE input database. Resources and methodologies included field surveys, aggregate databases, vendor resources, market scans, market analysis, physician substantiation, and statistical analysis to estimate and validate current prices for medical equipment and medical supplies. StrategyGen conducted secondary market research on each of the 2,072 DPEI medical equipment and supply items that CMS identified from the current DPEI. The primary and secondary resources StrategyGen used to gather price data and other information were:

• Telephone surveys with vendors for top priority items (Vendor Survey).
• Physician panel validation of market research results, prioritized by total spending (Physician Panel).
• The General Services Administration system (GSA).
• An aggregate health system buyers database with discounted prices (Buyers).
• Publicly available vendor resources, that is, Amazon Business, Cardinal Health (Vendors).

• The Federal Register , current DPEI data, historical proposed and final rules prior to CY 2018, and other resources; that is, AMA RUC reports (References).

StrategyGen prioritized the equipment and supply research based on current share of PE RVUs attributable by item provided by CMS. StrategyGen developed the preliminary Recommended Price (RP) methodology based on the following rules in hierarchical order considering both data representativeness and reliability.

(1) If the market share, as well as the sample size, for the top three commercial products were available, the weighted average price (weighted by percent market share) was the reported RP. Commercial price, as a weighted average of market share, represents a more robust estimate for each piece of equipment and a more precise reference for the RP.

(2) If no data were available for commercial products, the current CMS prices were used as the RP.

GSA prices were not used to calculate the StrategyGen recommended prices, due to our concern that the GSA system curtails the number and type of suppliers whose products may be accessed on the GSA Advantage website, and that the GSA prices may often be lower than prices that are available to non-governmental purchasers. After reviewing the StrategyGen report, we proposed to adopt the updated direct PE input prices for supplies and equipment as recommended by StrategyGen.

StrategyGen found that despite technological advancements, the average commercial price for medical equipment and supplies has remained relatively consistent with the current CMS price. Specifically, preliminary data indicated that there was no statistically significant difference between the estimated commercial prices and the current CMS prices for both equipment and supplies. This cumulative stable pricing for medical equipment and supplies appears similar to the pricing impacts of non-medical technology advancements where some historically high-priced equipment (that is, desktop PCs) has been increasingly substituted with current technology (that is, laptops and tablets) at similar or lower price points. However, while there were no statistically significant differences in pricing at the aggregate level, medical specialties would experience increases or decreases in their Medicare payments if we were to adopt the pricing updates recommended by StrategyGen. At the service level, there may be large shifts in PE RVUs for individual codes that happened to contain supplies and/or equipment with major changes in pricing, although we note that codes with a sizable PE RVU decrease would be limited by the requirement to phase in significant reductions in RVUs, as required by section 1848(c)(7) of the Act. The phase-in requirement limits the maximum RVU reduction for codes that are not new or revised to 19 percent in any individual calendar year.

We believe that it is important to make use of the most current information available for supply and equipment pricing instead of continuing to rely on pricing information that is more than a decade old. Given the potentially significant changes in payment that would occur, both for specific services and more broadly at the specialty level, in the CY 2019 PFS proposed rule we proposed to phase in our use of the new direct PE input pricing over a 4-year period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 percent (CY 2021), and 100/0 percent (CY 2022) split between new and old pricing. This approach is consistent with how we have previously incorporated significant new data into the calculation of PE RVUs, such as the 4-year transition period finalized in CY 2007 PFS final rule with comment period when changing to the “bottom-up” PE methodology (71 FR 69641). This transition period will not only ease the shift to the updated supply and equipment pricing, but will also allow interested parties an opportunity to review and respond to the new pricing information associated with their services.

We proposed to implement this phase-in over 4 years so that supply and equipment values transition smoothly from the prices we currently include to the final updated prices in CY 2022. We proposed to implement this pricing transition such that one quarter of the difference between the current price and the fully phased-in price is implemented for CY 2019, one third of the difference between the CY 2019 price and the final price is implemented for CY 2020, and one half of the difference between the CY 2020 price and the final price is implemented for CY 2021, with the new direct PE prices fully implemented for CY 2022. An example of the transition from the current to the fully-implemented new pricing is provided in Table 7.

For new supply and equipment codes for which we establish prices during the transition years (CYs 2019, 2020 and 2021) based on the public submission of invoices, we proposed to fully implement those prices with no transition since there are no current prices for these supply and equipment items. These new supply and equipment codes would immediately be priced at their newly established values. We also proposed that, for existing supply and equipment codes, when we establish prices based on invoices that are submitted as part of a revaluation or comprehensive review of a code or code family, they will be fully implemented for the year they are adopted without being phased in over the 4-year pricing transition. The formal review process for a HCPCS code includes a review of pricing of the supplies and equipment included in the code. When we find that the price on the submitted invoice is typical for the item in question, we believe it would be appropriate to finalize the new pricing immediately along with any other revisions we adopt for the code valuation.

For existing supply and equipment codes that are not part of a comprehensive review and valuation of a code family and for which we establish prices based on invoices submitted by the public, we proposed to implement the established invoice price as the updated price and to phase in the new price over the remaining years of the proposed 4-year pricing transition. During the proposed transition period, where price changes for supplies and equipment are adopted without a formal review of the HCPCS codes that include them (as is the case for the many updated prices we proposed to phase in over the 4-year transition period), we believe it is important to include them in the remaining transition toward the updated price. We also proposed to phase in any updated pricing we establish during the 4-year transition period for very commonly used supplies and equipment that are included in 100 or more codes, such as sterile gloves (SB024) or exam tables (EF023), even if invoices are provided as part of the formal review of a code family. We would implement the new prices for any such supplies and equipment over the remaining years of the proposed 4-year transition period. Our proposal was intended to minimize any potential disruptive effects during the proposed transition period that could be caused by other sudden shifts in RVUs due to the high number of services that make use of these very common supply and equipment items (meaning that these items are included in 100 or more codes).

We believed that implementing the proposed updated prices with a 4-year phase-in would improve payment accuracy, while maintaining stability and allowing stakeholders the opportunity to address potential concerns about changes in payment for particular items. Updating the pricing of direct PE inputs for supplies and equipment over a longer timeframe will allow more opportunities for public comment and submission of additional, applicable data. We welcomed feedback from stakeholders on the proposed updated supply and equipment pricing, including the submission of additional invoices for consideration.

We received many comments regarding the market-based supply and equipment pricing proposal following the publication of the CY 2019 PFS proposed rule. For a full discussion of these comments, we direct readers to the CY 2019 PFS final rule (83 FR 59475 through 59480). In each instance in which one commenter raised questions about the accuracy of a supply or equipment code's recommended price, the StrategyGen contractor conducted further research on the item and its price with special attention to ensuring that the recommended price was based on the correct item in question and the clarified unit of measure. Based on the commenters' requests, the StrategyGen contractor conducted an extensive examination of the pricing of any supply or equipment items that any commenter identified as requiring additional review. Invoices submitted by multiple commenters were greatly appreciated and ensured that medical equipment and supplies were re-examined and clarified. Multiple researchers reviewed these specified supply and equipment codes for accuracy and proper pricing. In most cases, the contractor also reached out to a team of nurses and their physician panel to further validate the accuracy of the data and pricing information. In some cases, the pricing for individual items needed further clarification due to a lack of information or due to significant variation in packaged items. After consideration of the comments and this additional price research, we updated the recommended prices for approximately 70 supply and equipment codes identified by the commenters. Table 9 in the CY 2019 PFS final rule lists the supply and equipment codes with price changes based on feedback from the commenters and the resulting additional research into pricing (83 FR 59479 through 59480).

After consideration of the public comments, we finalized our proposals associated with the market research study to update the PFS direct PE inputs for supply and equipment pricing. We continue to believe that implementing the updated prices with a 4-year phase-in will improve payment accuracy, while maintaining stability and allowing stakeholders the opportunity to address potential concerns about changes in payment for particular items. We continue to welcome feedback from stakeholders on the updated supply and equipment pricing, including the submission of additional invoices for consideration.

For CY 2022, we received invoice submissions from stakeholders for approximately half a dozen supply and equipment codes as part of the fourth year of the market-based supply and equipment pricing update. We used these submitted invoices in many cases to supplement the pricing originally proposed for the CY 2019 PFS rule cycle. We reviewed the invoices, as well as our own data for the relevant supply/equipment codes to make sure the item in the invoice was representative of the supply/equipment item in question and aligned with past research. Based on this review, we proposed to update the prices of six supply items listed in the valuation of specific codes section of the preamble under Table 23: CY 2022 Invoices Received for Existing Direct PE Inputs. Since this is the final year of the supply and equipment pricing update, the new pricing for each of these supply and equipment items would take effect immediately for CY 2022.

The proposed prices for the supply and equipment items listed in Table 23 of CY 2022 were generally calculated following our standard methodology of averaging together the prices on the submitted invoices. In the case of the Liquid coverslip (Ventana 650-010) (SL479) supply, we proposed a price of $0.051 based on the median invoice due to the presence of an outlier invoice that substantially increased the pricing when using an average. We believe that the price of $0.051 will be more typical for the SL479 supply based on the pricing information contained on the other submitted invoices. We also received several invoices for the 3C patch system (SD343) supply; however, since we established a price of $625.00 for this supply in last year's CY 2021 PFS final rule and the submitted invoices had an average price of $612.50, we did not propose to update the price. We believe that the submitted invoices confirm that the current pricing of $625.00 is typical for the SD343 supply.

We received public comments on the fourth and final year of the market-based supply and equipment pricing update. The following is a summary of the comments we received and our responses.

Comment: One commenter urged CMS to update prices for negative pressure wound therapy (NPWT) devices given the context of the clinical labor pricing update. The commenter stated that while one database reported typical costs of $400-$600 for single-use disposable NPWT devices, further prices provided by a medical equipment distributor show lower costs incurred by providers paying for PICO, Smith+Nephew's single-use disposable NPWT device. The commenter submitted five invoices for the negative pressure wound therapy, disposable kit (SA131) supply and stated that these updated prices for single-use NPWT devices could be used in future updates of direct cost inputs, which would strengthen the accuracy of Medicare pricing.

Response: We appreciate the submission of invoices from the commenter to update the pricing of the SA131 supply. This kit is currently priced at $208 and we are finalizing an update to a price of $263.25 based on the median of the five submitted invoices from one commenter. We believe that the median value is more reflective of the typical price than the average value as there was a clear outlier amongst the five invoice prices ($248.33, $252.00, $263.25, $284.50, and $340.20).

Comment: Several commenters stated their concerns regarding significant price reductions for several types of radiation therapy equipment: The IMRT treatment planning system (ED033), the HDR Afterload System Nucletron—Oldelft (ER003), and the SRS system SBRT (ER083). Commenters stated that they appreciated CMS' efforts to acquire current pricing information but believed that the recommended prices for these equipment items are below industry standards. Commenters stated that undervaluing equipment inputs has the potential to create access to care issues and potentially reduce the utilization of services that provide high quality patient outcomes.

Response: Although we share the concerns of the commenters about the importance of ensuring accuracy in pricing and beneficiary access to care, the commenters did not submit invoices or provide any other pricing information for the three equipment items in question. In the absence of other pricing data, we continue to believe that the equipment pricing we established for these items based on our past market-based research reflects the most accurate information for the equipment items in question.

Comment: An anonymous commenter submitted an invoice that they stated could be used to update the pricing of the endovascular laser treatment kit (SA074) supply. The commenter stated that the PE may be overvalued for CPT code 36478, and the cost of $205.00 per kit detailed in this invoice may be more accurately reflective of SA074 kit costs.

Response: We appreciate the invoice submission from the anonymous commenter. The SA074 supply has a current CY 2022 price of $438.60 based on invoices submitted in last year's CY 2021 rulemaking cycle. The new invoice submission is less than half of this price, and when we compared the specific kit in question on the invoices, they described two different products. The CY 2021 invoices described a 65 cm kit while the CY 2022 invoice described a 45 cm version of the same kit. We believe that this explains the disparity in pricing between the different invoices. Since it is unclear to us which of these two products is more typical for use in CPT code 36478, we are maintaining the current CY 2022 price of $438.60 pending availability of additional information. We encourage stakeholders to submit additional invoices to assist in the pricing of the SA074 supply. These invoices can be submitted with public comments in next year's CY 2023 rulemaking cycle or, if outside the notice and comment rulemaking process, via email at PE_Price_Input_Update@cms.hhs.gov.

Comment: One commenter requested that CMS establish a national physician payment rate for Category III CPT code 0583T, also known as tympanostomy under local anesthesia (Tula). The commenter stated that this device-intensive procedure has inappropriately low physician MAC-posted rates resulting from crosswalks to ENT codes that do not involve use of single-use implantable medical devices provided in the physician office setting. The commenter suggested work RVUs and direct PE inputs for Category III code 0583T to be used in national pricing of the service, and separately submitted six invoices showing prices paid by physicians for the tympanostomy under local anesthesia (Tula) implantable device and related supplies. The commenter requested a price of $995 for the Tula implantable device.

Response: We appreciate the submission of invoices and other pricing information from the commenter regarding Category III CPT code 0583T, but we did not propose to establish national pricing for this service. Category III CPT codes are typically contractor priced since they describe new and emerging technologies. We will review the materials provided by the commenter for potential use in future rulemaking; however, we are not finalizing national pricing for Category III CPT code 0583T or establishing a price for the Tula implantable device at this time.

After consideration of the public comments, we are finalizing the supply and equipment prices as detailed individually above. We note that the supply and equipment prices finalized for CY 2022 represent the fourth and final year of the market-based supply and equipment pricing update.

(2) Invoice Submission

The full list of updated supply and equipment pricing as implemented over the 4-year transition period will be made available as a public use file displayed on the CMS website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

We routinely accept public submission of invoices as part of our process for developing payment rates for new, revised, and potentially misvalued codes. Often these invoices are submitted in conjunction with the RUC-recommended values for the codes. To be included in a given year's proposed rule, we generally need to receive invoices by the same February 10th deadline we noted for consideration of RUC recommendations. However, we will consider invoices submitted as public comments during the comment period following the publication of the PFS proposed rule, and would consider any invoices received after February 10th or outside of the public comment process as part of our established annual process for requests to update supply and equipment prices. Stakeholders are encouraged to submit invoices with their public comments or, if outside the notice and comment rulemaking process, via email at PE_Price_Input_Update@cms.hhs.gov.

(3) Autologous Platelet-Rich Plasma (HCPCS Code G0460) Supply Inputs

We did not make any proposals associated with HCPCS code G0460 ( Autologous platelet rich plasma for chronic wounds/ulcers, including phlebotomy, centrifugation, and all other preparatory procedures, administration and dressings, per treatment ) in the CY 2021 PFS proposed rule. Following publication of the rule, stakeholders contacted CMS regarding the creation of a new 3C patch system supply, which is topically applied for the management of exuding cutaneous wounds, such as leg ulcers, pressure ulcers, and diabetic ulcers and mechanically or surgically-debrided wounds. Stakeholders first sought clarification on how CMS calculated the underlying nonfacility PE RVUs for HCPCS code G0460. Stakeholders also stated that autologous platelet rich plasma administration procedures furnished in clinical trials (including the new 3C patch system) are reported using HCPCS code G0460 and requested that CMS revalue the service to reflect the PEs associated with the new patch system supply. The stakeholders stated that the use of the new 3C patch system will represent the typical case for HCPCS code G0460, and suggested that, therefore, the cost inputs for this supply should be used to establish the RVUs for this code, as the current PFS payment rate is substantially less than the amount it costs to furnish the 3C patch.

We want to clarify that the direct PE inputs for HCPCS code G0460 increased for CY 2021 as a result of the ongoing market-based supply and equipment pricing update. However, there was also a minor decrease in the indirect PE allocation associated with this service for CY 2021, with the net result that the proposed PE RVU coincidentally ended up remaining the same as in the previous year. We also clarify that HCPCS code G0460 is not included in the Anticipated Specialty Assignment for Low Volume Services list, and therefore, was unaffected by low utilization in the claims data. In addition, as a contractor priced service, HCPCS code G0460 is unaffected by inclusion or exclusion from this list.

We share the concerns of the stakeholders that patient access to the 3C patch could be materially impacted if CMS maintains the current PE RVUs for HCPCS G0460. In the CY 2021 PFS final rule, we established contractor pricing for HCPCS code G0460 for CY 2021. We believe that the use of contractor pricing again for CY 2022 will allow us additional time to consider the most appropriate resource inputs and PE RVUs for HCPCS code G0460. We also added the 3C patch system to our supply database under supply code SD343 at a price of $625.00 based on an average of the submitted invoices. We proposed to maintain contractor pricing for CY 2022 for HCPCS code G0460 as we do not currently have sufficient information to establish national pricing. It remains unclear to us what the typical supply inputs would be for HCPCS code G0460 and whether they would include the use of the new 3C patch system. We believe that it would be more appropriate to maintain contractor pricing for the service, which will allow for more flexibility in pricing. We solicited any additional information that commenters can supply that CMS should consider to establish national payment for HCPCS code G0460.

We did not receive public comments on this proposal and are finalizing contractor pricing for HCPCS code G0460 for CY 2022 as proposed.

d. Clinical Labor Pricing Update

Section 220(a) of the PAMA provides that the Secretary may collect or obtain information from any eligible professional or any other source on the resources directly or indirectly related to furnishing services for which payment is made under the PFS, and that such information may be used in the determination of relative values for services under the PFS. Such information may include the time involved in furnishing services; the amounts, types and prices of PE inputs; overhead and accounting information for practices of physicians and other suppliers, and any other elements that would improve the valuation of services under the PFS.

Since 2019, we have been updating the supply and equipment prices used for PE as part of a market-based pricing transition; CY 2022 will be the final year of this 4-year transition. We initiated a market research contract with StrategyGen to conduct an in-depth and robust market research study to update the supply and equipment pricing for CY 2019, and we finalized a policy in CY 2019 to phase in the new pricing over a period of 4 years. However, we did not propose to update the clinical labor pricing, and the pricing for clinical labor has remained unchanged during this pricing transition. Clinical labor rates were last updated for CY 2002 using Bureau of Labor Statistics (BLS) data and other supplementary sources where BLS data were not available; we refer readers to the full discussion in the CY 2002 PFS final rule for additional details (66 FR 55257 through 55262).

Stakeholders have raised concerns that the long delay since clinical labor pricing was last updated has created a significant disparity between CMS' clinical wage data and the market average for clinical labor. In recent years, a number of stakeholders have suggested that certain wage rates are inadequate because they do not reflect current labor rate information. Some stakeholders have also stated that updating the supply and equipment pricing without updating the clinical labor pricing could create distortions in the allocation of direct PE. Since the pool of aggregated direct PE inputs is budget neutral, if these rates are not routinely updated, clinical labor may become undervalued over time relative to equipment and supplies, especially since the supply and equipment prices are in the process of being updated. There has been considerable stakeholder interest in updating the clinical labor rates, and when we solicited comment on this topic in past rules, such as in the CY 2019 PFS final rule (83 FR 59480), stakeholders supported the idea.

Therefore, we proposed to update the clinical labor pricing for CY 2022, in conjunction with the final year of the supply and equipment pricing update. We believe it is important to update the clinical labor pricing to maintain relativity with the recent supply and equipment pricing updates. We proposed to use the methodology outlined in the CY 2002 PFS final rule (66 FR 55257), which draws primarily from BLS wage data, to calculate updated clinical labor pricing. As we stated in the CY 2002 PFS final rule, the BLS' reputation for publishing valid estimates that are nationally representative led to the choice to use the BLS data as the main source. We believe that the BLS wage data continues to be the most accurate source to use as a basis for clinical labor pricing and this data will appropriately reflect changes in clinical labor resource inputs for purposes of setting PE RVUs under the PFS. We used the most current BLS survey data (2019) as the main source of wage data for this proposal.

We recognize that the BLS survey of wage data does not cover all the staff types contained in our direct PE database. Therefore, we crosswalked or extrapolated the wages for several staff types using supplementary data sources for verification whenever possible. In situations where the price wages of clinical labor types were not referenced in the BLS data, we have used the national salary data from the Salary Expert, an online project of the Economic Research Institute that surveys national and local salary ranges and averages for thousands of job titles using mainly government sources. (A detailed explanation of the methodology used by Salary Expert to estimate specific job salaries can be found at www.salaryexpert.com ). We previously used Salary Expert information as the primary backup source of wage data during the last update of clinical labor pricing in CY 2002. If we did not have direct BLS wage data available for a clinical labor type, we used the wage data from Salary Expert as a reference for pricing, then crosswalked these clinical labor types to a proxy BLS labor category rate that most closely matched the reference wage data, similar to the crosswalks used in our PE/HR allocation. For example, there is no direct BLS wage data for the Mammography Technologist (L043) clinical labor type; we used the wage data from Salary Expert as a reference and identified the BLS wage data for Respiratory Therapists as the best proxy category. We calculated rates for the “blend” clinical labor categories by combining the rates for each labor type in the blend and then dividing by the total number of labor types in the blend.

As in the CY 2002 clinical labor pricing update, the proposed cost per minute for each clinical staff type was derived by dividing the average hourly wage rate by 60 to arrive at the per minute cost. In cases where an hourly wage rate was not available for a clinical staff type, the proposed cost per minute for the clinical staff type was derived by dividing the annual salary (converted to 2021 dollars using the Medicare Economic Index) by 2080 (the number of hours in a typical work year) to arrive at the hourly wage rate and then again by 60 to arrive at the per minute cost. To account for the employers' cost of providing fringe benefits, such as sick leave, we used the same benefits multiplier of 1.366 as employed in CY 2002. As an example of this process, for the Physical Therapy Aide (L023A) clinical labor type, the BLS data reflected an average hourly wage rate of $14.03, which we multiplied by the 1.366 benefits modifier and then divided by 60 minutes to arrive at the proposed per-minute rate of $0.32.

Table 8 lists our updates to the clinical labor prices. The BLS occupational code used as a source of wage data is listed for each clinical labor type; for the “blend” clinical labor types, this may include multiple BLS occupational codes and other clinical labor types which were calculated separately and then averaged together. Clinical labor types without a direct BLS labor category where we are employing a proxy BLS wage rate are indicated with an asterisk in Table 8.

We proposed to use the 75th percentile of the average wage data for the Medical Physicist (L152A) clinical labor type because we believe this level will most closely fit with the historic wage data for this clinical labor type. A Medical Physicist is a specific type of physicist, and the available BLS wage data describes the more general category of physicist which is paid at a lower rate. In this specific case, the 75th percentile more accurately describes the clinical labor type in question based on how it has historically been paid. We also proposed to maintain the current clinical labor pricing for the Behavioral Health Care Manager (L057B) clinical labor type rather than update it. Although the BLS data reflected a decreased clinical labor rate for the Behavioral Health Care Manager labor type, we do not believe that the typical wages have decreased for this clinical labor type given that every other clinical labor type has increased over the past 5 years since the Behavioral Health Care Manager clinical labor type was created. The Behavioral Health Care Manager labor type was initially established in the CY 2017 PFS final rule (81 FR 80350). It seems more likely that we misidentified the proper BLS category for this clinical labor type than that wages have decreased since 2017. We believe that the clinical labor rate for the Behavioral Health Care Manager should be held constant for CY 2022 pending additional public feedback.

We solicited comments on the updated clinical labor pricing. We were particularly interested in additional wage data for the clinical labor types for which we lacked direct BLS wage data and made use of proxy labor categories for pricing. We understand that the clinical labor undertaken by, for example, a Histotechnologist (L037B) is not the same as the clinical labor provided by the Health Information Technologist category of BLS wage data that we employed as a proxy for pricing. Although these occupations are not directly analogous to each other in terms of the work they do, we nonetheless believe that the proposed crosswalks are appropriate in terms of the resulting hourly wage data. We indicated that we would appreciate any additional information that commenters could supply both in terms of direct wage data, as well as identifying the most accurate types of BLS categories that could be used as proxies to update pricing for clinical labor types that lack direct BLS wage data. We isolated the anticipated effects of the clinical labor pricing update on specialty payment impacts by comparing the proposed CY 2022 PFS rates with and without the clinical labor pricing updates in place as shown in Table 9.

The potential effects of the clinical labor pricing update on specialty payment impacts were largely driven by the share that labor costs represent of the direct PE inputs for each specialty. Specialties with a substantially lower or higher than average share of direct costs attributable to labor would experience significant declines or increases, respectively, if this proposal is finalized. For example, the Family Practice specialty had a higher share of direct costs associated with clinical labor, and payments to services comprising the specialty would be expected to increase as a result of this clinical labor pricing update. In contrast, Diagnostic Testing Facilities had a lower share of direct costs that are associated with clinical labor, and payments to services comprising the specialty would be expected to decrease. Other specialty-level payment impacts for the proposed clinical labor pricing changes were driven by changes in wage rates for a clinical labor category that affects a given specialty more than average. One such example would be the proposed increase of 11 percent for Oncology nurses as opposed to the average increase for nurses of 63 percent. We emphasized that these are not the projected impacts by specialty of all the policies we proposed in the proposed rule for CY 2022, only the anticipated effect of the isolated clinical labor pricing update, should this clinical labor pricing update be finalized as proposed.

When updates to our payment methodology based on new data produce significant shifts in payment, we often consider whether it would be appropriate to implement the updates through a phased transition across several calendar years. For example, we utilized a 4-year transition for the market-based supply and equipment pricing update concluding in CY 2022. We are considering the use of a similar 4-year transition to implement the clinical labor pricing update. A multi-year transition could smooth out the increases and decreases in payment caused by the pricing update for affected stakeholders, promoting payment stability. However, a phased transition would delay the full implementation of updated pricing and continue to rely in part on outdated data for clinical labor pricing. We discuss a potential 4-year transition for the clinical labor pricing update as an alternative considered in the Regulatory Impact Analysis (section VI.I of this final rule).

We received public comments on our proposal to update the clinical labor pricing. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to update the clinical labor pricing. Commenters overwhelmingly agreed that the BLS was the most accurate source of wage data and the best source to use for updating the clinical labor pricing. Commenters stated that CMS needs recurring and accurate sources of data to keep PE RVUs up to date and that such data sources should capture the prices of equipment and supplies, wage rates for clinical staff, the types and quantities of direct PE inputs, and specialties' practice costs. Commenters stated that inaccurate prices for PE inputs could lead to distortions in the PE RVUs; for example, updating prices for equipment and supplies but not clinical labor could lead to undervaluing of services that use a high share of clinical labor. Several commenters stated that, after almost 20 years, an update to clinical labor pricing was long overdue. Several commenters urged CMS to update the prices for clinical labor immediately because inaccurate payment rates distort the market for clinician services and further prolonging the necessary improvement in CMS' PE RVU methodology will result in additional, unnecessary delays for an already overdue pricing update. These commenters recognized that this update may negatively impact certain specialties and procedures, but stated that the lack of pricing updates has likely disadvantaged services that rely heavily on clinical labor, such as family medicine, for several years.

Response: We appreciate the support for our proposed policies from the commenters.

Comment: Many commenters supported the proposal to update the clinical labor pricing, but stated that the update should be phased in using a 4-year transition. Commenters stated that the use of a 4-year transition would be consistent with previous PE updates such as the market-based supply and equipment pricing update and the implementation of the bottom-up PE methodology. Commenters stated that the phased in approach would help minimize the reimbursement reductions to specific services which rely heavily on supply and equipment costs that otherwise could prove detrimental to Medicare beneficiary access to services. Commenters stated that these PE decreases coupled with the 3.75 percent reduction in the conversion factor resulting from the expiration of the temporary increase provided under the CY 2021 Consolidated Appropriations Act are difficult for practices to absorb as the country struggles to contain the COVID-19 pandemic, and that mitigating the effects of the clinical labor pricing update through the use of a 4-year transition would help maintain payment stability.

Response: We appreciate the support for the proposed clinical labor update from the commenters, with the additional request that we implement it using a 4-year transition. After consideration of the comments, we agree that the use of a multi-year transition will help smooth out the changes in payment resulting from the clinical labor pricing update, avoiding potentially disruptive changes in payment for affected stakeholders, and promoting payment stability from year-to-year. We believe it would be appropriate to use a 4-year transition, as we have for several other broad-based updates or methodological changes. While we recognize that using a 4-year transition to implement the update means that we will continue to rely in part on outdated data for clinical labor pricing until the change is fully completed in CY 2025, we agree with the commenters that these significant updates to PE valuation should be implemented in the same way, and for the same reasons, as for other major updates to pricing such as the recent supply and equipment update. We believe that the use of a 4-year transition in implementing the clinical labor pricing update will help to maintain payment stability, particularly given the ongoing public health emergency (PHE) for COVID-19.

We are finalizing the implementation of the clinical labor pricing update over 4 years to transition from current prices to the final updated prices in CY 2025. We considered, as an alternative to our proposal, implementing this pricing transition over 4 years, such that one quarter of the difference between the current price and the fully phased-in price is implemented for CY 2022, one third of the difference between the CY 2022 price and the final price is implemented for CY 2023, and one half of the difference between the CY 2023 price and the final price is implemented for CY 2024, with the new direct PE prices fully implemented for CY 2025. An example of the transition from the current to the fully-implemented new pricing that we are finalizing is provided in Table 10.

Comment: A few commenters requested the use of a 2-year transition as a timetable that they stated would be more equitable to all impacted providers. These commenters stated that if a 2-year timetable was not feasible, they would support a 4-year transition over a 1-year transition.

Response: While we appreciate the support from the commenters for the proposed clinical labor pricing update and the suggestion from some that we use a 2-year transition, we believe that a 4-year transition, which is consistent with the way we have implemented prior significant updates to resource input pricing and the PE methodology, would meet the need to update clinical labor pricing while providing the health care provider community time to adjust to the resulting shifts in payments, especially during the ongoing PHE.

Comment: Many commenters disagreed with the proposal to update clinical labor pricing and urged that the policy should not be finalized, with or without a 4-year transition. These commenters objected to proposed reductions in payment for many types of services, such as but not limited to services in the fields of radiation oncology, peripheral arterial disease, PT/INR home monitoring, flow cytometry, cardiovascular disease, and many others. Commenters stated that the clinical labor pricing update will limit access to care for Medicare patients and will force many Medicare beneficiaries into the facility-based system at a significantly higher cost to the Medicare program and its patients. Commenters stated that this shift in care to the facility-based hospital settings will cause great burdens on an already overwhelmed hospital system, exacerbate market consolidation, and will adversely affect physicians' ability to provide the right care to the right patient at the right time. Commenters stated that patients may have to travel farther and wait longer for care, as well as pay more out-of-pocket since every single case shifted to the facility setting means higher cost-sharing for the affected beneficiary. Commenters emphasized the benefits of office-based care for a variety of services and argued that clinical labor pricing should not be updated as we proposed to help maintain access to office-based care. Several commenters stated that the proposed decrease in payment for certain services will disproportionately affect women's health and racial minorities, with a negative impact on some of the most vulnerable of Medicare's beneficiaries.

Response: We share the concerns expressed by the commenters about the need to ensure continued access to quality and affordable care for all beneficiaries, in both the office and hospital settings. Under section 1848 of the Act, we are required to base payment for services under the PFS on relative resource costs. To accomplish that, it is necessary periodically to update the information on which we base relative values. We believe, and commenters overwhelmingly agreed, that the BLS wage data is the best source to use for clinical labor pricing, and commenters did not identify alternative sources of data that could be used to update pricing. Although we recognize that payment for some services will be reduced as a result of the pricing update due to the BN requirements of the PFS, we do not believe that this is a reason to refrain from updating clinical labor pricing to reflect changes in resource costs over time as suggested by some commenters. There are also other services, such as those primarily furnished by family practice and internal medicine specialties, that will be positively affected by the pricing update, which we anticipate will increase access to care for disadvantaged groups such as women and racial minorities. We also note that for many services that involve proportionally more clinical labor, payment rates were reduced as a result of the prior market-based supply and equipment pricing update, and payment rates will increase with the clinical labor pricing update, due to the same PFS BN requirements. We believe that the ongoing trend of market consolidation and site of service differentials highlight the need to update the overall PE data comprehensively, including a full accounting of indirect/overhead costs, to account for current trends in the delivery of health care, especially with regard to independent versus facility-based practices. We believe that CMS efforts to improve pricing accuracy would improve the sustainability of the Medicare PFS and the broader health system, improve access to care, and reduce inequitable disparities. We believe that the use of a 4-year transition in implementing the clinical labor pricing update will help to maintain payment stability and mitigate potential negative effects on healthcare providers by gradually phasing in the changes over a period of time. We believe that this transition period is also important given that the PHE for COVID-19 is ongoing and industry recovery is likely to take time.

Comment: Many commenters discussed the direct scaling factor used in the calculation of PE RVUs. Commenters stated that updating the clinical labor rates is estimated to increase direct PE costs by 30 percent which would equate to approximately $3.5 billion in total additional direct costs. Commenters noted that the direct scaling factor was proposed to decrease by 24 percent as a result, from 0.5916 in 2021 to 0.4468 in 2022, with the net effect that Medicare will now reimburse 44 cents on the dollar instead of 59 cents on the dollar for direct costs. Commenters stated that many services require the use of expensive supplies with considerable capital costs that need to be stocked and readily available. Commenters stated that they did not believe the cost of this labor rate update should be borne disproportionately by equipment and supply-heavy services, which are the services least able to accommodate sharp and sudden payment reductions since equipment costs are fixed. Many commenters stated that the proposed policy would place a huge and unfair burden on specialties that require expensive supplies and equipment; commenters stated that the high costs of maintaining this equipment remain the same whether or not the equipment is used. Commenters stated that the proposed policy would result in wildly fluctuating shifts in reimbursement, violating a core principle of the resource-based relative value system which is to stabilize RVUs and reduce fluctuations in year-to-year payments. Commenters stated that if payments change drastically, there is no way to accommodate those shifts through operating expenses without cuts elsewhere, including to staff and services offered. Commenters stated that CMS should explore options to adjust the scaling factor(s) in order to more appropriately reimburse for expenses incurred to treat their beneficiaries.

Response: We appreciate the estimate provided by commenters of the additional spending on direct costs as a result of the proposed clinical labor pricing update. However, we disagree with the commenters that updating the clinical labor pricing to make use of current wage data constitutes an unfair burden or has an inappropriate disproportionate impact on certain services. The PFS is a resource-based relative value payment system that necessarily relies on accuracy in the pricing of resource inputs. Continuing to use clinical labor cost data that are nearly 2 decades old would create distortions in relativity that undervalue many services which involve a higher proportion of clinical labor. As noted previously, payment for services that involve a higher proportion of clinical labor resources was negatively affected by the prior market-based supply and equipment pricing update as a result of the same BN requirements and will now be positively affected by the clinical labor pricing update. We do not agree that updates to pricing for the three categories of direct PE (clinical labor, supplies and equipment), create an unfair burden for individual services. We do agree with commenters that the impact of the proposed clinical labor pricing update is substantial, which is why we believe it is appropriate to use a 4-year transition to implement the pricing update. We believe the use of this transition will help address the concerns of the commenters about stabilizing RVUs and reducing large fluctuations in year-to-year payments.

Comment: Several commenters requested that CMS maintain the CY 2021 direct scaling factor of 0.5916 if the agency chooses to finalize the clinical labor pricing update.

Response: Under our current PE methodology, we calculate a direct PE scaling adjustment to ensure that the aggregate pool of direct PE costs does not vary from the aggregate pool of direct PE costs for the current year. (This calculation is described in more detail in the “PE RVU Methodology” section earlier in this rule.) In other words, the direct scaling adjustment ensures that the share of direct PE remains constant from year to year. If we continued to maintain the direct scaling factor from a previous calendar year, without making any adjustment to account for the total direct costs increasing as a result of the clinical labor pricing update, the amount of PFS spending allocated to direct PE would increase at the expense of all other spending. This would negatively affect the valuation of many services that have few or no direct PE inputs. It would also result in a substantial negative adjustment to the conversion factor under the statute's BN requirements as the total number of PE RVUs would increase and would need to be offset through the conversion factor. We do not agree that it would be appropriate to maintain the direct scaling factor from a previous calendar year; we did not propose to update our PE methodology and we are not finalizing any changes in the methodology.

Comment: Several commenters suggested that CMS spread the cost of the clinical labor update across both the direct and indirect PE pools. Commenters stated that this suggestion would allocate approximately 27 percent of the additional costs to the direct cost pool and 73 percent to the indirect cost pool. Commenters stated that this change would result in minimal changes in allowed charges for specialties such as general practice and family medicine, as compared with the changes that would result from the proposed approach.

Response: We disagree with the commenters that it would be appropriate to spread the increased spending from the clinical labor pricing update across both the direct and indirect PE pools, as opposed to solely the direct pool as proposed. This suggested change to the PE methodology would have an effect similar to continuing to maintain the direct scaling factor from previous calendar years, that is, the amount of PFS spending allocated to direct PE would increase at the expense of all other spending. In particular, services that have a higher proportion of indirect PE would be negatively affected as increases in the direct PE pool would be subsidized by the indirect PE pool. We do not believe that this would appropriately carry out the statute's directive to value services based on relative resource costs. We did not propose to update our PE methodology and we are not finalizing any changes in the methodology.

Comment: Several commenters suggested that CMS consider scaling the clinical labor and equipment/supply components of the direct PE pool separately. Commenters stated that based on the CY 2014 PFS final rule, it appeared that the clinical labor component of the pool should be weighted at 4.636 percent of PFS expenditures, and should not exceed about 66 percent of the direct cost pool.

Response: We disagree with the commenter that the three components of direct PE (clinical labor, supplies, and equipment) should be should be scaled separately instead of together. This would have the effect of freezing the portion of direct PE allocated to each of the three components; if we were to make this change to the PE methodology, updating the clinical labor pricing would not allocate any additional valuation to clinical labor at all. It would merely shift the relationship between the individual clinical labor types as they were re-priced. The clinical labor component of direct PE has not been updated since 2002, while supply and equipment pricing has been updated more recently. The commenters' suggested change to the PE methodology would lock in place the relativity between direct PE components at a particular time. We believe that this would be inconsistent with the statute's directive to value services based on relative resource costs. As noted above, we did not propose to modify our PE methodology, and we are not finalizing any changes in the methodology.

Comment: Several commenters stated that they had performed an analysis suggesting that the proportion of PFS expenditures allocated to direct PE may have shrunk from the proportion adopted in 2014. Commenters requested that CMS examine whether, and to what extent, the total PE pool has been reduced over time, and, if so, requested that it be restored.

Response: As explained above, the direct scaling adjustment ensures that the share of direct PE (and therefore, also indirect PE) remains constant from year to year. We can confirm for the commenters that our application of BN adjustments, which is required by statute, has maintained the total PE pool over time.

Comment: Several commenters referred to the decrease in the direct scaling factor and stated that this would cause huge second order effects that are not being considered by CMS. Commenters stated that the result would be a PFS that is ever more out of touch with reality as conversion factors, direct adjustment factors, and other factors make the PFS less and less reflective of what it actually takes to provide services in the office.

Response: We disagree with the commenters that our proposed clinical labor update makes the PFS less reflective of the real-world cost of providing services. We believe that updating clinical labor rates to reflect current pricing has the opposite effect, appropriately improving recognition of current clinical labor costs in the PFS methodology.

Comment: Several commenters stated that the PPIS data which underlie the share of PE allocated to direct PE and indirect PE are outdated, and that it was unreasonable to cap updated direct costs based on direct/indirect cost splits from 2006. Commenters stated that if the updated clinical labor pricing had been in effect in 2006, then direct costs undoubtedly would have constituted a larger proportion of the overall PE pool.

Response: We have no doubt that if the clinical labor pricing in 2006 had been based on BLS wage data from 2019, direct costs would have constituted a larger proportion of the overall PE pool. However, it is inappropriate to make use of wage data from 2019 and compare it to the direct/indirect cost splits from 2006 without also acknowledging that indirect costs such as administrative expenses and office rent have also greatly increased over the intervening span of time. While we share the concerns of the commenters that the PPIS data used in the PE methodology date back more than a decade, we have no evidence at present to indicate that direct costs have increased faster than indirect costs since 2006, or vice versa. As we noted in the CY 2021 PFS final rule (85 FR 84498 through 84499) and again in this rule, the RAND corporation is currently studying potential improvements to our PE allocation methodology and the data that underlie it. We are interested in exploring ways that the PPIS data can be updated; however, we do not believe that this constitutes a reason to refrain from updating the clinical labor pricing.

Comment: Several commenters referenced the BN requirements for the PFS that are included in the statute. Commenters stated that no adjustments to the $20 million threshold for BN have been made to account for new technology in over 30 years. Commenters stated that CMS should publish how the annual $20 million restriction on changes to expenditures could have played a role in the clinical labor updates.

Response: Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases in RVUs may not cause the amount of expenditures for the year to differ by more than $20 million from what expenditures would have been in the absence of these changes. If this threshold is exceeded, we make adjustments to preserve BN. As this is a statutory requirement of the PFS, we are required by law to apply BN adjustments to offset the spending impact of any changes exceeding $20 million; given the roughly $100 billion in spending associated with the PFS, this threshold is exceeded each calendar year by a wide margin. A BN adjustment would be avoided only if updating the clinical labor pricing failed to reach this $20 million threshold. We found that the estimated effect of the proposed clinical labor pricing update was approximately $3.5 billion, with our analysis matching the figure supplied by commenters, which far exceeds the $20 million threshold. Therefore, we were required by statute to make BN adjustments to reflect the expected effects of the clinical labor pricing update. We also note that as the BN requirement is statutory in nature, we do not have discretion to adjust it for new technology or other changes that may have taken place.

Comment: Several commenters urged CMS to use its discretion to waive BN in implementing the proposed update to clinical labor pricing. Other commenters urged CMS to hold harmless the specialties that are bearing the brunt of this proposal and consider alternative ways to update clinical labor pricing. Several commenters stated that updated clinical labor pricing should not be done within the confines of a budget neutral system, unless there were concomitant inflationary updates to the entire fee schedule.

Response: As mentioned above, BN adjustments are a statutory requirement of the PFS. We do not have discretion within the terms of the statute to waive BN or hold individual specialties harmless in implementing the clinical labor pricing update.

Comment: One commenter stated that while CMS has broad discretion to determine and adjust RVUs for physician services, CMS cannot make arbitrary changes to RVUs. The commenter stated that CMS must give a reasoned explanation for adjustments it makes for certain codes, and those explanations must relate to the relative resource use for a particular service. The commenter stated that the requirement to maintain BN does not authorize the agency to ignore the general rule that RVUs, and their individual components, must be based on relative resource use. The commenter stated that unless CMS can articulate how the relative cost of the other PE inputs—like supplies and medical equipment—has gone down, the agency is not authorized to decrease the value of those inputs. The commenter stated that CMS is only authorized to apply a BN adjustment across all RVUs and the BN provisions do not authorize CMS to manipulate the inputs to the two RVU components.

Response: We disagree with the commenter that we have proposed arbitrary changes to the valuation of individual services; we detailed the methodology behind our proposed clinical labor pricing update and provided an opportunity for commenters to submit feedback through notice and comment rulemaking. We believe that updating the clinical labor pricing makes the relative resource use basis dictated by the statute more accurate, not less accurate, for the valuation of services. While the relative resource cost of the other non-clinical labor direct PE inputs, such as supplies and equipment, would in fact decrease for CY 2022 based on our proposed update to clinical labor pricing, they have only decreased in relative terms because the PFS is based on the use of RVUs as part of a budget neutral methodology. We note again that the use of a 4-year transition in implementing the clinical labor pricing update should help to mitigate potential negative effects of these shifts in relative resource costs by spreading them out over a longer period of time.

Comment: Several commenters stated that the specialty impacts tables isolating the effects of the clinical labor pricing update in the CY 2022 PFS proposed rule were misleading. Commenters stated that in reality the negative impact for many services was much greater than displayed on these tables. Commenters stated that it would be more transparent to share impacts for individual services when they had a potentially large negative effect on providers of office-based procedures with high supply and equipment costs.

Response: Although we share the concerns of commenters regarding the importance of providing transparency in the published data, we disagree that the specialty impacts tables included in the CY 2022 PFS proposed rule were misleading, or that commenters lacked sufficient information about the pricing of individual services. We noted in the CY 2022 PFS proposed rule (86 FR 39532) that the impact tables are for illustrative purposes for aggregate impacts on specialties, and are not meant to be code specific; therefore, they are averages, and may not necessarily be representative of what is happening to the particular services furnished by a single practitioner within any given specialty. This has been a feature of the specialty impact tables published in the PFS for many years, and we believe it is generally well understood by stakeholders. We also note that the proposed RVUs for every HCPCS code were published in Addendum B as part of the CY 2022 PFS proposed rule to allow stakeholders the opportunity to provide comment on the proposed valuations for each code. Due to the thousands of HCPCS codes affected by the clinical labor pricing update, we did not publish a service-level analysis of the pricing update in the preamble, but did include this information in Addendum B for consideration by stakeholders. We will consider suggestions to improve the information available to stakeholders for future rulemaking.

Comment: Many commenters noted that 14 of the 32 clinical labor staff types had proposed valuations using a BLS crosswalk because an exact match was not available. Commenters stated that to maintain transparency CMS should publish the “other sources” wage data details for these clinical labor types. Commenters stated that CMS should update specific clinical labor wage rates based on stakeholder comments and data.

Response: We agree with the commenters that stakeholder comments and data will be valuable in updating the clinical labor pricing, and we share the concerns of the commenters regarding transparency in the data used for pricing. As we stated in the proposed rule, we used the national salary data from the Salary Expert as a reference for pricing, then crosswalked these clinical labor types to a proxy BLS labor category rate that most closely matched the reference wage data. For example, there is no direct BLS wage data for the Mammography Technologist (L043) clinical labor type; we used the wage data from Salary Expert for Mammography Technologists as a reference and identified the BLS wage data for Respiratory Therapists as the best proxy category. In the interest of transparency, Table 11 lists the Salary Expert wage data used for the clinical labor types which did not have direct BLS matches.

Comment: Many commenters stated that CMS proposed to utilize the mean wage data to establish updated clinical labor rates, while the majority of the data inputs for the PFS are based on the median value. Commenters used as an example how RUC recommendations for work RVUs, work times, and direct PE inputs were based on the median or typical case. Commenters requested that CMS use the median wage data, instead of mean wage data, to more accurately capture typical wage rates and to be consistent with the median statistic used for clinical staff time.

Response: We appreciate the feedback from the commenters regarding the use of mean versus median wage data in updating the clinical labor pricing. Based on the feedback from the commenters, we agree that the use of median BLS wage data would be more appropriate than average or mean wage data. We agree that the median value is less susceptible to outlier values, and therefore, better captures the “typical” case. We will use the median wage data when finalizing the pricing for the clinical labor update.

Comment: Many commenters disagreed with the proposal to use the same fringe benefits multiplier of 1.366 that was utilized during the previous clinical labor pricing in CY 2002. Commenters stated that using the fringe benefits multiplier rate from 20 years ago was not consistent with CMS' premise for updating the clinical labor pricing which was to maintain relativity with the recent supply and equipment pricing updates. Commenters stated that the BLS publishes benefits data routinely and that CMS should use a current fringe benefits multiplier; many commenters suggested using a multiplier of 1.296 from the most recent available BLS data.

Response: We agree with the commenters that it would be appropriate to use a more current fringe benefits multiplier as opposed to our proposal to use the same multiplier from 2002. According to a BLS release from June 17, 2021 (USDL-21-1094), the current fringe benefits multiplier for employees in private industry is 1.296, as noted and requested by the commenters. We believe that this will be more appropriate than the proposed fringe benefits multiplier of 1.366 from 2002.

Comment: Many commenters requested that CMS should delay the implementation of the clinical labor pricing update for one year, or finalize a 5-year transition with no update in the first year which was functionally the same request. Commenters stated that the current clinical labor proposal requires additional analysis and modifications prior to implementation and there was further work to be done by both CMS and stakeholders to ensure accurate data are used and appropriate methodological steps are taken for implementation. Some commenters stated that CMS should wait until after the market-based supply and equipment pricing update was concluded before beginning the process of updating clinical labor pricing. Many commenters mentioned the negative impacts of the ongoing COVID-19 PHE and the finalization of updated values for E/M visits in last year's CY 2021 PFS final rule as reasons to delay the clinical labor pricing update for a year.

Response: We disagree that the clinical labor pricing update should be delayed for another year before beginning the 4-year implementation timeline. We do not agree that delaying the pricing update will provide meaningful improvements in our data; commenters overwhelmingly agreed that BLS data was the best choice and did not suggest alternative sources of wage data which would have required additional research. In places where we made use of crosswalks to value individual clinical labor types, commenters provided helpful feedback (see discussion below) and will continue to have the opportunity to provide further engagement over the course of the 4-year implementation timeline. It is not clear to us what further work the commenters believe must be done to ensure appropriate clinical labor pricing given the near-universal support for the use of BLS wage data for the update. While we share the concerns of commenters regarding the effects of the ongoing COVID-19 pandemic, we believe that the use of a 4-year transition in implementing the clinical labor pricing update will help to maintain payment stability and mitigate potential negative effects on healthcare providers. Given that the statute requires PFS payment to be based on relative resource costs, and that the proposed update to clinical labor wages using the latest available BLS data was overwhelmingly supported by commenters, we do not believe that we should delay the transition from outdated pricing from 2002. All of the same issues concerning redistribution of payments through BN will still remain in place whether the clinical labor pricing update begins in CY 2022 or CY 2023.

Comment: One commenter stated that CMS should delay any repricing of clinical labor until it can also collect the latest prices paid for medical equipment and supplies. The commenter stated that this would ensure all updated prices for direct cost inputs used in setting PE payment are factored into Medicare physician rates concurrently.

Response: CY 2022 is the final year of the market-based supply and equipment pricing transition; we proposed to begin implementing the update to clinical labor pricing in this calendar year so that it could take place in conjunction with a portion of the supply and equipment pricing update. We agree with the commenter that it is important to update the clinical labor pricing to maintain relativity with the recent supply and equipment pricing updates.

Comment: Several commenters stated that CMS is currently considering more significant future changes to the PE methodology as explained at a June 16, 2021 Town Hall meeting (further details available on the CMS website at https://www.cms.gov/medicare/physician-fee-schedule/practice-expense-data-methods ). Commenters stated that given the potential for significant future updates to the data or PE methodology that could also have major impacts, CMS should postpone the update to clinical labor pricing until those changes can be analyzed in combination with other major changes to the PE methodology.

Response: As we noted in the CY 2021 PFS final rule (85 FR 84498 through 84499) and again in this rule, the RAND corporation is currently studying potential improvements to CMS' PE allocation methodology and the data that underlie it. We are interested in exploring ways that the PE methodology can be updated; however, we do not believe that this constitutes a reason to refrain from updating the clinical labor pricing or delay the implementation of the pricing update. We will employ a 4-year transition period for the clinical labor pricing update in order to provide payment stability and soften the effects of the pricing update in each calendar year.

Comment: Several commenters stated that the BLS is planning an update to the estimation methodology for the Occupational Employment and Wage Statistics (OEWS) survey next year that may impact their wage data. Commenters stated that although they could not predict the impact of these modifications, it is possible the revised BLS methodology will result in important changes to the hourly wage estimates that CMS proposed to use to update clinical labor pricing. Several commenters requested delaying the implementation of the clinical labor pricing update for one year to make use of updated BLS wage data.

Response: We appreciate the feedback from the commenters regarding ongoing improvements to the BLS methodology for the OEWS. However, we do not agree that this is a sufficient justification for continuing to maintain current clinical labor prices for another year. The BLS routinely updates its wage data and searches for ways to improve the survey methodology. We also note that the commenters who brought this issue to our attention stated that they could not predict the impact of these BLS methodological changes which we believe argues against delaying the pricing update for another year. We believe that the 2019 wage data from the BLS will certainly be an improvement over the current 2002 data, and we will continue to review and evaluate future BLS wage data to consider whether it would be appropriate to propose to incorporate them into the clinical labor pricing update during the course of the 4-year transition period or otherwise through future rulemaking.

Comment: One commenter stated that CMS appeared to have used only the BLS OEWS survey; however, when CMS last updated these data in 2002, CMS also leveraged the BLS National Compensation Survey (NCS). The commenter stated that while the OEWS survey can produce estimates at metropolitan statistical areas (MSAs), the NCS can produce estimates at the national and census region level. The commenter stated that OEWS wage estimates represent only wages and salaries and do not include nonwage benefits, such as health insurance, retirement contributions, and bonuses; whereas NCS data also includes nonwage benefits. The commenter stated that CMS used the national median wage across all employer types rather than the wage for physician office employers, and the commenter believed that CMS should use the physician office setting of care where possible rather than a median (or average) across all employer types.

Response: We appreciate the feedback from the commenters regarding additional aspects of the wage data provided by the BLS. We are aware that OEWS wage estimates represent only wages and salaries and do not include nonwage benefits, which is why we included a fringe benefits multiplier in our clinical labor pricing update as discussed above. We disagree with the commenter that using the physician office setting of care rather than a median across all employer types would be more accurate for clinical labor pricing; clinical labor is employed in many different sites of service, not solely in the physician office setting. We encourage commenters to submit additional information regarding clinical labor pricing, especially wage data for individual clinical labor types, during future rulemaking, especially over the course of the 4-year transition period for the update to clinical labor pricing.

Comment: Many commenters requested that CMS update pricing data on a more frequent basis for all inputs so that adjustments will not be as dramatic. Commenters stated that more frequent updates would prevent significant redistributive effects to specialties in the future and help ensure stability in payments. Commenters stated that CMS should make year-to-year payment stability a goal of the PFS, and large redistributive impacts on payment should occur infrequently.

Response: We agree with the commenters that the pricing data that underlie the PE methodology should be updated frequently to ensure its accuracy. For this reason, we believe that it is important to begin the transition process of updating the clinical labor pricing for CY 2022. We agree that more frequent updates to all direct PE inputs, clinical labor and supplies and equipment, would help to maintain payment stability across the PFS.

Comment: Several commenters recommended that CMS address the problems related to high-cost supplies by establishing Healthcare Common Procedure Coding System (HCPCS) Level II codes for supplies that exceed $500. Commenters stated that the establishment of individual coding for high cost supplies would help maintain patient access to care in the office setting by offsetting the projected decreases in payment from the clinical labor pricing update.

Response: We did not make any proposals to establish HCPCS Level II codes for high cost supplies. We have received in previous rulemaking cycles a number of prior requests from stakeholders, including the RUC, to implement separately billable alpha-numeric Level II HCPCS codes to allow practitioners to be paid for high cost disposable supplies per patient encounter instead of in connection with payment for the CPT code with which the supplies are furnished. We stated at the time, and we continue to believe, that this option presents a series of potential problems that we have addressed previously in the context of the broader challenges regarding our ability to price high cost disposable supply items. (For a discussion of this issue, we direct the reader to our discussion in the CY 2011 PFS final rule with comment period (75 FR 73251)).

Comment: One commenter stated that, as participating practitioners in the Medicare program, audiologists should not be included in the proposed clinical labor pricing update. The commenter stated that they are performing professional services for which they are billing Medicare independently, and should not be assigned any additional clinical labor time for their efforts. The commenter stated that this oversight has created significant rank order anomalies within the audiology code family as included in the proposed rule. The commenter identified several CPT codes which they stated contained significant rank order anomalies and requested again that audiologists be removed from the labor update pool.

Response: We would like to clarify for the commenter that we are proposing to update the rates for individual clinical labor types, not updating the pricing for individual specialties. The statute requires that valuation under the PFS is to be based on relative resource costs; as such, we do not believe that an individual clinical labor type could be priced at one rate when billed by some specialties and at a different rate when billed by other specialties. If the commenter believes that certain CPT codes have rank order anomalies in their valuation, we encourage them to nominate those codes as potentially misvalued for our additional review; see section II.C of this final rule (Potentially Misvalued Services under the PFS) for additional information.

After consideration of the comments detailed above, we are finalizing our proposal to implement the clinical labor pricing update through the use of a 4-year transition, with modifications. Rather than using the proposed BLS fringe benefits multiplier and the BLS mean wage data, in response to public comments, we will apply the BLS private industry fringe benefits multiplier for 2019 and use the BLS median wage data.

We also received a number of comments regarding the pricing of individual clinical labor types which are summarized along with our responses below. We note that, given our final policy to use the BLS median wage data instead of mean as we had proposed, we refer in our responses below to the median wage data.

Comment: Several commenters stated that they supported the proposal to use BLS category 19-1040 (Medical Scientist) for the Vascular Technologist (L054A) clinical labor type. Commenters stated that both vascular technologists and medical dosimetrists play critical roles in independently providing clinically accurate, reproducible and high-quality data for physician decision making. Commenters stated that although they did not have additional wage data to offer, they believed that the proposed crosswalk for the L054A clinical labor type is appropriate in terms of the resulting hourly wage rate and level of technical skill, physical and mental effort, judgment and stress relative to other professions utilizing ultrasound.

Response: We appreciate the support from the commenters for our proposed pricing of the Vascular Technologist (L054A) clinical labor type.

Comment: One commenter stated that they supported the proposed pricing of the Mammography Technologist (L043A), CT Technologist (L046A), and Vascular Technologist (L054A) clinical labor types based on their individual BLS categories.

Response: We appreciate the support from the commenter for our proposed clinical labor pricing.

Comment: Several commenters noted that the Angio Technician (L035A) clinical labor type does not have a direct BLS labor category and CMS proposed using BLS category 29-9000 (Other Healthcare Practitioners and Technical Occupations) at $27.20 as the proxy BLS wage rate. Commenters stated that they believed the Angio Technician was best represented by an advanced level VI certified Radiologic Technologist or an MR technologist. Commenters stated that according to the BLS, the median annual wage for magnetic resonance imaging technologists was $74,690 in May 2020, and the median annual wage for radiologic technologists and technicians was $61,900 in May 2020. Commenters recommended using BLS category 29-2035 Magnetic Resonance Imaging (MRI) Technologist as the proxy BLS wage rate for the Angio Technician clinical labor type.

Response: We appreciate the additional information provided by the commenters concerning the pricing of the Angio Technician (L035A) clinical labor type. However, we disagree that a Magnetic Resonance Imaging (MRI) Technologist described under BLS category 29-2035 would be the most appropriate choice to use in pricing the L035A clinical labor type. The median hourly wage for a Magnetic Resonance Imaging (MRI) Technologist under this BLS category is $35.30 while the hourly wage data for an Angio Technician that we have from Salary Expert is only $26.81. As such, we disagree that MRI Technologist would be an appropriate crosswalk for valuation. However, in response to the additional certification information provided by the commenters for this occupation, we are modifying our proposed crosswalk. We will instead crosswalk the Angio Technician to the Lab Tech/Histotechnologist (L035A) clinical labor type with a median hourly rate of $26.63 (or an annual rate of $55,390). We believe that this crosswalk better matches the wage data that we have available from Salary Expert for Angio Technicians.

Comment: Several commenters stated that CMS updated the RN/OCN (L056A) clinical labor type in CY 2004, which had been previously updated in 2002, with survey data provided by the American Society of Clinical Oncology (ASCO). Commenters noted that the proposed pricing for the L056A clinical labor type increased by only 11 percent, the third lowest increase among the 50 clinical labor types proposed in the update; and the commenters were concerned that the ASCO wage data were not appropriately captured in the proposed update. Commenters stated that the RN/OCN clinical labor type, which was proposed at a rate only 3.5 percent higher than the regular RN (L051A) clinical labor type, is clearly undervalued and should receive an upward adjustment prior to finalizing the clinical labor pricing update. Commenters urged CMS to delay implementation of the labor price update until they could work with the agency to establish an accurate methodology and labor price inputs for current RN/OCN labor.

Response: We appreciate the additional information provided by the commenter regarding the historical pricing of the RN/OCN (L056A) clinical labor type, and we will be happy to consider any wage data that they can provide. However, we did not receive any additional data from the commenter to be used in pricing the L056A clinical labor type, and in the absence of other information on current wage rates, we believe that our proposed use of BLS category 29-2033 (Nuclear Medicine Technologists) at $37.48 remains the most appropriate accurate pricing for L056A. We welcome the submission of additional pricing data for the RN/OCN clinical labor type in future rulemaking cycles, particularly over the course of the 4-year transition period.

Comment: One commenter provided recommendations on the pricing of several clinical labor types, as indicated in the next 13 comment summaries and responses. The commenter disagreed that BLS category 29-9098 (Health Information Technologists, Medical Registrars, Surgical Assistants, and Healthcare Practitioners and Technical Workers, All Other) at an hourly rate of $28.17 was the correct crosswalk for the Histotechnologist (L037B) clinical labor type. The commenter stated that BLS category 29-2010 (Clinical Laboratory Technologists and Technicians) more accurately describes the clinical staff type associated with Histotechnologists.

Response: We appreciate the additional information provided by this commenter concerning the pricing of the Histotechnologist (L037B) clinical labor type and the others that follow. We reviewed the request from the commenter and we agree that BLS category 29-2010 is a more appropriate crosswalk for the L037B clinical labor type, which has an updated median hourly wage of $25.54. This BLS category is a close match for the wage data that we have from the Salary Expert reference information that we discussed above.

Comment: The same commenter disagreed that BLS category 21-1023 (Mental Health and Substance Abuse Social Workers) at an hourly rate of $24.84 was the correct crosswalk for the Child Life Specialist (L037E) clinical labor type. The commenter stated that a child life specialist was described as a professional armed with a strong background in child development and family systems who promotes effective coping through play, preparation, education, and self-expression activities—not child mental health or substance abuse treatment. The commenter stated that that BLS category 21-1021 (Child, Family, and School Social Workers) more accurately describes the clinical staff type associated with Orthoptists.

Response: We reviewed the request from the commenter and we agree that BLS category 21-1021 is a more appropriate crosswalk for the L037E clinical labor type, which has an updated median hourly wage of $22.78. This BLS category is a close match for the wage data that we have from the Salary Expert reference information that we discussed above.

Comment: The commenter disagreed that BLS category 31-2011 (Occupational Therapy Assistants) at an hourly rate of $29.75 was the correct crosswalk for the Cardiovascular Technician (L038B) clinical labor type. The commenter stated that BLS category 29-2031 (Cardiovascular Technologists and Technicians) was a direct crosswalk for the L038B clinical labor type.

Response: We reviewed the request from the commenter and we agree that BLS category 29-2031 is a more appropriate crosswalk for the L038B clinical labor type, which has an updated median hourly wage of $27.75. This BLS category is a close match for the wage data that we have from the Salary Expert reference information that we discussed above.

Comment: The commenter disagreed that BLS category 29-1126 (Respiratory Therapists) at an hourly rate of $30.75 was the correct crosswalk for the Mammography Technologist (L043A) clinical labor type. The commenter stated that BLS category 29-2034 (Radiologic Technologists and Technicians) more accurately describes the clinical staff type associated with Mammography Technologists.

Response: We reviewed the request from the commenter and we agree that BLS category 29-2034 is a more appropriate crosswalk for the L043A clinical labor type, which has an updated median hourly wage of $29.09. This BLS category is a close match for the wage data that we have from the Salary Expert reference information that we discussed above.

Comment: The commenter disagreed with crosswalking the Certified Surgical Technician (CST) to BLS category 19-4010 (Agricultural and Food Science Technicians) at an hourly rate of $21.37 as part of the blended COMT/COT/RN/CST (L038A) clinical labor type. The commenter stated that BLS category 29-2055 (Surgical Technologist) was a direct crosswalk for the L038A clinical labor type.

Response: We believe that there may have been a misunderstanding on the part of the commenter; we proposed to crosswalk Certified Surgical Technicians to BLS category 29-2061, not BLS category 19-4010, at a median hourly rate of $22.83. There may have been some confusion regarding the COT and CST clinical labor types in this blend. Nevertheless, we reviewed the request from the commenter and we agree that BLS category 29-2055 is a more appropriate crosswalk for the CST portion of the L038A clinical labor type. This BLS category has a median hourly rate of $23.22 which was very similar to our previous pricing of $22.83. After we ran this updated rate for the CST through the blended methodology for the L038A clinical labor type, the per-minute pricing (including the fringe benefits multiplier) remained unchanged at $0.52.

Comment: The commenter disagreed that BLS category 29-2010 (Clinical Laboratory Technologists and Technicians) at an hourly rate of $26.34 was the correct crosswalk for the Certified Retinal Angiographer (L039A) clinical labor type. The commenter stated that BLS category 29-9000 (Other Healthcare Practitioners and Technical Occupations) or BLS category 29-2057 (Ophthalmic Medical Technician) more accurately described the clinical staff type associated with Certified Retinal Angiographers.

Response: We reviewed the request from the commenter and we agree that BLS category 29-9000 is a more appropriate crosswalk for the L039A clinical labor type, which has an updated median hourly wage of $23.93. The other suggested crosswalk to BLS category 29-2057 had a median hourly wage of $17.76, which did not fit with the data that we had from Salary Expert for Certified Retinal Angiographers; we believe the crosswalk to BLS category 29-9000 is a more appropriate choice.

Comment: The commenter disagreed that BLS category 29-1141 (Registered Nurses) at an hourly rate of $37.24 was the correct crosswalk for the Orthoptist (L037C) clinical labor type. The commenter stated that that BLS category 29-2057 (Ophthalmic Medical Technician) more accurately describes the clinical staff type associated with Orthoptists. The commenter also stated that the L037C clinical labor type is incorrectly assigned to the CPT code 62304. The commenter stated that the correct clinical labor type for CPT code 62304 should be L037D (RN/LPN/MTA), not L037C.

Response: We disagree with the commenter that an Ophthalmic Medical Technician described under BLS category 29-2057 would be the most appropriate choice to use in pricing the L037C clinical labor type. The median hourly wage for an Ophthalmic Medical Technician under this BLS category is $17.76 while the hourly wage data for an Orthoptist that we have from Salary Expert is substantially higher at $37.41. We continue to believe that our crosswalk to BLS category 29-1141 is a more appropriate choice for valuation. While we appreciate the feedback from the commenter, we reviewed CPT code 62304 and we did not find any errors in its clinical labor inputs. We did not propose to change the clinical labor type for CPT code 62304 and we are not finalizing any changes to the clinical labor types of this CPT code at this time.

Comment: The commenter disagreed that BLS category 21-1029 (Social Workers, All Other) at an hourly rate of $29.69 was the correct crosswalk for the Psychometrist (L039C) clinical labor type. The commenter stated that BLS category 31-1133 (Psychiatric Aide) more accurately describes the clinical staff type associated with Psychometrists.

Response: We disagree with the commenter that a Psychiatric Aide described under BLS category 31-1133 would be the most appropriate choice to use in pricing the L039C clinical labor type. The median hourly wage for a Psychiatric Aide under this BLS category is $14.96 while the hourly wage data for a Psychometrist that we have from Salary Expert is substantially higher at $29.29. We continue to believe that our crosswalk to BLS category 21-1029 is a more accurate choice for valuation.

Comment: The commenter disagreed that BLS category 29-9000 (Other Healthcare Practitioners and Technical Occupations) at an hourly rate of $27.22 was the correct crosswalk for the Angio Technician (L041A) clinical labor type. The commenter stated that BLS category 29-2034 (Radiologic Technologists and Technicians) was the previous BLS crosswalk used during the 2002 pricing of clinical labor and remains the correct crosswalk for an angiography technician.

Response: We disagree with the commenter that a Radiologic Technologist described under BLS category 29-2034 would be the most appropriate choice to use in pricing the L041A clinical labor type. The median hourly wage for a Radiologic Technologist under this BLS category is $29.09 and, as we discussed above, the hourly wage data for an Angio Technician that we have from Salary Expert is only $26.81. We are instead crosswalking the Angio Technician to the Lab Tech/Histotechnologist (L035A) clinical labor type with a median hourly rate of $26.63 as described above. We believe that this crosswalk better matches the wage data that we have available from Salary Expert for Angio Technicians. The previous BLS crosswalk may have been the most appropriate choice in 2002 but we have data from Salary Expert suggesting that it is no longer the best option.

Comment: The commenter disagreed that BLS category 29-2035 (Magnetic Resonance Imaging Technologists) at an hourly rate of $35.70 was the correct crosswalk for the Cytotechnologist (L045A) clinical labor type. The commenter stated that BLS category 29-2010 (Clinical Laboratory Technologists and Technicians) was the previous BLS crosswalk used during the 2002 pricing of clinical labor and remains the correct crosswalk for a cytotechnologist.

Response: We disagree with the commenter that the Clinical Laboratory Technologists described under BLS category 29-2010 would be the most accurate choice to use in pricing the L045A clinical labor type. The median hourly wage for a Clinical Laboratory Technologist under this BLS category is $25.54 while the hourly wage data for a Cytotechnologist that we have from Salary Expert is substantially higher at $36.19. We continue to believe that our proposed crosswalk to BLS category 29-2035 is a more appropriate choice for valuation. The previous BLS crosswalk we used in 2002 was based on available information at that time, but we have data suggesting that it is no longer the best option.

Comment: The commenter disagreed that BLS category 29-1124 (Radiation Therapists) at an hourly rate of $44.05 was the correct crosswalk for the Electron Microscopy Technologist (L045B) clinical labor type. The commenter stated that BLS category 29-2010 (Clinical Laboratory Technologists and Technicians) more accurately describes the clinical staff type associated with Electron Microscopy Technologists.

Response: We disagree with the commenter that the Clinical Laboratory Technologists described under BLS category 29-2010 would be the most appropriate choice to use in pricing the L045B clinical labor type. The median hourly wage for a Clinical Laboratory Technologist under this BLS category is $25.54 while the hourly wage data for an Electron Microscopy Technologist that we have from Salary Expert is substantially higher at $44.90. We continue to believe that our crosswalk to BLS category 29-1124 is a more appropriate choice for valuation.

Comment: The commenter disagreed that BLS category 19-1040 (Medical Scientists) at an hourly rate of $46.95 was the correct crosswalk for the Medical Dosimetrist (L063A) clinical labor type. The commenter stated that BLS category 29-2098 (Medical Dosimetrists, Medical Records Specialists, and Health Technologists and Technicians, All Other) more accurately describes the clinical staff type associated with Medical Dosimetrists.

Response: We disagree with the commenter that the clinical labor described under BLS category 29-2098 would be the most appropriate choice to use in pricing the L045B clinical labor type. The median hourly wage under this BLS category is $20.50 while the hourly wage data for a Medical Dosimetrist that we have from Salary Expert is substantially higher at $48.31. We recognize that BLS category 29-2098 includes Medical Dosimetrists in its heading, however this is an aggregated category that also includes many other miscellaneous types of technicians. If we were to use this category for pricing Medical Dosimetrists, the clinical labor type would be priced significantly lower than its 2002 valuation ($27.67) which we do not believe would be accurate for this profession, especially in the context of the wage data that we have from Salary Expert for the profession. We continue to believe that our crosswalk to BLS category 19-1040 is a more appropriate choice for valuation.

Comment: The commenter disagreed that the 75th percentile of BLS category 19-2012 (Physicists) at an hourly rate of $78.95 was the correct crosswalk for the Medical Physicist (L152A) clinical labor type. The commenter stated that the rationale to use the 75th percentile was based on maintaining the historical wage level for clinical labor type L152A which defeats the purpose of updating clinical labor rates. The commenter stated that BLS category 19-2012 (Physicist) was the highest of several options and would suffice as a crosswalk without using the 75th percentile rate.

Response: We disagree with the commenter that the Physicists described under BLS category 19-2012 would be the most accurate choice to use in pricing the L152A clinical labor type. The median hourly wage for a Physicist under this BLS category is $59.06 while the hourly wage data for a Medical Physicist that we have from Salary Expert is substantially higher at $66.90. While we also have our reservations about the use of 75th percentile wage data from the BLS, we continue to believe that it is a more accurate choice for valuation than BLS category 19-2012.

Comment: Several commenters stated that the BLS wage data for a Physicist are not equivalent or representative of a Medical Physicist, even at the CMS proposed 75th percentile labor rate. Commenters stated that the sophistication and complexity of radiation therapy technology has increased exponentially in the past few decades and as radiation treatments have become more targeted and precise, they have also required increasingly complex equipment and processes. Commenters stated that as the complexity of radiation therapy treatments has grown, the work of ensuring treatment accuracy and patient safety throughout a prescribed course of treatment has also become more demanding in expertise and attention. These commenters recommended that CMS utilize the CY 2020 Professional Survey Report on salary data from the American Association of Physicists in Medicine (AAPM) to determine the updated clinical labor rate per minute for the Medical Physicist clinical labor type. Commenters also noted that CMS utilized the AAPM 2005 salary data, inflated to 2006, when CMS updated the clinical labor wage rates for CY 2002. This report on Medical Physicist salary data was submitted as a public comment and commenters recommended that the Medical Physicist clinical labor rate be updated to $2.25 per minute based on the weighted median salary of certified qualified Medical Physicists multiplied by the CMS proposed benefits factor of 1.366.

Response: We appreciate the submission of this additional wage data specifically for Medical Physicists to supplement the BLS wage data. We agree with the commenters that the BLS wage data for a Physicist is not representative of a Medical Physicist, which was why we proposed to use the 75th percentile of the BLS wage data due to a lack of other sources of information. We agree with the commenters that the submitted AAPM wage data more accurately captures the salary of Medical Physicists and better matches the data that we have from Salary Expert. The submitted AAPM data had an average salary of $205,838 for certified qualified Medical Physicists with a Masters or Ph.D. degree; according to our proposed methodology we divide this by 2080 hours annually for a per-hour rate of $98.96 and a per-minute rate of $1.65. However, since we are finalizing a different fringe benefits multiplier in response to comments (1.296 instead of the proposed 1.366), we arrive at a final adjusted clinical labor rate of $2.14 per minute instead of the $2.25 detailed by the commenters. As noted by the commenters, the L152A clinical labor type is included as part of the blended Medical Dosimetrist/Medical Physicist (L107A) clinical labor type, which we have also updated in response to the new $2.14 pricing.

After consideration of the comments, we are finalizing the clinical labor prices as shown in Table 12.

We once again isolated the anticipated effects of the clinical labor pricing update on specialty payment impacts by comparing the CY 2022 PFS rates with and without the clinical labor pricing updates in place, including with both the fully implemented pricing update and the first year of a 4-year transition as shown in Table 13.

We emphasize again that these are not the projected impacts by specialty of all the policies we are finalizing for CY 2022, only the anticipated effect of the isolated clinical labor pricing update (the allowed changes for each specialty therefore may not match the allowed charges listed in the Regulatory Impacts Analysis section of this rule). Several commenters asked CMS to clarify that the 4-year transition would only be implementing the first year of the projected adjustment amount for CY 2022, and not impose some other compounded effect that would deepen the payment reduction. These commenters pointed to Table 135 in the CY 2022 PFS proposed rule (86 FR 39563-39564) and sought assurances that the −1 percent in a 4-year transition would not grow to be a −4 percent by the end of the 4-year transition, rather than the −2 percent listed on the table for the full transition. We are happy to clarify for commenters that these cases, such as applying to the Audiologist specialty in the above table, are caused by rounding and the “Fully Updated” column contains the full effects of the entire clinical labor pricing update.

As was the case for the market-based supply and equipment pricing update, the clinical labor rates will remain open for public comment over the course of the 4-year transition period. We welcome additional feedback on clinical labor pricing from commenters in next year's rulemaking cycle, especially any data that will continue to improve the accuracy of our finalized pricing.

e. Establishment of Values for Remote Retinal Imaging (CPT Code 92229), Comment Solicitation for Fractional Flow Reserve Derived From Computed Tomography (CPT Code 0503T), and Comment Solicitation for Codes Involving Innovative Technology

Rapid advances in innovative technology are having a profound effect on every facet of the economy, including in the delivery of health care. Emerging and evolving technologies are introducing advances in treatment options that have the potential to increase access to care for Medicare beneficiaries, improve outcomes, and reduce overall costs to the program. While new services have emerged over the last several years, it is possible that the COVID-19 PHE could be accelerating the supply and demand for these innovations. Emerging and evolving technologies could be useful tools for improving disparities in care that have been exacerbated by the PHE. Some of these new applications have codes for which innovative technology is substituting for and/or augmenting physician work. For example, the CPT Editorial Panel created CPT code 92229 ( Imaging of retina for detection or monitoring of disease; point-of-care automated analysis and report, unilateral or bilateral ), a diagnostic test for diabetic retinopathy that uses a software algorithm, and the RUC provided valuation recommendations which included a retinal camera and an analysis fee for remote imaging. In the CY 2021 PFS final rule (85 FR 84629 through 84630), we considered CPT code 92229 to be a diagnostic service under the PFS, contractor-priced it, and stated that we would have ongoing conversations with stakeholders. In the proposed rule, we discussed a proposal to establish RVUs for CPT code 92229, solicited feedback to establish RVUs for CPT code 0503T ( Noninvasive estimated coronary fractional flow reserve (FFR) derived from coronary computed tomography angiography data using computation fluid dynamics physiologic simulation software analysis of functional data to assess the severity of coronary artery disease; analysis of fluid dynamics and simulated maximal coronary hyperemia, and generation of estimated FFR model ), and solicited feedback to help us better understand the resource costs for services involving the use of innovative technologies such as software algorithms and artificial intelligence (AI).

In our discussion of CPT code 92229 in the CY 2021 PFS final rule (85 FR 84629 through 84630), we wrote that as the data used in our PE methodology have aged, and more services have begun to include innovative technology such as software algorithms and AI, these innovative applications are not well accounted for in our PE methodology. As described earlier in this section, PE resources involved in furnishing services are characterized as either direct or indirect costs. Direct costs of the PE resources involved in furnish a service are estimated for each code and include clinical labor, medical supplies, and medical equipment. Indirect costs include administrative labor, office expenses, and all other expenses. Indirect PE is allocated to each service based on physician work, direct costs, and a specialty-specific indirect percentage. The source of the specialty specific indirect percentage was the Physician Practice Information Survey (PPIS), last administered in 2007 and 2008, when emerging technologies that rely primarily on software, licensing, and analysis fees, with minimal costs in equipment and hardware may not have been typical. Thus, these costs are not well accounted for in the PE methodology.

Consistent with our PE methodology and as we have stated in past PFS rulemaking (83 FR 59557), we have considered most computer software and associated analysis and licensing fees to be indirect costs tied to costs for associated hardware that is considered to be medical equipment. In the case of CPT code 92229, the hardware is a retinal camera used for remote imaging. Given that indirect costs are based on physician work, direct costs, and specialty-specific indirect percentages that can include high-cost equipment, our concern is that if we were to consider an analysis fee to be a supply cost, as was recommended by the RUC, it is possible that we would inadvertently allocate too many indirect costs for a supply item that may not require additional indirect expenses. Unlike a piece of equipment, such as the retinal camera, an analysis fee for software does not require physical space in an office or administrative staff hours to maintain it.

However, increasingly, stakeholders have routinely expressed concerns with our policy to consider analysis fees as indirect costs, especially for evolving technologies that rely primarily on these fees with minimal costs in equipment or hardware. In comments in the CY 2021 PFS final rule (85 FR 84629 through 84630) responding to our proposal to price the analysis fee for remote imaging as an indirect cost, stakeholders stated that there would be no service if the software was not used. There are two aspects that distinguish CPT code 92229 from other services. First, most of the RUC's recommended resource costs for CPT code 92229 were for the analysis fee, rather than high-cost equipment or other supplies that require commensurate indirect costs to accommodate for space or administrative labor. Second, the innovative technology incorporated into the service is a software algorithm, which interprets data collected during the test, either augmenting the work of the physician or NPP performing the test, or in some cases replacing at least some work that a physician would typically furnish. In general, it is possible that physician work time and intensity of furnishing care to patients could be affected as more services that involve innovative technologies such as software algorithms or AI become available.

We finalized a policy to establish contractor pricing for CPT code 92229 (85 FR 84629 through 84630) because analysis fees for software algorithms and AI applications are not well accounted for our PE methodology, and to recognize that practitioners do incur resource costs for purchase and ongoing use of the software. We stated that we would continue to seek out new data sources and have ongoing conversations with stakeholders while also considering other approaches to reflect overall resource costs for these technologies in our PE methodology.

As we described in the CY 2021 PFS final rule (85 FR 84498 through 84499), the RAND Corporation is currently studying potential improvements to CMS' PE allocation methodology and the data that underlie it. RAND has found that the PPIS data last collected in 2007-2008 may no longer reflect the resource allocation, staffing arrangements, and cost structures that describe practitioners' resource requirements in furnishing services to Medicare beneficiaries, and consequently may not accurately capture the indirect PE resources required to furnish services to Medicare fee-for-service (FFS) beneficiaries. Our experience with the challenge of accurately accounting for resource costs for innovative and emerging technologies such as ongoing service-specific software costs that are included in CPT code 92229 is another reason we continue to be interested in potentially refining the PE methodology and updating the data used to establish RVUs and payment rates under the PFS. We commonly employ a crosswalk to recognize resource costs when we lack the inputs that we would need to calculate work, PE, and/or malpractice RVUs for a service otherwise. When we use a crosswalk to value a service, we substitute the established RVUs for other services with similar resource costs in the physician office setting to set RVUs and the national payment rates for that particular service.

For CY 2022, we proposed to establish values for CPT code 92229 using our crosswalk approach, and thus this service would no longer be contractor-priced. We continue to believe that the software algorithm present in the analysis fee for CPT code 92229 is not well accounted for in our PE methodology; however, we recognize that practitioners are incurring resource costs for purchase of the software and its ongoing use. We proposed to use a crosswalk that reflects the overall relative resource costs for this service while we continue to consider potentially refining the PE methodology and updating the data we use to establish PE RVUs under the PFS. Specifically, we proposed a crosswalk to CPT code 92325 ( Modification of contact lens (separate procedure), with medical supervision of adaptation ), a PE-only code used for the eye, as we believe it reflects overall resource costs for CPT code 92229 in the physician office setting. We recognize that the services described by CPT code 92325 are not the same as the services in CPT code 92229; however, we believe that the total resource costs would be similar across these two codes. We believe that crosswalking the RVUs for CPT code 92229 to a code with similar resource costs allows CMS to recognize that practitioners are incurring resource costs for the purchase and ongoing use of the software employed in CPT code 92229, which would not typically be considered direct PE under our current methodology. We also solicited comments on our proposal to crosswalk CPT code 92229 to CPT code 92325, and whether other codes would provide a more appropriate crosswalk in terms of resource costs. In addition, as discussed in section II.E of this final rule, we proposed to use our crosswalk approach for CPT code 77089 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk ) and CPT code 77091 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk, technical calculation only ).

We received public comments on our proposal to crosswalk CPT code 92229 to CPT code 92325. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to crosswalk CPT code 92229 to CPT code 92325 to better reflect the overall relative resource costs for this service. Commenters stated that that these services were not clinically similar but the total direct practice cost of CPT code 92325 was similar to the RUC-recommended total direct PE cost for CPT code 92229 and commenters agreed with the CMS proposal to implement relative values for this service. Commenters stated that although many of the MACs have worked with providers to establish pricing, there remains significant variability in payment across MAC jurisdictions and a lack of transparency in the valuation methodology. Commenters stated that this variability in the current MAC pricing can impact provider and beneficiary access to novel and vision-saving technologies. These commenters supported national pricing for CPT code 92229 through the use of the proposed crosswalk code to help provide transparency and facilitate beneficiary access to care. We did not receive comments requesting that CMS return to the contractor pricing finalized for CY 2021 for CPT code 92229.

Response: We appreciate the support for our proposed crosswalk from the commenters.

Comment: Several commenters expressed concern that CMS repeatedly stated that software and analysis fees are not direct expenses. Commenters disagreed and stated that software that is directly attributed to a specific physician service is a direct expense, and furthermore that there are multiple examples of the implementation of such costs. Several comments provided a list of current CPT codes that they stated included software as a direct PE input, such as CPT code 95905 ( Motor and/or sensory nerve conduction, using preconfigured electrode array(s), amplitude and latency/velocity study, each limb, includes F-wave study when performed, with interpretation and report ). Several commenters raised the issue of software as a medical device (SaMD) and stated that it should be considered a direct PE expense similar to other medical equipment. Commenters stated that even though SaMD does not require physical space in an office or administrative staff hours to maintain it, SaMD does require ongoing upgrades, improvements, and security mitigation, as well as the same regulatory oversight by the Food and Drug Administration (FDA) as hardware medical devices. Commenters stated that the legal, regulatory, and financial burdens incumbent of a SaMD manufacturer are no different than those of hardware medical device manufacturers.

Response: We appreciate the detailed feedback from the commenters regarding the issues surrounding software and analysis fees. We agree with the commenters that there have been occasions in the past where we have finalized the inclusion of software as a direct PE expense if it met our criteria as typical and medically necessary for the service in question and could be individually allocable to a particular patient for a particular service. For example, we included the sheer wave elastography software (ED060) as a direct PE input for CPT codes 76981-76983 in CY 2019. In this case, the sheer wave elastography software was an additional resource cost added to the general ultrasound room (EL015) equipment without which the service cannot be performed. We have been more hesitant to classify software, licensing, and analysis fees that are not associated with physical equipment used in the performance of a service as they pose more significant challenges for our traditional PE methodology. Therefore, we wish to clarify that although we have typically considered software costs to be indirect PE under our methodology, as these costs were not individually allocable to a particular patient for a particular service, there have been exceptions to this general principle where software costs have been included directly in the service under review.

As we stated in the proposed rule, we believe that costs associated with software, licensing, and analysis fees are not well accounted for in the PE methodology. Unlike a piece of equipment, such as the retinal camera, an analysis fee for software does not require physical space in an office or administrative staff hours to maintain it. These types of costs were much less prevalent when the Physician Practice Information Survey (PPIS) was last administered in 2007 and 2008 and of course did not exist at all in the case of AI-based services. We remain concerned that if we were to consider software analysis fees and software as a medical device expenses to be direct costs in all cases, we may inadvertently allocate too many indirect costs for supplies that may not require additional indirect expenses. The data underlying the PPIS assumes that direct expenses will require costs associated with physical space and physical maintenance that may not appropriate for these new types of software. However, we do recognize that practitioners are incurring resource costs for purchase of the software and its ongoing use, which is why we proposed the crosswalk to CPT code 92325 to capture these resource costs for CPT code 92229. We believe that the use of this crosswalk and other similar crosswalks are the best way to value services that make use of software, licensing, and analysis fees at the moment while we explore ongoing potential updates to the PE methodology.

Comment: One commenter stated that CMS should consider crosswalks to CPT codes 95249 ( Ambulatory CGM of interstitial tissue fluid via a subcutaneous sensor for a minimum of 72 hours; patient provided equipment, sensor placement, hook-up, calibration of monitor, patient training, and printout of recording ) and 92977 ( Thrombolysis, coronary; by intravenous infusion ). The commenter stated that these codes are expected to be utilized in primary care and diabetes care settings and reflect similar resource costs.

Response: We appreciate the additional suggested crosswalk codes from the commenter. However, we continue to believe that our proposed crosswalk to CPT code 92325 is a more appropriate choice to use for valuing CPT code 92229 because it more closely matches the RUC-recommended total direct PE costs for CPT code 92229. Although CPT codes 95249 and 92977 share some clinical similarities with CPT code 92229, they both include additional resource costs which would result in an inappropriately higher valuation if we were to employ them as our crosswalk code.

After consideration of the public comments, we are finalizing our proposal to establish values for CPT code 92229 based on a direct crosswalk to CPT code 92325.

We are aware of other services that use similar innovative technologies to those used for the diagnostic test for diabetic retinopathy and trabecular bone score, and that those technologies also are not well-accounted for in our PE methodology. For CY 2018, the AMA CPT Editorial Panel established four new Category III CPT codes for fractional flow reserve derived from computed tomography (FFRCT): CPT code 0501T ( Noninvasive estimated coronary fractional flow reserve (FFR) derived from coronary computed tomography angiography data using computation fluid dynamics physiologic simulation software analysis of functional data to assess the severity of coronary artery disease; data preparation and transmission, analysis of fluid dynamics and simulated maximal coronary hyperemia, generation of estimated FFR model, with anatomical data review in comparison with estimated FFR model to reconcile discordant data, interpretation and report ); CPT code 0502T ( Noninvasive estimated coronary fractional flow reserve (FFR) derived from coronary computed tomography angiography data using computation fluid dynamics physiologic simulation software analysis of functional data to assess the severity of coronary artery disease; data preparation and transmission ); CPT code 0503T ( Noninvasive estimated coronary fractional flow reserve (FFR) derived from coronary computed tomography angiography data using computation fluid dynamics physiologic simulation software analysis of functional data to assess the severity of coronary artery disease; analysis of fluid dynamics and simulated maximal coronary hyperemia, and generation of estimated FFR model ); and CPT code 0504T ( Noninvasive estimated coronary fractional flow reserve (FFR) derived from coronary computed tomography angiography data using computation fluid dynamics physiologic simulation software analysis of functional data to assess the severity of coronary artery disease; anatomical data review in comparison with estimated FFR model to reconcile discordant data, interpretation and report ). FFRCT is a noninvasive diagnostic service that allows physicians to measure coronary artery disease in a patient through coronary CT scans. It uses a proprietary data analysis process performed at a central facility to develop a three-dimensional image of a patient's coronary arteries, which allows physicians to identify the fractional flow reserve to assess whether or not patients should undergo further invasive testing or treatment (typically, a coronary angiogram). We understand that FFRCT can show through non-invasive imaging whether a beneficiary has coronary artery disease thereby potentially avoiding an invasive coronary procedure. Medicare began payment for CPT code 0503T in the HOPD setting under the Outpatient Prospective Payment System (OPPS) in CY 2018 (82 FR 59284). For the PFS, we typically assign contractor pricing for Category III codes since they are temporary codes assigned to emerging technology and services. We followed this established process for Category III codes by assigning and listing them as contractor pricing in Appendix B in the CY 2018 PFS final rule (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1676-F ).

We have since been trying to understand the costs of the PE resource inputs for CPT code 0503T in the physician office setting. In the CY 2021 PFS final rule, we stated that we found FFRCT to be similar to other technologies that use algorithms, artificial intelligence, or other innovative forms of analysis to determine a course of treatment, where the analysis portion of the service cannot adequately be reflected under the PE methodology; and that our recent reviews for the overall cost of CPT code 0503T have shown the costs in the physician office setting to be similar to costs reflected in payment under the OPPS (85 FR 84630). For the CY 2021 OPPS/ASC final rule, we found that the geometric mean cost reported by HOPDs for the service was $804.35 (85 FR 85943). We believe the costs reported under the OPPS are instructive as they reflect actual costs that hospitals incurred in furnishing the service described by CPT code 0503T to Medicare beneficiaries, and, as we stated in the CY 2021 PFS final rule, we believe that these costs would be similar in the physician office setting. Using the geometric mean costs under the OPPS as a proxy, we then searched for services paid under the PFS that could potentially serve as a crosswalk. Specifically, we looked for services paid under the PFS that include only a TC because CPT code 0503T is a TC-only service, and that have similar total costs to CPT code 0503T. We identified the following potential crosswalks, and solicited public comment on which, if any of them, would be appropriate: CPT code 93455 ( Catheter placement in coronary artery(s) for coronary angiography, including intraprocedural injection(s) for coronary angiography, imaging supervision and interpretation; with catheter placement(s) in bypass graft(s) (internal mammary, free arterial, venous grafts) including intraprocedural injection(s) for bypass graft angiography ) and CPT code 93458 ( Catheter placement in coronary artery(s) for coronary angiography, including intraprocedural injection(s) for coronary angiography, imaging supervision and interpretation; with left heart catheterization including intraprocedural injection(s) for left ventriculography, when performed ). We also solicited comment on whether other codes would provide a more appropriate crosswalk in terms of resource costs.

We received public comments on our comment solicitation for potential crosswalks to use to establish national payment for CPT code 0503T. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to use a crosswalk to recognize resource costs and appropriately pay for CPT code 0503T. These commenters disagreed, however, with the proposal to use costs reported under the OPPS as a proxy to inform our selection of a crosswalk to similarly resourced services under the PFS. Some of these commenters, including the AMA RUC, expressed concern about our reliance on data from the OPPS in establishing relative values for the PFS. These commenters cited Section 4505 of the Balanced Budget Act of 1997 and highlighted what they believed to be requirements for what data CMS should consider in establishing payments under the PFS. Specifically, they stated that CMS must utilize generally accepted cost accounting principles to recognize all staff, equipment, supplies and expenses, not just those which can be tied to specific procedures, and to use actual data on equipment utilization and other key assumptions, as well as to consult with organizations representing physicians regarding methodology. They asserted that any proposal to use the relativity of hospital charge data to determine the relativity of practice costs within a physician office is not consistent with the statutory provisions established by the BBA of 1997. The AMA RUC stated that it would solicit the national specialty societies to determine if RUC recommendations may be developed for this service.

Response: In response to commenters' concerns about our potential use of OPPS cost data, we note that section 1848(c)(2)(N) of the Act authorizes our use of alternative approaches to establishing PE relative values using cost, charge, or other data from suppliers or providers of services in order to ensure accurate valuation of services under the PFS. As previously stated, we believe this is an appropriate approach as our recent reviews for the overall cost of CPT code 0503T have shown the costs in the physician office setting to be similar to costs reflected in payment under the OPPS.

Comment: Some commenters requested that CMS use submitted invoice information, which included a price of $1,100 for furnishing the whole service described under CPT code 0503T, as a direct expense input to establish national payment for CPT code 0503T.

Response: We thank the commenters for the invoice information they provided. We note that, in recent years, these services have been contractor priced, both out of consideration for the relative newness of the technology involved in the services and to allow time for CMS to consider how best to appropriately reflect costs for the service in payments established under the PFS. Stakeholders have worked with MACs to establish payment for the service but have expressed concern with the variability in payments across the different MAC jurisdictions during this time and have continued to urge CMS to establish national payment rates. In response, CMS in recent years has reviewed cost information for this service. Our recent reviews for the overall cost of CPT code 0503T have shown that the costs in the physician office setting are similar to costs reflected in payment under the OPPS (85 FR 84630). We continue to believe the costs and resulting payment reported under the OPPS are instructive as they reflect actual costs that hospitals incurred in furnishing the service described by CPT code 0503T to Medicare beneficiaries. Further, as we stated in the CY 2021 PFS final rule, we believe that these costs would be similar in the physician office setting, given stakeholders' description of the way that this TC-only service is furnished (that is, a technician conducts a proprietary data analysis process at a central facility). In soliciting comments on the appropriate crosswalk for use to establish a PFS payment for this service, we had referenced the CY 2021 OPPS/ASC geometric mean cost of $804.35 for 0503T. We note, however that we finalized an OPPS payment rate of $950.50 for the service based on an assignment to a new technology Ambulatory Payment Classification (APC) in order to provide payment stability and equitable payment for providers as they continue to become more familiar with the proper cost reporting for CPT 0503T and other services that similarly use artificial intelligence technologies. Based on our reference to the underlying OPPS/ASC geometric mean cost data for the service, we had identified CPT code 93455 ( Catheter placement in coronary artery(s) for coronary angiography, including intraprocedural injection(s) for coronary angiography, imaging supervision and interpretation; with catheter placement(s) in bypass graft(s) (internal mammary, free arterial, venous grafts) including intraprocedural injection(s) for bypass graft angiography ) and CPT code 93458 ( Catheter placement in coronary artery(s) for coronary angiography, including intraprocedural injection(s) for coronary angiography, imaging supervision and interpretation; with left heart catheterization including intraprocedural injection(s) for left ventriculography, when performed ) as potential crosswalks. We had intended in the CY 2022 PFS proposed rule to reference and use the OPPS payment rate to identify an appropriate crosswalk for CPT code 0503T, but due to a technical error, we inadvertently referenced the cost information to identify potential resource-based crosswalks under the PFS. As discussed briefly above, the geometric mean cost information is used under the OPPS to identify an APC assignment based on similarity of cost and clinical characteristics to other services. We believe that using the CY 2021 OPPS payment rate for 0503T ($950.50), as the reference for cost to identify an appropriate crosswalk code under the PFS, which is higher than the underlying geometric mean cost-based information we had proposed ($804.35) to use, strikes the right balance between acknowledging the invoice information we received from commenters and the OPPS payment information informed by hundreds of claims with cost data for the FFRCT service. We reiterate that given stakeholders' description of the way that this TC-only service is furnished (that is, a technician conducts a proprietary data analysis process at a central facility), we believe that the costs for the FFRCT service as reflected in the OPPS payment that we used to identify a suitable resource-based crosswalk, would be similar in the physician office setting. Using the CY 2021 OPPS payment rate (which is based on the geometric mean costs data) as a proxy, we identified the TC for CPT code 93457 ( Catheter placement in coronary artery(s) for coronary angiography, including intraprocedural injection(s) for coronary angiography, imaging supervision and interpretation; with catheter placement(s) in bypass graft(s) (internal mammary, free arterial, venous graft(s) including intraprocedural injection(s) for bypass grafts angiography and right heart catherization ) as a more appropriate crosswalk. After consideration of the public comments, we are finalizing national pricing for CPT code 0503T, based on a valuation crosswalk to the TC of CPT code 93457 ( Catheter placement in coronary artery(s) for coronary angiography, including intraprocedural injection(s) for coronary angiography, imaging supervision and interpretation; with catheter placement(s) in bypass graft(s) (internal mammary, free arterial, venous graft(s) including intraprocedural injection(s) for bypass grafts angiography and right heart catherization ). We intend to continue working with stakeholders to help us better understand the resource costs that should be reflected in payment for services involving the use of innovative technologies, address payment for innovative services (such as CPT code 0503T), and consider how the cost for such services should be accounted for in our PE methodology.

We also more broadly solicited public comment to help us better understand the resource costs for services involving the use of innovative technologies, including but not limited to software algorithms and AI. We refer readers to the CY 2022 PFS proposed rule (86 FR 39125) for more detail on the questions we asked the public to consider.

We received public comments on the resource costs for services involving the use of innovative technologies, including but not limited to software algorithms and AI. The following is a summary of the comments we received and our response.

Comment: Commenters were unanimously appreciative of the effort to understand and proactively engage on AI topics, and the acknowledgment that AI and innovative technologies are not well accounted for in the current PE methodology. Many commenters noted that the approach to understanding costs and impact on providers, systems, and patients is highly dependent upon the service and circumstances of the clinical encounter, and that it is difficult to broadly assess the impact of innovations on individual components of the RVU for a service. Some commenters encouraged CMS to issue a separate, stand-alone, request for information (RFI) that looks holistically at this issue rather than in the context of a specific payment rule or structure, noting this would help to ensure a broader range of stakeholder views are represented.

Many commenters noted that while there may be one-time or start-up costs associated with implementing an AI-enabled technology or software algorithm, the costs are more likely recurring, and consider these technologies a direct PE instead of an indirect PE. One commenter suggested that the specific AI work and related AI cost should be paid separately under a new code, or added on to the existing code. Another commenter encouraged CMS to exercise flexibility in how it considers costs to allow for a range of cost structures, such as subscription models, per-use costs, device/supply purchases, and AI service purchases, when determining its approach. One commenter noted that the costs associated with innovative technologies should align with the rest of the RBRVS, with staff, supplies and equipment costs resource-based, and with appropriate updates to the PPI Survey to accurately capture these indirect costs. Another commenter encouraged an assessment and analysis of how these and other methodologies for calculating a per-patient cost can accommodate emerging business models for these innovative technologies.

Many commenters disagreed with any characterization of innovative technologies as a replacement for physician work. One commenter stated that the new technologies do not categorically increase or decrease physician work time and intensity, but rather, they change what physicians do. Many commenters referred to the following three broad categories when describing the different roles these technologies play in physician work: (1) Assistive, which enhances clinical management, but does not generate additional physician work; (2) automated, which provides additional insight that informs the physician's actions); and (3) autonomous, which provides diagnosis or clinical management decisions, but does not require physician intervention. Commenters further note that applications in each of these categories can either increase or decrease physician work and intensity. Some commenters noted that technologies such as AI are so nascent or absent in their respective specialties that there are insufficient examples to even illustrate the impact on physician work.

Many commenters noted the potential for these technologies to facilitate more efficient and timely care. A few commenters noted that while these technologies have the potential to increase access to care, beneficiaries in rural areas with limited broadband access could face barriers. One commenter noted that these technologies often require specific hardware, software, broadband and other capabilities that may exceed the resources of a physician, and in turn have an impact on quality and equity. The commenter encouraged CMS to consider policies outside the PFS to mitigate disparities in equitable diffusion and uptake of these technologies. Some commenters acknowledged that these technologies may foster or perpetuate bias, citing the established literature base on bias in machine-learning algorithms. One commenter noted that the FDA approval process includes an assessment of bias in these technologies. One commenter asserts that while software algorithms and AI improve health care disparities, demonstrated by the diabetic retinopathy example, the potential to worsen or widen health disparities also exists.

Commenters also noted the importance of establishing monitoring and other guardrails to mitigate fraud, waste, and abuse, and to ensure that bias does not lead to compromised patient care.

Response: We thank the commenters for all the information submitted. We will review the many public comments we received on this topic and will also consider how best to continue to engage with all stakeholders as we consider this issue further for potential future rulemaking.

As we described in the CY 2021 PFS final rule (85 FR 84498 through 84499), the RAND Corporation has been studying potential improvements to CMS' PE allocation methodology and the data that underlie it. CMS and RAND hosted a virtual Town Hall meeting on June 16, 2021 and materials are available at https://www.cms.gov/medicare/physician-fee-schedule/practice-expense-data-methods. Prior RAND research reports are also available at https://www.rand.org/pubs/research_reports/RR2166.html and https://www.rand.org/t/RR3248 . RAND has issued the results of its final phase of research, available at www.rand.org/t/RRA1181-1. This report is also available as a public use file displayed on the CMS website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html.

C. Potentially Misvalued Services Under the PFS

1. Background

Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a periodic review, not less often than every 5 years, of the relative value units (RVUs) established under the PFS. Section 1848(c)(2)(K) of the Act requires the Secretary to periodically identify potentially misvalued services using certain criteria and to review and make appropriate adjustments to the relative values for those services. Section 1848(c)(2)(L) of the Act also requires the Secretary to develop a process to validate the RVUs of certain potentially misvalued codes under the PFS, using the same criteria used to identify potentially misvalued codes, and to make appropriate adjustments.

As discussed in section II.E. of this final rule, Valuation of Specific Codes, each year we develop appropriate adjustments to the RVUs taking into account recommendations provided by the American Medical Association (AMA) Resource-Based Relative Value Scale (RVS) Update Committee (RUC), MedPAC, and other stakeholders. For many years, the RUC has provided us with recommendations on the appropriate relative values for new, revised, and potentially misvalued PFS services. We review these recommendations on a code-by-code basis and consider these recommendations in conjunction with analyses of other data, such as claims data, to inform the decision-making process as authorized by statute. We may also consider analyses of work time, work RVUs, or direct PE inputs using other data sources, such as Department of Veteran Affairs (VA), National Surgical Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons (STS), and the Merit-based Incentive Payment System (MIPS) data. In addition to considering the most recently available data, we assess the results of physician surveys and specialty recommendations submitted to us by the RUC for our review. We also consider information provided by other stakeholders. We conduct a review to assess the appropriate RVUs in the context of contemporary medical practice. We note that section 1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and other techniques to determine the RVUs for physicians' services for which specific data are not available and requires us to take into account the results of consultations with organizations representing physicians who provide the services. In accordance with section 1848(c) of the Act, we determine and make appropriate adjustments to the RVUs.

In its March 2006 Report to the Congress ( http://www.medpac.gov/docs/default-source/reports/Mar06_Ch03.pdf?sfvrsn=0 ), MedPAC discussed the importance of appropriately valuing physicians' services, noting that misvalued services can distort the market for physicians' services, as well as for other health care services that physicians order, such as hospital services. In that same report, MedPAC postulated that physicians' services under the PFS can become misvalued over time. MedPAC stated, “When a new service is added to the physician fee schedule, it may be assigned a relatively high value because of the time, technical skill, and psychological stress that are often required to furnish that service. Over time, the work required for certain services would be expected to decline as physicians become more familiar with the service and more efficient in furnishing it.” We believe services can also become overvalued when PE costs decline. This can happen when the costs of equipment and supplies fall, or when equipment is used more frequently than is estimated in the PE methodology, reducing its cost per use. Likewise, services can become undervalued when physician work increases or PE costs rises.

As MedPAC noted in its March 2009 Report to Congress ( http://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf ), in the intervening years since MedPAC made the initial recommendations, CMS and the RUC have taken several steps to improve the review process. Also, section 1848(c)(2)(K)(ii) of the Act augments our efforts by directing the Secretary to specifically examine, as determined appropriate, potentially misvalued services in the following categories:

• Codes that have experienced the fastest growth.
• Codes that have experienced substantial changes in PE.
• Codes that describe new technologies or services within an appropriate time-period (such as 3 years) after the relative values are initially established for such codes.
• Codes which are multiple codes that are frequently billed in conjunction with furnishing a single service.
• Codes with low relative values, particularly those that are often billed multiple times for a single treatment.
• Codes that have not been subject to review since implementation of the fee schedule.
• Codes that account for the majority of spending under the PFS.
• Codes for services that have experienced a substantial change in the hospital length of stay or procedure time.
• Codes for which there may be a change in the typical site of service since the code was last valued.

• Codes for which there is a significant difference in payment for the same service between different sites of service.

• Codes for which there may be anomalies in relative values within a family of codes.
• Codes for services where there may be efficiencies when a service is furnished at the same time as other services.
• Codes with high intraservice work per unit of time.
• Codes with high PE RVUs.
• Codes with high cost supplies.
• Codes as determined appropriate by the Secretary.

Section 1848(c)(2)(K)(iii) of the Act also specifies that the Secretary may use existing processes to receive recommendations on the review and appropriate adjustment of potentially misvalued services. In addition, the Secretary may conduct surveys, other data collection activities, studies, or other analyses, as the Secretary determines to be appropriate, to facilitate the review and appropriate adjustment of potentially misvalued services. This section also authorizes the use of analytic contractors to identify and analyze potentially misvalued codes, conduct surveys or collect data, and make recommendations on the review and appropriate adjustment of potentially misvalued services. Additionally, this section provides that the Secretary may coordinate the review and adjustment of any RVU with the periodic review described in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make appropriate coding revisions (including using existing processes for consideration of coding changes) that may include consolidation of individual services into bundled codes for payment under the PFS.

2. Progress in Identifying and Reviewing Potentially Misvalued Codes

To fulfill our statutory mandate, we have identified and reviewed numerous potentially misvalued codes as specified in section 1848(c)(2)(K)(ii) of the Act, and we intend to continue our work examining potentially misvalued codes in these areas over the upcoming years. As part of our current process, we identify potentially misvalued codes for review, and request recommendations from the RUC and other public commenters on revised work RVUs and direct PE inputs for those codes. The RUC, through its own processes, also identifies potentially misvalued codes for review. Through our public nomination process for potentially misvalued codes established in the CY 2012 PFS final rule with comment period, other individuals and stakeholder groups submit nominations for review of potentially misvalued codes as well. Individuals and stakeholder groups may submit codes for review under the potentially misvalued codes initiative to CMS in one of two ways. Nominations may be submitted to CMS via email or through postal mail. Email submissions should be sent to the CMS emailbox MedicarePhysisianFeeSchedule@cms.hhs.gov, with the phrase “Potentially Misvalued Codes” and the referencing CPT code number(s) and/or the CPT descriptor(s) in the subject line. Physical letters for nominations should be sent via the U.S. Postal Service to the Centers for Medicare & Medicaid Services, Mail Stop: C4-01-26, 7500 Security Blvd., Baltimore, Maryland 21244. Envelopes containing the nomination letters must be labeled “Attention: Division of Practitioner Services, Potentially Misvalued Codes”. Nominations for consideration in our next annual rule cycle should be received by our February 10th deadline. Since CY 2009, as a part of the annual potentially misvalued code review and Five-Year Review process, we have reviewed over 1,700 potentially misvalued codes to refine work RVUs and direct PE inputs. We have assigned appropriate work RVUs and direct PE inputs for these services as a result of these reviews. A more detailed discussion of the extensive prior reviews of potentially misvalued codes is included in the Medicare Program; Payment Policies Under the Physician Fee Schedule, Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee Schedule: Signature on Requisition, and Other Revisions to Part B for CY 2012; final rule (76 FR 73052 through 73055) (hereinafter referred to as the “CY 2012 PFS final rule with comment period”). In the CY 2012 PFS final rule with comment period (76 FR 73055 through 73958), we finalized our policy to consolidate the review of physician work and PE at the same time, and established a process for the annual public nomination of potentially misvalued services.

In the Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the Requirement for Termination of Non-Random Prepayment Complex Medical Review and Other Revisions to Part B for CY 2013 (77 FR 68892) (hereinafter referred to as the “CY 2013 PFS final rule with comment period”), we built upon the work we began in CY 2009 to review potentially misvalued codes that have not been reviewed since the implementation of the PFS (so-called “Harvard-valued codes”). In the Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2009; and Revisions to the Amendment of the E-Prescribing Exemption for Computer Generated Facsimile Transmissions; Proposed Rule (73 FR 38589) (hereinafter referred to as the “CY 2009 PFS proposed rule”), we requested recommendations from the RUC to aid in our review of Harvard-valued codes that had not yet been reviewed, focusing first on high-volume, low intensity codes. In the fourth Five-Year Review (76 FR 32410), we requested recommendations from the RUC to aid in our review of Harvard-valued codes with annual utilization of greater than 30,000 services. In the CY 2013 PFS final rule with comment period, we identified specific Harvard-valued services with annual allowed charges that total at least $10,000,000 as potentially misvalued. In addition to the Harvard-valued codes, in the CY 2013 PFS final rule with comment period we finalized for review a list of potentially misvalued codes that have stand-alone PE (codes with physician work and no listed work time and codes with no physician work that have listed work time). We continue each year to consider and finalize a list of potentially misvalued codes that have or will be reviewed and revised as appropriate in future rulemaking.

3. CY 2022 Identification and Review of Potentially Misvalued Services

In the CY 2012 PFS final rule with comment period (76 FR 73058), we finalized a process for the public to nominate potentially misvalued codes. In the CY 2015 PFS final rule with comment period (79 FR 67606 through 67608), we modified this process whereby the public and stakeholders may nominate potentially misvalued codes for review by submitting the code with supporting documentation by February 10th of each year. Supporting documentation for codes nominated for the annual review of potentially misvalued codes may include the following:

• Documentation in peer reviewed medical literature or other reliable data that demonstrate changes in physician work due to one or more of the following: Technique, knowledge and technology, patient population, site-of-service, length of hospital stay, and work time.
• An anomalous relationship between the code being proposed for review and other codes.

• Evidence that technology has changed physician work.

• Analysis of other data on time and effort measures, such as operating room logs or national and other representative databases.
• Evidence that incorrect assumptions were made in the previous valuation of the service, such as a misleading vignette, survey, or flawed crosswalk assumptions in a previous evaluation.
• Prices for certain high cost supplies or other direct PE inputs that are used to determine PE RVUs are inaccurate and do not reflect current information.
• Analyses of work time, work RVU, or direct PE inputs using other data sources (for example, VA, NSQIP, the STS National Database, and the MIPS data).
• National surveys of work time and intensity from professional and management societies and organizations, such as hospital associations.

We evaluate the supporting documentation submitted with the nominated codes and assess whether the nominated codes appear to be potentially misvalued codes appropriate for review under the annual process. In the following year's PFS proposed rule, we publish the list of nominated codes and indicate for each nominated code whether we agree with its inclusion as a potentially misvalued code. The public has the opportunity to comment on these and all other proposed potentially misvalued codes. In that year's final rule, we finalize our list of potentially misvalued codes.

a. Public Nominations

In the proposed rule, we solicited comments regarding the codes that were nominated by the public and stakeholders as potentially misvalued. In this final rule, we review and summarize the comments we received regarding such codes, and we explain whether we are finalizing such codes as potentially misvalued. We received public nominations for potentially misvalued codes by February 10th and we displayed those nominations on our public website, where we also included the submitter's name and their associated organization for full transparency. Some submissions were for specific, PE-related inputs for codes, and we refer readers to section II.B. of this final rule Determination of PE RVUs for further discussions on PE-related submissions. Discussed below is the summary of this year's submissions under the potentially misvalued code initiative and the comments received from the proposed rule.

A stakeholder nominated CPT code 22551 ( Fusion of spine bones with removal of disc at upper spinal column, anterior approach, complex ) “and common related services” as potentially misvalued. Citing the CY 2021 PFS final rule (84 FR 84501) where CMS agreed with the public nomination of CPT code 22867 ( Insertion of interlaminar/interspinous process stabilization/distraction device, without fusion, including image guidance when performed, with open decompression, lumbar; single level ) as potentially misvalued, and discussed the relationship between CPT code 22867 and CPT code 63047 ( Laminectomy, facetectomy and foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s], [e.g., spinal or lateral recess stenosis]), single vertebral segment; lumbar ), this stakeholder suggests that there are additional CPT code values related to spine procedures that are in need of contemporaneous review with CPT code 22867. The stakeholder believes that CMS has an interest in reviewing associated anterior cervical discectomy and fusion (ACDF) procedures as well, and suggests that CPT code 22551 “and common related services” can result in cumulative RVUs that do not sufficiently reflect physician work, time, or outcomes.

In their submission, the stakeholder expressed concern that there is a discrepancy between the typical total RVUs for codes billed for vertebral fusion procedures performed using three synthetic cage devices with plate and vertebral fusion procedures performed using three allografts with plate. Both methods of vertebral fusion are described by CPT code 22551 (includes a 90-day global period), which has a work RVU of 25.00. Both methods of vertebral fusion involve two units of CPT code 22552 ( Arthrodesis, anterior interbody, including disc space preparation, discectomy, osteophytectomy and decompression of spinal cord and/or nerve roots; cervical below C2, each additional interspace (List separately in addition to code for primary procedure) (ZZZ global period) ) with a total work RVU of 13.00 (6.50 × 2); and both methods of vertebral fusion involve 1 unit of CPT code 22846 ( Anterior instrumentation; 4 to 7 vertebral segments (List separately in addition to code for primary procedure) (ZZZ global period) ) with a work RVU of 12.40. The vertebral fusion method employing three synthetic cage devices with a plate would involve CPT code 22853 ( Insertion of interbody biomechanical device(s) (e.g., synthetic cage, mesh) with integral anterior instrumentation for device anchoring (e.g., screws, flanges), when performed, to intervertebral disc space in conjunction with interbody arthrodesis, each interspace (List separately in addition to code for primary procedure) (ZZZ global period) ) for the insertion of synthetic cage devices for a total work RVU of 12.75 (4.25 × 3), and CPT code 20930 ( Allograft, morselized, or placement of osteopromotive material, for spine surgery only (List separately in addition to code for primary procedure) ) with a work RVU of 0.00 (because Medicare considers this code to be bundled into codes for other services). The stakeholder stated that the total work RVUs for the typical vertebral fusion employing three synthetic cage devices with plate would be 63.15 work RVUs.

In contrast, the stakeholder asserted that the vertebral fusion method employing three allografts with plate involves the same set of services and codes (CPT code 22551 (090 global period) and CPT code 22846 (ZZZ global period)), but instead of CPT codes 22853 or 20930, involve CPT code 20931 ( Allograft, structural, for spine surgery only (List separately in addition to code for primary procedure) (ZZZ global period) ) with a work RVU of 1.81. Altogether, the total work RVUs for CPT codes involved in this vertebral fusion method is 52.21. The stakeholder suggested that this difference in total work RVUs, 63.15 versus 52.21, is evidence that these services are misvalued, and that the total work RVUs do not reflect the differences in the amount of work, resources, and intensity between the two vertebral fusion methods.

This stakeholder's description of the potential misvaluation of CPT code 22551 “and common related services” differs from the CMS approach to identifying potentially misvalued services by using certain criteria, as described in the beginning of this section. Our determination that one or more codes are potentially misvalued generally revolves around the specific RVUs assigned to an individual code, or several codes within a family of codes. CMS generally does not examine the summed differences in total RVUs based on billing patterns using different codes in different scenarios, representing different physician work, and then comparing the two methods of a procedure, in this case, the use or non-use, of the synthetic cage devices in the vertebral fusion with removal of the disc in the upper spinal column. We do not believe that the stakeholder has provided support for the premise that CPT code 22551 alone is misvalued, or that any of the codes identified as common related services are misvalued. Therefore, we were not inclined to propose this code as potentially misvalued. However, we solicited comment, including any analysis or studies demonstrating that one or more of these codes meet the criteria listed above under “Identification and Review of Potentially Misvalued Services,” particularly in regard to any changes in the resources to providing a service, or are otherwise potentially misvalued.

A stakeholder nominated CPT code 49436 ( Delayed creation of exit site from embedded subcutaneous segment of intraperitoneal cannula or catheter ) as potentially misvalued, as it has not been valued for payment in the non-facility/office setting. This stakeholder did not include in their submission detailed recommendations for the items, quantities, and unit costs for the supplies, equipment types, and clinical labor (if any), that might be incurred in the non-facility/office setting, all of which are key factors when determining potential valuation or mis-valuation of a service. Medicare claims data for 2018, 2019, and 2020 show that CPT code 49436 is solely performed in the facility ASC setting. We solicited comment, including any analysis or studies demonstrating that this code meets the criteria listed above under “Identification and Review of Potentially Misvalued Services,” particularly in regard to any changes in the resources to providing a service, or is otherwise potentially misvalued.

A stakeholder nominated CPT code 55880 ( Ablation of malignant prostate tissue, transrectal, with high intensity-focused ultrasound (HIFU), including ultrasound guidance ) as potentially misvalued, as it has not been valued in the non-facility/office setting. This stakeholder also did not include in their submission detailed recommendations for items, quantities, and unit costs for the supplies, equipment types, and clinical labor (if any), that might be incurred in the non-facility/office setting, all of which are key factors when determining valuation or mis-valuation. This stakeholder stated that the advances in High Intensity Focused Ultrasound (HIFU) technology toward the destruction of cancerous tissues in the prostate gland have matured to the point where this procedure is now equally as effective and as safe as the cryoablation procedure described by CPT code 55873 ( Cryosurgical ablation of the prostate (includes ultrasonic guidance and monitoring) ), which is currently valued in the non-facility/office setting (186.69 total RVUs, approximately $6,514) and has been for approximately 10 years. We note that CPT code 55880 was reviewed and valued in the CY 2021 PFS final rule (85 FR 84614 through 84615) in the facility setting only. Accordingly, we do not have enough claims data for this code to make accurate comparisons to similar codes that may be furnished in non-facility settings. In the proposed rule, we explained that there was no case presented that constituted a misvaluation of CPT code 55880, and therefore, we were not inclined to put this code forward as potentially misvalued for CY 2022; however, we solicited comment, including any analysis or studies demonstrating that this code meets the criteria listed above under “Identification and Review of Potentially Misvalued Services,” particularly in regard to any changes in the resources to providing a service, or is otherwise potentially misvalued.

A stakeholder nominated CPT code 59200 ( Insertion cervical dilator (e.g., laminaria, prostaglandin) ) as potentially misvalued because the direct PE inputs do not include the supply item, Dilapan-S. This stakeholder had sought to establish a Level II HCPCS code for Dilapan-S, but CMS did not find sufficient evidence to support that request. The stakeholder submitted Dilapan-S to be considered as PE supply input to a Level I CPT code(s). This stakeholder seeks to add Dilapan-S to the nonfacility/office PE inputs for CPT code 59200. Specifically, the stakeholder recommends adding 4 rods of Dilapan-S at $80.00 per unit, for a total of $320.00, as a replacement for the current PE supply item, laminaria tent (a small rod of dehydrated seaweed that when inserted in the cervix, rehydrates, absorbing the water from the surrounding tissue in the woman's body), which is currently listed at $4.0683 per unit, with a total of 3 units, for a total of $12.20. We solicited comment, including any analysis or studies demonstrating that this code meets the criteria listed above under “Identification and Review of Potentially Misvalued Services,” particularly in regard to any changes in the resources to providing a service, or is otherwise potentially misvalued.

A stakeholder nominated CPT codes 66982 through 66986 as potentially misvalued, as they have not been valued in the non-facility/office setting. This stakeholder did not submit other details or reasoning to support their nomination. We note that some of these cataract-related procedures were initially reviewed and valued in CY 2020 PFS final rule (84 FR 62751), and that presently, additional codes in this family are scheduled to be reviewed and valued in this CY 2022 PFS final rule (we refer readers to section II.E. of this final rule, Valuation of Specific Codes). The highest utilization of these cataract codes are CPT code 66982 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique ( e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery ( e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; without endoscopic cyclophotocoagulation) ) and CPT code 66984 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique ( e.g., irrigation and aspiration or phacoemulsification); without endoscopic cyclophotocoagulation ). In 2018 and 2019, these services were almost all performed in the ASC facility setting, but based on 2020 claims, the most common setting appears to have shifted to the hospital inpatient or hospital outpatient facility setting. In the proposed rule, we noted that there was no case presented that constituted a misvaluation of CPT codes 66982 to 66986, and therefore, we were not inclined to put this code family forward as potentially misvalued for CY 2022; however, we solicited comment, including any analysis or studies demonstrating that one or more of these codes meet the criteria listed above under “Identification and Review of Potentially Misvalued Services,” particularly in regard to any changes in the resources involved in providing a service, or that the code(s) are otherwise potentially misvalued. See Table 14.

In response to the proposed rule, we received public comments on the CY 2022 identification and review of potentially misvalued services. The following is a summary of the comments we received and our responses.

Comment: We received one comment regarding CPT code 22551 “and other common related services typically billed with CPT 22551” on the same day of service, with the same patient, with the same provider(s). The commenter stated they believe that this code is not misvalued.

Response: We do not typically look at a collection of services to see if any one combination of services is misvalued against any other combination of services. This is true not just of vertebral fusion procedures, but of any combination of codes that are furnished by a billing physician. We generally only examine the potential misvaluation of a single code, and not a possible mix of multiple codes/services that might be furnished and billed together. Since CPT code 22551 was not nominated as being potentially misvalued for any of the reasons that we have described above in our criteria of being potentially misvalued, we are finalizing our proposal that this code will not be considered as potentially misvalued for CY 2022.

Comment: We received one comment for CPT code 55880, informing us that this service is expected to see further review for valuation recommendations with the AMA RUC in 2022 for possible CY 2024 recommendations to CMS, and that we should reconsider the valuation of CPT code 55880 at that later time.

Response: We appreciate this information, and note that this CPT code is already slated for review by the AMA RUC in the coming year. Therefore, we are finalizing our proposal that CPT code 55880 will not be considered as potentially misvalued for CY 2022.

Comment: We received comments regarding CPT code 59200 concerning the addition of the supply item Dilapan-S, and one of the comments was from the stakeholder that nominated CPT code 59200 as potentially misvalued. The commenters restated that Dilapan-S is not on the list of direct PE supplies for this code, and that the much less costly equivalent item, “laminaria tent,” is on the list of direct PE supplies for this code. One commenter cited evidence suggesting an increased risk of infections in using the laminaria tent as compared to Dilapan-S and that Dilapan-S achieves faster cervical ripening for quicker deliveries by 4 hours. This information was not echoed by other commenters and there were no other reasons given as to why Dilapan-S should replace the item laminaria tent and no evidence that Dilapan-S was in any other way a better performing supply that is widely used as a replacement.

Response: Based on these public comments, and the absence of broader support from any additional commenters on this nomination, we are not finalizing CPT code 59200 as potentially misvalued for CY 2022.

Comment: One commenter posited that the drug administration CPT codes 96401 to 96549 are potentially misvalued because claims in that code range are being adjusted by Medicare Administrative Contractors (MACs) and replaced with the less complex CPT codes [96360 to 96379].

Response: These “Complex Biological Agent Administration” codes (that is, CPT codes 96401 to 96549 and CPT codes 96360 to 96379) were not nominated as potentially misvalued for our consideration in the CY 2022 PFS proposed rule, and therefore, we did not address them in the proposed rule. As such, they are outside the scope of this CY 2022 PFS rulemaking process. Therefore, we decline to directly address this comment. However, we note that it is not clear to us how the commenter's assertion that MACs are making adjustments to the codes they use in their drug administration claims is relevant to the question of whether the codes are potentially misvalued. If the commenter continues to believe there is a potential code misvaluation, we suggest they consider submitting a nomination that addresses the criteria we use to assess whether a code is potentially misvalued, as explained above, before our February 10th deadline for a future rulemaking cycle.

Comment: We received comments on the nomination of CPT code 49436 only from the nominator of the code. The nominator provided additional documentation that CPT code 49436 can be safely performed in the nonfacility/office setting. The nominator noted that the total Medicare payment amount for this procedure when done in the nonfacility/office setting would be less than when furnished in the HOPD or ASC facility setting. The nominator stated that performing this procedure in the nonfacility/office rather than in an ASC is a significant ease in burden to the practitioner and the patient since there would be no need to coordinate and schedule an ASC time slot, travel to and from the ASC, or incur the cost involved in utilizing the ASC facility. The nominator also states that easing access to this service would promote peritoneal dialysis in the home setting (and may avoid in-center hemodialysis with a central venous catheter). The nominator also noted that dialysis in the home may be favorable to the patient during the public health emergency (PHE) for COVID-19, which imposes social distancing and self-isolation for a measure of safety from the transmission of infection. The nominator states that the PHE for COVID-19 may also be constraining access to ASC operating facilities due to their restricted schedules of operation.

Response: We agree with the nominator that CPT code 49436 can be safely performed in the nonfacility/office setting. We are also aware that the PHE for COVID-19 may also be constraining access to ASC operating facilities where CPT code 49436 is performed, and if this service were to be done in the nonfacility/office setting, there may well be an ease in the burden to the provider and the patient, when trying to coordinate access with the current PHE ASC restricted schedules. We expect that a nonfacility/office valuation for CPT code 49436, would include the similar supplies, equipment, and clinical labor (if any), that is part of the ASC/Hospital Outpatient facility's service, plus the payment of the physician's work. The sum of these PEs incurred in the nonfacility/office, will likely be less than current amount paid to the ASC/Hospital Outpatient facility and may result in a net savings when CPT code 49436 is provided in the nonfacility/office setting. After considering the additional information provided by the nominator in combination with our above criteria that a code's typical site of service may need to change since it was last valued, we believe it may be appropriate to explore establishing a value for CPT code 49436 in the non-facility/office setting, and therefore, we are finalizing this code as potentially misvalued for CY 2022.

We received no comments recommending that CPT codes 66982 through 66986 should be valued for payment in the non-facility/office setting, and the nominator supplied no reasoning in support of their nomination of these codes as potentially misvalued codes. Since, as we explained in the proposed rule, there is no case presented with this nomination that constitutes a potential code misvaluation, we are finalizing our proposal that these codes will not be considered as potentially misvalued for CY 2022.

We received two comments requesting that CMS establish a national payment rate for Category III CPT code 0583T ( Insertion of ventilating tube in eardrum using an automated tube delivery system under local anesthesia ), also known as tympanostomy under local anesthesia (Tula). This code is currently carrier-priced and was not discussed in the CY 2022 PFS proposed rule. As such, these comments are outside the scope of the CY 2022 PFS rulemaking process, and we will not formally respond to them. However, the commenters are welcome to submit this code by February 10 of the coming year for consideration as potentially misvalued for the CY 2023 PFS proposed rule. See above for more information on how to submit a nomination for a potentially misvalued code.

D. Telehealth and Other Services Involving Communications Technology, and Interim Final Rule With Comment Period for Coding and Payment of Virtual Check-In Services—Payment for Medicare Telehealth Services Under Section 1834(m) of the Act

As discussed in prior rulemaking, several conditions must be met for Medicare to make payment for telehealth services under the PFS. See further details and full discussion of the scope of Medicare telehealth services in the CY 2018 PFS final rule (82 FR 53006) and CY 2021 PFS final rule (85 FR 84502) and in 42 CFR 410.78 and 414.65.

1. Payment for Medicare Telehealth Services Under Section 1834(m) of the Act

a. Changes to the Medicare Telehealth Services List

In the CY 2003 PFS final rule with comment period (67 FR 79988), we established a regulatory process for adding services to or deleting services from the Medicare telehealth services list in accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR 410.78(f)). This process provides the public with an ongoing opportunity to submit requests for adding services, which are then reviewed by us and assigned to categories established through notice and comment rulemaking. Specifically, we assign any submitted request to add to the Medicare telehealth services list to one of the following two categories:

• Category 1: Services that are similar to professional consultations, office visits, and office psychiatry services that are currently on the Medicare telehealth services list. In reviewing these requests, we look for similarities between the requested and existing telehealth services for the roles of, and interactions among, the beneficiary, the physician (or other practitioner) at the distant site and, if necessary, the telepresenter, a practitioner who is present with the beneficiary in the originating site. We also look for similarities in the telecommunications system used to deliver the service; for example, the use of interactive audio and video equipment.

• Category 2: Services that are not similar to those on the current Medicare telehealth services list. Our review of these requests includes an assessment of whether the service is accurately described by the corresponding code when furnished via telehealth and whether the use of a telecommunications system to furnish the service produces demonstrated clinical benefit to the patient. Submitted evidence should include both a description of relevant clinical studies that demonstrate the service furnished by telehealth to a Medicare beneficiary improves the diagnosis or treatment of an illness or injury or improves the functioning of a malformed body part, including dates and findings, and a list and copies of published peer reviewed articles relevant to the service when furnished via telehealth. Our evidentiary standard of clinical benefit does not include minor or incidental benefits. Some examples of other clinical benefits that we consider include the following:

• Ability to diagnose a medical condition in a patient population without access to clinically appropriate in-person diagnostic services.
• Treatment option for a patient population without access to clinically appropriate in-person treatment options.
• Reduced rate of complications.
• Decreased rate of subsequent diagnostic or therapeutic interventions (for example, due to reduced rate of recurrence of the disease process).
• Decreased number of future hospitalizations or physician visits.
• More rapid beneficial resolution of the disease process treatment.
• Decreased pain, bleeding, or other quantifiable symptom.
• Reduced recovery time.

• Category 3: In the CY 2021 PFS final rule (85 FR 84507), we created a third category of criteria for adding services to the Medicare telehealth services list on a temporary basis following the end of the PHE for the COVID-19 pandemic. This new category describes services that were added to the Medicare telehealth services list during the PHE for which there is likely to be clinical benefit when furnished via telehealth, but there is not yet sufficient evidence available to consider the services for permanent addition under the Category 1 or Category 2 criteria. Services added on a temporary, Category 3 basis will ultimately need to meet the criteria under Category 1 or 2 in order to be permanently added to the Medicare telehealth services list. To add specific services on a Category 3 basis, we conducted a clinical assessment to identify those services for which we could foresee a reasonable potential likelihood of clinical benefit when furnished via telehealth. We considered the following factors:

++ Whether, outside of the circumstances of the PHE for COVID-19, there are concerns for patient safety if the service is furnished as a telehealth service.

++ Whether, outside of the circumstances of the PHE for COVID-19, there are concerns about whether the provision of the service via telehealth is likely to jeopardize quality of care.

++ Whether all elements of the service could fully and effectively be performed by a remotely located clinician using two-way, audio/video telecommunications technology.

In the CY 2021 PFS final rule (85 FR 84507), we also temporarily added several services to the Medicare telehealth services list using the Category 3 criteria described above. In this final rule, we are considering additional requests to add services to the Medicare telehealth services list on a Category 3 basis using the previously described Category 3 criteria.

The Medicare telehealth services list, including the additions described later in this section, is available on the CMS website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.

Beginning in CY 2019, we stated that for CY 2019 and onward, we intend to accept requests through February 10, consistent with the deadline for our receipt of code valuation recommendations from the RUC (83 FR 59491). For CY 2022, requests to add services to the Medicare telehealth services list must have been submitted and received by February 10, 2021. Each request to add a service to the Medicare telehealth services list must have included any supporting documentation the requester wishes us to consider as we review the request. Because we use the annual PFS rulemaking process as the vehicle to make changes to the Medicare telehealth services list, requesters are advised that any information submitted as part of a request is subject to public disclosure for this purpose. For more information on submitting a request in the future to add services to the Medicare telehealth services list, including where to mail these requests, see our website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.

b. Requests To Add Services to the Medicare Telehealth Services List for CY 2022

Under our current policy, we add services to the Medicare telehealth services list on a Category 1 basis when we determine that they are similar to services on the existing Medicare telehealth services list for the roles of, and interactions among, the beneficiary, physician (or other practitioner) at the distant site and, if necessary, the telepresenter. As we stated in the CY 2012 PFS final rule with comment period (76 FR 73098), we believe that the Category 1 criteria not only streamline our review process for publicly requested services that fall into this category, but also expedite our ability to identify codes for the Medicare telehealth services list that resemble those services already on the Medicare telehealth services list.

We received several requests to permanently add various services to the Medicare telehealth services list effective for CY 2022. We found that none of the requests we received by the February 10th submission deadline met our Category 1 or Category 2 criteria for permanent addition to the Medicare telehealth services list. The requested services are listed in Table 15.

We remind stakeholders that the criterion for adding services to the Medicare telehealth list under Category 1 is that the requested services are similar to professional consultations, office visits, and office psychiatry services that are currently on the Medicare telehealth services list, and that the criterion for adding services under Category 2 is that there is evidence of clinical benefit if provided as telehealth. As explained below, we find that none of the requested services met the Category 1 criterion.

We received a request to permanently add CPT code 51741 ( Complex uroflowmetry ( e.g., calibrated electronic equipment )) to the Medicare telehealth services list. This CPT code describes the acquisition of uroflowmetric information and analysis of that information. The code includes a technical component and a professional component. The technical component describes the acquisition of the uroflowmetric information when billed as a standalone service. The professional component describes the analysis for the uroflowmetric information when it is billed as a standalone service. As we have explained in previous rulemaking (see 83 FR 59483), the remote interpretation of diagnostic tests is not considered to be a telehealth service under section 1834(m) of the Act or our regulation at § 410.78. We do not believe that the technical component, which includes acquisition of the uroflowmetric information, will meet the criterion to be added on a Category 1 basis, because it is not similar to other services on the Medicare telehealth list. Moreover, we do not believe the uroflowmetric information can be accurately and effectively collected using two-way, audio/video communications technology to the degree that will make the results clinically useful. We believe the patient would need to be in the same location as the equipment; thus, making it impracticable to achieve via telehealth. Due to these concerns, we do not believe that the submitted information demonstrates sufficient clinical benefit to support the addition of CPT code 51741 to the Medicare telehealth services list.

We received a request to permanently add several biofeedback, services, CPT codes 90901, 90912, and 90913, to the Medicare telehealth services list. We do not believe these services are similar to Category 1 services on the Medicare telehealth list in that these services describe the application of electrodes directly to the patient's skin and using them to monitor the patient's response. Therefore, we do not believe they meet the criterion for addition to the Medicare telehealth services list on a Category 1 basis. We also believe that proper application of electrodes and monitoring of the patient's response would require the furnishing practitioner to be in the same physical location as the beneficiary. As such, we do not believe these services meet the criteria for addition to the Medicare telehealth list on a Category 2 basis. When we reviewed these biofeedback services on a Category 2 basis, we found that the information supplied with the requests was not detailed enough to determine if the objective functional outcomes (that is, Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs) of the telehealth patients) were similar to that of patients treated in person. Moreover, we believe that the ADLs/IADLs alone are not sufficient to determine if these services, when performed via telehealth, demonstrate a clinical benefit to a patient. We request that stakeholders supply a more comprehensive set of objective data in order to fully illustrate any benefits, to better enable us to evaluate all outcomes.

We received requests to permanently add Neuropsychological/Psychological Testing services, CPT codes 96130-96133 and 96136-96139, to the Medicare telehealth services list. We separately reviewed each of the services in these two code families. In prior years' rulemaking, we have declined to add these services on a Category 1 basis because, in contrast to other services on the telehealth list, these services require close observation by the furnishing practitioner to monitor how a patient responds and progresses through the testing (see 81 FR 80197). We continue to believe that this is the case. All of these codes describe services that involve a very thorough observation and testing process, and require the tester to observe the following: Speed of responses; the ability to adjust focus; written, sometimes manual tasks; following tasks that display the patients' visuospatial mapping abilities, pattern recognition, abstraction, calculation—all while appreciating that the patient may be distracted or aided by environmental cues. The tester must also maintain some subjective amount of flexibility to allow the patient to be in their environment. Additionally, the tester has to maintain professional scrutiny through dynamic tasks. Given all of the above, remote observation by the furnishing practitioner to accomplish the testing in question seems impractical and potentially creates the risk of inaccuracies in diagnosis and subsequent treatment. We note that the information supplied by stakeholders did not address these concerns, and as such, we have concerns over patient safety and the ability of these services to be accurately and thoroughly performed via telehealth to demonstrate a clinical benefit to Medicare beneficiaries. Therefore, we do not believe these services meet the Category 2 criteria for permanent addition to the Medicare telehealth list of services. Consequently, we did not propose to add these services to the Medicare telehealth services list. We encourage stakeholders to submit information addressing the concerns we have stated in any future requests to have these services added to the Medicare telehealth list of services.

We received requests to add Therapy Procedures, CPT codes 97110, 97112, 97116, 97150, and 97530; Physical Therapy Evaluations, CPT codes 97161-97164; Therapy Personal Care services, CPT codes 97535, 97537, and 97542; and Therapy Tests and Measurements services, CPT codes 97750, 97755, and 97763, to the Medicare telehealth services list. In the CY 2017 PFS final rule (81 FR 80198), we noted that section 1834(m)(4)(E) of the Act specifies the types of practitioners who may furnish and bill for Medicare telehealth services as those practitioners under section 1842(b)(18)(C) of the Act. Physical therapists (PTs), occupational therapists (OTs), and speech-language pathologists (SLPs) are not among the practitioners identified in section 1842(b)(18)(C) of the Act. We also stated in the CY 2017 PFS final rule that, because these services are predominantly furnished by PTs, OTs, and SLPs, we did not believe it would be appropriate to add them to the Medicare telehealth services list at that time. In a subsequent request to consider adding these services for 2018, the original requester suggested that we might propose these services be added to the Medicare telehealth services list so that payment can be made for them when furnished via telehealth by physicians or practitioners who can serve as distant site practitioners. We stated that, since the majority of the codes are furnished over 90 percent of the time by therapy professionals who are not included on the statutory list of eligible distant site practitioners, we believed that adding therapy services to the Medicare telehealth services list could result in confusion about who is authorized to furnish and bill for these services when furnished via telehealth. We continue to believe this to be true; however, we reviewed each therapy service separately, and have categorized them together here for convenience as the same set of information accompanied the request for each of these services.

We determined that these services did not meet the Category 1 criteria for addition to the Medicare telehealth services because they are therapeutic in nature and in many instances involve direct physical contact between the practitioner and the patient. In assessing the evidence that was supplied by stakeholders in support of adding these services to the Medicare telehealth services list on a Category 2 basis, we concluded that it did not provide sufficient detail to determine whether all of the necessary elements of the service could be furnished remotely, and whether the objective functional outcomes of ADL and IADL for the telehealth patients were similar to those of patients receiving the services in person. As we stated above when discussing the request to add certain biofeedback services to the telehealth list, we do not believe ADLs and IADLS alone are sufficient to demonstrate clinical benefit to a Medicare beneficiary. We have enumerated above some examples of the types of clinical benefits we will consider when evaluating services using the Category 2 criterion.

Therefore, we do not believe the supplied information demonstrates that the services meet either the Category 1 or the Category 2 criteria. We did not propose to add these services to the Medicare telehealth services list. We continue to encourage commenters to supply sufficient data for us to be able to see all measurements/parameters performed, so that we may evaluate all outcomes.

We received requests to add the services in Table 16, and we note that these services are generally not separately payable under the Medicare PFS. Given that these services are not separately payable when furnished in-person, they likewise will not be separately payable when furnished as telehealth. Section 1834(m)(2)(A) of the Act provides that payment for a service when furnished as a telehealth services is equal to the payment when the service is furnished in person. CPT code 90849 has a restricted payment status, indicating that claims must be adjudicated on a case-by-case basis when furnished in-person. Accordingly, any separate payment for that service will require special consideration and not be routine. Therefore, we do not believe this service should be added to the Medicare telehealth list. CPT codes 98960-98962 are bundled services, and therefore, payment for these services is always bundled into payment of other services. For that reason, we did not propose to add them to the Medicare list of telehealth services.

We received requests to temporarily add Neurostimulators, CPT codes 95970-95972, and Neurostimulators, Analysis-Programming services, CPT codes 95983 and 95984, to the Medicare telehealth services list using the Category 3 criteria (see Table 17). In their submission, the requestor noted they would conduct a future study and would submit the study data to CMS at a later date. These services are on the expanded telehealth services list for the PHE, but were not added by CMS on a category 3 basis in the CY 2021 PFS final rule. We do not yet have sufficient information to adjudicate whether these services are likely to meet the category 1 or category 2 criteria given additional time on the Medicare telehealth services list, without having evaluated the full data, and we encourage commenters to submit all available information, when available, for future consideration. As a result, we did not propose to add these services to the Medicare telehealth list of services on a Category 3 basis at this time.

We received public comments on the requests to add services to the Medicare telehealth services list. The following is a summary of the comments we received and our responses.

Comment: Commenters expressed disappointment that CMS did not propose to add Neurostimulators, CPT codes 95970-95972, and Neurostimulators, Analysis-Programming services, CPT codes 95983 and 95984, to the Medicare telehealth services list on a Category 3 basis. Commenters stated that, by not adding these services to the Medicare telehealth list on a Category 3 basis, CMS is risking disruption of care for patients who may have become accustomed to receiving these services as telehealth during the PHE.

Some commenters requested that CMS add all codes that were added to the Medicare telehealth services list on an interim basis (in response to the PHE for COVID-19) to the Medicare telehealth list on a Category 3 basis (Table 18), but these commenters did not provide any additional clinical information.

Many commenters opposed CMS' decision not to add CPT codes describing therapy services permanently to the list of Medicare telehealth services. They stated that adding these CPT codes to the list of covered telehealth services would better ensure a seamless transition if additional practitioners, such as physical therapists, become eligible to furnish and bill for telehealth services under Medicare.

Some commenters stated that CMS should maintain payment for Medicare telehealth services at the non-facility, rather than facility payment rates.

Response: We added services temporarily to the Medicare telehealth services list on an emergency basis to allow practitioners and beneficiaries to have access to medically necessary care while avoiding both risk for infection and further burdening healthcare settings during the PHE for COVID-19. The comments provided did not include sufficient clinical information to support adding these services to the telehealth services list. Absent additional clinical information from the commenters, we still believe that these services are not appropriate for addition on either a permanent or Category 3 basis; however, we are continuing to collect information on the use of these services during the PHE for COVID-19, and we invite stakeholders to provide additional information and to submit requests for addition to the telehealth list through our usual process. With regard to the comment requesting Medicare telehealth payment at the non-facility versus facility rate, we refer readers to discussion of this issue in the CY 2017 PFS final rule (81 FR 80199- 80201). Payment for telehealth services using the facility PE RVUs is consistent with our belief that the direct practice expense costs are generally incurred at the originating site where the beneficiary is located, and not by the distant site practitioner. With respect to commenters' concerns about potential disruption of care, we do not agree that this will occur. These services have been included on the Medicare telehealth services list only in response to the PHE for COVID-19. We believe patients and practitioners have a longstanding history of in-person delivery of care. We anticipate that the end of the PHE will not be declared abruptly, and note that healthcare has already begun to transition back to typical, in-person delivery.

After consideration of public comments, we are finalizing our proposal not to add the aforementioned codes to the telehealth list.

c. Revised Timeframe for Consideration of Services Added to the Telehealth List on a Temporary Basis

In the CY 2021 PFS final rule (85 FR 84506), in response to the PHE for COVID-19, we created a third category of criteria for adding services to the Medicare telehealth services list on a temporary basis. We included in this category the services that were added during the PHE for COVID-19 for which we believed there is likely to be clinical benefit when furnished via telehealth, but for which there is not yet sufficient evidence available to consider the services as permanent additions under Category 1 or Category 2 criteria. We recognized that the services we added on a temporary basis under Category 3 will ultimately need to meet the criteria under Categories 1 or 2 in order to be permanently added to the Medicare telehealth services list, and that there was a potential for evidence development that could continue through the Category 3 temporary addition period. We also stated that any service added on a temporary basis under Category 3 will remain on the Medicare telehealth services list through the end of the calendar year in which the PHE for COVID-19 ends.

We added 135 services to the Medicare telehealth list in CY 2020 on an interim basis in response to the PHE for COVID-19 through the interim final rule with comment period (IFC) (March 31st COVID-19 IFC (85 FR 19234-19243) and the subregulatory process established in the May 8th COVID-19 IFC (85 FR 27550-27649). Since the publication of the May 8th COVID-19 IFC, we have added several services to the Medicare telehealth list of services using this subregulatory process (please see https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes for the list of codes available for telehealth under the PFS). As discussed in the CY 2021 PFS final rule (FR 85 84507), at the conclusion of the PHE for COVID-19, associated waivers and interim policies will expire, payment for Medicare telehealth services will once again be limited by the requirements of section 1834(m) of the Act, and we will return to the policies established through the regular notice-and-comment rulemaking process, including the previously established Medicare telehealth services list, as modified by subsequent changes in policies and additions to the telehealth services list adopted through rulemaking. Many services that were temporarily added on an interim basis during the PHE for COVID-19 will not be continued on the list after the end of the PHE for COVID-19.

Numerous stakeholders have continued to note that there is uncertainty about when the PHE for COVID-19 may end, and express concerns that the services added to the telehealth list on a temporary basis could be removed from the list before practitioners have had time to compile and submit evidence to support the permanent addition of these services on a Category 1 or Category 2 basis. To respond to these continuing concerns, we proposed to revise the timeframe for inclusion of the services we added to the Medicare telehealth services list on a temporary, Category 3 basis. Extending the temporary inclusion of these, Category 3 services on the telehealth list will allow additional time for stakeholders to collect, analyze, and submit data on those services to support their consideration for permanent addition to the list on a Category 1 or Category 2 basis.

We proposed to retain all services added to the Medicare telehealth services list on a Category 3 basis until the end of CY 2023. We noted that this proposal would allow us time to collect more information regarding utilization of these services during the pandemic, and provide stakeholders the opportunity to continue to develop support for the permanent addition of appropriate services to the telehealth list through our regular consideration process, which includes notice-and-comment rulemaking. By keeping these services on the Medicare telehealth services list through CY 2023, we will facilitate the submission of requests to add services permanently to the Medicare telehealth services list for consideration in the CY 2023 PFS rulemaking process and for consideration in the CY 2024 PFS rule.

We recognize that, during the time between the publication of the CY 2021 PFS final rule and this final rule, practitioners may have used that time to compile new evidence of clinical benefit to support addition to the Medicare telehealth services list on a Category 3 basis, including information that suggests that a certain service will likely meet the Category 1 or Category 2 criteria if provided with more time. We solicited comment on whether any of the services that were added to the Medicare telehealth list for the duration of the PHE for COVID-19 should now be added to the Medicare telehealth list on a Category 3 basis, to allow for additional data collection for submission for CMS to consider as part of the rulemaking process described in prior paragraphs.

We received public comments on the proposed revised timeframe for consideration of services added to the telehealth list on a temporary basis and our comment solicitation on any additional services we should consider under Category 3 criteria. The following is a summary of the comments we received and our responses.

Comment: Commenters supported our proposal to maintain services temporarily added to the Medicare telehealth services list on a Category 3 basis through the end of CY 2023. Commenters stated that by extending the inclusion of these services on the telehealth services list through a set date that is not linked to the end of the PHE, CMS is eliminating the unnecessary suspense and confusion that would have come from a more abrupt change. Some commenters suggested that CMS extend the timeframe beyond the end of 2023, if the PHE is extended beyond that point.

Response: We appreciate commenters support for a more definitive timeframe for Category 3 codes to remain available on the Medicare telehealth services list. Consideration of any extensions at this time is outside the scope of this final rule.

Comment: Some commenters requested that CMS add certain therapy, audiology, and speech-language pathology services to the Medicare telehealth list on a Category 3 basis to facilitate the collection of information on how these services can be furnished via telehealth and so that these services may be furnished via telehealth outside of the PHE, billed incident to a physician's professional services. These commenters also suggested that this may also aid in CMS' efforts to continue to gather information on these services when performed via telehealth. These commenters did not provide any additional clinical information to support their request.

Response: The commenters did not provide any additional clinical information with their request, especially clinical information that would satisfy our criteria for inclusion on the Medicare telehealth list, in any category. We are not finalizing addition of these services to the Medicare telehealth list.

Comment: Some commenters requested that CMS add CPT codes 93797 (Physician or other qualified health care professional services for outpatient cardiac rehabilitation; without continuous ECG monitoring (per session)) and 93798 (Physician or other qualified health care professional services for outpatient cardiac rehabilitation; with continuous ECG monitoring (per session)) and HCPCS codes G0422 (Intensive cardiac rehabilitation; with or without continuous ecg monitoring with exercise, per session) and G0423 (Intensive cardiac rehabilitation; with or without continuous ecg monitoring; without exercise, per session) to the Medicare telehealth list on a Category 3 basis. These commenters provided a number of studies on the safety and efficacy of at-home cardiac rehabilitation services.

Response: We agree with commenters that it would be appropriate to add CPT codes 93797 and 93798 and HCPCS codes G0422 and G0423 to the telehealth services list on a Category 3 basis. We also remind commenters that any services added on a Category 3 basis would ultimately need to meet the criteria for addition to the telehealth services list on either a Category 1 or 2 basis in order to be permanently added to the Medicare telehealth services list. In the future, we would expect to see evidence that the risk:benefit ratio of these services when provided via telehealth is clearly in favor of the patient and that the welfare of beneficiaries is not compromised nor are their outcomes diminished. We would also be interested in considering the patient characteristics which allow the treating practitioner to select the most appropriate recipients of these services via telehealth. As the evidence evolves on this subject matter, we welcome further discussion with stakeholders on this topic.

Comment: Many commenters requested that CPT codes 99441-99443 (Telephone evaluation and management services by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment) be added to the Medicare telehealth list on a Category 3 basis. The commenters noted that these codes could be used for mental health services and should be permanently available as part of the expansion of availability of mental health services via telehealth.

Response: We note that for services for the diagnosis, evaluation or treatment of mental health conditions, we are finalizing a policy to revise the definition of “telecommunications system” for purposes of section 1834(m) of the Act to allow the use of audio-only technology under certain circumstances, described in detail below, that will allow visits and others services furnished via audio-only technology to be reported as telehealth services with the appropriate modifier. For example, the office/outpatient E/M codes are on the telehealth list permanently and when used to describe care for mental health conditions, will be reportable when furnished via audio-only technology to patients in their homes. Since audio-only telecommunications technology can be used to furnish mental health telehealth services to patients in their homes, the addition of these codes to the telehealth services list is unnecessary for mental health telehealth services. For telehealth services other than mental health care, we continue to believe that two-way, audio/video communications technology is the appropriate, general standard that will apply for telehealth services after the PHE, so we do not believe it would be appropriate for these codes to remain on the telehealth list after the end of the PHE.

After consideration of public comments, we are finalizing as proposed the revised timeframe for inclusion of the services we added to the Medicare telehealth services list on a temporary, Category 3 basis. We will retain all services added to the Medicare telehealth services list on a Category 3 basis until the end of CY 2023. Additionally, we are adding CPT codes 93797 and 93798 and HCPCS codes G0422 and G0423 to the Category 3 Medicare telehealth services list. These services appear on the list of telehealth services on the CMS telehealth website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html with a status of “Available through December 31, 2023.”

d. Implementation of Provisions of the Consolidated Appropriations Act, 2021 (CAA)

The Consolidated Appropriations Act, 2021 (CAA) (Pub. L. 116-260, December 27, 2020) included a number of provisions pertaining to Medicare telehealth services. The Medicare telehealth statute at section 1834(m)(4)(C) of the Act generally limits the scope of telehealth services to those furnished in rural areas and in certain enumerated types of “originating sites” including physician offices, hospitals, and other medical care settings. Section 1834(m)(7) of the Act, (as added by section 2001(a) of the SUPPORT for Patients and Communities Act (Pub. L. 115-271, October 24, 2018), specifies that the geographic restrictions under section 1834(m)(4)(C)(i) of the Act do not apply, and includes the patient's home as a permissible originating site, for telehealth services furnished to a patient with a diagnosed substance use disorder (SUD) for treatment of that disorder or a co-occurring mental health disorder. Section 123(a) of Division CC of the CAA amended section 1834(m)(7)(A) of the Act to broaden the scope of services for which the geographic restrictions under section 1834(m)(4)(C)(i) of the Act do not apply and for which the patient's home is a permissible originating site to include telehealth services furnished for the purpose of diagnosis, evaluation, or treatment of a mental health disorder, effective for services furnished on or after the end of the PHE for COVID-19.

Section 123(a) of the CAA also added subparagraph (B) to section 1834(m)(7) of the Act to prohibit payment for a telehealth service furnished in the patient's home under paragraph (7) unless the physician or practitioner furnishes an item or service in-person, without the use of telehealth, within 6 months prior to the first time the physician or practitioner furnishes a telehealth service to the beneficiary, and thereafter, at such times as the Secretary determines appropriate. However, section 123(a) of the CAA added a clarification at section 1834(m)(7)(B)(ii) of the Act that the periodic requirement for an in-person item or service does not apply if payment for the telehealth service furnished would have been allowed without the new amendments. As such, the requirement for a periodic in-person item or service applies only for telehealth services furnished for purposes of diagnosis, evaluation, or treatment of a mental health disorder other than for treatment of a diagnosed SUD or co-occurring mental health disorder, and only in locations that do not meet the geographic requirements in section 1834(m)(4)(C)(i) of the Act or when the originating site is the home of the patient, regardless of geography. We solicited comments on whether we should adopt a claims-based mechanism to distinguish between the mental health telehealth services that are within the scope of the CAA amendments and those that are not (in other words, the services for which payment was newly authorized by the CAA amendments, and those for which payment was authorized before the CAA amendments), and if so, what that mechanism should be. In the event that we need to distinguish between the mental health telehealth services that are within the scope of the CAA amendments and those that are not, we also solicited comments on whether a clarification should be added to the regulation at § 410.78 as follows (which will take into account the other amendments we proposed to § 410.78):

The requirement that the physician or practitioner must furnish an item or service in person, without the use of telehealth, within a specified time frame shall not apply to telehealth services furnished for treatment of a diagnosed substance use disorder or co-occurring mental health disorder, or to services furnished in an originating site described in paragraphs (b)(3)(i) through (viii) or (xiii) that meets the geographic requirements specified in paragraph (b)(4) other than paragraph (b)(4)(iv)(D).

As we noted above, section 123(a) of the CAA amends section 1834(m)(7)(B)(i)(I) of the Act to prohibit payment for telehealth services under that paragraph unless the physician or practitioner furnished an item or service to the patient in person, without the use of telehealth, within 6 months before the first telehealth service. Thereafter, section 1834(m)(7)(B)(i)(II) of the Act leaves the Secretary discretion to specify the times or intervals at which an in-person, non-telehealth service is required as a condition of payment for these telehealth services. Therefore, in order to implement the new statutory requirement to specify when an in-person service is required, we proposed that, as a condition of payment for a mental health telehealth service described in section 1834(m)(7)(A) of the Act other than services described in section 1834(m)(7)(B)(ii) of the Act (that is, services for which payment was authorized before the CAA amendments), the billing physician or practitioner must have furnished an in-person, non-telehealth service to the beneficiary within the 6-month period before the date of the telehealth service.

We also solicited comments on whether the required in-person, non-telehealth service could also be furnished by another physician or practitioner of the same specialty and same subspecialty within the same group as the physician or practitioner who furnishes the telehealth service. We note that the language in the CAA states that the physician or practitioner furnishing the in-person, non-telehealth service must be the same person as the practitioner furnishing the telehealth service. There are several circumstances, however, under which we have historically treated the billing practitioner and other practitioners of the same specialty or subspecialty in the same group as if they were the same individual. For instance, for purposes of deciding whether a patient is a new or established patient, or whether to bill for initial or subsequent visit, practitioners of the same specialty/subspecialty in the same group are treated as the same person. For example, when Physician A and Physician B are of the same specialty and subspecialty and in the same group, if Physician A furnishes an initial critical care service to a patient, and Physician B subsequently furnishes additional critical care services to the same beneficiary for the same condition on the same day, Physician B will bill for a subsequent critical care service rather than an initial critical care visit. As we explain in section II.F of this final rule, because practitioners in the same specialty and same group often cover for one another to provide concurrent services, we believe the total time for critical care services furnished to a patient on the same day by the practitioners in the same group with the same specialty should be reflected as if it were a single set of critical care services furnished to the patient. See section II.F.2 of this final rule for further discussion of our current policies for billing critical care services. Similarly, if Physician A furnished a service to a patient, and then Physician B furnished a service to the patient a few months later, that patient will be considered an established patient with respect to both Physician A and Physician B. For example, Physician B could initiate care management services for the patient as an established patient. An example of guidance to this effect can be found in the Medicare Claims Processing Manual (IOM Pub. 100-04, Chapter 12, § 30.6.7), which defines “new patient” as a patient who has not received any professional services, that is, E/M service or other face-to-face service (for example, surgical procedure) from the physician or physician group (same physician specialty) within the previous 3 years, for E/M services.

We note that this manual provision is also consistent with CPT guidance on whether a patient is a new or established patient.

We solicited comments regarding the extent to which a patient routinely receiving mental health services from one practitioner in a group might have occasion to see a different practitioner of the same specialty in that group for treatment of the same condition. This might occur when practitioners in a group cover for each other when a particular practitioner is unavailable or when a practitioner has left the group, but the beneficiary continues to receive services furnished by the group. In addition, fee-for-time compensation arrangements (formerly referred to as locum tenens arrangements), as described in section 1842(b)(6)(D) of the Act, allow for payment to be made to a physician for physicians' services (and services furnished incident to such services) furnished by a second physician to patients of the first physician if the first physician is unavailable to provide the services, and the services are furnished pursuant to an arrangement that is either informal and reciprocal, or involves per diem or other fee-for-time compensation for such services.

Recognizing the importance of ensuring access to mental health telehealth services for beneficiaries who are unable to see the same practitioner who furnished the prerequisite in-person services due to the practitioner's unavailability, we solicited comments on an alternative policy to also allow the prerequisite in-person, non-telehealth service for certain mental health telehealth services to be furnished by a practitioner in the same specialty/subspecialty in the same group when the physician or practitioner who furnishes the telehealth service is unavailable or the two professionals are practicing as a team.

As amended by the CAA, section 1834(m)(7)(B)(i)(II) of the Act specifies that for subsequent mental health telehealth service, an in-person, non-telehealth service is required at such times as the Secretary determines appropriate. We proposed to require that an in-person, non-telehealth service must be furnished by the physician or practitioner at least once within 6 months before each telehealth service furnished for the diagnosis, evaluation, or treatment of a mental health disorder by the same practitioner, other than for treatment of a diagnosed SUD or co-occurring mental health disorder, and that the distinction between the telehealth and non-telehealth services must be documented in the patient's medical record. We are clarifying here that, consistent with the conditions specified in section 1834(m)(7)(B)(i) of the Act, the in-person non-telehealth service requirements apply only to telehealth services furnished to a patient in a home originating site. We distinguish between mental health services furnished for a diagnosed SUD or co-occurring mental health disorder and those furnished to beneficiaries without a SUD diagnosis on the basis of ICD-10 diagnosis codes included on claims when the services are billed. We chose this interval because we are concerned that an interval less than 6 months may impose potentially burdensome travel requirements on the beneficiary, but that an interval greater than 6 months could result in the beneficiary not receiving clinically necessary in-person care/observation. The 6-month interval also matches the specified statutory interval for the initial telehealth service. We believe that a 6-month interval strikes an appropriate balance between these competing considerations, but solicited comments on whether a different interval, whether shorter, such as 3-4 months or longer, such as 12 months, may be appropriate to balance program integrity and patient safety concerns with increased access to care. We noted, however, that regardless of the time interval we establish, the practitioner is not precluded from scheduling in-person visits at a more frequent interval, should such visit be determined to be clinically appropriate or preferred by the patient.

As discussed below in this section of this final rule, “e. Payment for Medicare Telehealth Services Furnished Using Audio-Only Communications Technology,” we proposed to revise our regulatory definition of “interactive telecommunications system” to permit use of audio-only communications technology for mental health telehealth services under certain conditions when provided to beneficiaries located in their home. Therefore, we solicited comments on whether it would be appropriate to establish a different interval for these telehealth services, for the diagnosis, evaluation, or treatment of mental health disorders, other than for treatment of diagnosed SUD or co-occurring mental health disorder, when furnished as permitted through audio-only communications technology.

In any event, we proposed that there would need to be an in-person visit within 6 months of any telehealth service furnished for the diagnosis, evaluation, or treatment of mental health disorders (other than for treatment of a diagnosed SUD or co-occurring mental health disorder), and the in-person visit would need to be documented in the patient's medical record. Payment would not be made for these telehealth services unless the required in-person service was furnished within 6 months of the telehealth service.

Given the addition of the home of the individual as a permissible originating site for telehealth services for purposes of diagnosis, evaluation, or treatment of a mental health disorder, we proposed to revise our regulation at § 410.78(b)(3) to add a new paragraph (xiv) to identify the home of a beneficiary as an originating site for telehealth services for the diagnosis, evaluation, or treatment of a mental health disorder, effective for services furnished on or after the first day after the end of the PHE as defined § 400.200 of our regulations; and to provide that payment will not be made for a telehealth service furnished under this paragraph unless the physician or practitioner has furnished an item or service in person, without the use of telehealth, for which Medicare payment was made (or would have been made if the patient were entitled to, or enrolled for, Medicare benefits at the time the item or service is furnished) within 6 months of the telehealth service. We also proposed to revise our regulation at § 410.78(b)(4)(iv)(D) to specify that the geographic restrictions in § 410.78(b)(4) do not apply to telehealth services furnished for the diagnosis, evaluation, or treatment of a mental health disorder, effective for services furnished on or after the first day after the end of the PHE as defined in our regulation at § 400.200.

In addition, section 125(c) of the CAA amended section 1834(m)(4)(C)(ii) of the Act to add to the list of permissible telehealth originating sites a rural emergency hospital, which is a new Medicare provider type added by section 125 of the CAA effective beginning in CY 2023.

We also proposed to amend our regulation at § 410.78, Telehealth services, to conform with the statutory change to include rural emergency hospitals as telehealth originating sites beginning in CY 2023. In accordance with section 1834(m)(4)(C)(ii)(XI) of the Act, as added by section 125(c) of the CAA, we proposed to revise § 410.78(b)(3) of our regulations to add a rural emergency hospital, as defined in section 1861(kkk)(2) of the Act, as a permissible originating site for telehealth services furnished on or after January 1, 2023.

We received public comments on the implementation of provisions of the CAA, 2021. The following is a summary of the comments we received and our responses.

Comment: Commenters generally supported our proposals to implement sections 123 and 125 of the CAA, 2021.

Many commenters opposed our proposal to require an in-person, non-telehealth visit every 6 months for beneficiaries receiving mental health telehealth services in their home under the amendments made by section 123 of the CAA, 2021. They opined that requiring another in-person visit would be excessive and limit access to services, particularly given the ongoing shortage of mental health practitioners, and that the telehealth practitioner should be able to use professional judgement as to when an in-person interaction is necessary. Some commenters also noted that, during the PHE for COVID-19, there have been no requirements for in-person visits, and this illustrates that the in-person requirement is unnecessary. Other commenters stated that if we do require a subsequent in-person, non-telehealth visit, then the required in-person visit interval should be extended as long as possible, for example at least 12 months. Some commenters also suggested, in keeping with the definition of an established patient, that if CMS were to implement a requirement for in-person services, they should consider an interval of once every 3 years. Other commenters suggested CMS implement a list of exceptions to any in-person visit requirement that could be noted in the medical record, and allow the patient to opt out of the requirement.

Some commenters, such as MedPAC, supported our proposal to require in-person, non-telehealth visits for beneficiaries receiving mental health services via telehealth, stating that this policy would help safeguard beneficiaries and the Medicare program from fraud. MedPAC also noted that this requirement may limit access to mental health services via telehealth, and encouraged CMS to study the impact of this policy and consider adjustments through future rulemaking. MedPAC also recommended that CMS apply additional scrutiny to outlier clinicians who bill many more telehealth services per beneficiary than other clinicians or who bill for a high number of services in a week or a month, and prohibit “incident to” billing for telehealth services provided by any clinician who can bill Medicare directly.

Response: We appreciate the many comments and suggestions regarding our implementation of the amendments made by section 123 of the CAA, especially regarding the frequency with which a beneficiary receiving mental health services in their home through telehealth would need to receive an in-person, non-telehealth service. While we agree with MedPAC and others that requiring an in-person, non-telehealth service for beneficiaries receiving mental health services via telehealth in their home may help to safeguard beneficiaries and the Medicare program from possible program integrity issues we must balance those concerns with concerns raised by commenters about ensuring access to valuable (and underutilized) mental health services. We are also concerned about access to services, particularly given the ongoing shortage of mental health practitioners, and that there is not a “one size fits all” model in the management of mental health where some patients may require more frequent in-person visits and some may require less, which is also why we have an exceptions process. Therefore, in response to comments, we are finalizing an interval for the in-person visit requirement of 12 months, rather than the proposed 6-month timeframe.

We note that patients and practitioners should ultimately determine the cadence of meeting during the year, who may decide to meet more often than annually, which is permissible under our policy, as driven by clinical needs on a case-by-case basis. Further, the exceptions process will allow for situations where an in-person annual visit is not needed. CMS will monitor claims data regarding use of telehealth mental health services to identify areas for further investigation and to inform future rulemaking, including situations where there is evidence beneficiaries are potentially experiencing adverse health outcomes or increased difficulty accessing in-person care, or if inappropriate use or billing of telehealth mental health services is suspected.

We also agree with commenters that there may be specific circumstances when an in-person visit requirement within 12 months of each mental health telehealth service furnished in a beneficiary's home may be inadvisable or impracticable for an individual beneficiary. If the patient and practitioner consider the risks and burdens of an in-person service and agree that, on balance, these outweigh the benefits (such as the opportunity to assess in-person body language or conducting a physical exam to monitor for medication side effects), and the practitioner documents the basis for that decision in the patient's medical record, then the in-person visit requirement is not applicable for that 12-month period. Therefore, we are finalizing our proposed policy with a modification to require, in general, that after the first mental health telehealth service in the patient's home, there must be an in-person, non-telehealth service within 12 months of each mental health telehealth service—but to allow for limited exceptions to the requirement. Specifically, if the patient and practitioner agree that the benefits of an in-person, non-telehealth service within 12 months of the mental health telehealth service are outweighed by risks and burdens associated with an in-person service, and the basis for that decision is documented in the patient's medical record, the in-person visit requirement will not apply for that particular 12-month period. For example, situations in which the risks and burdens associated with an in-person service may outweigh the benefit could include, but are not limited to instances when an in-person service is likely to cause disruption in service delivery or has the potential to worsen the patient's condition(s). The risks and burdens associated with an in-person service could also outweigh the benefit if a patient is in partial or full remission and only requires a maintenance level of care. Other examples of such instances may include the clinician's professional judgement that the patient is clinically stable and/or that an in-person visit has the risk of worsening the patient's condition, creating undue hardship on self or family, or if it is determined that the patient is at risk for disengagement with care that has been effective in managing the illness. Practitioners must also document that the patient has the ability to obtain any needed point of care testing, including vital sign monitoring and laboratory studies. Practitioners must note the exception for any applicable 12-month interval. We note that there is no exception to the statutory requirement that the physician or practitioner must furnish to the beneficiary an in-person, non-telehealth service within 6 months prior to initiation of mental health services via telehealth.

Comment: Many commenters agreed with the alternative policy we considered to allow the required in-person, non-telehealth service to be furnished by another physician or practitioner of the same specialty and subspecialty in the same group as the practitioner who furnishes the mental health telehealth service to the beneficiary if the practitioner who furnishes the telehealth service is unavailable.

Response: We are adopting the alternative policy discussed in the proposed rule to allow a clinician's colleague in the same subspecialty in the same group to furnish the in-person, non-telehealth service to the beneficiary if the original practitioner is unavailable. This is also consistent with longstanding policy, which defines an established patient as an individual who receives professional services from the physician/NPP or another physician of the same specialty and subspecialty who belongs to the same group within the previous three years, for purposes of billing for E/M services.

Comment: A few commenters provided suggestions as to how CMS would distinguish between mental health services provided to beneficiaries in their homes via telehealth that co-occur with a SUD (and therefore, would not be subject to the requirement for an in-person, non-telehealth visit every 6 months) and those that are not co-occurring with a SUD. A few commenters stated that use of a mental health or behavioral health diagnosis code(s) on the claim (for which no substance use disorder code is reported), place of service is home, and for which modifier 95 is used would identify a mental health telehealth visit that is newly covered under the CAA.

Response: We will consider these suggestions and undertake future rulemaking as necessary. We note that we are not finalizing any changes to our policies regarding payment for telehealth services furnished for treatment of a patient with a diagnosed SUD or co-occurring mental health disorder, although we are clarifying that these telehealth services are considered mental health services for purposes of the audio-only policy we are finalizing as discussed in the section that follows below.

Comment: A few commenters requested that CMS implement a broad definition of the term “home” in terms of mental healthcare delivery site, as a strict definition would only serve to exacerbate existing socioeconomic barriers and reduce access to care for an already underserved and vulnerable patient population. For example, some patients may not have access to traditional living space, as they may be living in places such as shelters and transitional housing or lack access to housing entirely. According to these commenters, requiring patients to access telehealth from their own residence creates an unnecessary barrier to telehealth services and may reinforce health inequities for individuals of lesser financial means. Commenters further pointed out that, for privacy reasons, a beneficiary may not be comfortable receiving mental health services in their home and may wish to receive mental health services in a temporary location, such as a car or other private location.

Response: Our definition of home, both in general and for this purpose, can include temporary lodging, such as hotels and homeless shelters. We clarify that for circumstances where the patient, for privacy or other personal reasons, chooses to travel a short distance from the exact home location during a telehealth service, the service is still considered to be furnished “in the home of an individual” for purposes of section 1834(m)(4)(C)(ii)(X) of the Act.

After consideration of public comments, we are finalizing the proposed amendments to our regulation at § 410.78, Telehealth services, to implement the amendments made by section 123 of the CAA as explained above, with some modifications. We are finalizing amendments to § 410.78(b)(3) and (4) to add the home of a beneficiary as an originating site for telehealth services for the diagnosis, evaluation, or treatment of mental health disorders, to specify that the geographic restrictions do not apply to these services, to add the conditions of payment requiring an in-person, non-telehealth visit within 6 months of the mental health telehealth service in the patient's home, and to add the exception for subsequent mental health telehealth services when the risks and burdens outweigh the benefits of this requirement. Specifically, we are modifying the proposed amendments to clarify that payment will not be made for a telehealth service furnished under § 410.78(b)(3)(xiv) unless the following conditions are met:

(1) The physician or practitioner has furnished an item or service in-person, without the use of telehealth, for which Medicare payment was made (or would have been made if the patient were entitled to, or enrolled for, Medicare benefits at the time the item or service is furnished) within 6 months prior to the initial telehealth service;

(2) The physician or practitioner has furnished an item or service in-person, without the use of telehealth, at least once within 6 months of each subsequent telehealth service described in this paragraph, with exceptions as noted above.

(3) The requirements of paragraph (2) may be met by another physician or practitioner of the same specialty and subspecialty in the same group as the physician or practitioner who furnishes the telehealth service, if the physician or practitioner who furnishes the telehealth service described under this paragraph is not available.

We are also finalizing our proposal to add a rural emergency hospital, as defined in section 1861(kkk)(2) of the Act, as a permissible originating site.

We are also clarifying that, as proposed, our definition of home can include temporary lodging such as hotels and homeless shelters as well as locations a short distance from the beneficiary's home.

e. Payment for Medicare Telehealth Services Furnished Using Audio-Only Communications Technology

Section 1834(m) of the Act outlines the requirements for Medicare payment for telehealth services that are furnished via a “telecommunications system,” and specifies that, only for purposes of Medicare telehealth services through a Federal telemedicine demonstration program conducted in Alaska or Hawaii, the term “telecommunications system” includes asynchronous, store-and-forward technologies. We further defined the term, “telecommunications system,” in the regulation at § 410.78(a)(3) to mean an interactive telecommunications system, which is defined as multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communications between the patient and distant site physician or practitioner.

During the PHE for COVID-19, we used waiver authority under section 1135(b)(8) of the Act to temporarily waive the requirement, for certain behavioral health and/or counseling services and for audio-only evaluation and management (E/M) visits, that telehealth services must be furnished using an interactive telecommunications system that includes video communications technology. Therefore, for certain services furnished during the PHE for COVID-19, we make payment for these telehealth services when they are furnished using audio-only communications technology. Emergency waiver authority is no longer available after the PHE for COVID-19 ends, and telehealth services will again be subject to all statutory and regulatory requirements.

In the CY 2021 PFS final rule (85 FR 84535), we noted that we continued to believe that our longstanding regulatory definition of “telecommunications system” reflected the intent of statute and that the term should continue to be defined as including two way, real-time, audio/video communications technology.

Historically, we have not proposed any permanent modifications to the definition of “interactive telecommunications system” to allow for use of audio-only communications technology due to our interpretation of the statutory requirements, as well as concerns over program integrity and quality of care. Specifically, we were concerned that the use of audio-only communications technology for Medicare telehealth services could lead to inappropriate overutilization, and believed that video visualization of the patient generally was necessary to fulfill the full scope of service elements of the codes included on the Medicare telehealth list. We believe it is reasonable to reassess these concerns, given the now widespread utilization during the PHE for COVID-19 of Medicare telehealth services furnished using audio-only communications technology. Based upon an initial review of claims data collected during the PHE for COVID-19, which describe audio-only telephone E/M services, we observed that the audio-only E/M visits have been some of the most commonly performed telehealth services during the PHE, and that most of the beneficiaries receiving these services were receiving them for treatment of a mental health condition. Given the generalized shortage of mental health care professionals ( https://bhw.hrsa.gov/data-research/review-health-workforce-research ), and the existence of areas and populations where there is limited access to broadband due to geographic or socioeconomic challenges, we believe beneficiaries may have come to rely upon the use of audio-only communications technology in order to receive mental health services, and that a sudden discontinuation of this flexibility at the end of the PHE could have a negative impact on access to care.

As explained above, section 123 of the CAA removes the geographic restrictions for Medicare telehealth services for the diagnosis, evaluation, or treatment of a mental health disorder, and adds the patient's home as a permissible originating site for these telehealth services. We also believe that mental health services are different from most other services on the Medicare telehealth services list in that many of the services primarily involve verbal conversation where visualization between the patient and furnishing physician or practitioner may be less critical to provision of the service. While we continue to believe that two-way, audio/video communications technology is the appropriate, general standard for telehealth services, and that there may be particular instances where visual cues may help a practitioner's ability to assess and treat patients with mental health disorders, especially where opioids or mental health medications are involved (for example, visual cues as to patient hygiene, or indicators of self-destructive behavior), we note that stakeholders have suggested to us that the availability of telehealth services for mental health care via audio-only communications technology will increase access to care. This is especially true in areas with poor broadband infrastructure and among patient populations that do not wish to use, do not have access to, and/or are unable to utilize devices that permit a two-way, audio/video interaction. Our preliminary analysis of Medicare claims data, as well as information provided to us by stakeholders on the popularity of these services, indicates that use of interactive communications technology for mental health care will likely continue to be high even beyond the circumstances of the COVID-19 pandemic. According to our analysis of Medicare Part B claims data for services furnished via Medicare telehealth during the PHE for COVID-19, utilization of telehealth for many professional services spiked around April 2020 and has diminished over the ensuing months. In contrast, preliminary analysis of Medicare claims data suggests that, for many mental health services that were permanently and temporarily added to the Medicare Telehealth list, there is a steady utilization trend from April 2020 and thereafter. Furthermore, as described above, according to preliminary analysis of claims data which examined utilization by diagnosis, the codes for audio-only E/M services have been highly utilized during the PHE, particularly for beneficiaries with mental health conditions.

Given these considerations, we now believe that it will be appropriate to revisit our regulatory definition of “interactive telecommunications system” beyond the circumstances of the PHE to allow for the inclusion of audio-only services under certain circumstances. Therefore, we proposed to amend our regulation at § 410.78(a)(3) to define interactive telecommunications system to include audio-only communications technology when used for telehealth services for the diagnosis, evaluation, or treatment of mental health disorders furnished to established patients when the originating site is the patient's home. We believe this proposal is consistent with the expansion of at-home access to mental health telehealth services in section 1834(m)(7) of the Act, as amended by section 123 of the CAA, which required that the beneficiary must have received a Medicare-paid (or payable), in-person item or service from the physician or practitioner furnishing the mental health services through telehealth within 6 months of the first mental health telehealth service. We proposed to adopt a similar, ongoing requirement that an in-person item or service must be furnished within 6 months of such a mental health telehealth service. We reiterate that our policy to permit audio-only telehealth services is limited to services where the home is the originating site. This is because the other enumerated telehealth originating sites are medical settings that are far more likely to have access to reliable broadband internet service. When a patient is located at one of these originating sites, access to care is far less likely to be limited by access to broadband that facilitates a video connection. In contrast, access to broadband, devices, and user expertise to enable a video connection is less likely to be available in the patient's home. As described in prior paragraphs, we also believe that mental health services are distinct from other kinds of services on the Medicare telehealth list in that many of the services do not necessarily require visualization of the patient to fulfill the full scope of service elements

We also proposed to limit payment for audio-only services to services furnished by physicians or practitioners who have the capacity to furnish two-way, audio/video telehealth services but are providing the mental health services via audio-only communication technology, in instances where the beneficiary is unable to use, does not wish to use, or does not have access to two-way, audio/video technology. We believe that this requirement will ensure that mental health services furnished via telehealth are only conducted using audio-only communications technology in instances where the use of audio-only technology is facilitating access to care that would be unlikely to occur otherwise, given the patient's technological limitations, abilities, or preferences. In the interests of monitoring utilization and program integrity concerns for audio-only telehealth services furnished under the terms of this exception, we proposed to create a service-level modifier that would identify these mental health telehealth services furnished to a beneficiary in their home using audio-only communications technology. The use of this modifier will also serve to certify that the audio-only telehealth service meets the requirements for the exception specified in § 410.78(a)(3), including that the furnishing physician or practitioner has the capacity to furnish the service using interactive two-way, real-time audio/video communications technology, but instead used audio-only technology under the conditions specified in the regulation.

We proposed to amend our regulation at § 410.78(a)(3) to specify that an interactive telecommunications system can include interactive, real-time, two-way audio-only technology for telehealth services furnished for the diagnosis, evaluation, or treatment of a mental health disorder as described under paragraph (b)(4)(D), under the following conditions: The patient is located in their home at the time of service as described at § 410.78 (b)(3)(xiv); The distant site physician or practitioner has the technical capability at the time of the service to use an interactive telecommunications system that includes video; and the patient is not capable of, or does not consent to, the use video technology for the service.

We solicited comments on these proposals, as well as what, if any, additional documentation should be required in the patient's medical record to support the clinical appropriateness of providing audio-only telehealth services for mental health in the event of an audit or claims denial. Additional required documentation could include information about the patient's level of risk and any other guardrails that are appropriate to demonstrate clinical appropriateness, and minimize program integrity and patient safety concerns.

We solicited comment on whether, for purposes of the proposed audio-only mental health telehealth services exception, we should exclude certain higher-level services, such as level 4 or 5 E/M visit codes, when furnished alongside add-on codes for psychotherapy, or codes that describe psychotherapy with crisis. We solicited comment on whether the full scope of service elements for these codes could be performed via audio-only communications technology. However, we also noted that maintaining the availability of these services through audio-only communications technology might give patients access to care needed to address their higher level or acute mental health needs in instances where they are unable to access two-way, audio/video communications technology.

We received public comments on the payment for Medicare telehealth services furnished using audio-only communications technology. The following is a summary of the comments we received and our responses.

Comment: Commenters were very supportive of our proposal to allow for mental health services to be furnished using audio-only communications technology. A few commenters, while supportive of the use of audio-only communications technology during the PHE, urged CMS to further study and evaluate the safety and effectiveness of the audio-only modality for various levels of care and treatments to determine appropriateness of continuing payment after the PHE expires.

Some commenters requested that CMS allow office/outpatient E/M services furnished via telehealth to be conducted via audio-only communications technology, at least through the end of year in which the PHE ends. Some commenters requested that CMS clarify that SUD services are considered mental health services for purposes of the expanded definition of “interactive telecommunications system” to include audio-only services under § 410.78(a)(3), as well as to ensure that the periodic in-person non-telehealth visit requirements would not apply when audio-only communications technology is used for services for the treatment of a SUD or co-occurring mental health disorder to established patients with a SUD diagnosis. Other commenters suggested that CMS allow all Medicare telehealth services, not just mental health services, to be conducted via audio-only communications technology. Some commenters requested that CMS permit audio-only communications technology to be used to furnish psychological and neuropsychological testing evaluation (CPT codes 96130-96133) and Health Behavior Assessment and Intervention (HBAI) services (CPT codes 96156-96171) as these services do not require visualization of the patient. Some commenters expressed disappointment that CMS did not propose to continue payment beyond the PHE for COVID-19 for CPT codes 99441-99443, which describe audio-only office/outpatient visits, as the commenter believes these services are also important for beneficiaries who do not have access to two-way, audio/video communications technology.

Response: As we explain above, we continue to believe that mental health services are different from most other services on the Medicare telehealth services list in that they primarily involve verbal conversation where visualization between the patient and the furnishing physician or practitioner may be less critical to provision of the service. We continue to believe that office/outpatient E/M visits furnished via telehealth that are not for the diagnosis, evaluation, or treatment of a mental health disorder are most appropriately furnished via an interactive telecommunications system that includes two-way, audio/video communications technology. We would like to clarify that SUD services are considered mental health services for purposes of the expanded definition of “interactive telecommunications system” to include audio-only services under § 410.78(a)(3). CMS used waiver authority under section 1135(b)(8) of the Act to waive the video requirement under the regulation at § 410.78(a)(3) during the pandemic for certain behavioral health and/or counseling services, and this waiver expires with the expiration of the PHE. We proposed to amend the definition of interactive telecommunications system to include audio-only technology only for certain mental health telehealth services; and we continue to believe that, except for those mental health services and outside the circumstances of the PHE, it is appropriate to continue the current policy of defining “interactive telecommunications system” as technology that allows two-way, real-time interactive audio and video communications.

Regarding telephone E/M services CPT codes 99441, 99442, and 99443, please see above for a discussion of these services These telephone E/M codes will remain on the telehealth services list temporarily through the end of the PHE for COVID-19.

Comment: A few commenters suggested other conditions for which audio-only communications technology could be appropriate, such as neurologic services in treatment for headache, seizure, dementia, pain, along with adherence and side-effect follow-up. Other commenters stated that audio-only technology could also be used for other conditions such as patients with chronic pain or for provision of MNT services.

Response: As stated earlier, we continue to believe that mental health services are different from other services because they principally involve verbal exchanges between patient and practitioner. We note that the home is not a permissible originating site for the vast majority of telehealth services; that the geographic limitations for telehealth originating sites apply outside the circumstances of the PHE; and that, when telehealth services are furnished in an originating site other than the patient's home, the facility/office that serves as the originating site should have available broadband/video to allow the patient the ability to have real-time, audio/video interaction with their physician/practitioner. Additionally, given that payment for Medicare telehealth services under section 1834(m) of the Act is at the same rate as for in-person services, we have some concerns about making sure that the telehealth service provided is a sufficiently close substitute for what the patient would get in an in-person service. As such, we are not expanding the scope of Medicare telehealth services for which audio-only communications technology may be used to include services other than those furnished in the home to diagnose, evaluate or treat a mental health condition.

Comment: Commenters supported the proposal to create a service-level modifier to identify mental health telehealth visits “furnished to a beneficiary in their home using audio-only communications technology.” Some commenters stated that the creation of a service-level modifier to identify telehealth services furnished using audio-only would help facilitate further study of the use of audio-only technology for telehealth services.

Some commenters did not support additional documentation requirements for audio-only visits beyond those already required, while others recommended that CMS require practitioners to document the reason the beneficiary declined to participate in a live, two-way video visit and specify if it was due to lack of access, the inability to use the technology, or the patient's unwillingness to consent.

A few commenters suggested that CMS remove the requirement that the practitioner have access to two-way, audio/video communications technology in order to furnish audio-only telehealth services, stating that practitioners in rural areas may not have access to reliable broadband and should not be precluded from providing audio-only telehealth services due to this lack of access.

Response: We appreciate commenters' concerns. However, we continue to believe that, because a telehealth service is generally analogous to and must include the elements of the in-person service, it is generally appropriate to continue to require the use of two-way, real-time audio/video communications technology to furnish the service. Therefore, we are maintaining the requirement that distant site physicians and practitioners must have the technical capability to use an interactive telecommunications system that includes two-way, real-time, interactive audio and video communications at the time that an audio-only telehealth service is furnished. With regard to documentation requirements, we are finalizing a requirement that the reason for using audio-only technology to furnish a telehealth service must be documented in the patient's medical record.

Comment: A few commenters provided examples of services that they believe should not be conducted via audio-only communications technology. These included: Level 4 and 5 office visits as well as services describing psychotherapy for crisis (CPT codes 90839-90840), group psychotherapy (CPT code 90853), psychological and neuropsychological testing (CPT codes (96130-96133 and 96136-96139), psychological and neuropsychological testing), and Applied Behavior Analysis Therapy (CPT codes 97151-97157).

Other commenters stated that there should be no restrictions on furnishing higher level mental health telehealth visits to patients in the home via audio-only technology.

In response to our statement regarding utilization of CPT codes 99441-99443 (telephone E/M services), a few commenters requested the agency share with the public the audio-only utilization data that has been collected during the public health emergency to provide stakeholders with a better understanding of how these services have been utilized outside of the treatment of mental health conditions.

Response: We would like to thank commenters for their support and suggestions. We continue to believe that real-time, audio-video telehealth interactions are the standard for Medicare telehealth services in most instances. We will continue to consider how the delivery of certain services via telehealth impacts patient care, and we encourage stakeholders to submit requests with supporting documentation using our process for the addition or removal of services on the Medicare telehealth services list. Regarding CPT codes 99441-99443, which describe telephone E/M services, please find our discussion earlier in this preamble. In response to the request for utilization data on audio-only telehealth services furnished during the PHE for COVID-19, we refer readers to publicly available utilization data (an example available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Research-Statistics-Data-and-Systems ).

After consideration of public comments, we are finalizing as proposed creation of a service-level modifier for use to identify mental health telehealth services furnished to a beneficiary in their home using audio-only communications technology. We are also amending our regulation at § 410.78(a)(3) to specify that an interactive telecommunications system can include interactive, real-time, two-way audio-only technology for telehealth services furnished for the diagnosis, evaluation, or treatment of a mental health disorder as described under paragraph (b)(4)(iv)(D), under the following conditions: The patient is located in their home at the time of service as described at § 410.78 (b)(3)(xiv); the distant site physician or practitioner has the technical capability at the time of the service to use an interactive telecommunications system that includes video; and the patient is not capable of, or does not consent to, the use of video technology for the service. We are also clarifying that SUD services are considered mental health services for purposes of the amended definition of “interactive telecommunications system” to include audio-only services under § 410.78(a)(3). We anticipate that this will have a positive impact on access to care for mental health conditions and contribute to overall health equity.

2. Other Non-Face-to-Face Services Involving Communications Technology Under the PFS

a. Expiration of PHE Flexibilities for Direct Supervision Requirements

Under section 1861 of the Act and at § 410.32(b)(3) of the regulations, Medicare requires certain types of services to be furnished under specific levels of supervision of a physician or practitioner, including diagnostic tests, services incident to physician services, and other services. For professional services furnished incident to the services of a billing physician or practitioner (see § 410.26) and many diagnostic tests (see § 410.32), direct supervision is required. Additionally, for pulmonary rehabilitation services (see § 410.47) and for cardiac rehabilitation and intensive cardiac rehabilitation services (see § 410.49), requirements for immediate availability and accessibility of a physician are considered to be satisfied if the physician meets the requirements for direct supervision for physician office services at § 410.26 and for hospital outpatient services at § 410.27. Outside the circumstances of the PHE, direct supervision requires the immediate availability of the supervising physician or other practitioner, but the professional need not be present in the same room during the service, and we have interpreted this “immediate availability” requirement to mean in-person, physical, not virtual, availability.

Through the March 31st COVID-19 IFC, we changed the definition of “direct supervision” during the PHE for COVID-19 (85 FR 19245 through 19246) as it pertains to supervision of diagnostic tests, physicians' services, and some hospital outpatient services, to allow the supervising professional to be immediately available through virtual presence using real-time audio/video technology, instead of requiring their physical presence. In the CY 2021 PFS final rule (85 FR 84538 through 84540), we finalized continuation of this policy through the later of the end of the calendar year in which the PHE for COVID-19 ends or December 31, 2021. In that rule, we also solicited comment on issues related to the policy allowing virtual provision of direct supervision, specifically whether there should be any additional guardrails or limitations put in place to ensure patient safety/clinical appropriateness, beyond typical clinical standards, and whether we should consider potential restrictions to prevent fraud or inappropriate use. We also stated that we will consider this and other information as we contemplate future policy regarding use of communications technology to satisfy supervision requirements, as well as the best approach for safeguarding patient safety while promoting use of technology to enhance access.

We also noted that the temporary exception to allow immediate availability for direct supervision through virtual presence facilitates the provision of telehealth services by clinical staff of physicians and other practitioners incident to their own professional services. This is discussed in the March 31st COVID-19 IFC (85 FR 19246). This is especially relevant for services such as physical therapy, occupational therapy, and speech language pathology services, since those practitioners can only bill Medicare directly for telehealth services under telehealth waivers that are effective only during the PHE for COVID-19. We note that sections 1834(m)(4)(D) and (E) of the Act specifies the types of clinicians who may furnish and bill for Medicare telehealth services, and include only physicians as defined in section 1861(r) of the Act and practitioners described in section 1842(b)(18)(C) of the Act.

We solicited information on whether this flexibility should be continued beyond the later of the end of the PHE for COVID-19 or CY 2021. Specifically, we solicited comments on the extent to which the flexibility to meet the immediate availability requirement for direct supervision through the use of real-time, audio/video technology is being used during the PHE, and whether physicians and practitioners anticipate relying on this flexibility after the end of the PHE. We solicited comments on whether this flexibility should potentially be made permanent, meaning that we would revise the definition of “direct supervision” at § 410.32(b)(3)(ii) to include immediate availability through the virtual presence of the supervising physician or practitioner using real-time, interactive audio/video communications technology without limitation after the PHE for COVID-19, or if we should continue the policy in place for a short additional time to facilitate a gradual sunset of the policy. We solicited comment on whether the current timeframe for continuing this flexibility at § 410.32(b)(3)(ii), which is currently the later of the end of the year in which the PHE for COVID-19 ends or December 31, 2021, remains appropriate, or if this timeframe should be extended through some later date to facilitate the gathering of additional information in recognition that, due to the on-going nature of the PHE for COVID-19, practitioners may not yet have had time to assess the implications of a permanent change in this policy. We also solicited comment regarding the possibility of permanently allowing immediate availability for direct supervision through virtual presence using real-time audio/video technology for only a subset of services, as we recognize that it may be inappropriate to allow direct supervision without physical presence for some services, due to potential concerns over patient safety if the practitioner is not immediately available in-person. We also solicited comments on, if this policy to be made permanent, whether a service-level modifier should be required to identify when the requirements for direct supervision were met using two-way, audio/video communications technology.

We received public comments on the expiration of PHE flexibilities for direct supervision requirements. The following is a summary of the comments we received and our responses.

Comment: Several commenters supported continuing to allow requirements for direct supervision of services to be met through virtual presence using telecommunications technology beyond the PHE. They stated that COVID-19 may not be completely eradicated for at least a year after the end of the PHE, and that health professionals will need time to recover from the pandemic's effects. Other commenters stated that CMS should permanently modify the definition of direct supervision to include the presence of the supervising practitioner via real-time, interactive audio/video technology in certain cases. Some commenters encouraged CMS to create a service-level modifier for purposes of identifying advanced practice provider involvement in care and requested that CMS consult with specialty societies as this change is developed.

Some commenters supported use of a service-level modifier to identify services furnished under direct supervision where the supervising physician was available through two-way, audio/video communications technology.

Some commenters specifically requested that CMS maintain the flexibility for the supervising physician to be available using two-way, audio/video when a nurse practitioner is furnishing a behavioral health service, as these are services that do not require a physical exam.

MedPAC, while supportive of our extension of this policy through the year in which the PHE ends, stated two concerns about making it permanent after the PHE in the absence of evidence about its effects on safety, quality, and spending. First, allowing clinicians to supervise “incident to” services virtually could pose a safety risk to beneficiaries because the clinician would not be physically available to help the individual being supervised, if necessary, which is important if the service is a complex procedure. Second, allowing virtual supervision could potentially enable a clinician to supervise many individuals at multiple locations at the same time. It could be difficult for a clinician to address urgent, clinical needs while virtually supervising many people at multiple locations simultaneously. This scenario could also lead to higher spending by allowing clinicians to bill for more “incident-to” services during a single day.

Some commenters stated that, if CMS were to make this policy permanent, certain services should be precluded, such as complex drug therapies or anesthesia services.

Response: We thank commenters for their input and will consider addressing the issues raised by these comments in future rules or guidance, as appropriate.

b. Interim Final Provisions in the CY 2021 PFS Final Rule

In the CY 2021 PFS final rule (85 FR 84536), we finalized the establishment of HCPCS code G2252 (Brief communication technology-based service, e.g., virtual check-in service, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 11-20 minutes of medical discussion ) on an interim basis. We stated that, given the widespread concerns expressed by commenters about the continuing need for audio-only conversations with patients and our determination that we will not continue to pay for audio-only E/M visits after the conclusion of the PHE (see 85 FR 84533 through 84535 for further discussion of that policy), we believed it will be expedient to establish additional coding and payment for an extended virtual check-in, which could be furnished using any form of synchronous communications technology, including audio-only, on an interim basis for CY 2021. We stated that we believed establishing payment for this service on an interim basis will support access to care for beneficiaries who may be reluctant to return to in-person visits unless absolutely necessary, and allow us to consider whether this policy should be adopted on a permanent basis. In that rule, we finalized a direct crosswalk to CPT code 99442, the value of which we believe most accurately reflects the resources associated with a longer service delivered via synchronous communications technology, which can include audio-only communications. Commenters supported the creation and interim final adoption of this service. Commenters stated that, as beneficiaries and practitioners may be reluctant to return to primarily in-person services post-PHE, payment for a longer virtual check-in will be necessary to account for circumstances where more time is spent determining whether an in-person visit is needed beyond the 5-10 minutes accounted for by HCPCS code G2012 ( Brief communication technology-based service, e.g. virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related e/m service provided within the previous 7 days nor leading to an e/m service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion ). Commenters also supported valuing HCPCS code G2252 through a direct crosswalk to CPT code 99442. We agree with commenters that additional time may be needed to assess the necessity of an in-person service given concerns over exposure to illnesses beyond the duration of the PHE for COVID-19 and that current coding may not accurately reflect that time. Based on support from commenters, we proposed to permanently adopt coding and payment for CY 2022, HCPCS code G2252 as described in the CY 2021 PFS final rule.

We received public comments on the interim final provisions in the CY 2021 PFS final rule. The following is a summary of the comments we received and our responses.

Comment: Commenters supported CMS' finalizing separate coding and payment for a longer virtual check-in.

Some commenters, including the AMA RUC, supported valuing HCPCS code G2252 through a direct crosswalk to the value of CPT code 99442 but recommended that CMS work with the CPT Editorial Panel to editorially revise CPT codes 99441-99443 so that the CPT codes may be consistently reported by all payors to describe audio-only services.

Some commenters stated that CMS should create a parallel code to HCPCS code G2252 billable by those practitioners who cannot independently bill for E/M services. Commenters pointed out that, in the CY 2021 PFS final rule, CMS implemented a similar policy for HCPCS codes G2010 and G2012.

Response: With regard to HCPCS code G2252 being billable by those practitioners who cannot independently bill for E/M services, we appreciate commenters bringing this issue to our attention, and we will consider these comments for future rulemaking.

After consideration of public comments, we are finalizing our proposal to permanently establish separate coding and payment for the longer virtual check-in service described by HCPCS code G2252 for CY 2022 using a crosswalk to the value of CPT code 99442, as proposed. As described in the CY 2021 PFS final rule (85 FR 84536), we believe that the value of CPT code 99442 most accurately reflects the resources associated with a longer service delivered via synchronous communications technology, which can include audio-only communications. This is consistent with our approach to valuing the virtual check-in service (HCPCS code G2012), which used CPT code 99441 as the basis for valuation. In the case of HCPCS code G2252 and CPT code 99442, both codes describe 11-20 minutes of medical discussion when the practitioner may not necessarily be able to visualize the patient, and is used when the acuity of the patient's problem is not necessarily likely to warrant a visit, but when the needs of the particular patient require more assessment time from the practitioner. In the case of HCPCS code G2252, the additional time would be used to determine the necessity of an in-person visit and result in a work time/intensity that is similar to the crosswalk code.

3. Telehealth Originating Site Facility Fee Payment Amount Update

Section 1834(m)(2)(B) of the Act established the Medicare telehealth originating site facility fee for telehealth services furnished from October 1, 2001 through December 31, 2002, at $20.00.

For telehealth services furnished on or after January 1 of each subsequent calendar year, the telehealth originating site facility fee is increased by the percentage increase in the Medicare Economic Index (MEI) as defined in section 1842(i)(3) of the Act. The originating site facility fee for telehealth services furnished in CY 2022 is $27.59.

The MEI increase for CY 2022 is 2.1 percent and is based on the most recent historical percentage increase of the MEI for the second quarter of 2021 (2.3 percent), and the most recent historical productivity adjustment for calendar year 2020 (0.2 percent).

Therefore, for CY 2022, the payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is $27.59. The Medicare telehealth originating site facility fee and the MEI increase by the applicable time period is shown in Table 18.

E. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially Misvalued Codes

Establishing valuations for newly created and revised CPT codes is a routine part of maintaining the PFS. Since the inception of the PFS, it has also been a priority to revalue services regularly to make sure that the payment rates reflect the changing trends in the practice of medicine and current prices for inputs used in the PE calculations. Initially, this was accomplished primarily through the 5-year review process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 2011, and revised MP RVUs in CY 2010, CY 2015, and CY 2020. Under the 5-year review process, revisions in RVUs were proposed and finalized via rulemaking. In addition to the 5-year reviews, beginning with CY 2009, CMS and the RUC identified a number of potentially misvalued codes each year using various identification screens, as discussed in section II.C. of this final rule, Potentially Misvalued Services under the PFS. Historically, when we received RUC recommendations, our process had been to establish interim final RVUs for the potentially misvalued codes, new codes, and any other codes for which there were coding changes in the final rule with comment period for a year. Then, during the 60-day period following the publication of the final rule with comment period, we accepted public comment about those valuations. For services furnished during the calendar year following the publication of interim final rates, we paid for services based upon the interim final values established in the final rule. In the final rule with comment period for the subsequent year, we considered and responded to public comments received on the interim final values, and typically made any appropriate adjustments and finalized those values.

In the CY 2015 PFS final rule with comment period (79 FR 67547), we finalized a new process for establishing values for new, revised and potentially misvalued codes. Under the new process, we include proposed values for these services in the proposed rule, rather than establishing them as interim final in the final rule with comment period. Beginning with the CY 2017 PFS proposed rule (81 FR 46162), the new process was applicable to all codes, except for new codes that describe truly new services. For CY 2017, we proposed new values in the CY 2017 PFS proposed rule for the vast majority of new, revised, and potentially misvalued codes for which we received complete RUC recommendations by February 10, 2016. To complete the transition to this new process, for codes for which we established interim final values in the CY 2016 PFS final rule with comment period (81 FR 80170), we reviewed the comments received during the 60-day public comment period following release of the CY 2016 PFS final rule with comment period (80 FR 70886), and re-proposed values for those codes in the CY 2017 PFS proposed rule.

We considered public comments received during the 60-day public comment period for the proposed rule before establishing final values in the CY 2017 PFS final rule. As part of our established process, we will adopt interim final values only in the case of wholly new services for which there are no predecessor codes or values and for which we do not receive recommendations in time to propose values.

As part of our obligation to establish RVUs for the PFS, we thoroughly review and consider available information including recommendations and supporting information from the RUC, the Health Care Professionals Advisory Committee (HCPAC), public commenters, medical literature, Medicare claims data, comparative databases, comparison with other codes within the PFS, as well as consultation with other physicians and healthcare professionals within CMS and the Federal Government as part of our process for establishing valuations. Where we concur that the RUC's recommendations, or recommendations from other commenters, are reasonable and appropriate and are consistent with the time and intensity paradigm of physician work, we proposed those values as recommended. Additionally, we continually engage with stakeholders, including the RUC, with regard to our approach for accurately valuing codes, and as we prioritize our obligation to value new, revised, and potentially misvalued codes. We continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process.

2. Methodology for Establishing Work RVUs

For each code identified in this section, we conduct a review that includes the current work RVU (if any), RUC-recommended work RVU, intensity, time to furnish the preservice, intraservice, and postservice activities, as well as other components of the service that contribute to the value. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). When referring to a survey, unless otherwise noted, we mean the surveys conducted by specialty societies as part of the formal RUC process.

Components that we use in the building block approach may include preservice, intraservice, or postservice time and post-procedure visits. When referring to a bundled CPT code, the building block components could include the CPT codes that make up the bundled code and the inputs associated with those codes. We use the building block methodology to construct, or deconstruct, the work RVU for a CPT code based on component pieces of the code. Magnitude estimation refers to a methodology for valuing work that determines the appropriate work RVU for a service by gauging the total amount of work for that service relative to the work for a similar service across the PFS without explicitly valuing the components of that work. In addition to these methodologies, we frequently utilize an incremental methodology in which we value a code based upon its incremental difference between another code and another family of codes. Section 1848(c)(1)(A) of the Act specifically defines the work component as the resources that reflect time and intensity in furnishing the service. Also, the published literature on valuing work has recognized the key role of time in overall work. For particular codes, we refine the work RVUs in direct proportion to the changes in the best information regarding the time resources involved in furnishing particular services, either considering the total time or the intraservice time.

Several years ago, to aid in the development of preservice time recommendations for new and revised CPT codes, the RUC created standardized preservice time packages. The packages include preservice evaluation time, preservice positioning time, and preservice scrub, dress and wait time. Currently, there are preservice time packages for services typically furnished in the facility setting (for example, preservice time packages reflecting the different combinations of straightforward or difficult procedure, and straightforward or difficult patient). Currently, there are three preservice time packages for services typically furnished in the nonfacility setting.

We developed several standard building block methodologies to value services appropriately when they have common billing patterns. In cases where a service is typically furnished to a beneficiary on the same day as an E/M service, we believe that there is overlap between the two services in some of the activities furnished during the preservice evaluation and postservice time. Our longstanding adjustments have reflected a broad assumption that at least one-third of the work time in both the preservice evaluation and postservice period is duplicative of work furnished during the E/M visit.

Accordingly, in cases where we believe that the RUC has not adequately accounted for the overlapping activities in the recommended work RVU and/or times, we adjust the work RVU and/or times to account for the overlap. The work RVU for a service is the product of the time involved in furnishing the service multiplied by the intensity of the work. Preservice evaluation time and postservice time both have a long-established intensity of work per unit of time (IWPUT) of 0.0224, which means that 1 minute of preservice evaluation or postservice time equates to 0.0224 of a work RVU.

Therefore, in many cases when we remove 2 minutes of preservice time and 2 minutes of postservice time from a procedure to account for the overlap with the same day E/M service, we also remove a work RVU of 0.09 (4 minutes × 0.0224 IWPUT) if we do not believe the overlap in time had already been accounted for in the work RVU. The RUC has recognized this valuation policy and, in many cases, now addresses the overlap in time and work when a service is typically furnished on the same day as an E/M service.

The following paragraphs contain a general discussion of our approach to reviewing RUC recommendations and developing proposed values for specific codes. When they exist we also include a summary of stakeholder reactions to our approach. We note that many commenters and stakeholders have expressed concerns over the years with our ongoing adjustment of work RVUs based on changes in the best information we had regarding the time resources involved in furnishing individual services. We have been particularly concerned with the RUC's and various specialty societies' objections to our approach given the significance of their recommendations to our process for valuing services and since much of the information we used to make the adjustments is derived from their survey process. We are obligated under the statute to consider both time and intensity in establishing work RVUs for PFS services. As explained in the CY 2016 PFS final rule with comment period (80 FR 70933), we recognize that adjusting work RVUs for changes in time is not always a straightforward process, so we have applied various methodologies to identify several potential work values for individual codes.

We have observed that for many codes reviewed by the RUC, recommended work RVUs have appeared to be incongruous with recommended assumptions regarding the resource costs in time. This has been the case for a significant portion of codes for which we recently established or proposed work RVUs that are based on refinements to the RUC-recommended values. When we have adjusted work RVUs to account for significant changes in time, we have started by looking at the change in the time in the context of the RUC-recommended work RVU. When the recommended work RVUs do not appear to account for significant changes in time, we have employed the different approaches to identify potential values that reconcile the recommended work RVUs with the recommended time values. Many of these methodologies, such as survey data, building block, crosswalks to key reference or similar codes, and magnitude estimation have long been used in developing work RVUs under the PFS. In addition to these, we sometimes use the relationship between the old time values and the new time values for particular services to identify alternative work RVUs based on changes in time components.

In so doing, rather than ignoring the RUC-recommended value, we have used the recommended values as a starting reference and then applied one of these several methodologies to account for the reductions in time that we believe were not otherwise reflected in the RUC-recommended value. If we believe that such changes in time are already accounted for in the RUC's recommendation, then we do not make such adjustments. Likewise, we do not arbitrarily apply time ratios to current work RVUs to calculate proposed work RVUs. We use the ratios to identify potential work RVUs and consider these work RVUs as potential options relative to the values developed through other options.

We do not imply that the decrease in time as reflected in survey values should always equate to a one-to-one or linear decrease in newly valued work RVUs. Instead, we believe that, since the two components of work are time and intensity, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has increased, significant decreases in time should be reflected in decreases to work RVUs. If the RUC's recommendation has appeared to disregard or dismiss the changes in time, without a persuasive explanation of why such a change should not be accounted for in the overall work of the service, then we have generally used one of the aforementioned methodologies to identify potential work RVUs, including the methodologies intended to account for the changes in the resources involved in furnishing the procedure.

Several stakeholders, including the RUC, have expressed general objections to our use of these methodologies and deemed our actions in adjusting the recommended work RVUs as inappropriate; other stakeholders have also expressed general concerns with CMS refinements to RUC-recommended values in general. In the CY 2017 PFS final rule (81 FR 80272 through 80277), we responded in detail to several comments that we received regarding this issue. In the CY 2017 PFS proposed rule (81 FR 46162), we requested comments regarding potential alternatives to making adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services; however, we did not receive any specific potential alternatives. As described earlier in this section, crosswalks to key reference or similar codes are one of the many methodological approaches we have employed to identify potential values that reconcile the RUC-recommend work RVUs with the recommended time values when the RUC-recommended work RVUs did not appear to account for significant changes in time.

We received several comments regarding our methodologies for work valuation in response to the CY 2022 PFS proposed rule and those comments are summarized below.

Comment: Several commenters disagreed with our reference to older work time sources, and stated that their use led to the proposal of work RVUs based on flawed assumptions. Commenters stated that codes with “CMS/Other” or “Harvard” work time sources, used in the original valuation of certain older services, were not surveyed, and therefore, were not resource-based. Commenters also stated that it was invalid to draw comparisons between the current work times and work RVUs of these services to the newly surveyed work time and work RVUs as recommended by the RUC.

Response: We agree that it is important to use the recent data available regarding work times, and we note that when many years have passed since work time has been measured, significant discrepancies can occur. However, we also believe that our operating assumption regarding the validity of the existing values as a point of comparison is critical to the integrity of the relative value system as currently constructed. The work times currently associated with codes play a very important role in PFS ratesetting, both as points of comparison in establishing work RVUs and in the allocation of indirect PE RVUs by specialty. If we were to operate under the assumption that previously recommended work times had been routinely overestimated, this would undermine the relativity of the work RVUs on the PFS in general, in light of the fact that codes are often valued based on comparisons to other codes with similar work times. Such an assumption would also undermine the validity of the allocation of indirect PE RVUs to physician specialties across the PFS.

Instead, we believe that it is crucial that the code valuation process take place with the understanding that the existing work times that have been used in PFS ratesetting are accurate. We recognize that adjusting work RVUs for changes in time is not always a straightforward process and that the intensity associated with changes in time is not necessarily always linear, which is why we apply various methodologies to identify several potential work values for individual codes. However, we reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available, and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of old work time values that were established many years ago and have not since been reviewed in our methodology, we refer readers to our discussion of the subject in the CY 2017 PFS final rule (81 FR 80273 through 80274).

Comment: Several commenters disagreed with the use of time ratio methodologies for work valuation. Commenters stated that this use of time ratios is not a valid methodology for valuation of physician services. Commenters stated that treating all components of physician time (preservice, intraservice, postservice and post-operative visits) as having identical intensity is incorrect, and inconsistently applying it to only certain services under review creates inherent payment disparities in a payment system, which is based on relative valuation. Commenters stated that in many scenarios, CMS selects an arbitrary combination of inputs to apply rather than seeking a valid clinically relevant relationship that would preserve relativity. Commenters suggested that CMS determine the work valuation for each code based not only on surveyed work times, but also the intensity and complexity of the service and relativity to other similar services, rather than basing the work value entirely on time.

Response: We disagree and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for survey information that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in time are not accounted for in a recommended work RVU, we believe we have an obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs.

We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. We clarify again that we do not treat all components of physician time as having identical intensity. If we were to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is not the case, as indicated by the many services that share the same time values but have different work RVUs. For example, among the codes reviewed in this CY 2022 PFS final rule, CPT codes 63053 ( Laminectomy, facetectomy, or foraminotomy ( unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s] [eg, spinal or lateral recess stenosis] ), during posterior interbody arthrodesis, lumbar; each additional segment ), 67335 ( Placement of adjustable suture(s) during strabismus surgery, including postoperative adjustment(s) of suture(s) ), 80504 ( Pathology clinical consultation; for a moderately complex clinical problem, with review of patient's history and medical records and moderate level of medical decision making. When using time for code selection, 21-40 minutes of total time is spent on the date of the consultation ), and 99425 ( Principal care management services, for a single high-risk disease; additional 30 minutes provided personally by a physician or other qualified health care professional, per calendar month ) all share the same intraservice and total work time of 30 minutes. However, these codes have very different proposed work RVUs of 2.31 and 3.23 and 0.91 and 1.00 respectively. These examples demonstrate that we do not value services purely based on work time; instead, we incorporate time as one of multiple different factors employed in our review process. Furthermore, we reiterate that we use time ratios to identify potentially appropriate work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. For more details on our methodology for developing work RVUs, we direct readers to the discussion CY 2017 PFS final rule (81 FR 80272 through 80277).

We also clarify for the commenters that our review process is not arbitrary in nature. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). With regard to the invocation of clinically relevant relationships by the commenters, we emphasize that we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

Comment: Several commenters discouraged the use of valuation of codes based on work RVU increments. Commenters stated that this methodology for valuing codes inaccurately treats all components of the physician time as having identical intensity and would lead to incorrect work valuations. Commenters stated that CMS should carefully consider the clinical information justifying the changes in physician work intensity provided by the RUC and other stakeholders.

Response: We believe the use of an incremental difference between the work RVUs of codes is a valid methodology for setting values, especially in valuing services within a family of revised codes where it is important to maintain appropriate intra-family relativity. Historically, we have frequently utilized an incremental methodology in which we value a code based upon the incremental work RVU difference between the code and another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We have no evidence to suggest that the use of an incremental difference between the work RVUs of codes conflicts with the statute's definition of the work component as the resources in time and intensity required in furnishing the service. We do consider clinical information associated with physician work intensity provided by the RUC and other stakeholders as part of our review process, although we remind readers again that we do not believe that it is necessary for codes to share the same site of service, patient population, or utilization level in order to serve as an appropriate crosswalk.

Comment: Several commenters stated that they were concerned about CMS' lack of consideration for compelling evidence that services have changed. Commenters stated that CMS appeared to dismiss the fact that services may change due to technological advances, changes in the patient population, shifts in the specialty of physicians providing services or changes in the physician work or intensity required to perform services. Commenters stated that CMS' failure to discuss compelling evidence does not reflect the long history of reviewing potentially misvalued codes, first through the statutorily mandated 5-year review processes and more recently from continuous annual reviews. Commenters stated that CMS has discussed compelling evidence in rulemaking since the inception of the RBRVS and has informed public commenters to consider compelling evidence to identify potentially misvalued codes. Commenters requested that CMS address the compelling evidence submitted with the RUC recommendations when the agency does not accept the RUC's recommended work RVUs.

Response : The concept of compelling evidence was developed by the RUC as part of its work RVU review process for individual codes. The RUC determines whether there is compelling evidence to justify an increase in valuation. The RUC's compelling evidence criteria include documented changes in physician work, an anomalous relationship between the code and multiple key reference services, evidence that technology has changed physician work, analysis of other data on time and effort measures, and evidence that incorrect assumptions were made in the previous valuation of the service. While we appreciate the submission of this additional information for review, we emphasize that the RUC developed the concept of compelling evidence for its own review process; an evaluation of “compelling evidence,” at least as conceptualized by the RUC, is not part of our review process, as our focus is the time and intensity of services, in accordance with the statute. With that said, we do consider changes in technology, patient population, and other compelling evidence criteria, as such evidence may affect the time and intensity of a service under review. For example, new technology may cause a service to become easier or more difficult to perform, with corresponding effects on the time and intensity of the service. However, we are under no obligation to adopt the same review process or compelling evidence criteria as the RUC. We instead focus on evaluating and addressing the time and intensity of services when reviewing potentially misvalued codes because section 1848(c)(1)(A) of the Act specifically defines the work component as the resources that reflect time and intensity in furnishing the service.

Comment: A commenter stated that there has been a disparate impact on the valuation of cardiothoracic services over the past decade. The commenter stated that CMS has taken a prejudicial approach to services from this specialty over the period 2009-2019 by making refinements to the RUC's recommended work RVUs at a higher percentage than all other specialties.

Response: We disagree with the commenter that there has been any prejudicial approach to the valuation of services from the cardiothoracic specialty or any other specialty. We value services on an individual case-by-case basis using time and intensity as directed by the statute. When the recommended work RVUs from the RUC do not appear to account for significant changes in time, we have employed different approaches (such as survey data, building block, crosswalks to key reference or similar codes, and magnitude estimation) to identify potential values that reconcile the recommended work RVUs with the recommended time values. We continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another, and the dominant specialty of the service under review is not part of our work valuation methodology.

Comment: Several commenters raised the issue of the refinement panel which was last reformed in CY 2016. Commenters stated that the refinement panel was not obsolete and was not mutually exclusive with the change to include all proposed valuations in each year's proposed rule. Commenters stated that for two decades, the refinement panel process was considered by stakeholders to be an appeals process and its elimination discontinued CMS' reliance on outside stakeholders to provide accountability through a transparent appeals process. Commenters requested that CMS consider these issues and create an objective, transparent and consistently applied formal appeals process that would be open to any commenting organization.

Response: We did not propose any changes to the refinement panel and we are not finalizing any changes to the refinement panel for CY 2022. As we stated in the CY 2016 PFS final rule (80 FR 70917-70918), the refinement panel was established to assist us in reviewing the public comments on CPT codes with interim final work RVUs and in balancing the interests of the specialty societies who commented on the work RVUs with the budgetary and redistributive effects that could occur if we accepted extensive increases in work RVUs across a broad range of services. We did not believe that the refinement panel had generally served as the kind of “appeals” or reconsideration process that some stakeholders envisioned in their comments. We also believe that the refinement panel was not achieving its intended purpose. Rather than providing us with additional information, balanced across specialty interests, to assist us in establishing work RVUs, the refinement panel process generally served to rehash the issues raised and information already discussed at the RUC meetings and considered by CMS. In contrast to the prior process of establishing interim final values and using a refinement panel process that generally was not observed by members of the public, we continue to believe that the current process of proposing the majority of code values in a proposed rule, giving the public the opportunity to comment on those proposed values, and then finalizing those values in a final rule offers greater transparency and accountability.

We also note that we did not finalize our proposal to eliminate the refinement panel completely in CY 2016. We retain the ability to convene refinement panels for codes with interim final values under circumstances where additional input provided by the panel is likely to add value as a supplement to notice and comment rulemaking. We also remind stakeholders that we have established an annual process for the public nomination of potentially misvalued codes. This process, described in the CY 2012 PFS final rule (76 FR 73058), provides an annual means for those who believe that values for individual services are inaccurate and should be readdressed through notice and comment rulemaking to bring those codes to our attention.

Comment: Several commenters requested that CMS use the interim RUC recommendations from the April 2021 meeting for several code families which had previously been reviewed at the October 2020 RUC meeting or the January 2021 RUC meeting. Commenters stated that the earlier RUC recommendations were made on an interim basis and requested an expedited review of the recommendations from the April 2021 RUC meeting; the RUC resubmitted its recommendations for these code families as part of its comment submission.

Response: We finalized a policy in the CY 2015 PFS final rule to make all changes in the work and MP RVUs and the direct PE inputs for new, revised, and potentially misvalued services under the PFS by proposing and then finalizing such changes through notice and comment rulemaking, as opposed to initially finalizing changes on an interim final basis (79 FR 67602 through 67609). As we stated when promulgating the CY 2015 PFS final rule, this approach has the significant advantage that the RVUs for all services under the PFS are established using a full notice and comment procedure, including consideration of the RUC recommendations, before they take effect, providing the public the opportunity to comment on a specific proposal prior to it being implemented. We continue to believe that this is a far more transparent process which assures that we have the full benefit of stakeholder comments before establishing values. Since we did not make proposals on the code families in question using the RUC's recommendations from the April 2021 meeting, we would be forced to finalize valuation for these codes on an interim final basis, without the opportunity for public comment. This would contradict the policy that we finalized in the CY 2015 PFS final rule, and we do not believe that it would serve the interests of transparency. Although we will consider any information submitted by stakeholders for valuation during the comment period, as we do for all codes which are subject to notice and comment rulemaking, we will formally review the recommendations from the April 2021 RUC meeting next year as part of the CY 2023 PFS rulemaking cycle.

In response to comments, in the CY 2019 PFS final rule (83 FR 59515), we clarified that terms “reference services”, “key reference services”, and “crosswalks” as described by the commenters are part of the RUC's process for code valuation. These are not terms that we created, and we do not agree that we necessarily must employ them in the identical fashion for the purposes of discussing our valuation of individual services that come up for review. However, in the interest of minimizing confusion and providing clear language to facilitate stakeholder feedback, we will seek to limit the use of the term, “crosswalk,” to those cases where we are making a comparison to a CPT code with the identical work RVU. We also occasionally make use of a “bracket” for code valuation. A “bracket” refers to when a work RVU falls between the values of two CPT codes, one at a higher work RVU and one at a lower work RVU.

We look forward to continuing to engage with stakeholders and commenters, including the RUC, as we prioritize our obligation to value new, revised, and potentially misvalued codes; and will continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process. We refer readers to the detailed discussion in this section of the valuation considered for specific codes. Table 21 contains a list of codes and descriptors for which we proposed work RVUs; this includes all codes for which we received RUC recommendations by February 10, 2021. The finalized work RVUs, work time and other payment information for all CY 2022 payable codes are available on the CMS website under downloads for the CY 2022 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/index.html ).

3. Methodology for the Direct PE Inputs To Develop PE RVUs

a. Background

On an annual basis, the RUC provides us with recommendations regarding PE inputs for new, revised, and potentially misvalued codes. We review the RUC-recommended direct PE inputs on a code by code basis. Like our review of recommended work RVUs, our review of recommended direct PE inputs generally includes, but is not limited to, a review of information provided by the RUC, HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, and consultation with physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. When we determine that the RUC's recommendations appropriately estimate the direct PE inputs (clinical labor, disposable supplies, and medical equipment) required for the typical service, are consistent with the principles of relativity, and reflect our payment policies, we use those direct PE inputs to value a service. If not, we refine the recommended PE inputs to better reflect our estimate of the PE resources required for the service. We also confirm whether CPT codes should have facility and/or nonfacility direct PE inputs and refine the inputs accordingly.

Our review and refinement of the RUC-recommended direct PE inputs includes many refinements that are common across codes, as well as refinements that are specific to particular services. Table 22 details our refinements of the RUC's direct PE recommendations at the code-specific level. In section II.B. of this final rule, Determination of Practice Expense Relative Value Units (PE RVUs), we addressed certain refinements that will be common across codes. Refinements to particular codes are addressed in the portions of that section that are dedicated to particular codes. We noted that for each refinement, we indicated the impact on direct costs for that service. We noted that, on average, in any case where the impact on the direct cost for a particular refinement is $0.35 or less, the refinement has no impact on the PE RVUs. This calculation considers both the impact on the direct portion of the PE RVU, as well as the impact on the indirect allocator for the average service. In the proposed rule, we also noted that many of the refinements listed in Table 21 of the proposed rule resulted in changes under the $0.35 threshold and were unlikely to result in a change to the RVUs.

We note that the direct PE inputs for CY 2022 are displayed in the CY 2022 direct PE input files, available on the CMS website under the downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html. The inputs displayed there have been used in developing the CY 2022 PE RVUs as displayed in Addendum B.

b. Common Refinements

(1) Changes in Work Time

Some direct PE inputs are directly affected by revisions in work time. Specifically, changes in the intraservice portions of the work time and changes in the number or level of postoperative visits associated with the global periods result in corresponding changes to direct PE inputs. The direct PE input recommendations generally correspond to the work time values associated with services. We believe that inadvertent discrepancies between work time values and direct PE inputs should be refined or adjusted in the establishment of proposed direct PE inputs to resolve the discrepancies.

(2) Equipment Time

Prior to CY 2010, the RUC did not generally provide CMS with recommendations regarding equipment time inputs. In CY 2010, in the interest of ensuring the greatest possible degree of accuracy in allocating equipment minutes, we requested that the RUC provide equipment times along with the other direct PE recommendations, and we provided the RUC with general guidelines regarding appropriate equipment time inputs. We appreciate the RUC's willingness to provide us with these additional inputs as part of its PE recommendations.

In general, the equipment time inputs correspond to the service period portion of the clinical labor times. We clarified this principle over several years of rulemaking, indicating that we consider equipment time as the time within the intraservice period when a clinician is using the piece of equipment plus any additional time that the piece of equipment is not available for use for another patient due to its use during the designated procedure. For those services for which we allocate cleaning time to portable equipment items, because the portable equipment does not need to be cleaned in the room where the service is furnished, we do not include that cleaning time for the remaining equipment items, as those items and the room are both available for use for other patients during that time. In addition, when a piece of equipment is typically used during follow-up postoperative visits included in the global period for a service, the equipment time will also reflect that use.

We believe that certain highly technical pieces of equipment and equipment rooms are less likely to be used during all of the preservice or postservice tasks performed by clinical labor staff on the day of the procedure (the clinical labor service period) and are typically available for other patients even when one member of the clinical staff may be occupied with a preservice or postservice task related to the procedure. We also noted that we believe these same assumptions will apply to inexpensive equipment items that are used in conjunction with and located in a room with non-portable highly technical equipment items since any items in the room in question will be available if the room is not being occupied by a particular patient. For additional information, we refer readers to our discussion of these issues in the CY 2012 PFS final rule with comment period (76 FR 73182) and the CY 2015 PFS final rule with comment period (79 FR 67639).

(3) Standard Tasks and Minutes for Clinical Labor Tasks

In general, the preservice, intraservice, and postservice clinical labor minutes associated with clinical labor inputs in the direct PE input database reflect the sum of particular tasks described in the information that accompanies the RUC-recommended direct PE inputs, commonly called the “PE worksheets.” For most of these described tasks, there is a standardized number of minutes, depending on the type of procedure, its typical setting, its global period, and the other procedures with which it is typically reported. The RUC sometimes recommends a number of minutes either greater than or less than the time typically allotted for certain tasks. In those cases, we review the deviations from the standards and any rationale provided for the deviations. When we do not accept the RUC-recommended exceptions, we refine the proposed direct PE inputs to conform to the standard times for those tasks. In addition, in cases when a service is typically billed with an E/M service, we remove the preservice clinical labor tasks to avoid duplicative inputs and to reflect the resource costs of furnishing the typical service.

Comment: Several commenters stated that CMS is proposing to refine the facility pre-service clinical labor times for major procedures to conform to the 000-day or 010-day global period standards for “Extensive use of clinical staff” despite the RUC recommendation of standard 090-day preservice clinical labor times. Commenters stated that these procedures are performed under general anesthesia in the facility setting and require specialized supplies and equipment and pre-operative coordination between multiple specialists necessitating office clinical staff time typical of 90-day global procedures performed in the facility setting. Commenters stated that reassignment of global periods for select codes does not negate the fact that a major procedure is a major procedure and the pre-service facility clinical staff time for a major procedure is independent of the global period assignment. Commenters stated that each procedure should be evaluated on a case-by-case basis.

Response: We agree with the commenters that the direct PE inputs for each service should be evaluated on a case-by-case basis based on our criteria of what would be reasonable and medically necessary in the typical case. We reviewed the individual codes in question and concluded that the use of 000-day or 010-day global period standards for “Extensive use of clinical staff” would be most typical in these cases. As we noted under the Standardization of Clinical Labor Tasks (section II.B) part of this final rule, we continue to believe that setting and maintaining clinical labor standards provides greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes. For additional discussion, we direct readers to the individual code families affected by our proposed preservice clinical labor times (CPT codes 46020 and 46030 and CPT codes 61736 and 61737).

We refer readers to section II.B. of this final rule, Determination of Practice Expense Relative Value Units (PE RVUs), for more information regarding the collaborative work of CMS and the RUC in improvements in standardizing clinical labor tasks.

(4) Recommended Items That Are Not Direct PE Inputs

In some cases, the PE worksheets included with the RUC's recommendations include items that are not clinical labor, disposable supplies, or medical equipment or that cannot be allocated to individual services or patients. We addressed these kinds of recommendations in previous rulemaking (78 FR 74242), and we do not use items included in these recommendations as direct PE inputs in the calculation of PE RVUs.

(5) New Supply and Equipment Items

The RUC generally recommends the use of supply and equipment items that already exist in the direct PE input database for new, revised, and potentially misvalued codes. However, some recommendations include supply or equipment items that are not currently in the direct PE input database. In these cases, the RUC has historically recommended that a new item be created and has facilitated our pricing of that item by working with the specialty societies to provide us copies of sales invoices. For CY 2022 we received invoices for several new supply and equipment items. Tables 23 and 24 detail the invoices received for new and existing items in the direct PE database. As discussed in section II.B. of this final rule, Determination of Practice Expense Relative Value Units, we encourage stakeholders to review the prices associated with these new and existing items to determine whether these prices appear to be accurate. Where prices appear inaccurate, we encourage stakeholders to submit invoices or other information to improve the accuracy of pricing for these items in the direct PE database by February 10th of the following year for consideration in future rulemaking, similar to our process for consideration of RUC recommendations.

We remind stakeholders that due to the relativity inherent in the development of RVUs, reductions in existing prices for any items in the direct PE database increase the pool of direct PE RVUs available to all other PFS services. Tables 23 and 24 also include the number of invoices received and the number of nonfacility allowed services for procedures that use these equipment items. We provide the nonfacility allowed services so that stakeholders will note the impact the particular price might have on PE relativity, as well as to identify items that are used frequently, since we believe that stakeholders are more likely to have better pricing information for items used more frequently. A single invoice may not be reflective of typical costs and we encourage stakeholders to provide additional invoices so that we might identify and use accurate prices in the development of PE RVUs.

In some cases, we do not use the price listed on the invoice that accompanies the recommendation because we identify publicly available alternative prices or information that suggests a different price is more accurate. In these cases, we include this in the discussion of these codes. In other cases, we cannot adequately price a newly recommended item due to inadequate information. Sometimes, no supporting information regarding the price of the item has been included in the recommendation. In other cases, the supporting information does not demonstrate that the item has been purchased at the listed price (for example, vendor price quotes instead of paid invoices). In cases where the information provided on the item allows us to identify clinically appropriate proxy items, we might use existing items as proxies for the newly recommended items. In other cases, we include the item in the direct PE input database without any associated price. Although including the item without an associated price means that the item does not contribute to the calculation of the final PE RVU for particular services, it facilitates our ability to incorporate a price once we obtain information and are able to do so.

(6) Service Period Clinical Labor Time in the Facility Setting

Generally speaking, our direct PE inputs do not include clinical labor minutes assigned to the service period because the cost of clinical labor during the service period for a procedure in the facility setting is not considered a resource cost to the practitioner since Medicare makes separate payment to the facility for these costs. We address code-specific refinements to clinical labor in the individual code sections.

(7) Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap

We note that the list of services for the upcoming calendar year that are subject to the MPPR on diagnostic cardiovascular services, diagnostic imaging services, diagnostic ophthalmology services, and therapy services; and the list of procedures that meet the definition of imaging under section 1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap; are displayed in the public use files for the PFS proposed and final rules for each year. The public use files for CY 2022 are available on the CMS website under downloads for the CY 2022 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.html. For more information regarding the history of the MPPR policy, we refer readers to the CY 2014 PFS final rule with comment period (78 FR 74261 through 74263).

Effective January 1, 2007, section 5102(b)(1) of the Deficit Reduction Act of 2005 (Pub. L. 109-171) (DRA) amended section 1848(b)(4) of the Act to require that, for imaging services, if—(i) The TC (including the TC portion of a global fee) of the service established for a year under the fee schedule without application of the geographic adjustment factor, exceeds (ii) The Medicare OPD fee schedule amount established under the prospective payment system (PPS) for HOPD services under section 1833(t)(3)(D) of the Act for such service for such year, determined without regard to geographic adjustment under paragraph (t)(2)(D) of such section, the Secretary shall substitute the amount described in clause (ii), adjusted by the geographic adjustment factor [under the PFS], for the fee schedule amount for such TC for such year. As required by the section 1848(b)(4)(A) of the Act, for imaging services furnished on or after January 1, 2007, we cap the TC of the PFS payment amount for the year (prior to geographic adjustment) by the Outpatient Prospective Payment System (OPPS) payment amount for the service (prior to geographic adjustment). We then apply the PFS geographic adjustment to the capped payment amount. Section 1848(b)(4)(B) of the Act defines imaging services as “imaging and computer-assisted imaging services, including X-ray, ultrasound (including echocardiography), nuclear medicine (including PET), magnetic resonance imaging (MRI), computed tomography (CT), and fluoroscopy, but excluding diagnostic and screening mammography.” For more information regarding the history of the cap on the TC of the PFS payment amount under the DRA (the “OPPS cap”), we refer readers to the CY 2007 PFS final rule with comment period (71 FR 69659 through 69662).

For CY 2022, we identified new and revised codes to determine which services meet the definition of “imaging services” as defined above for purposes of this cap. Beginning for CY 2022, we proposed to include the following services on the list of codes to which the OPPS cap applies: CPT codes 0633T ( Computed tomography, breast, including 3D rendering, when performed, unilateral; without contrast material ), 0634T ( Computed tomography, breast, including 3D rendering, when performed, unilateral; with contrast material(s) ), 0635T ( Computed tomography, breast, including 3D rendering, when performed, unilateral; without contrast, followed by contrast material(s) ), 0636T ( Computed tomography, breast, including 3D rendering, when performed, bilateral; without contrast material(s) ), 0637T ( Computed tomography, breast, including 3D rendering, when performed, bilateral; with contrast material(s) ), 0638T ( Computed tomography, breast, including 3D rendering, when performed, bilateral; without contrast, followed by contrast material(s) ), 0648T ( Quantitative magnetic resonance for analysis of tissue composition (eg, fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained without diagnostic MRI examination of the same anatomy (eg, organ, gland, tissue, target structure) during the same session ), 0649T ( Quantitative magnetic resonance for analysis of tissue composition (eg, fat, iron, water content), including multiparametric data acquisition, data preparation and transmission, interpretation and report, obtained with diagnostic MRI examination of the same anatomy (eg, organ, gland, tissue, target structure) (List separately in addition to code for primary procedure) ), 77089 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk ), 77090 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk, technical preparation and transmission of data for analysis to be performed elsewhere ), 77091 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk, technical calculation only ), 77092 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk interpretation and report on fracture risk only, by other qualified health care professional ), 91113 ( Gastrointestinal tract imaging, intraluminal (eg, capsule endoscopy), colon, with interpretation and report ), and 93319 ( 3D echocardiographic imaging and postprocessing during transesophageal echocardiography or transthoracic echocardiography for congenital cardiac anomalies for the assessment of cardiac structure(s) (eg, cardiac chambers and valves, left atrial appendage, intraterial septum, interventricular septum) and function, when performed ). We believe that these codes meet the definition of imaging services under section 1848(b)(4)(B) of the Act, and thus, should be subject to the OPPS cap.

We did not receive public comments on this proposal. We are finalizing the addition of the services listed above to the list of codes to which the OPPS cap applies, as proposed.

4. Valuation of Specific Codes for CY 2022

(1) Anesthesia for Cardiac Electrophysiologic Procedures (CPT Code 00537)

In October 2019, the RUC reviewed CPT code 00537 ( Anesthesia for cardiac electrophysiologic procedures including radiofrequency ablation ) and recommended that the code be surveyed for the October 2020 meeting. This service was identified by the RUC via the high volume growth screen for services with total Medicare utilization of 10,000 or more that have increased by at least 100 percent from 2009 through 2014. Additionally, at the October 2019 RUC meeting, the RUC approved an anesthesia reference service list (RSL) and a method to assess the relativity among services on the anesthesia fee schedule that uses a revised building block methodology and a regression line analysis. The RUC has stated that the revised building block methodology generates “proxy RVUs” that are then compared against the RSL regression line to assess relativity among anesthesia services. The RUC has indicated that their primary and approved method for anesthesia base unit valuation continues to be the anesthesia survey results, and that the building block and regression line analysis are used as a supplemental validation measure.

The RUC recommended a valuation of 12 base units for CPT code 00537. We disagree with the RUC-recommended valuation of 12 base units for CPT code 00537. After performing a RUC database search of codes with similar total times and post-induction period procedure anesthesia (PIPPA) times, 12 base units appears to be on the very high range. We proposed a valuation of 10 base units supported by reference codes CPT code 00620 ( anesthesia for procedures on the thoracic spine and cord, not otherwise specified ) and CPT code 00600 ( Anesthesia for procedures on cervical spine and cord; not otherwise specified ), which both have a valuation of 10 base units. CPT code 00620 has a very similar total time of 235 minutes and CPT code 00600 has a higher total time of 257 minutes and the same base unit value of 10, which indicates that this is an appropriate valuation. Additionally, we note that the survey total time for CPT code 00537 increased from 150 to 238 minutes, resulting in a survey result 25th percentile valuation of 10 base units.

We proposed the RUC-recommended direct PE inputs for CPT code 00537.

Comment: Commenters disagreed with the proposed valuation of 10 base units for CPT code 00537 and stated that CMS should instead finalize the RUC-recommended valuation of 12 base units. Commenters disagreed with CMS using reference codes CPT code 00620 ( anesthesia for procedures on the thoracic spine and cord, not otherwise specified ) and CPT code 00600 ( Anesthesia for procedures on cervical spine and cord; not otherwise specified ) as a basis for the valuation of 10 base units. Commenters stated that CMS ignored the reference codes chosen by the RUC and instead used reference codes that were not surveyed, which makes the time source unknown. They also stated that CMS ignored the validation measures that the RUC used to support their recommendations and that CMS only considered the total times of the reference codes and not all inputs of time, such as post induction time. Additionally, commenters stated that they believe CMS did not consider the intensity of the service for CPT code 00537, as the supporting reference codes have a lower intensity and are not clinically similar.

Response: We disagree and continue to believe that using multiple methodologies for identifying potential base units for anesthesia services is appropriate. Codes are, and have been over many years, often valued by comparisons to codes with similar times, including the total time of a service. Therefore, we consider total time to be an appropriate measure for comparison. We also use reference codes to validate a base unit valuation. When using reference codes to support a proposed valuation, we do not consider them as a direct “cross-walk” between the CPT code that is being revalued and the chosen reference code. Instead, a reference code is used as a supportive check in validating times. For CPT code 00600 and CPT code 00620, we believe that the similarities in time, as well as the base unit value of 10 being the survey 25th percentile result, make them appropriate reference codes. We continue to believe that the relative value system of the PFS is such that all services are appropriately subject to comparison to one another. We do not agree that codes must share the same patient population, utilization, age of the CPT code, or survey tool to serve as an appropriate reference code. We do consider clinical information associated with the intensity of a physician's work provided by the RUC and other stakeholders as part of our review process, although we remind readers again that we do not agree that codes must share the same clinical aspects of work to serve as an appropriate reference code. For CPT code 00537, we considered the intensity of the service as it relates to other CPT codes on the fee schedule, the total time of the service, as well as aspects of time compared to supporting reference codes to determine the base unit valuation for this CPT code. For additional information regarding our use of supporting reference codes and our use of time inputs as a tool for comparison, we refer readers to our discussion of the subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2. of the final rule).

Comment: We received one comment in support of our proposed valuation for CPT code 00537.

Response: We acknowledge and appreciate the support of a base unit valuation of 10 for CPT code 00537.

After consideration of these public comments, we are finalizing the base unit valuation and direct PE inputs for CPT code 00537 as proposed.

(2) Anesthesia Services for Image-Guided Spinal Procedures (CPT Codes 01937, 01938, 01939, 01940, 01941, and 01942)

In 2017, the RUC identified CPT code 01936 ( Anesthesia for percutaneous image guided procedures on the spine and spinal cord; therapeutic ) as possibly needing refinement due to inaccurate reporting via the high-volume growth screen. The Relativity Assessment Workgroup reviewed data on what procedures were reported with this anesthesia code. In October 2019, the Workgroup reviewed this service and recommended that it be referred to the CPT Editorial Panel to create more granular codes. In October 2020, the CPT Editorial Panel replaced CPT codes 01935 and 01936 with six new codes to report percutaneous image-guided spine and spinal cord anesthesia procedures. These CPT codes are 01937 ( Anesthesia for percutaneous image-guided injection, drainage or aspiration procedures on the spine or spinal cord; cervical or thoracic ), 01938 ( Anesthesia for percutaneous image guided injection, drainage or aspiration procedures on the spine or spinal cord; lumbar or sacral ), 01939 ( Anesthesia for percutaneous image guided destruction procedures by neurolytic agent on the spine or spinal cord; cervical or thoracic ), 01940 ( Anesthesia for percutaneous image guided destruction procedures by neurolytic agent on the spine or spinal cord; lumbar or sacral ), 01941, ( Anesthesia for percutaneous image guided neuromodulation or intravertebral procedures ) ( e.g., Kyphoplasty, vertebroplasty) on the spine or spinal cord; cervical or thoracic ) and 01942 ( Anesthesia for percutaneous image guided neuromodulation or intravertebral procedures ( e.g., Kyphoplasty, vertebroplasty) on the spine or spinal cord; lumbar or sacral ).

We proposed the RUC-recommended valuation of 4 base units for CPT codes 01937, 01938, 01939, and 01940.

We disagreed with the RUC-recommend valuation of 6 base units for CPT codes 01941 and 01942. After performing a RUC database search of codes with similar total times and post-induction period procedure anesthesia (PIPPA) times, 6 base units for CPT codes 01941 and 01942 appeared to be a high valuation. We proposed a valuation of 5 base units for both codes supported by a reference code, CPT code 00813 ( Anesthesia for combined upper and lower gastrointestinal endoscopic procedures, endoscope introduced both proximal to and distal to the duodenum ). CPT code 00813 has a valuation of 5 base units with a higher PIPPA time of 40 minutes, as well as a higher total time of 70 minutes. The RUC noted that CPT codes 01941 and 01942 should have a higher base unit valuation than the other similar codes within this family due to the complex nature of these procedures that have a more intensive anesthesia process. The RUC supported their recommendation with a crosswalk code, CPT code 00732 ( Anesthesia for upper gastrointestinal endoscopic procedures, endoscope introduced proximal to duodenum; endoscopic retrograde cholangiopancreatography (ECRP) ). CPT code 00732 has a valuation of 6 base units, a total time of 100 minutes, and a PIPPA time of 65 minutes. CPT codes 01941 and 019427 have a total time of 58 minutes and a PIPPA time of 20 minutes. We agreed that a more complex procedure may require a higher base unit valuation within a code family; however, given the disparity in total and PIPPA time, we disagreed with the use of this crosswalk code to support a valuation of 6 base units and instead proposed a valuation of 5 base units supported by reference CPT code 00813, which has higher times and the same base unit valuation.

We proposed the RUC-recommended direct PE inputs for all six codes in the family.

Comment: Commenters disagreed with the proposed valuation of 5 base units for CPT code 01941 and CPT code 01942 and stated that CMS should finalize the RUC-recommended base unit of 6 for both CPT codes. Commenters disagreed with our use of CPT code 00813 ( Anesthesia for combined upper and lower gastrointestinal endoscopic procedures, endoscope introduced both proximal to and distal to the duodenum ) as a reference code for the proposed valuation of 5 base units for CPT code 01941 and CPT code 01942. Commenters stated that from a clinical perspective, the RUC's reference code was more appropriate and similar in complexity.

Response: We disagree that a supporting reference code must have similar clinical features. We believe that other methods of comparison, such as total and intra-service time, can also be used to reach appropriate valuations when clinical features are disparate. The relativity of the PFS allows for comparisons amongst all codes. We also do not consider supporting reference codes as direct “cross-walks”. We use supporting reference codes to further validate valuations that are based on comparisons of time and intensity, but not necessarily clinical similarities. The higher total and post induction times for our chosen reference code, with a base unit value of 5, make it an appropriate code for purposes of comparison with CPT code 01941 and CPT code 01942 to reach a base unit valuation. Additionally, we note that the RUC chose the survey 25th percentile result or lower for every other CPT code in this family, but for CPT code 01941 and 01942 they chose a survey result value that is above the 25th percentile. We believe that using the survey 25th percentile of 5 base units is appropriate to maintain consistency within the family for purposes of valuation and that a base unit valuation of 5 will also account for the increase in intensity of CPT code 01941 and CPT code 01942. For additional information regarding our use of supporting reference codes, we refer readers to our discussion of the subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2. of this final rule).

After consideration of these public comments, we are finalizing the base unit valuation and direct PE inputs for this code family as proposed.

(3) Closed Treatment of Nasal Bone Fracture (CPT Codes 21315 and 21320)

We agreed with the RUC's recommendation to change CPT codes 21315 ( Closed treatment of nasal bone fracture; without stabilization ) and 21320 ( Closed treatment of nasal bone fracture; with stabilization ) to 000-day global period codes from 010-day global period codes to account for the degree of swelling within 10 days post-procedure, and because the patient can remove their own splint at home for CPT code 21320. For CPT codes 21315 and 21320, we disagreed with the RUC-recommended work RVUs of 2.00 and 2.33, respectively, as we believe these values do not adequately reflect the surveyed reductions in physician time and the change to a 000-day global period from a 010-day global period for these CPT codes. We proposed a work RVU of 0.96 for CPT code 21315 and 1.59 for CPT code 21320 based on the reverse building block methodology to remove the RVUs associated with the 010-day global period and the surveyed reductions in physician time. We believe that the proposed work RVU of 0.96 for CPT code 21315 adequately accounts for the 50 percent decrease in intraservice and postservice time, a 31-minute decrease in total time, and a change to a 000-day global period which will allow for separately billable E/M visits as medically necessary. We believe that the proposed work RVU of 1.59 for CPT code 21320 adequately accounts for the 5-minute decrease in intraservice time, 3-minute decrease in total time, and 48 percent decrease in postservice time. Absent an explicitly stated rationale for an intensity increase for CPT codes 21315 and 21320, we proposed to adjust the work RVU to reflect significant decreases in surveyed physician time.

The global period changes from 010-day to 000-day allow for separately billable E/M visits relating to CPT codes 21315 and 21320, therefore we removed RVUs that we believed were attributable to the currently bundled E/M visits totaling 1.30 RVUs for CPT code 21315 and 0.35 RVUs for CPT code 21320. CPT code 21315 is currently bundled with one post-operative follow up office visit, CPT code 99213 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and low level of medical decision making. When using time for code selection, 20-29 minutes of total time is spent on the date of the encounter ). CPT code 21320 is currently bundled with half of a post-operative follow up office visit, CPT code 99212 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and straightforward medical decision making. When using time for code selection, 10-19 minutes of total time is spent on the date of the encounter ). We do not believe the RUC adequately accounted for the loss of these E/M visits in their recommended work RVUs for CPT codes 21315 and 21320. The RUC's recommendations also seem to dismiss the significant changes in surveyed physician time, without a persuasive explanation of a significant increase in IWPUT that results from the RUC's recommended work RVUs for CPT codes 21315 and 21320. We believe the surveyed decreases in physician time in conjunction with the loss of the post-operative visits for CPT codes 21315 and 21320 merit decreases in the work RVUs from the current work RVUs.

We considered using a modified total time ratio methodology given the age and potentially flawed methodology used to arrive at the current valuation. The modified total time ratio calculation does not include the loss of 8 minutes of post-operative time attributable to the change from a 010-day global period to a 000-day global period for CPT code 21320 and loss of 23 minutes of post-operative time for CPT code 21315. This modified time ratio methodology reflects how the physician time is changing in the pre-, intra-, and postservice periods when a code's global period is changing, given that E/M services can be billed as medically necessary and appropriate for a 000-day global code. The total time ratio between the current and proposed total times for CPT code 21315, excluding the 23 minutes of post-operative time in the current total time, equals 1.64. We arrived at 1.64 by modifying the original total time ratio equation to equal the proposed new total time divided by the current time, less any time attributable to the post-operative global period, then multiplied by the current work RVU. The current total time for CPT code 21315 without the 23 minutes of post-operative time that will be lost by going from a 010-day to a 000-day global period code is 76 minutes, therefore, the modified total time ratio = (68 minutes/(99 minutes − 23 minutes)) * 1.83 = 1.64. When using the original total time ratio methodology for CPT code 21315, it shows a 31 percent decrease in total time [(68 minutes − 99 minutes)/99 minutes = −0.31], whereas the modified methodology shows that there is only an 11 percent decrease in newly proposed pre-, intra-, and postservice time from the current times [(68 minutes − 76 minutes)/76 minutes = −0.11].

The same modified total time ratio methodology could be applicable to CPT code 21320. The current total time for CPT code 21320 without the 8 minutes of post-operative time that will be lost by going from a 010-day to a 000-day global period code is 70 minutes, therefore, the modified total time ratio = (75 minutes/(78 minutes−8 minutes) * 1.88 = 2.01. The modified methodology shows that the pre-, intra-, and postservice time is increasing by 7 percent for CPT code 21320, whereas the original methodology, which accounts for the loss of the 8 post-operative minutes in the total time ratio, shows a 4 percent decrease in total time that would indicate the need for a work RVU decrease. We recognize that we have not previously used a modified total time approach to consider work RVU values when there is a change in the global period for a service in conjunction with significant surveyed changes to the pre-, intra-, and postservice times; therefore, we solicited comment on application of the modified total time ratio approach to value services that have a global period change and significant surveyed physician time changes. We believe this methodology may account for the loss of post-operative visits and the surveyed changes in the pre-, intra-, and postservice times in this unique situation.

Comment: Commenters stated that CMS did not address the compelling evidence submitted with the RUC recommendations for CPT codes 21315 and 21320. Commenters stated that CMS dismisses the fact that services may change due to technological advances, changes in the patient population, shifts in the specialty of physicians providing services or changes in the physician work or intensity required to perform services, and CMS only proposes blanket reductions instead of considering how a service may have changed or increased over time. Commenters requested that CMS address the compelling evidence submitted with the RUC recommendations when the agency does not accept the RUC's recommended work RVUs.

Response: The concept of compelling evidence was developed by the RUC as part of its work RVU review process for individual codes. The RUC determines whether there is compelling evidence to justify an increase in valuation. The RUC's compelling evidence criteria include documented changes in physician work, an anomalous relationship between the code and multiple key reference services, evidence that technology has changed physician work, analysis of other data on time and effort measures, and evidence that incorrect assumptions were made in the previous valuation of the service. While we appreciate the submission of this additional information for review, we emphasize that the RUC developed the concept of compelling evidence for its own review process; an evaluation of “compelling evidence,” at least as conceptualized by the RUC, is not part of our review process, as our focus is the time and intensity of services, in accordance with the statute. With that said, we do consider changes in technology, patient population, and other compelling evidence criteria, as such evidence may affect the time and intensity of a service under review. For example, new technology may cause a service to become easier or more difficult to perform, with corresponding effects on the time and intensity of the service. However, we are under no obligation to adopt the same review process or compelling evidence criteria as the RUC. We instead focus on evaluating and addressing the time and intensity of services when reviewing potentially misvalued codes because section 1848(c)(1)(A) of the Act specifically defines the work component as the resources that reflect time and intensity in furnishing the service.

Comment: Commenters disagreed with our reference to older work time sources, and stated that their use led to the proposal of work RVUs based on flawed assumptions. Commenters also stated that it was invalid to draw comparisons between the current work times and work RVUs to the newly surveyed work time and work RVUs as recommended by the RUC, particularly with regards to the removal of RVUs that we believed were attributable to the global period. Commenters unanimously disagreed with the subtraction of the increased CY 2021 office/outpatient E/M work RVUs of 0.70 and 1.30 for CPT codes 99212 and 99213, respectively, to arrive at our proposed work RVUs for CPT codes 21315 and 21320.

Response: The global period changes from 010-day to 000-day allow for separately billable E/M visits relating to CPT codes 21315 and 21320, therefore we removed RVUs that we believed were attributable to the currently bundled E/M visits totaling 1.30 RVUs (when billed separately) for CPT code 21315 and 0.35 RVUs (when billed separately) for CPT code 21320. We used the reverse building block methodology to calculate the proposed work RVUs, which accounts for the longstanding time and intensity associated with CPT code 99212 and CPT code 99213 for bundled office visits in the surgical global period, rather than the increased CY 2021 office/outpatient E/M work RVUs of 0.70 and 1.30 for CPT codes 99212 and 91213, respectively, as commenters suggested. In the proposed rule, we stated that CPT code 21315 is currently bundled with one post-operative follow up office visit, CPT code 99213. When separately furnished, practitioners could bill for a total of 1.30 work RVUs, as the post-operative follow up office visit would no longer be bundled in the global period, therefore the practitioner could bill for the increased CY 2021 office/outpatient E/M value. CPT code 21320 is currently bundled with half of a post-operative follow up office visit, CPT code 99212. When separately furnished, practitioners could bill for the increased CY 2021 office/outpatient E/M value a total of 0.35 work RVUs for the half of a post-operative follow up office visit, CPT code 99212, as the half of a post-operative follow up office visit would no longer be bundled in the global period. We continue to believe that the RUC did not adequately account for the removal of these E/M visits as a result of the global period changes in their recommended work RVUs for CPT codes 21315 and 21320.

We believe that it is crucial that the code valuation process take place with the understanding that the existing work times that have been used in PFS ratesetting are accurate. We recognize that adjusting work RVUs for changes in time is not always a straightforward process and that the intensity associated with changes in time is not necessarily always linear, which is why we apply various methodologies to identify several potential work values for individual codes. However, we reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available, and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of old work time values that were established many years ago and have not since been reviewed in our methodology, we refer readers to our discussion of the subject in the CY 2017 PFS final rule (81 FR 80273 through 80274).

Comments: Commenters opposed our proposed work RVUs for CPT codes 21315 and 21320 and urged us to finalize the RUC-recommended work RVUs for these codes. Commenters stated that CMS' reverse building block, total time ratio, and modified total time ratio calculations ignore magnitude estimates as indicated by physicians who perform these services and compromise the correct relativity of these services. Commenters also stated that CMS' calculations ignore and discount the intensity of these services.

Response: We disagree with the commenters and continue to believe that reverse building block and time ratio calculations are appropriate methods for identifying potential work RVUs for PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys which suggests that the amount of time involved in furnishing the service has changed significantly. For additional information regarding the use of old work time values that were established many years ago and have not since been reviewed in our methodology, we refer readers to our discussion of the subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2.), as well as a comprehensive discussion in the CY 2017 PFS final rule (81 FR 80273 through 80274). We note that the modified total time ratio discussed above was not used to arrive at the valuation for CPT codes 21315 or 21320, but was discussed solely to seek comment on a potential approach to value services that have a global period change and significant surveyed physician time changes.

We continue to believe that using the reverse building block methodology to calculate a proposed work RVU of 0.96 for CPT code 21315 and 1.59 for CPT code 21320 was appropriate. Based on the aforementioned references to section II.E.2. and the CY 2017 PFS final rule (81 FR 80273 through 80274) and consideration of the comments, we are finalizing the work RVUs for CPT codes 21315 and 21320 as proposed. We believe the work RVU of 0.96 for CPT code 21315 adequately accounts for the 50 percent decrease in intraservice and postservice time, a 31-minute decrease in total time, and a change to a 000-day global period which will allow for separately billable E/M visits as medically necessary for CPT code 21315. We also believe that the work RVU of 1.59 for CPT code 21320 adequately accounts for a 5-minute decrease in intraservice time, 3-minute decrease in total time, 48 percent decrease in postservice time, and a change to a 000-day global period which will allow for separately billable E/M visits as medically necessary for CPT code 21320.

We are also finalizing the RUC-recommended direct PE inputs without refinements and the surveyed physician times for CPT codes 21315 and 21320 as proposed.

(4) Insertion of Interlaminar/Interspinous Device (CPT Code 22867)

We proposed the RUC-recommended work RVU of 15.00 for CPT code 22867 ( Insertion of interlaminar/interspinous process stabilization/distraction device, without fusion, including image guidance when performed, with open decompression, lumbar; single level ). The RUC did not recommend changes to the current PE inputs, and we did not propose any changes to the current PE inputs.

Comment: Several commenters stated that they supported the proposal of the RUC-recommended work RVU 15.00 for CPT code 22867.

Response: We appreciate the support from the commenters for our proposed RUC-recommended work RVU of 15.00 for CPT code 22867.

Comment: Some commenters expressed appreciation for the acceptance of the new, higher work RVU of 15.00, but urged consideration of adding additional work RVUs to the adjusted value to represent the physician work and intensity of CPT code 22867. The commenters stated that CPT code 22867 includes the work of an open laminectomy, which is coded as CPT code 63047 ( Laminectomy, facetectomy and foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s], [eg, spinal or lateral recess stenosis]), single vertebral segment; lumbar ). One commenter stated that a work RVU of 19.62 would be more appropriate for CPT code 22867. This work RVU was derived by adding the work RVU of CPT code 63047, valued at 15.37, to the work RVU of add-on CPT code 22853 ( Insertion of interbody biomechanical device(s) (eg, synthetic cage, mesh) with integral anterior instrumentation for device anchoring (eg, screws, flanges), when performed, to intervertebral disc space in conjunction with interbody arthrodesis, each interspace (List separately in addition to code for primary procedure) ), valued at 4.25. Other commenters asserted that a work RVU of 20.00 is more appropriate. Commenters stated that new research was available as of July 1, 2021 that suggests CPT code 22867 requires more physician work than CPT code 63047 alone.

Response: We appreciate the additional information, but we continue to believe that the original survey results and RUC's reaffirmed value for CPT code 22867 accurately reflect the time and intensity of CPT code 22867. At the January 2021 meeting, the RUC agreed that a third survey would not be useful at the time and agreed to reaffirm the January 2016 RUC recommendations. Although we will consider any information submitted by stakeholders for valuation during the comment period, as we do for all codes which are subject to notice and comment rulemaking, the newly available research was not discussed in the proposed rule, and CMS did not broach the topic of the amount of physician work that factors into CPT code 22867 versus CPT code 63047 alone. Further, CMS did not propose a work RVU of 20.00 for CPT code 22867, therefore the public has not had notice or the opportunity to comment on this potential policy. Lastly, the AMA RUC did not review or consider the validity of the assertions in the research in their recommendations for CPT code 22867. We continue to believe that this is important to be transparent and have the full benefit of stakeholder comments before establishing values, so we are not finalizing a work RVU of 20.00 for CPT code 22867. We expect that new research would be considered in any future recommendations or rulemaking.

After consideration of the comments, we are finalizing the proposed work RVU of 15.00 for CPT code 22867.

(5) Treatment of Foot Infection (CPT Codes 28001, 28002, and 28003)

Through a screen of codes with 010-day global period service with more than one post-operative follow-up office visit, the RUC identified this family of major surgical codes that did not have consistent global periods. The RUC conducted a survey of these codes as 000-day globals for their April 2020 meeting, and the review was postponed until October 2020. CPT code 28001 ( Incision and drainage, bursa, foot ) (work RVU of 2.78 with 31 minutes of intraservice time) currently has a 010-day global period with one post-operative follow-up office visit, CPT code 99212 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A problem focused history; A problem focused examination; Straightforward medical decision making. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are self limited or minor. Typically, 10 minutes are spent face-to-face with the patient and/or family ). Survey results from podiatrists and orthopedic surgeons yielded a median work RVU of 2.00 with 17 minutes of preservice evaluation time, 3 minutes of preservice positioning time, 5 minutes of preservice scrub/dress/wait time, 20 minutes intraservice time, and 15 minutes immediate postservice time for a total of 60 minutes total time. We proposed the RUC-recommended work RVU of 2.00 and the surveyed physician times for this 000-day global code.

CPT code 28002 ( Incision and drainage below fascia, with or without tendon sheath involvement, foot; single bursal space ) (work RVU of 5.34 with 30 minutes of intraservice time) currently has a 010-day global period with two post-operative follow-up office visits, CPT code 99213 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: An expanded problem focused history; An expanded problem focused examination; Medical decision making of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Typically, 15 minutes are spent face-to-face with the patient and/or family ); and a half day hospital discharge CPT code 99238 ( Hospital discharge day management; 30 minutes or less ). For CPT code 28002, the RUC recommended 30 minutes of preservice evaluation time, 5 minutes of preservice positioning time, 15 minutes of preservice scrub/dress/wait time, 30 minutes of intraservice time, and 20 minutes of immediate postservice time, for a total of 100 minutes total time. The RUC recommended a work RVU of 3.50 and the surveyed physician times for this 000-day global code.

We note that the result from the survey's 50th percentile work RVU was 3.73 and that the survey's 25th percentile work RVU was 2.80. As this CPT code is converting from a 010-day global to a 000-day global we find the reference CPT code 43193 ( Esophagoscopy, rigid, transoral; with biopsy, single or multiple ) as a more suitable value of 2.79 work RVUs with a similar 30 minutes of intraservice physician time and 106 minutes of total time. We proposed a work RVU of 2.79 for CPT code 28002 and we proposed the RUC surveyed physician times for this 000-day global code.

CPT code 28003 ( Incision and drainage below fascia, with or without tendon sheath involvement, foot; multiple areas ) currently has a 090-day global period with two post-operative follow-up office visits, CPT code 99212 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A problem focused history; A problem focused examination; Straightforward medical decision making. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are self limited or minor. Typically, 10 minutes are spent face-to-face with the patient and/or family ); three post-operative follow-up office visits, CPT code 99213 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: An expanded problem focused history; An expanded problem focused examination; Medical decision making of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the presenting problem(s) are of low to moderate severity. Typically, 15 minutes are spent face-to-face with the patient and/or family. ); one post-operative CPT code 99231 ( Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A problem focused interval history; A problem focused examination; Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering or improving. Typically, 15 minutes are spent at the bedside and on the patient's hospital floor or unit ); one post-operative CPT code 99232 ( Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: An expanded problem focused interval history; An expanded problem focused examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 25 minutes are spent at the bedside and on the patient's hospital floor or unit ), and one hospital discharge CPT code 99238 ( Hospital discharge day management; 30 minutes or less ), for a total of eight post op follow-up visits, across five types of E/M and hospital care codes. For CPT code 28003, the RUC recommends 40 minutes of preservice evaluation time, 10 minutes of preservice positioning time, 15 minutes of preservice scrub/dress/wait time, 45 minutes of intraservice time, and 20 minutes of immediate postservice time, for a total time of 130 minutes. We proposed the RUC-recommended work RVU of 5.28 and surveyed physician times for this 000-day global code.

In order to complete the adjustments for making these Treatment of Foot Infection codes consistent as 000-day global codes, the RUC adjusted the PE inputs for these codes to reflect their proposed global periods from 010 and 090-day globals to 000-day global, and to reflect the use of more typical supplies, equipment, and clinical labor employed now, than what was necessary a decade ago. Some relatively small valued supply items were removed, while other items were added, and clinical labor times were largely adjusted to remove minutes from the post-operative follow-up office visit times in the 010 and 090-day global codes. We proposed all of the PE refinements as recommended by the RUC for these codes.

Comment: Commenters supported CMS' proposal to adopt the AMA RUC-recommended work RVU of 2.00 for CPT code 28001 and work RVU of 5.28 for CPT code 28003, in this family of codes. However, commenters objected to the CMS proposed work RVU of 2.79 for CPT code 28002, as the AMA RUC recommended a higher work RVU of 3.50. Commenters stated that a work RVU of 2.79 for this code is too low and does not reflect the work intensity of CPT code 28002. Commenters objected to CMS' consideration of the physician work value 25th percentile survey result, which has a work RVU of 2.80. Commenters noted that the AMA RUC's 50th percentile survey result—a work RVU of 3.73—was too high, indicating that the AMA RUC recommend work RVU should fall somewhere between these two percentiles.

Response: We note that the current work RVU for CPT code 28002 as a 010-day global code with 30 minutes of intra-service time and 163 minutes of total time is 5.34. Since the AMA RUC recommended that this family of codes (Treatment of Foot Infection (CPT codes 28001, 28002, and 28003)) be revised to 000-day globals, any post-op follow-up visits included with CPT code 28002 and this family of codes, would be billed separately. We would expect that total time for CPT code 28002 would be revised to reflect this change. Specifically, CPT code 28002, a 010-day global code, is bundled with two E/M visits: CPT code 99213 (0.97 work RVUs and 23 minutes total time) and one half-day CPT code 99238 Hospital Discharge Day service (1.28 work RVUs and 38 minutes total time). Removing these postoperative services from the bundle should change the total time of CPT code 28002 from 163.0 minutes to 100.0 minutes.

Removing the post-op follow-up visits from the total time of CPT code 28002 results in a total time decrease of 65 minutes, but the AMA RUC recommended adding 2 minutes to the procedure's pre-positioning time, which nets to removing 63 minutes from current total of 163 minutes to a new total time of 100 minutes. This is a reduction of about 39 percent from the current total time for CPT code 28002. CPT code 99213 has a work RVU of 0.97. CMS multiplies this work RVU by two post-op visits, which totals 1.94, and the half-day Hospital discharge of CPT code 99239 is 0.64 work RVUs (1.28 divided by 2). CMS adds 1.94 and 0.64 work RVUs to get 2.58 work RVUs. Subtracting 2.58 work RVUs from the original 5.34 work RVUs for CPT code 28002 is 2.76 work RVUs. This 2.76 value, plus the survey's 25th percentile level work RVU of 2.80, and the comparator CPT code 43193 with a work RVU of 2.79, in combination suggests that the proposed work value of 2.79 is a proper valuation for CPT code 28002. This value maintains a proper relative relationship of work RVUs and time within this family of codes.

Comment: Commenters suggested alternative cross walk codes for CPT code 28002 that differed from the comparator code proposed by CMS (CPT code 43193). Specifically, they suggested CPT codes with the same 000-day global periods and the same intra-service minutes but with much higher work RVUs. The AMA RUC specifically suggested several codes as alternative crosswalks, including CPT code 31287 ( Nasal/sinus endoscopy, surgical, with sphenoidotomy; with a work RVU of 3.50, 30 minutes of intra-service time, and 86 minutes of total time), CPT code 41530 ( Submucosal ablation of the tongue base, radiofrequency, 1 or more sites, per session; with a work RVU of 3.50, 20 minutes intra-service time, and 95 minutes total time), CPT code 52334 ( Cystourethroscopy with insertion of ureteral guide wire through kidney to establish a percutaneous nephrostomy, retrograde ; with a work RVU of 3.37, 30 minutes intra-service time, and 75 minutes total time), CPT code 43194 ( Esophagoscopy, rigid, transoral; with removal of foreign body(s); with a work RVU of 3.51, 30 minutes of intra-service time, and 107 minutes total time) and CPT code 58558 ( Biopsy and/or removal of polyp of the uterus using an endoscope; with a work RVU of 4.17, 30 minutes of intra-service time, and 106 minutes total time), all of which are varying in levels of work and intensity, but all equal in intra-service times.

Response: The AMA RUC recommended a median intra-service time of 20 minutes for CPT code 28001, which is a reduction from 31 minutes, which is indicative of a reduction in this procedure's work intensity. The AMA RUC recommended median intra-service time for CPT code 28002 remains the same at 30 minutes, and indicates that the work intensity for this procedure has not changed. The AMA RUC recommended median intra-service time of 45 minutes for CPT code 28003 is a reduction from 53 minutes, which indicates a reduction in this procedure's work intensity. The AMA RUC has not recommended an increase in median intra-service time for any of the codes in this family, which indicates that work intensity for these codes is not increasing. Even so, the AMA RUC has recommended that physician time be added back to these services in pre-times and in immediate post-times. CMS' comparator CPT code 43193 accounts for these increases in pre-service and immediate post service minutes, whereas the example comparison codes that the AMA RUC has recommended, do not, and we believe them to be a less suitable match than CPT code 43193. CPT code 28002 maintains its intra-service time and is not changing its intensity to justify a higher work RVU as recommended by the AMA RUC.

Comment: One commenter stated that CMS' decision to reduce the work RVU for CPT code 28002 for CY 2010 unfairly devalued CPT code 28002, and that CMS is further perpetuating that undervaluation now. This commenter stated that a flawed assumption about the site of service for CPT code 28002 was based on early 2009 data indicating that this service was performed in the inpatient setting 49.2 percent of the time. Subsequent utilization information indicated that the service was actually performed over 50 percent of the time in the inpatient setting. The commenter stated that this incorrect assumption led to the inclusion of only a half-day CPT code 99238 hospital discharge day for CPT code 28002's post-op services and a recommended reduction of 10 percent in work RVU. The commenter offered recent Medicare utilization claims for CPT code 28002 suggesting that the service is furnished in the inpatient setting over 60 percent of the time, which likely indicates that it was probably always an inpatient procedure, and that the CY 2010 work RVU reduction was unjustified because CMS assumed that this service was performed in the inpatient setting less than half of the time.

Response: The values for CPT code 28002 were finalized in CY 2010 and have been the basis of payment ever since then. Even if the AMA RUC agreed that CPT code 28002 was performed more often in the inpatient setting as compared to the outpatient setting in 2010, and recommended a full day hospital discharge instead of a half day discharge and reduced the payment for CPT code 28002, we still cannot say what their recommended final valuation might have been back then. CMS expects that any changes in valuation that reflect new information would come to CMS in the form of AMA RUC recommendations and if there was a flaw in the CY 2010 final valuation, commenters would have flagged this code for CMS review sooner, as 11 years have passed since CY 2010. CPT code 28002's current conversion to 000-day global code from a 010-day global code, makes the original half-day CPT code 99238 hospital discharge assignment irrelevant, since 000-day global codes do not have post-service discharge activities, and include no post-service follow-up visits.

After review of comments, we are finalizing the proposed work RVU value of 2.79 for CPT code 28002, as well as our proposal of the AMA RUC-recommended work RVUs for the other two codes in the family: CPT code 28001 and CPT code 28003. We are also finalizing the direct PE inputs recommended by the AMA RUC for all three CPT codes, as proposed.

(6) Percutaneous Cerebral Embolic Protection (CPT Codes 33370)

CPT code 33370 ( Transcatheter placement and subsequent removal of cerebral embolic protection device(s), including arterial access, catheterization, imaging, and radiological supervision and interpretation, percutaneous (List separately in addition to code for primary procedure) ) was created in October 2020, by the CPT Editorial Panel as a new add-on code to report transcatheter placement and subsequent removal of cerebral embolic protection device(s). The CPT Editorial Panel also added instructions to report the new code in the Aortic Valve guidelines. The RUC reviewed the survey results for the new add-on code and noted that the survey respondents likely overvalued the physician work involved in performing this service, with a 25th percentile work value of 3.43. The RUC recommends a work RVU of 2.50 for CPT code 33370.

We proposed the RUC-recommended work RVU of 2.50 for CPT code 33370. This is a facility-based add-on code with no direct PE inputs.

Comment: Commenters stated that they were pleased that CMS accepted the RUC-recommended values for CPT code 33370.

Response: We are finalizing a work RVU of 2.50 for this code as proposed.

(7) Exclusion of Left Atrial Appendage (CPT Codes 33267, 33268, and 33269)

In May 2020, the CPT Editorial Panel approved the creation of three new codes to describe open and thoracoscopic left atrial appendage management procedures when performed as stand-alone procedures or in conjunction with other procedures. The codes represent new technology and surgical techniques that may be used to treat atrial fibrillation at the time of another surgical procedure and include CPT code 33267 ( Exclusion of left atrial appendage, open, any method (e.g., excision, isolation via stapling, oversewing, ligation, plication, clip ), CPT code 33268 ( Exclusion of left atrial appendage, open, performed at the time of other sternotomy or thoracotomy procedure(s), any method (e.g., excision, isolation via stapling, oversewing, ligation, plication, clip) (List separately in addition to code for primary procedure) ), and CPT code 33269 ( Exclusion of left atrial appendage, thoracoscopic, any method (e.g., excision, isolation via stapling, oversewing, ligation, plication, clip )). CPT codes 33267 and 33269 are 090-day global codes while CPT code 33268 is a ZZZ global code.

In October 2020, the RUC reviewed and recommended work and PE values for the three new codes. Recommended work values include 18.50 RVUs for CPT code 33267, 2.50 work RVUs for CPT code 33268, and 14.31 work RVUs for CPT code 33269.

We proposed the RUC-recommended work RVUs for the three new codes. We also proposed the RUC-recommended direct PE inputs for CPT codes 33267 and 33269. We note that CPT code 33268 has no direct PE inputs.

Comment: A few commenters supported our decision to propose the RUC-recommended valuations on the proposed values for the three new Exclusion of the Left Atrial Appendage codes.

Response: We thank commenters for their feedback. We are finalizing the proposed values for the codes: 18.50 RVUs for CPT code 33267, 2.50 work RVUs for CPT code 33268, and 14.31 work RVUs for CPT code 33269. We are also finalizing the direct PE inputs as proposed for all three codes.

(8) Endovascular Repair of Aortic Coarctation (CPT Codes 33894, 33895, and 33897)

In October 2020, the CPT Editorial Panel created CPT codes 33894 ( Endovascular stent repair of coarctation of the ascending, transverse, or descending thoracic or abdominal aorta, involving stent placement; across major side branches ) and 33895 ( Endovascular stent repair of coarctation of the ascending, transverse, or descending thoracic or abdominal aorta, involving stent placement; not crossing major side branches ) to report endovascular stent repair of coarctation of the thoracic or abdominal aorta; and CPT code 33897 ( Percutaneous transluminal angioplasty of native or recurrent coarctation of the aorta ) to report trans-liminal angioplasty for repair of native or recurrent percutaneous coarctation of the aorta. For CY 2022, the RUC recommended a work RVU of 21.70 for CPT code 33894, a work RVU 17.97 for CPT code 33895, and a work RVU 14.00 for CPT code 33897.

We disagree with the RUC-recommended work RVUs for the CPT code family of 33894, 33895, and 33897. We found that the recommended work RVUs for these CPT codes were high when compared to other codes with similar time values. Therefore, we proposed the RUC survey 25th percentile of 18.27 as the work RVU for 33894, we proposed a work RVU of 14.54 for 33895, and we proposed a work RVU of 10.81 for 33897.

When we reviewed CPT code 33894, we found that the recommended work RVU was high compared to other codes with similar time values. The RUC survey 25th percentile of 18.27 falls within the range of RVUs with similar intra service time. This is supported by the reference CPT codes we compared to CPT code 33894 with intra service time similar to the 134 minutes of intra service time for CPT code 33894; reference CPT code 37231 ( Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with transluminal stent placement(s) and atherectomy, includes angioplasty within the same vessel, when performed ) has a work RVU of 14.75 with 135 minutes of intra service time, and CPT code 93590 ( Percutaneous transcatheter closure of paravalvular leak; initial occlusion device, mitral valve ) has a work RVU of 21.70 with 135 minutes of intra service time. We note that the RUC-recommended RVU of 21.70 is a crosswalk from CPT code 93590 and is the highest value code within the range of reference codes we reviewed with similar intra service time. Again, we believe the RUC survey 25th percentile of 18.27 is a more appropriate value overall than 21.70 when compared to the range of codes with similar intra service time.

The RUC-recommended RVU of 17.97 for CPT code 33895 was higher than other codes with the same 120 minutes of intra service time and similar total time. Although we disagree with the RUC-recommended work RVU for 33895, we concur that the relative difference in work between CPT codes 33894 and 33895 is equivalent to the RUC-recommended interval of 3.73 RVUs. We believe the use of an incremental difference between these CPT codes is a valid methodology for setting values, especially in valuing services within a family of codes where it is important to maintain an appropriate intra-family relativity. Therefore, we proposed a work RVU of 14.54 for CPT code 33895, based on the RUC-recommended interval of 3.73 RVUs below our proposed work RVU of 18.27 for CPT code 33894.

The RUC-recommended work RVU of 14.00 for CPT code 33897 was higher than other codes with the same 90 minutes of intra service time and similar total time and we believe it will be more accurate to propose a work RVU that maintains the 3.73 incremental difference between the codes in this family. Therefore, for CPT code 33897, we proposed a work RVU of 10.81 which also continues the 3.73 incremental difference used between CPT codes 33894 and 33895, instead of the RUC incremental difference of 3.97 between CPT codes 33895 and 33897. Although the work RVU of 10.81 we proposed for CPT code 33897 is lower than the RUC recommendation, the 3.73 incremental difference between CPT codes 33895 and 33897 we proposed is more generous than the RUC incremental difference of 3.97 between CPT codes 33895 and 33897.

We proposed no direct PE inputs for the CPT code family of 33894, 33895, and 33897, as recommended by the RUC. These services are provided exclusively in the facility setting.

Comment: Commenters disagreed with our proposal and stated that we did not provide any clinical foundation for the proposed alternate value of CPT code 33894 and that we made no acknowledgement that this service is for pediatric patients with congenital defects and the extra work that goes into working with these special patients. Also, there are no 000-day global services with similar times. Some commenters stated that our use of CPT code 37231 as a reference code for CPT code 33894 was not suitable since it has 81 fewer minutes of total time. Commenters stated that beyond having similar intra-service time, reference CPT code 37231 has few similarities to CPT code 33894 and is a service that is less intensive to perform than CPT code 33894. In addition, commenters noted that CPT code 37231 is vastly different than CPT code 33894. The other reference code we used for CPT code 33894 was CPT code 93590, and commenters noted that CPT code 93590 was the code that the RUC had recommended to use as a direct work RVU crosswalk. Code 93590 has much less total time than CPT code 33894, though it was used by the RUC as a crosswalk due to the lack of services with similar total times.

Response: We continue to believe that the RUC-recommended work RVU of 21.70 for CPT code 33894 was high when compared to other codes with similar time values, and that the RUC survey 25th percentile work RVU of 18.27 is appropriate for CPT code 33894. We did use other 000-day Global services within a range of 120 to 135 minutes of intra-service time, and 203 to 223 minutes of total time, in our comparisons. Such comparison codes included reference CPT code 37231 on the low end of the range and CPT code 93590 on the high end of the range. The 25th percentile work RVU of 18.27 falls within the range of RVUs with similar intra-service time and total time. A direct work RVU crosswalk from CPT code 93590 would have put CPT code 33894 at the top end of the reference code range between CPT codes 37231 and 93590.

We continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparison to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

Comment: Commenters stated that relative to adult patients with normal cardiac anatomy, the pre-service evaluation time for pediatric patients with congenital defects includes additional time to discuss a patient's procedure with the parent. Commenters went on to say that similarly, the post-procedure work includes additional time to explain the pathology of the child to the parent. Also, commenters stated that congenital heart programs are now required to enter hemodynamic data and other procedural details into national registries which can add significant post procedure work time. By solely comparing CPT code 33894 to adult patient population services with much lower total times, commenters argue that we are not providing adequate consideration for the additional work or that a pediatric population with congenital defects is a more intense and complex patient population. In addition, commenters said we did not provide any discussion regarding the clinical attributes of CPT code 33894 or any of the reference codes and strongly recommended that we accept the RUC-recommended work RVU of 21.70 for CPT code 33894.

Response: We continue to believe that the RUC-recommended work RVU of 21.70 for CPT code 33894 was high when compared to other codes with similar time values, and that the RUC survey 25th percentile of 18.27 is appropriate for CPT code 33894. Regarding consideration of the clinical attributes and the complexity of working with the pediatric population for CPT code 33894, the review we conducted included the RUC-recommended work RVU, intensity, time to furnish the preservice, intra-service, and post-service activities, as well as other components of the service that contributed to the value. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, other public commenters, medical literature, as well as a comparison with other codes within the PFS, and consultation with other physicians and health care professionals within CMS and the Federal Government. We are obligated under the statute to consider both time and intensity in establishing work RVUs for PFS services. As stated in the response above, we also continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

Comment: Commenters disagreed with our proposed work RVU of 14.54 for CPT code 33895, which was calculated by subtracting the 3.73 incremental difference between the RUC-recommend work RVUs for CPT codes 33894 and 33895 from our proposed work RVU of 18.27 for CPT code 33894 (18.27−3.73 = 14.54). Commenters noted that our rejection of the RUC-recommended work RVU of 21.70 for 33894 is flawed, and therefore, the proposed work RVU of 14.54 for 33895 instead of the RUC-recommended work RVU of 17.97 is inaccurate.

Response: In the responses above, we address the work RVU of 18.27 that we proposed for CPT code 33894. Although we disagreed with the RUC-recommended work RVU for CPT code 33895, we concurred that the relative difference in work between CPT codes 33894 and 33895 is equivalent to the RUC-recommended interval of 3.73 RVUs. Therefore, the work RVU of 14.54 for CPT code 33895 is valid, based on the RUC-recommended interval of a 3.73 reduction in RVUs below our proposed work RVU of 18.27 for CPT code 33895.

Comment: Commenters disagreed with our proposal to continue to use the 3.73 incremental difference between the other codes in this family (CPT codes 33894 and 33895) to calculate the proposed work RVU of 10.81 for CPT code 33897. Commenters said the RUC recommendation of a work RVU of 14.00 for CPT code 33897 does not have that increment with the other services in this family so CMS' rationale does not make sense, and the incremental difference between the other codes in this family should not be used as the basis to derive a new value for CPT code 33897.

Response: The 3.73 incremental difference is based on the RUC-recommended incremental difference between CPT codes 33894 and 33895. We believe that it is appropriate to have the same incremental difference of 3.73 between all three codes in the family. Therefore, we applied the same 3.73 increment to the work RVUs for 33895 and 33897 which resulted in our proposed work RVU of 10.81 for CPT code 33897. The RUC recommended incremental difference between CPT codes 33895 and 33897 was 3.97, which would have resulted in a lower proposed work RVU for 33897 if we had applied that same incremental difference to our proposed work RVU of 14.54 for CPT code 33895. Using the RUC-recommended incremental difference between CPT codes 33895 and 33897 would have brought our proposed work RVU for CPT code 33897 down to 10.57 instead of 10.81.

We believe the use of an incremental difference between codes is a valid methodology for setting work RVUs, especially in valuing services within a family of codes where it is important to maintain appropriate intra-family relativity. Historically, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code or another family of codes.

Comment: Commenters stated that in general, CMS' review process for this code family and the reference code comparison seemed like CMS selecting an arbitrary and capricious value from the vast array of possible mathematical calculations, rather than seeking a valid, clinically relevant relationship that would preserve relativity between work RVUs. Also, commenters stated that CMS did not provide any clinical foundation for the proposed alternate value and made no acknowledgement that this service is for pediatric patients with congenital defects. Further, commenters thought that CMS did not provide a discussion regarding the clinical attributes of the surveyed procedure or any of the reference codes.

Response: We clarify for the commenters that our review process is not arbitrary in nature. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). With regard to clinically relevant relationships, we emphasize that we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk. We also refer readers to the discussion of this subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2.) for more information.

After consideration of the public comments, we are finalizing the proposed work RVU of 18.27 for CPT code 33894, the work RVU of 14.54 for CPT code 33895, and the work RVU of 10.81 for CPT code 33897. There are no direct PE inputs for the CPT code family of 33894, 33895, and 33897, as these services are provided exclusively in the facility setting.

(9) Harvest of Upper Extremity Artery (CPT Codes 33509 and 35600)

In May 2020, the CPT Editorial Panel created CPT code 33509 ( Harvest of upper extremity artery, 1 segment, for coronary artery bypass procedure, endoscopic ) to describe endoscopic radial artery harvest via an endoscopic approach, and CPT code 35600 ( Harvest of upper extremity artery, 1 segment, for coronary artery bypass procedure, open ) was modified to only include an open approach for the upper extremity harvesting procedure. The RUC also stated that CPT codes 33509 and 35600 are almost always exclusively performed in conjunction with coronary artery bypass grafting (CABG) procedures. For CY 2022, the RUC-recommended a work RVU of 3.75 for CPT code 33509 and a work RVU of 4.00 for CPT code 35600.

We disagree with the RUC-recommended RVUs for the CPT code family of 33509 and 35600. We found that the recommended work RVUs for these CPT codes were high when compared to other codes with similar time values. Therefore, we proposed 3.34 as the work RVU for 33509 and we proposed a work RVU of 3.59 for 35600.

We disagree with the RUC-recommended work RVU for CPT code 33509 and we proposed an RVU of 3.34 which is a direct work RVU crosswalk from CPT code 35686 ( Creation of distal arteriovenous fistula during lower extremity bypass surgery (non-hemodialysis) (List separately in addition to code for primary procedure) ). The RUC-recommended value of 3.75 is higher than other codes with similar intra service time and total time. This is supported by the reference CPT codes we compared to CPT code 33509 with the same 35 minutes of intra service time and 35 minutes of total time as CPT code 33509; reference CPT code 74713 ( Magnetic resonance (e.g., proton) imaging, fetal, including placental and maternal pelvic imaging when performed; each additional gestation (List separately in addition to code for primary procedure) ) has a work RVU of 1.85, and CPT code 35686 has a work RVU of 3.34.

Although we disagree with the RUC-recommended work RVU for CPT code 35600, we concur that the relative difference in work between CPT codes 33509 and 35600 is equivalent to the RUC-recommended interval of 0.25 RVUs. We believe the use of an incremental difference between these CPT codes is a valid methodology for setting values, especially in valuing services within a family of codes where it is important to maintain an appropriate intra-family relativity. Therefore, we proposed a work RVU of 3.59 for CPT code 35600, based on the RUC-recommended interval of 0.25 RVUs above our proposed work RVU of 3.34 for CPT code 33509.

We proposed no direct PE inputs for the CPT code family of 33509 and 35600 as recommended by the RUC. These services are provided exclusively in the facility setting.

The RUC acknowledged that CPT codes 33509 and 35600 are almost always exclusively performed in conjunction with coronary artery bypass grafting (CABG) procedures. Such codes are designated as add-on procedures and are assigned a ZZZ-day global period (that is, code related to another service and is always included in the global period of the other service). The RUC also requested that the global period for both CPT codes 33509 and 35600 be an XXX-day global period (that is, global concept does not apply) and not a ZZZ-day global period as is customary for add-on codes. The RUC stated that an XXX-day global period would allow the individual that performs the harvest of upper extremity artery procedure (often separate from the surgeon performing the base CABG procedure) to report it under their own provider number. The RUC noted that it is often a nurse practitioner (NP) or physician's assistant (PA) who performs the harvest procedure. However, the RUC surveyed CPT codes 33509 and 35600 using reference codes with the ZZZ-day global period. Therefore, we believe it is appropriate to use that same ZZZ-day global period for CPT codes 33509 and 35600, and we proposed to assign the ZZZ-day global period to CPT codes 33509 and 35600 for CY 2022. Through our scrutiny of comparing the code descriptions of codes with matching intra service times, we find much more clinically coherent similarities with codes with a ZZZ-day global period (procedures complementary, and sometimes necessary, to complete a larger procedure) than codes with an XXX-day global period.

However, we were compelled to understand more about the billing circumstances presented by the RUC and stakeholders that have presented this approach for CPT codes 33509 and 35600 to CMS for consideration. We solicited comments and requested information that could inform why CPT codes 33509 and 35600 should have an XXX-day global period instead of the ZZZ-day global period that is customary for add-on codes.

Comment: Commenters disagreed with our proposed work RVU of 3.34 for CPT code 33509 and stated that unlike reference CPT codes 35686 and 74713, CPT code 33509 is typically performed by a separate practitioner than the one that is performing the base procedure. Also, there were concerns that we did not take into consideration the intraoperative evaluation, the total physician work, and the intensity associated with the procedure, which also contributed to the RUC's recommendation for a value that is higher than other procedures with similar intra and total times.

Response: We disagree with the commenters regarding our use of CPT codes 35686 and 74713 as reference codes to determine our proposed work RVU of 3.34 for CPT code 33509. Whether or not the practitioner performing CPT code 33509 is the same practitioner who performed the base procedure or is a separate practitioner does not change the work RVU for this procedure. For CPT code 33509, we proposed an RVU of 3.34 which is a direct work RVU crosswalk from CPT code 35686. When we looked at codes with the same 35 minutes of intra-service time and 35 minutes of total time as CPT code 33509, reference CPT code 35686 had the highest RVU of the codes with the same 35 minutes of intra-service time and total time.

Comment: Commenters stated that the reference code CMS used, CPT code 35686, as a direct work RVU crosswalk for CPT code 33509 has not been reviewed by the RUC or CMS in 20 years and has virtually no volume. Furthermore, the reference code that CMS cited as support for their proposal—CPT code 74713—is an imaging code that has no clinical similarities to the survey code.

Response: We disagree with the commenters' statement that CPT code 35686 should not be used as a reference code because it has not been reviewed in 20 years and has low utilization. We also disagree with the commenters' statement that CPT code 74713 should not be used as a reference code because it is not a service similar to CPT code 33509. We agree that it is important to use the recent data available regarding time, and we acknowledge that when many years have passed since work time is measured, significant discrepancies can occur. However, we also believe that our operating assumption regarding the validity of the existing values as a point of comparison is critical to the integrity of the relative value system as currently constructed. The times currently associated with codes are a very important element in PFS ratesetting, both as points of comparison in establishing work RVUs and in the allocation of indirect PE RVUs by specialty. If we were to operate under the assumption that previously recommended work times had routinely been underestimated or overestimated, this would undermine the relativity of the work RVUs on the PFS in general, given the process under which codes are often valued by comparisons to codes with similar times and it undermines the validity of the allocation of indirect PE RVUs to physician specialties across the PFS. Instead, we believe that it is crucial that the code valuation process take place with the understanding that the existing work times used in the PFS ratesetting process are accurate. We recognize that adjusting work RVUs for changes in time is not always a straightforward process and that the intensity associated with changes in time is not necessarily always linear, which is why we apply various methodologies to identify several potential work values for individual codes. However, we reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of old work time values in our methodology, we refer readers to our discussion of the subject in the CY 2017 PFS final rule (81 FR 80273 through 80274).

We continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

Comment: Commenters disagreed with our proposed work RVU of 3.59 for CPT code 35600 based on the increment of 0.25 between the RUC-recommended values of CPT codes 33509 and 35600, and stated that we did not list any specific reference codes for this service to support our proposed work RVU of 3.59. Commenters also stated that our proposed work RVU of 3.59 lowers the intensity to an amount well below that of the other surgical add-on procedures, and that the RUC's recommended RVU of 4.00 was already leading to a decrease of 19 percent even though the surveys supported the same intra and total time for CPT code 35600 which has a higher valuation of 4.94.

Response: Although we disagreed with the RUC-recommended work RVU for CPT code 35600, we concurred that the relative difference in work between CPT codes 33509 and 35600 is equivalent to the recommended interval of 0.25 RVUs. Therefore, the work RVU of 3.59 for CPT code 35600 is valid, based on the recommended interval of a 0.25 increase in RVUs above our proposed work RVU of 3.34 for CPT code 33509. Also, as stated in our response above, for CPT code 33509, the reference codes we used were CPT codes 35686 and 74713. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. We apply various methodologies to identify several potential work RVU values for individual codes. We also refer readers to the discussion of this subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2.) for more information.

Comment: Two commenters responded to our request for information regarding the RUC's request that the global period for both CPT codes 33509 and 35600 be an XXX-day global period (that is, global concept does not apply) and not a ZZZ-day global period as is customary for add-on codes. The commenters both provided very similar information, and stated that the rationale for assigning an XXX global period instead of a ZZZ add-on global period for CPT codes 33509 and 35600, even though these services are almost exclusively performed in conjunction with an arterial Coronary arterial bypass graft (CABG) procedure, is that an XXX global would allow the individual who performs the harvest of an upper extremity artery procedure (often separate from the surgeon performing the base CABG procedure and not the first assistant) to report it under their National Provider Identifier (NPI) number. The societies involved in surveying CPT codes 33509 and 35600 had also indicated that sometimes a separate physician or other qualified health professional (QHP), typically a PA or NP, performing these codes is not part of the same practice as the surgeon performing the CABG procedure or is not the first assistant at surgery for the CABG procedure. Therefore, there would be no established mechanism for paying this practitioner for their work.

Similarly, commenters stated if the physician or QHP who performs the upper extremity artery harvest is in the same practice but is not the first assistant at surgery for the CABG surgery, they have no mechanism to report an add-on code since they are not reporting the base arterial CABG code. In both situations, the individual performing CPT codes 33509 or 35600 does not have a primary code to report with it, which would result in these codes being denied for payment. In many cases, even if the individual performing CPT codes 33509 and 35600 is the first assistant at surgery and reports an arterial CABG procedure with an appropriate assistant at surgery modifier (-80, -82 or -AS), the add-on code, which is only reported by the assistant at surgery, is not recognized by payers. Commenters noted that by assigning an XXX-day global period to these codes and valuing them as ZZZ-day global codes, the individual that performs CPT codes 33509 and 35600 can report these codes without also having to report an arterial CABG code, thereby ensuring that the practitioner performing the service is reimbursed at the appropriate rate (for example, physician vs NP or PA). The reason that the two codes were surveyed using a reference service list with ZZZ-day global codes is to ensure that the codes were valued in the same manner as an add-on code with no pre or post service work included in the procedure. Commenters stated that this is the case because, as CMS points out, they are worded in the same manner as other add-on codes and only include the additional work of harvesting the upper extremity artery. While these codes are in essence an add-on code, they are unique in that the additional intra-operative work represented by the procedures is typically performed by individuals that specialize in harvesting the grafts for CABG procedures. These individuals may or may not be associated with the same practice as the surgeon performing the procedure, and it is often the only service that individual provides for the case.

In addition, commenters stated that when referencing that the harvest procedure is almost always performed with a CABG procedure, CMS noted that “. . . such codes are designated as add-on procedures and are assigned a ZZZ-day global period (that is, a code related to another service and is always included in the global period of the other service).” However, commenters stated that is not the case for services that are performed by a separate provider than the surgeon performing the primary procedure. A relatively recent example of services like this are the separate practitioner moderate sedation CPT code 99155 ( Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intraservice time, patient younger than 5 years of age), 99156 (Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intraservice time, patient age 5 years or older), and 99157 (Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; each additional 15 minutes intraservice time (List separately in addition to code for primary service) ) which CMS assigned an XXX-day global period.

Response: We solicited comments and requested information that could inform why CPT codes 33509 and 35600 should have an XXX-day global period instead of the ZZZ-day global period that is customary for add-on codes, and received two comments. After reviewing the comments, it remains unclear that the solution to a billing issue which does not seem to affect the majority of the practitioners billing for these add-on services is to revise the global period for CPT codes 33509 and 35600 in order to bypass our existing standard policies and payment procedures. For instance, CPT code 35600 has been in use as a ZZZ-day global period code since 2001, and we are unaware of any information from stakeholders suggesting that they were unable to get their claims paid because of the ZZZ-day global period in the past. We are concerned that assigning an XXX-day global period instead of a ZZZ-day global period for CPT codes 33509 and 35600 would be inconsistent with current standard policies and payment procedures. These codes are not relative to the other services with an XXX-day global period. We find much more clinically coherent similarities with ZZZ-day global codes (procedures complementary, and sometimes necessary, to complete a larger procedure) than XXX-day global period codes. A ZZZ-day global add-on code is a code that is related to another service and is always included in the global period of the other service. (Note: Physician work is associated with intra-service time and in some instances the post service time.) Both commenters also agreed that CPT codes 33509 and 35600 are, in essence, add-on procedures. Therefore, we believe that a ZZZ-day global period is appropriate for both of these codes because they would not be done on their own, and would always be performed with another surgical procedure. Codes with ZZZ-day global periods are always listed separately in addition to the primary procedure and included in the global period of the other service, while the global period concept does not apply to codes with an XXX-day global period. However, we also believe there may be another solution to the billing issue described by the two commenters. Instead of altering the global periods for these codes, we suggest that stakeholders consider coding options that describe when a different practitioner is performing the add-on procedure, the same way the practitioner performing the preoperative or postoperative care during the global period of a surgery can be distinguished from a different practitioner who performed that surgery through the use of modifiers. This would be similar to the example provided by the commenters who highlighted how the separate practitioner moderate sedation CPT codes 99155, 99156, and 99157 were created. Unlike the descriptions for CPT codes 33509 and 35600, the descriptions for CPT codes 99155, 99156, and 99157 specifically state that these codes identify situations in which moderate sedation services are provided by a practitioner who is not performing the diagnostic or therapeutic service that the sedation supports. Also, we note that while CPT codes 99155 and 99156 both have an XXX-day global period, CPT code 99157 has a ZZZ-day global period and not an XXX-day global period as stated by the commenters.

After consideration of the public comments, we are finalizing the proposed work RVU of 3.34 for CPT code 33509 with a ZZZ-day global period, and the proposed work RVU of 3.59 for CPT code 35600 with a ZZZ-day global period. There are no direct PE inputs for this CPT code family, as these services are provided exclusively in the facility setting.

(10) Needle Biopsy of Lymph Nodes (CPT Code 38505)

CPT code 38505 ( Biopsy or excision of lymph node(s); by needle, superficial (eg, cervical, inguinal, axillary) ) was identified in October 2019 as Harvard Valued with a utilization of over 30,000 claims. In January 2020, the RUC recommended that the code be surveyed for October 2020 RUC meeting. The RUC recommended increasing the work RVU to 1.59 which is the survey 25th percentile, acknowledging a change in the service, which now involves larger tissue samples, as well as a change in technology, and a change in the dominant specialty now reporting the service.

We proposed the RUC-recommended work RVU of 1.59 for CPT code 38505. We also proposed the RUC-recommended direct PE inputs for this code.

Comment: One commenter suggested that we give the primary specialties that use CPT code 38505 time to investigate and identify the root cause of the claim submission, provide appropriate education to their practitioners regarding appropriate use criteria, and present that data to the RUC subcommittee or workgroup for evaluation.

Response: We believe this comment is directed towards the RUC. We will consider any future RUC recommendations for the work RVU for CPT code 38505 when they are submitted.

Comment: Commenters appreciated that CMS proposed the RUC-recommended work RVU and direct PE inputs for CPT code 38505.

Response: We thank the commenters for their support.

After consideration of the public comments, we are finalizing the proposed work RVU of 1.59 for CPT code 38505. We are also finalizing the RUC-recommended direct PE inputs for code 38505 without refinement.

(11) Drug Induced Sleep Endoscopy (CPT Codes 42975)

CPT code 42975 ( Drug induced sleep endoscopy; with dynamic evaluation of velum, pharynx, tongue base, and larynx for evaluation of sleep disordered breathing; flexible, diagnostic ) is a new code created to report drug induced sleep endoscopy (DISE) flexible, diagnostic. The RUC recommended, and we agree, that the survey 25th percentile for the work RVU of 1.90 accurately reflects the typical physician work necessary to perform this service.

Since this is a drug induced sleep endoscopy, we proposed CPT code 31575 ( Diagnostic laryngoscopy ) as the endoscopic base code for CPT code 42975 because the description of the proposed CPT code is the same as what is described for CPT code 31575 with the additional component of the patient being sedated. The procedure is performed with a flexible endoscope or laryngoscope. CPT code 42975 is not an add-on code, it has a 0-day global period. The endoscopic base code that it is using is a specific type of multiple procedure discount that applies to some endoscopy codes.

We proposed the RUC-recommended work RVU of 1.90 for CPT code 42975. We also proposed the RUC-recommended direct PE inputs for this code.

Comment: Commenters appreciated that CMS proposed the RUC-recommended work RVU of 1.90 and the RUC-recommended direct PE inputs for CPT code 42975.

Response: We thank commenters for their support.

After consideration of the public comments, we are finalizing the RUC-recommended work RVU of 1.90 and the RUC-recommended direct PE inputs for CPT code 42975 as proposed.

(12) Per-Oral Endoscopic Myotomy (POEM) (CPT Codes 43497)

In May 2020, the CPT Editorial Panel created a new CPT code 43497 ( Lower esophageal myotomy, transoral (i.e., peroral endoscopic myotomy [POEM]) ) to describe a Per-Oral Endoscopic Myotomy (POEM), which involves the visualization and dissection of the esophageal muscle layers via an endoscope to treat esophageal motility disorders such as achalasia. This procedure accomplishes a comparable myotomy to what traditional open and laparoscopic myotomy (Heller) accomplishes. POEM utilizes an endoscope and specially designed dissecting, cutting, and cauterizing instruments to create a long submucosal tunnel beginning in the mid-esophagus and extending several centimeters into the cardia. For CY 2022, the RUC recommended a work RVU of 15.50 for CPT code 43497.

We disagreed with the RUC-recommended work RVU for CPT code 43497 and proposed a work RVU of 13.29 based on a direct work RVU crosswalk from CPT code 36819 ( Arteriovenous anastomosis, open; by upper arm basilic vein transposition ). CPT code 36819 has the same 120 minutes of intra service time as CPT code 43497, and has 283 minutes of total time, which is 2 minutes more than the 281 minutes of total time than for 43497. The RUC used CPT codes 43279 ( Laparoscopy, surgical, esophagomyotomy (Heller type), with fundoplasty, when performed ) and 43180 ( Esophagoscopy, rigid, transoral with diverticulectomy of hypopharynx or cervical esophagus (e.g., Zenker's diverticulum), with cricopharyngeal myotomy, includes use of telescope or operating microscope and repair, when performed ) as reference codes for CPT code 43497. However, the intra service time of 150 minutes and total time of 404 minutes for the RUC reference CPT code 43279, and intra service time of 60 minutes and total time of 201 minutes for the RUC reference CPT code 43180, are not adequate comparisons since they do not have similar time values to those of CPT code 43497. Therefore, we believe the proposed work RVU of 13.29 for CPT code 43497 based on a direct work RVU crosswalk from CPT code 36819 is a better representation of the work being performed and is more appropriate based on the same intra service time and similar total time.

We proposed the RUC-recommended direct PE inputs for CPT code 43497 without refinement.

Comment: Commenters disagreed with our proposal to crosswalk the work RVU of 13.29 from CPT code 36819 to CPT code 43497. The commenters stated that crosswalking to CPT code 36819 based on time alone is inappropriate and fails to consider the physician work necessary to perform this service. Beyond comparing the time similarities, it is unclear whether any other criteria were used to identify the CMS recommended work RVU as CMS did not include any clinical comparisons or quantifiable inputs. Also, commenters stated that CMS failed to provide justification on why the survey data was ignored in the analyses used to determine the work RVU for this service. Most importantly, commenters noted that CMS does not provide a rationale that would warrant the work RVU to fall below the survey 25th percentile from a robust survey. They said that a crosswalk based on time alone is not an appropriate justification for any code, especially a new code.

Response: We believe that the proposed work RVU of 13.29 for CPT code 43497 is appropriate. CPT code 36819 was reviewed in 2013 and has the same intra-service time of 120 minutes and 2 additional minutes of total time than the 281 minutes of total time for CPT code 43497, and is close to an exact crosswalk. We compared CPT code 43497 to the other codes with the same 120 minutes of intra-service time and with total times ranging from 271 to 291 minutes. We found the work RVUs ranged from a low of 5.90 (represented by CPT code 33220 ( Repair of 2 transvenous electrodes for permanent pacemaker or implantable defibrillator) with 276 minutes of total time ) to a high of 17.71 (represented by CPT code 58572 ( Laparoscopy, surgical, with total hysterectomy, for uterus greater than 250 g ) with 271 minutes of total time). The RUC recommended RVU of 15.50 was high in comparison to the range of RVUs for the comparison CPT codes with the same intra-service time and similar total times, therefore we believe this work RVU crosswalk from CPT code 36819 to CPT code 43497 is a valid crosswalk. Also, the Total Time Ratio of 12.62 between the 2nd key reference code of CPT code 43180 and CPT code 43497 supports a value closer to 13.00 RVUs. The survey data ranged from a minimum value of 5.00 to a maximum value of 39.00. We looked at the RUC survey 25th percentile value of 15.50, which is also the RUC-recommended work RVU. We also looked at the 25th percentile value of each of the surveys listed on the RUC Summary Report, and note that there was a wide range of 25th percentile values shown, ranging from 12.00 to 21.00. Our proposed work RVU crosswalk of 13.29 for CPT code 43497 from CPT code 36819 is above the lowest 25th percentile value that was provided in the RUC Summary Report, and is closer to the Total Time Ratio of 12.62 described above. We believe this provides additional support for a work RVU that is closer to 13.00, and therefore, our proposed work RVU of 13.29 for CPT code 43497 is appropriate.

Comment: Commenters stated that CPT code 43497 should have a work RVU value of 15.50 based on the RUC's 119 survey results and physician input, and that a work RVU of 15.50 accurately reflects the physician work necessary to perform this service. They noted that the flawed crosswalk work RVU of 13.29 for CPT code 43497 creates inconsistencies within the RBRVS as the intensity level for CPT code 43180 would be higher if the proposed work RVU is accepted.

Response: We believe the RUC-recommend work RVU of 15.50 for CPT code 43497 is high in comparison to the range of work RVUs for the comparison CPT codes with the same intra-service time and similar total times, and therefore, we believe this work RVU crosswalk from CPT code 36819 to CPT code 43497 is a valid crosswalk. CPT code 36819 has the same intra-service time of 120 minutes and 2 additional minutes of total time than the 281 minutes of total time for CPT code 43497, and is close to an exact crosswalk. We compared CPT code 43497 to the other codes with the same 120 minutes of intra-service time and with total times ranging from 271 to 291 minutes. We found the work RVUs ranged from a low of 5.90 (represented by CPT code 33220 with 276 minutes of total time) to a high of 17.71 (represented by CPT code 58572 with 271 minutes of total time). Also, the Total Time Ratio of 12.62 between the 2nd key reference code of CPT code 43180 and CPT code 43497 supports a value closer to 13.00 RVUs. Therefore, we believe that the proposed work RVU of 13.29 for CPT code 43497 is appropriate.

Comment: Commenters stated that the reference CPT codes 43279 and 43180 provided by the RUC were never meant to be crosswalk codes; they are reference codes that act as bookends to demonstrate how the value of CPT code 43497 falls appropriately between them thereby maintaining relativity. It is logical that the survey takers migrated towards CPT codes 43279 and 43180 as the top two key reference services based on their familiarity with these procedures and the disease states treated by these procedures. Commenters stated that the reference codes are intended to act as supporting rationale to demonstrate relativity within the PFS. Commenters assert that CPT codes 43279 and 43180 are representative of this concept in that they demonstrate the validity of the 15.50 RVU recommendation for 43497, which falls between the established RVUs of CPT code 43279, the longer more intense procedure, and CPT code 43180, the shorter less intense procedure. Also, there are numerous codes with a similar intra-service time and intensity with higher work RVUs that CMS could have selected as a more appropriate crosswalk for CPT code 43497. Commenters believe that a work RVU of 15.50 most accurately reflects the physician work and intensity necessary to perform this service.

Response: We believe the RUC-recommended work RVU of 15.50 is high. We compared CPT code 43497 to the other codes with the same 120 minutes of intra-service time and with total times ranging from 271 to 291 minutes. We found the work RVUs ranged from a low of 5.90 (represented by CPT code 33220 with 276 minutes of total time) to a high of 17.71 (represented by CPT code 58572 with 271 minutes of total time). Therefore, we believe the work RVU crosswalk from CPT code 36819 to CPT code 43497 is appropriate. CPT code 36819 has the same intra-service time of 120 minutes and 2 additional minutes of total time than the 281 minutes of total time for CPT code 43497, and is close to an exact crosswalk. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). With regard to the invocation of clinically relevant relationships by the commenters, we emphasize that we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk. We also refer readers to our discussion of the subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2.)

Comment: Commenters stated that CMS' recommendation to crosswalk CPT code 43497 to 36819 is based only on time and fails to take into consideration the difference in intensity between the procedures. CPT code 36819 represents one of many codes that CMS could have selected to use as a crosswalk based on time. Value is based on multiple factors including procedure time, technical skill required, physical effort involved, mental effort and judgment, and stress due to the potential risks to the patient. Commenters stated that if CMS were to truly have considered intensity in addition to time, the selected crosswalk should have reflected this consideration by selecting a code with similar intensity. A search of the RUC database for 90-day global codes with 120 minutes of intra- service time yields 235 CPT codes with an intra-service work per unit of time (IWPUT) ranging from -0.036 to 0.1983. CMS' recommended work RVU of 13.29 for CPT code 43497 creates a rank-order anomaly in the intensities of related procedures.

Response: We continue to believe that crosswalking the work RVU of 13.29 from CPT code 36819 to CPT code 43497 is appropriate. CPT code 36819 has the same intra-service time of 120 minutes and 2 additional minutes of total time than the 281 minutes of total time for CPT code 43497, and is close to an exact crosswalk for CPT code 43497. In general, CMS considers a variety of factors when we review the RUC recommendations as indicated in the response above. Again, we refer readers to our discussion of the subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2.).

Comment: Commenters disagreed with crosswalking the work RVU of CPT code 36819 to CPT code 43497 and urged CMS to accept the RUC-recommended RVU of 15.50 for CPT code 43497. CPT code 36819 is an open, three-dimensional procedure with a multi-person surgical team using a wide field of view, operating on an upper extremity with local anesthesia from nerve block. Also, CPT code 36819 is not an endoscopic procedure, involves completely different work and has an IWPUT of 0.0755. The IWPUT of CPT code 43497 is significantly higher at 0.091.

Response: We continue to believe that the RVU of 13.29 for CPT code 43497 based on a crosswalk from CPT code 36819 is more appropriate than the RUC-recommended work RVU of 15.50. CPT code 36819 has the same intra-service time of 120 minutes and 2 additional minutes of total time than the 281 minutes of total time for CPT code 43497, and is close to an exact crosswalk for CPT code 43497. In more general terms, we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

After consideration of the public comments, we are finalizing the proposed work RVU of 13.29 for CPT code 43497. We are also finalizing the RUC-recommended direct PE inputs for CPT code 43497 without refinement.

(13) Placement-Removal of Seton (CPT Codes 46020 and 46030)

For CPT codes 46020 ( Placement of seton ) and 46030 ( Removal of anal seton, other marker ), we disagree with the RUC-recommended work RVUs of 3.50 and 2.00, respectively, as we believe these values do not adequately reflect the surveyed reductions in physician time for CPT code 46020 and the change to a 000-day global period from a 010-day global period for these CPT codes. Instead, we proposed a work RVU of 1.86 for CPT code 46020 and 1.48 for CPT code 46030 based on a reverse building block methodology.

The survey showed that total time and intraservice time are decreasing for CPT code 46020 by 26 minutes and 5 minutes, respectively. We believe the surveyed decreases in physician time in conjunction with the loss of the post-operative visits for CPT code 46020 merit a decrease in work RVU from the current work RVU.

We note that the proposed work RVU of 1.48 for CPT code 46030 falls between CPT code 57410 (Pelvic examination under anesthesia (other than local)) , which has a work RVU of 1.75, and CPT code 64487 (Transversus abdominis plane (TAP) block (abdominal plane block, rectus sheath block) unilateral; by continuous infusion(s) (includes imaging guidance, when performed)), which has a work RVU of 1.48. Both of these bracketing reference codes have identical intraservice times and similar total time values. While we understand that total time is going up for CPT code 46030, this increase is a result of significant increases to evaluation, positioning, and scrub, dress, wait preservice times, which is mostly low-intensity physician work.

We agree with the RUC's recommendation to change CPT codes 46020 and 46030 to 000-day global period codes from 010-day global period codes to account for the highly variable follow-up care for these services, but we note that the differences in RUC-recommended work RVUs and our proposed work RVUs largely reflect the change in global period and loss of physician time to provide the E/M services. The global period changes from 010-day to 000-day allow for separately billable E/M visits relating to CPT codes 46020 and 46030, therefore we removed RVUs that we believed were attributable to the currently bundled E/M visits totaling 2.04 RVUs for CPT code 46020 and 0.35 RVUs for CPT code 46030. CPT code 46020 is currently bundled with two post-operative follow up office visits, CPT code 99212 (Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and straightforward medical decision making. When using time for code selection, 10-19 minutes of total time is spent on the date of the encounter), and a half hospital discharge CPT code 99238 ( Hospital discharge day management; 30 minutes or less ). CPT code 46030 is currently bundled with half of a post-operative follow up office visit, CPT code 99212 (Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and straightforward medical decision making. When using time for code selection, 10-19 minutes of total time is spent on the date of the encounter). We do not believe the RUC adequately accounted for the loss of these E/M visits in their recommended work RVUs for CPT codes 46020 and 46030.

The RUC proposed the standard 090-day preservice times for the clinical labor activities CA001, CA002, CA003, CA004, and CA005 for CPT code 46020 in the facility. We note that the RUC recommended 090-day preservice clinical labor times despite surveying the service as a 000-day service. We disagree with the RUC-recommended 090-day preservice clinical labor times as we believe 000-day services should have times consistent with 000-day services, not 090-day services. However, we recognize there is time needed to coordinate this service. Therefore, we proposed the following standard clinical labor times for extensive use of clinical staff for a 000-day global code for CPT code 46020 in the facility:

• Complete preservice diagnostic and referral forms (CA001) 5 minutes.
• Coordinate pre-surgery services (including test results) (CA002) 10 minutes.
• Schedule space and equipment in facility (CA003) 5 minutes.
• Provide preservice education/obtain consent (CA004) 7 minutes.
• Complete pre-procedure phone calls and prescription (CA005) 3 minutes.

We also proposed to refine the direct PE input for Coordinate post-procedure services (CA038) to 0 minutes from the RUC-recommended 3 minutes to align with 000-day standards instead of 090-day standards for CPT code 46020.

For CPT code 46030, the RUC recommended the standard 000-day extensive use of clinical staff preservice times for clinical activities CA001, CA002, CA003, CA004, and CA005 in the facility and non-facility settings. Preservice times for 000-day codes are presumed to be zero unless there is sufficient justification that preservice time is warranted. We do not agree that sufficient justification was presented to warrant preservice time in the non-facility setting, therefore, we proposed the following standard clinical labor times for use of clinical staff in the non-facility setting. We also proposed the standards for minimal use of clinical staff in the facility setting, as we recognize there is time needed to coordinate this service for CPT code 46030:

• Complete preservice diagnostic and referral forms (CA001) 0 minutes for non-facility and 3 minutes for facility.
• Coordinate pre-surgery services (including test results) (CA002) 0 minutes for non-facility and 3 minutes for facility.
• Schedule space and equipment in facility (CA003) 0 minutes for non-facility and 3 minutes for facility.
• Provide preservice education/obtain consent (CA004) 0 minutes for non-facility and 3 minutes for facility.
• Complete pre-procedure phone calls and prescription (CA005) 0 minutes for non-facility and 3 minutes for facility.

We also proposed to refine the direct PE input for Coordinate post-procedure services (CA038) to 0 minutes from the RUC-recommended 3 minutes to align with 000-day standards instead of 090-day standards for CPT code 46030.

Comment: Commenters opposed the use of reverse building block methodology and stated that the calculations of work RVUs for these CPT codes were not transparent. Commenters stated that we removed work RVUs based on the CY 2021 E/M increased work RVU of 0.70 for CPT code 99212. Commenters also stated that CPT code 46020 was originally misvalued. Commenters disagreed with our reference to older work time sources, and stated that their use led to the proposal of work RVUs based on flawed assumptions. Commenters also stated that it was invalid to draw comparisons between the current work times and work RVUs to the newly surveyed work time and work RVUs as recommended by the RUC.

Response: The global period changes from 010-day to 000-day allow for separately billable E/M visits relating to CPT codes 46020 and 46030; therefore, we removed RVUs that we believed were attributable to the currently bundled E/M visits totaling 2.04 RVUs (when billed separately) for CPT code 46020 and 0.35 RVUs (when billed separately) for CPT code 46030 using the reverse building block methodology. Reverse building block methodology accounts for the longstanding times and work RVU associated with CPT code 99212 (Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and straightforward medical decision making. When using time for code selection, 10-19 minutes of total time is spent on the date of the encounter) for bundled office visits in the surgical global period, rather than the increased CY 2021 office/outpatient E/M work RVU of 0.70 for CPT code 99212, as commenters suggested. The longstanding times and work RVUs accounted for in the reverse building block methodology are 16 minutes and 0.48 work RVUs for CPT code 99212 and 38 minutes and 1.28 work RVUs for CPT code 99238. Therefore, we did not subtract the increased CY 2021 office/outpatient E/M work RVU of 0.70 for CPT code 99212 as the commenters suggested. CPT code 46020 is currently bundled with two post-operative follow up office visits (CPT code 99212) and a half hospital discharge day (CPT code 99238). In CY 2022, when the currently bundled visits in the global period are furnished, practitioners could bill for a total of 2.04 work RVUs, as the visits would no longer be bundled in the global period. CPT code 46030 is currently bundled with half of a post-operative follow up office visit, CPT code 99212. In CY 2022, when the currently bundled visits in the global period are furnished, practitioners could bill for a total of 0.35 work RVUs, as the visit would no longer be bundled in the global period. We continue to believe that the RUC did not adequately account for the removal of these E/M visits as a result of the global period changes in their recommended work RVUs for CPT codes 46020 and 46030.

We agree with commenters that it is important to use the recent data available regarding work times, and we note that when many years have passed between when time is measured, significant discrepancies can occur. However, we also believe that our operating assumption regarding the validity of the existing values as a point of comparison is critical to the integrity of the relative value system as currently constructed. The work times currently associated with codes play a very important role in PFS ratesetting, both as points of comparison in establishing work RVUs and in the allocation of indirect PE RVUs by specialty. If we were to operate under the assumption that previously recommended work times had routinely been underestimated, this would undermine the relativity of the work RVUs on the PFS in general, given the process under which codes are often valued by comparisons to codes with similar times.

Instead, we believe that it is crucial that the code valuation process take place with the understanding that the existing work times that have been used in PFS ratesetting are accurate. We recognize that adjusting work RVUs for changes in time is not always a straightforward process and that the intensity associated with changes in time is not necessarily always linear, which is why we apply various methodologies to identify several potential work values for individual codes. However, we reiterate that we believe it would be irresponsible to ignore changes in time based on the best data available, and that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. For additional information regarding the use of old work time values that were established many years ago and have not since been reviewed in our methodology, we refer readers to our discussion of the subject in the CY 2017 PFS final rule (81 FR 80273 through 80274).

Comment: Some commenters stated that they were concerned about CMS' lack of consideration for compelling evidence that services have changed. Commenters stated that CMS appeared to dismiss the fact that services may change due to technological advances, changes in the patient population, shifts in the specialty of physicians providing services or changes in the physician work or intensity required to perform services. Commenters requested that CMS address the compelling evidence submitted with the RUC recommendations when the agency does not accept the RUC's recommended work RVUs.

Response: The concept of compelling evidence was developed by the RUC as part of its work RVU review process for individual codes. The RUC determines whether there is compelling evidence to justify an increase in valuation. The RUC's compelling evidence criteria include documented changes in physician work, an anomalous relationship between the code and multiple key reference services, evidence that technology has changed physician work, analysis of other data on time and effort measures, and evidence that incorrect assumptions were made in the previous valuation of the service. While we appreciate the submission of this additional information for review, we emphasize that the RUC developed the concept of compelling evidence for its own review process; an evaluation of “compelling evidence,” at least as conceptualized by the RUC, is not part of our review process, as our focus is on the time and intensity of services, in accordance with the statute. With that said, we do consider changes in technology, patient population, and other compelling evidence criteria, as such evidence may affect the time and intensity of a service under review. For example, new technology may cause a service to become easier or more difficult to perform, with corresponding effects on the time and intensity of the service. However, we are under no obligation to adopt the same review process or compelling evidence criteria as the RUC. We instead focus on evaluating and addressing the time and intensity of services when reviewing potentially misvalued codes because section 1848(c)(1)(A) of the Act specifically defines the work component as the resources that reflect time and intensity in furnishing the service.

Based on the aforementioned references and consideration of the comments, we are finalizing the work RVUs as proposed for CPT codes 46020 and 46030 based on the reverse building block methodology. We continue to believe the proposed work RVU for CPT code 46020 adequately accounts for the 5-minute decrease in intraservice time, 26-minute decrease in total time, 51-minute decreased in postservice time, and a change to a 000-day global period which will allow for separately billable E/M visits as medically necessary. We continue to believe that the 1.48 work RVUs for CPT code 46030 adequately accounts for the 3-minute decrease in intraservice time, 8-minute decrease in post-service time, and a change to a 000-day global period which will allow for separately billable E/M visits as medically necessary.

Comment: Some commenters stated that CMS is proposing to refine the preservice clinical labor times for major procedures to conform to the 000-day global period standards despite the RUC recommendation of standard 090-day preservice clinical labor times. Commenters stated that CPT codes 46020 and 46030 are major procedures performed under general anesthesia when performed the facility setting. Commenters stated that the change to a 000-day global period was requested to account for variable post-operative care and does not change the need for clinical staff time typical of 90-day global procedures performed in the facility setting. Commenters stated that reassignment of global periods for select codes does not negate the fact that a major procedure is a major procedure and the pre-service facility clinical staff time for a major procedure is independent of the global period assignment. Commenters stated that each procedure should be evaluated on a case-by-case basis.

Response: We agree with the commenters that the direct PE inputs for each service should be evaluated on a case-by-case basis based on our criteria of what would be reasonable and medically necessary in the typical case. We reviewed the individual codes in question and concluded that the use of 000-day global period standards for “Extensive use of clinical staff” for CPT code 46020 and 000-day global period standards for “Minimal use of clinical staff” for CPT code 46030 in the facility would be most typical in these cases. As we noted under the Standardization of Clinical Labor Tasks section (section II.B) of this final rule, we continue to believe that setting and maintaining clinical labor standards provides greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes.

We refer readers to section II.B of this final rule, Determination of Practice Expense Relative Value Units (PE RVUs), for more information regarding the collaborative work of CMS and the RUC in improvements in standardizing clinical labor tasks.

After consideration of the comments, we are finalizing the work RVUs as proposed for CPT codes 46020 and 46030. We are also finalizing our clinical labor inputs as proposed for CPT codes 46020 and 46030.

(14) Periurethral Balloon Continence Device Procedures (CPT Codes 53451, 53452, 53453, and 53454)

In October 2020, the CPT Editorial Panel replaced four CPT Category III codes with four new CPT Category I codes to report periurethral adjustable balloon continence devices. Given the low utilization and the low survey response rate for the four new codes, the RUC recommended that CMS assign contractor pricing to these procedures. We agree with the RUC and we proposed contractor pricing for all four codes in the family, CPT codes 53451 (Periurethral transperineal adjustable balloon continence device; bilateral insertion, including cystourethroscopy and imaging guidance), 53452 (Periurethral transperineal adjustable balloon continence device; unilateral insertion, including cystourethroscopy and imaging guidance), 53453 (Periurethral transperineal adjustable balloon continence device; removal, each balloon) and 53454 (Periurethral transperineal adjustable balloon continence device; percutaneous adjustment of balloon(s) fluid volume).

Comment: Several commenters supported the proposal to assign contractor pricing for CPT Codes 53451-53454.

Response: We appreciate the support for our proposal from the commenters.

After consideration of the comments, we are finalizing our proposal of contractor pricing for all four codes in the family.

(15) Intracranial Laser Interstitial Thermal Therapy (LITT) (CPT Codes 61736 and 61737)

In October 2020, the CPT Editorial Panel approved the addition of two codes to report laser interstitial thermal therapy (LITT) of lesion, intracranial, including burr hole(s), with magnetic resonance (MR) imaging guidance for a single trajectory for 1 simple lesion and multiple trajectories for multiple or complex lesion(s). LITT is a novel procedure that involves multiple steps and movements of the patient through the hospital for different stages of the procedure. The typical facility does not have an interoperative MRI suite (a small minority of academic medical centers may), so patient transport is necessary.

The RUC recommended a work RVU of 20.00 for CPT code 61736 (Laser interstitial thermal therapy (LITT) of lesion, intracranial, including burr hole(s), with magnetic resonance imaging guidance, when performed; single trajectory for 1 simple lesion) based on the survey median response. CPT code 61736 was surveyed with having one subsequent hospital visit, CPT code 99232 (sbsq hospital care/day 25 minutes) and 40 minutes of immediate postservice time. The RUC noted that although the survey median immediate postservice time was 40 minutes, for 61736, the CMS 23-Hour Stay Outpatient Surgical Services with Subsequent Hospital Visits Policy was applied which resulted in the 99232 visit being removed and its 20 minutes of intraservice time being applied to the 40 minutes of immediate postservice time resulting in 60 minutes of immediate postservice time. See the 2011 PFS final rule (75 FR 73226) for an in-depth explanation of the 23-hour policy. We believe the RUC partially applied the 23-hr policy when it applied the policy to the immediate post service time but not to the work RVU. We believe the 23-hour policy in its entirety should be applied to CPT code 6173661736 which includes the work RVUs along with the immediate postservice time.

Following the valuation methodology we established for 23-hour stay services in the CY 2011 PFS final rule, CPT code 61736 will have a work RVU of 19.06.

The steps are as follows:

• Step (1): CPT code 61736 does not have a hospital discharge day management service; therefore, we will skip this step.
• Step (2): 20−1.39 ** = 18.61.
• Step (3): 18.61 + (20 minutes × 0.0224)*** = 19.06 RVUs.

* Value associated with 1/2 hospital discharge day management service.

** Value associated with an inpatient hospital visit, CPT code 99232.

*** Value associated with the reallocated intraservice time multiplied by the postservice intensity of the 23-hour stay code.

Therefore, for CY 2022 we proposed a work RVU of 19.06 for CPT code 61736.

In reviewing the RUC-recommended direct PE inputs for 61736 we noticed the RUC proposed the standard 090-day preservice times for the following clinical labor activities:

• Complete preservice diagnostic and referral forms (CA001) 5 minutes.
• Coordinate pre-surgery services (including test results) (CA002) 20 minutes.
• Schedule space and equipment in facility (CA003) 8 minutes.
• Provide preservice education/obtain consent (CA004) 20 minutes.

Complete pre-procedure phone calls and prescription (CA005) 7 minutes.

We note that the RUC recommended 090-day preservice times despite surveying the service as a 000-day service. We disagree with the RUC-recommended 090-day times as we believe this is a 000-day service and should have times consistent with 000-day services. However, we recognize there is time needed to coordinate this service. Therefore, for CY 2022 we proposed the following standard clinical labor times for a 000-day extensive:

• Complete preservice diagnostic and referral forms (CA001) 5 minutes.
• Coordinate pre-surgery services (including test results) (CA002) 10 minutes.
• Schedule space and equipment in facility (CA003) 5 minutes.
• Provide preservice education/obtain consent (CA004) 7 minutes.
• Complete pre-procedure phone calls and prescription (CA005) 3 minutes.

For CPT code 61737 (Laser interstitial thermal therapy (LITT) of lesion, intracranial, including burr hole(s), with magnetic resonance imaging guidance, when performed; multiple trajectories for multiple or complex lesion(s)), the RUC recommended a work RVU of 24.00 which is the survey median. The RUC's recommendation also included 40 minutes of immediate postservice time and one hospital visit, CPT code 99233 (sbsq hospital care/day visit 35 minutes) . We believe it will be appropriate to apply the 23-hr policy to CPT code 61737 as well.

The steps are as follows:

• Step (1): CPT code 61737 does not have a hospital discharge day management service. Therefore, we will skip this step.
• Step (2): 24 − 2 ** = 22
• Step (3): 22 + (30 minutes × 0.0224) *** = 22.67 RVUs

* Value associated with hospital discharge day management service.

** Value associated with an inpatient hospital visit, CPT code 99233.

*** Value associated with the reallocated intraservice time multiplied by the postservice intensity of the 23-hour stay code.

This results in a work RVU of 22.67, and an immediate post service time of 70 minutes. Therefore, for CY 2022 we proposed a work RVU of 22.67 and 70 minutes of immediate postservice time for CPT code 61737.

For the direct PE, the RUC proposed identical preservice times for CPT codes 61736 and 61737. For the reasons stated above concerning the direct PE inputs for CPT code 61736, we proposed the standard clinical labor times associated with a 000-day extensive for CPT code 61737 for CY 2022.

Comment: A commenter stated that CMS proposed to apply a formulaic reduction to the work RVU attributed to the CMS 23-Hour Stay Outpatient Surgical Services with Subsequent Hospital Visits Policy when it proposed its work valuation for CPT code 61736. The commenter also noted that the LITT codes have 000-day global periods, which typically do not allow for an E/M visit on the same day as the procedure. However, in its recommendation the RUC applied the CMS 23-hour policy related to the post-service time for the base code. Although the median survey post-service time for CPT code 61736 was 40 minutes, the CMS 23-hour stay policy was applied resulting in 60 minutes of immediate post-service time. The intra-service time was reallocated from the same-day E/M code 99232 to the immediate post-service time of the outpatient service (adding 20 minutes of intra-service time from 99232). Lastly, the commenters stated that mathematically reducing work RVUs, despite a valid RUC survey, was not warranted and was not previously implemented by CMS when other services eligible for the 23-hour stay policy were reviewed.

Response: As we have stated earlier in this rule and in the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), CMS uses a variety of methodologies and approaches to develop work RVUs, including survey data, building blocks, crosswalk to key reference or similar codes, and magnitude estimation. In the CY 2011 PFS final rule, we also discussed the 23-hour policy and provided the formula for applying the policy to the work RVUs and the times of the outpatient service and the same-day E/M code. The commenter's statement reaffirms our belief that the RUC partially applied the 23-hour policy in its calculation of the recommended RVUs. When the policy is applied correctly, a work RVU of 19.06 is the appropriate valuation for CPT code 61736.

We also note, had we used the 25th percentile in the RUC's survey, which the RUC frequently recommends for valuing services, CPT code 61736 would have an RVU of 17.78, which is more than one RVU lower that CMS' proposed value. We also note that the RUC-recommended work RVU of 20.00 for CPT code 61736 is significantly higher than similarly timed codes which could imply that the service is overvalued. The commenter noted that the LITT codes have 000-day global periods, which typically do not allow for an E/M visit on the same day as the procedure. However, CPT code 61736 was surveyed as having one same-day E/M visit of CPT code 99232. We do not believe it is appropriate to apply select portions of the 23-hour policy. As we stated in the proposed rule, the 23-hour policy, when applied, should be applied in its entirety and applying the 23-hour policy in this context resulted in the work RVU of 19.06 for CPT code 61736. Lastly, we believe we have consistently applied the CMS 23-hour stay policy where applicable, in accordance with the policy that we finalized in the 2011 PFS final rule (75 FR 73226).

Comment: A commenter stated their objection to any proposed valuation that uses reverse building block methodology, or any other purely formulaic approach, to systematically reduce work RVUs for services. In the case of CPT code 61737, the commenter noted that, although these codes have 000-day global periods which typically do not allow for an E/M visit on the same day as the procedure, code 61737 typically involves a full 2-midnight admission which justifies the same-day E/M visit.

The commenter also stated when compared to patients undergoing LITT for a single lesion, the complexity of code 61737 and the level of patient medical instability and risk is greater. The typical number of “multiple” trajectories is two, thus in many aspects the physician work is doubled.

Response: In the CY 2011 PFS final rule we stated we believed that the 23-hour stay issue encompasses several scenarios. The typical patient under the 23-hour policy is commonly in the hospital for less than 24 hours, which often means the patient may indeed stay overnight in the hospital. On occasion, the patient may stay longer than a single night in the hospital; however, in both cases (one night or more than one night), the patient is considered for Medicare purposes to be a hospital outpatient, not an inpatient, and our claims data support that the typical 23-hour stay service is billed as an outpatient service. Accordingly, we believe that the valuation of the codes that fall into the 23-hour stay category should not reflect work that is typically associated with an inpatient service.

The RUC surveyed and recommended CPT code 61737 with a CPT code 99233 subsequent hospital visit. In the CY 2010 PFS proposed rule and final rule with comment period (74 FR 33556 and 74 FR 61777, respectively), we stated that we believed the use of inpatient E/M visit codes for services rendered in the post-service period for outpatient 23-hour stay procedures would result in overpayment for pre- and post-service work that would not be furnished. In CY 2011, we modified our proposed CY 2010 approach and suggested that in the future, when the AMA RUC reviews new and potentially misvalued codes that are identified as 23-hour stay services, the AMA RUC would apply the 23-Hour Stay Outpatient Surgical Services with Subsequent Hospital Visits Policy. Therefore, we believe it would be inappropriate to not apply the policy we established for services in this scenario.

With regards to the commenter's statement on the physician's work being doubled for CPT code 61737, we note the RUC-recommended a difference of four RVUs between CPT codes 61736 and 61737. We proposed a work RVU of 19.06 for CPT code 61736 and a work RVU of 22.67 for CPT code 61737, which would maintain a 3.61 RVU difference between these codes. We believe that a difference of 3.61 RVUs is fairly consistent with the RUC's recommendation and values the physician's work appropriately.

Comment: One commenter noted that CMS proposed the standard clinical labor times associated with the pre-service time package for 000-day global “Extensive use of Clinical Staff” facility inputs for CPT codes 61736 and 61737 while the RUC had recommended time associated with 090-day global periods. The commenter stated that it is most appropriate for the specialties to be able to advocate for the appropriate pre-service time for any given service. The commenters also suggested that with evidence some subset of codes may require extensive use of clinical staff and has allocated time when appropriate despite the assigned global period.

Response: We agree with the commenter that the direct PE inputs for each service should be evaluated on a case-by-case basis based on our criteria of what would be reasonable and medically necessary in the typical case. We reviewed the individual codes in question and concluded that the use of 000-day or 010-day global period standards for “Extensive use of clinical staff” would be most typical in these cases. As we noted under the Standardization of Clinical Labor Tasks (section II.B) part of this final rule, we continue to believe that setting and maintaining clinical labor standards provides greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes. For additional discussion, we direct readers to the individual code families affected by our proposed preservice clinical labor times (CPT codes 46020 and 46030 and CPT codes 61736 and 61737).

After consideration of the public comments, we are finalizing our proposals for CPT codes 61736 and 61737 as proposed.

(16) Arthrodesis Decompression (CPT Codes 63052 and 63053)

For CPT codes 63052 ( Laminectomy, facetectomy, or foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s] [e.g., spinal or lateral recess stenosis]), during posterior interbody arthrodesis, lumbar; single vertebral segment (List separately in addition to code for primary procedure)) and 63053 ( Laminectomy, facetectomy, or foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s] [e.g., spinal or lateral recess stenosis]), during posterior interbody arthrodesis, lumbar; each additional segment (List separately in addition to code for primary procedure) ), we disagree with the RUC-recommended work RVUs of 5.55 and 4.44, respectively, because these values are anomalously high in comparison to other similar add-on codes that have longer intraservice times, and we proposed a work RVU of 3.08 for CPT code 63052 and a work RVU of 2.31 for CPT code 63053.

CPT codes 63052 and 63053 are new add-on codes to report decompression when performed in conjunction with posterior interbody arthrodesis at the same interspace. The proposed work RVU for CPT code 63052 is based on an intraservice time ratio between the proposed 40 minutes of intraservice time for CPT code 63052 and the 45 minutes of intraservice time for CPT code 63048 ( Laminectomy, facetectomy and foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s], [e.g., spinal or lateral recess stenosis]), single vertebral segment; each additional segment, cervical, thoracic, or lumbar (List separately in addition to code for primary procedure) ). We believed that CPT code 63048 was a stronger reference code for CPT code 63052 than the RUC-recommended reference CPT codes 33924 ( Ligation and takedown of a systemic-to-pulmonary artery shunt, performed in conjunction with a congenital heart procedure (List separately in addition to code for primary procedure) ) and 22614 ( Arthrodesis, posterior or posterolateral technique, single level; each additional vertebral segment (List separately in addition to code for primary procedure) ) because of the similarities in the long descriptors, physician time, and intensity of intraservice work for CPT codes 63052 and 63048. The intraservice time ratio between CPT codes 63048 and 63052 equals a work RVU of 3.08 for CPT code 63052 ((40 minutes/45 minutes) * 3.47 = 3.08). Therefore, we proposed a work RVU of 3.08 for CPT code 63052. The intraservice time ratio between CPT codes 63048 and 63052 was selected to value CPT code 63052 because of the similarities in the descriptions of intraservice work provided in the RUC's summary of recommendations for CPT code 63052 and the RUC Database for CPT code 63048. We proposed a work RVU of 2.31 for CPT code 63053 based on an intraservice time ratio between the proposed 30 minutes of intraservice time for CPT code 63053 and the proposed 40 minutes of intraservice time for CPT code 63052 ((30 minutes/40 minutes) * 3.08 = 2.31), given that the RUC contends that there are some efficiencies in providing an additional level of decompression, evidenced by the 10 minutes less of intraservice time for CPT code 63053 compared to CPT code 63052. These work RVU proposals are further supported by brackets of other 30 and 40 minute ZZZ codes.

We note that the proposed work RVU for CPT code 63052 falls between CPT code 19294 ( Preparation of tumor cavity, with placement of a radiation therapy applicator for intraoperative radiation therapy (IORT) concurrent with partial mastectomy (List separately in addition to code for primary procedure) ), which has a work RVU of 3.00, and CPT code 37185 ( Primary percutaneous transluminal mechanical thrombectomy, noncoronary, non-intracranial, arterial or arterial bypass graft, including fluoroscopic guidance and intraprocedural pharmacological thrombolytic injection(s); second and all subsequent vessel(s) within the same vascular family (List separately in addition to code for primary mechanical thrombectomy procedure) ), which has a work RVU of 3.28. Both of these bracketing reference codes have identical intraservice times as CPT code 63052. The proposed work RVU for CPT code 63053 falls between CPT code 43273 ( Endoscopic cannulation of papilla with direct visualization of pancreatic/common bile duct(s) (List separately in addition to code(s) for primary procedure) ), which has a work RVU of 2.24, and CPT code 22870 ( Insertion of interlaminar/interspinous process stabilization/distraction device, without open decompression or fusion, including image guidance when performed, lumbar; second level (List separately in addition to code for primary procedure) ), which has a work RVU of 2.34. Both of these bracketing reference codes have identical intraservice times as CPT code 63053. When we compared the RUC-recommended work RVU of 5.55 for CPT code 63052 and 4.44 for CPT code 63053 to other spinal add-on codes in the 63000 CPT code series in the RUC database, we found that CPT code 63052 would have the highest work RVU and the second shortest intraservice time (with CPT code 63053 having the shortest intraservice time), and CPT code 63053 would have the third highest work RVU and shortest intraservice time compared to the 10 other nationally-priced spinal add-on codes in the 63000 CPT code series. We do not agree that decompression when performed in conjunction with posterior interbody arthrodesis at the same interspace should have an anomalously high work value in comparison to other similar add-on codes in the 63000 CPT code series that have longer intraservice times. 6305263053We note that the specialty societies did not survey the two new add-on codes with the base codes for the January 2021 RUC, which is a standard to provide assurance that the respondents followed instruction to only consider the work of the add-on codes. CPT codes 63052 and 63053 were reviewed again with their base codes at the April 2021 RUC meeting. There were also revisions to the base codes' definitions, guidelines, and parenthetical instructions, which were approved by the CPT Editorial Panel for CY 2022.

The RUC did not recommend any direct PE inputs for these codes and we did not propose any direct PE inputs.

Comment: Several commenters requested that CMS use the interim RUC recommendations from the April 2021 meeting for these add-on codes which had previously been reviewed at the January 2021 RUC meeting. Commenters stated that the earlier RUC recommendations were made on an interim basis and requested an expedited review of the recommendations from the April 2021 RUC meeting; the RUC resubmitted its recommendations for these code families as part of its comment submission.

Response: We finalized a policy in the CY 2015 PFS final rule to make all changes in the work and MP RVUs and the direct PE inputs for new, revised, and potentially misvalued services under the PFS by proposing and then finalizing such changes through notice and comment rulemaking, as opposed to initially finalizing changes on an interim final basis (79 FR 67602-67609). As we stated when promulgating the CY 2015 PFS final rule, this approach has the significant advantage that the RVUs for all services under the PFS are established using a full notice and comment procedure, including consideration of the RUC recommendations, before they take effect, providing the public the opportunity to comment on a specific proposal prior to it being implemented. We continue to believe that this is a far more transparent process which assures that we have the full benefit of stakeholder comments before establishing values. Since we did not make proposals on the code families in question using the RUC's recommendations from the April 2021 meeting, we would be forced to finalize valuation for these codes on an interim final basis, without the opportunity for public comment. This would contradict the policy that we finalized in the CY 2015 PFS final rule and we do not believe that it would serve the interests of transparency. Although we will consider any information submitted by stakeholders for valuation during the comment period, as we do for all codes which are subject to notice and comment rulemaking, we will formally review the recommendations from the April 2021 RUC meeting next year as part of the CY 2023 rule cycle.

Comment: Commenters unanimously disagreed with the intraservice time ratio between CPT codes 63048 and 63052, stating that CPT code 63048 is an inappropriate comparator because of differences in procedure and patient elements. Commenters stated that part of the work and time involved in CPT code 63048 is that of exposure of bony and soft tissue elements of the adjacent level. Commenters stated that CPT code 63052 does not require additional work of exposure because it is completed as part of the base interbody fusion code, and therefore, CPT code 63052 describes only the high intensity, dangerous aspects of neural element and spinal cord decompression. Commenters agreed that the procedures are similar, but differ in intensity.

Response: We appreciate the additional information provided by the commenters and are compelled to utilize a different methodology than the proposed intraservice time ratio between CPT codes 63048 and 63052, to value CPT code 63052 because the commenters provided sufficient information about how CPT codes 63048 and 63052 differ in intensity.

After consideration of the public comments regarding CPT code 63052, we are finalizing a work RVU of 4.25 for CPT code 63052 based on a crosswalk to CPT code 22853 ( Insertion of interbody biomechanical device(s) (e.g., synthetic cage, mesh) with integral anterior instrumentation for device anchoring (e.g., screws, flanges), when performed, to intervertebral disc space in conjunction with interbody arthrodesis, each interspace (List separately in addition to code for primary procedure) ), which has a work RVU of 4.25 and an intraservice time of 45 minutes. CPT code 22853 has only 5 more minutes of intraservice time than CPT code 63052, is a spinal procedure, and is an add-on code to the same base codes as CPT code 63052. We note that the finalized work RVU of 4.25 is supported by the commenters. Commenters supported the bracket of key reference service CPT code 22552 ( Arthrodesis, anterior interbody, including disc space preparation, discectomy, osteophytectomy and decompression of spinal cord and/or nerve roots; cervical below C2, each additional interspace (List separately in addition to code for primary procedure) ) and MPC CPT code 34812 ( Open femoral artery exposure for delivery of endovascular prosthesis, by groin incision, unilateral (List separately in addition to code for primary procedure) ). CPT code 22552 has a work RVU of 6.50 and an intraservice time of 45 minutes, and commenters noted that CPT code 22552 has a higher intensity as anticipated for a surgical procedure and in comparison, with a lumbar procedure. CPT code 34812 has a work RVU of 4.13 and 40 minutes of intraservice time, and commenters noted that this code involves open femoral artery exposure by groin incision and closure of the wound, typically for separately reported delivery of an endovascular prosthesis for an asymptomatic infrarenal abdominal aortic aneurysm. In comparison, exposure and closure for CPT code 63052 are performed as part of the primary arthrodesis code and the intraservice time includes higher intensity bony and soft tissue resection, therefore, although both codes require the same time, the physician work and intensity of CPT code 63052 is greater than CPT code 34812.

After consideration of the public comments regarding CPT code 63053, we are finalizing a work RVU of 3.19 for CPT code 63053 based on an intraservice time ratio between CPT codes 63052 and 63053 ((30 minutes/40 minutes) * 4.25 = 3.19). As we stated above, we are also finalizing a work RVU of 4.25 for CPT code 63052 based on a crosswalk to CPT code 22853. The RUC did not recommend any direct PE inputs for these codes and we are not finalizing any direct PE inputs.

(17) Hypoglossal Nerve Stimulator Services (CPT Codes 64582, 64583, and 64584)

In October 2020, the CPT Editorial Panel added three new CPT Category I codes to report open implantation, revision or replacement, and removal of hypoglossal nerve stimulator array. These new CPT codes replaced three CPT Category III codes which were reported with CPT codes 64568 ( Incision for implantation of cranial nerve (e.g., vagus nerve) neurostimulator electrode array and pulse generator ), 64569 (Revision or replacement of cranial nerve (e.g., vagus nerve) neurostimulator electrode array, including connection to existing pulse generator) and 64570 (Removal of cranial nerve (e.g., vagus nerve) neurostimulator electrode array and pulse generator) .

CPT code 64582 ( Open implantation of hypoglossal nerve neruostimulator array, pulse generator, and distal respiratory sensor electrode or electrode array ) was previously reported using the now deleted Category III CPT code 0466T ( Insertion of chest wall respiratory sensor electrode or electrode array, including connection to pulse generator (List separately in addition to code for primary procedure) ) along with CPT code 64568. We did not propose the RUC-recommendation to use the survey median work RVU of 16.00 for CPT code 64582. We proposed a work RVU of 14.00 based on the intraservice time ratio of CPT code 64568 compared to the RUC-recommended intraservice time for CPT code 64582. CPT code 64568 has a work RVU of 9.00, intraservice time of 90 minutes and total time of 275 minutes. CPT code 64582 has a RUC-recommended work RVU of 16.00, intraservice time of 140 minutes and total time of 294 minutes. Additionally, when we reviewed CPT code 64582, we found that the RUC-recommended work RVU was higher than other global 90-day codes with similar time values. We did not agree that it would be typical to value this code so much higher than services with similar work time values. Additionally, we note that the proposed work RVU of 14.00 is also the survey 25th percentile. Therefore, as previously stated, we believe 14.00 is a more appropriate value overall than 16.00 when compared to the range of codes with similar work times.

We did not propose the RUC-recommended work value of 16.50 for CPT code 64583 ( Revision or replacement of hypoglossal nerve neruostimulator array and distal respiratory sensor electrode or electrode array, including connection to an existing pulse generator ), rather we proposed a work RVU of 14.50. Although we disagree with the RUC-recommended work RVU, we concur that the relative difference in work between CPT codes 64582 and 64583 is equivalent to the recommended increment of 0.50 RVUs. Therefore, we proposed a work RVU of 14.50 for CPT code 64583 based on the recommended increment of 0.50 additional RVUs above our proposed work RVU of 14.00 for CPT code 64582. We believe the use of an incremental difference between these CPT codes is a valid methodology for setting values, especially in valuing services within a family of codes where it is important to maintain an appropriate intra-family relativity. Additionally, we note that the proposed work RVU of 14.50 is also nearly identical to the 25th percentile survey value for CPT code 64583 of 14.63. Therefore, as previously stated, we believe 14.50 is a more appropriate value than 16.50 to maintain an appropriate intra-family relativity.

We did not propose the RUC-recommended work value of 14.00 for CPT code 64584 ( Removal of hypoglossal nerve neruostimulator array, pulse generator, and distal respiratory sensor electrode or electrode array ), rather we proposed a work RVU of 12.00. Although we disagree with the RUC-recommended work RVU, we concur that the relative difference in work between CPT codes 64582 and 64584 is equivalent to the recommended increment of −2.0 RVUs. We believe the use of an incremental difference between these CPT codes is a valid methodology for setting values, especially in valuing services within a family of codes where it is important to maintain an appropriate intra-family relativity. Therefore, we proposed a work RVU of 12.00 for CPT code 64584 based on the recommended increment of 2.0 RVUs below our proposed work RVU of 14.00 for CPT code 64582. Additionally, we note that the proposed work RVU of 12.00 is also the RUC 25th percentile survey value for CPT code 64584.

We proposed the RUC-recommended direct PE inputs without refinements for CPT codes 64582, 64583 and 64584.

Comment: A few commenters including the RUC urged CMS to finalize a work RVU of 16.00 for CPT code 64582, 16.50 for CPT code 64583 and 14.00 for CPT code 64584 based on the survey median. The commenters disagreed with CMS calculating intra-service time ratios for valuing 64582, and also disagreed with CMS utilizing the incremental difference for valuing 64583 and 64584. The commenters also indicated that the survey median is more appropriate, given the physician work, intensity and complexity of the service.

Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for survey information that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. Therefore, when our review of recommended values reveals that changes in time are not accounted for in a recommended work RVU, we believe we have an obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios, we are using derived intensity measures based on current work RVUs for individual procedures. Again, we clarify that we do not treat all components of physician time as having identical intensity. If we were to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case, as indicated by the many services that share the same time values but have different work RVUs. We have responded to concerns about our methodology earlier in this section. We disagree with the commenters and continue to believe that finalizing a work RVU of 14.00 is more appropriate than a work RVU of 16.00 for CPT code 64582 based on the intraservice time ratio of CPT code 64568 compared to the RUC-recommended intraservice time for CPT code 64582. As stated in the proposed rule, the AMA RUC surveyed 25th percentile work RVU for CPT code 64582 was 14.00. Additionally, we also note that the RUC has also used the surveyed 25th percentile work value as a basis to recommend the work RVU for a code.

We believe the use of an incremental difference between the work RVUs of codes is a valid methodology for setting values, especially in valuing services within a family. Historically, we have frequently utilized an incremental methodology in which we value a code based upon the incremental work RVU difference between the code and another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We have no evidence to suggest that the use of an incremental difference between the work RVUs of codes conflicts with the statute's definition of the work component as the resources in time and intensity required in furnishing the service. We do consider clinical information associated with physician work intensity provided by the RUC and other stakeholders as part of our review process, although we remind readers again that we do not believe it is necessary for codes to share the same site of service, patient population, or utilization level to in order to serve as an appropriate crosswalk. Therefore, we are finalizing a work RVU of 14.50 for CPT code 64583 based on the recommended increment of 0.50 additional RVUs above the finalized work RVU of 14.00 for CPT code 64582, and we are finalizing a work RVU of 12.00 for CPT code 64584 based on the recommended increment of 2.0 RVUs below the finalized work RVU of 14.00 for CPT code 64582.

Comment: A commenter supported CMS' proposal to accept the RUC-recommended direct PE inputs without refinements for CPT codes 64582, 64583 and 64584.

Response: We appreciate the support for our proposed direct PE inputs.

After consideration of public comments, we are finalizing work RVUs of 14.00 for CPT code 64582, 14.50 for CPT code 64583 and 12.00 for CPT code 64584. We are finalizing the RUC-recommended direct PE inputs without refinement for CPT codes 64582, 64583 and 64584.

(18) Destruction by Neurolytic Agent (CPT Codes 64633, 64634, 64635, and 64636)

In September 2014, the Relativity Assessment Workgroup identified a work neutrality issue for CPT codes 64633 ( Destruction by neurolytic agent, paravertebral facet joint nerve(s), with imaging guidance (fluoroscopy or CT); cervical or thoracic, single facet joint), 64634 ( Destruction by neurolytic agent, paravertebral facet joint nerve(s), with imaging guidance (fluoroscopy or CT); cervical or thoracic, each additional facet joint (List separately in addition to code for primary procedure)), 64635 (Destruction by neurolytic agent, paravertebral facet joint nerve(s), with imaging guidance (fluoroscopy or CT); lumbar or sacral, single facet joint), and 64636 (Destruction by neurolytic agent, paravertebral facet joint nerve(s), with imaging guidance (fluoroscopy or CT); lumbar or sacral, each additional facet joint (List separately in addition to code for primary procedure) ) related to incorrect coding relative to how the services were originally valued. In May 2015, the CPT Editorial Panel revised the parenthetical instructions for the five codes describing paravertebral facet joint nerve destruction to clarify that these codes are reported per joint, not nerve. Due to the extensive growth and original incorrect assumptions about distribution of reporting, the RUC recommended that CPT codes 64633-64636 be surveyed. We proposed the RUC-recommended work RVU of 1.32 for CPT code 64634 and the RUC-recommended work RVU of 1.16 for CPT code 64636.

For CPT codes 64633 and 64635, we did not propose the RUC-recommended work RVU of 3.42 for both codes, as we believe this value understates the decrease in physician work time for these codes. An analysis of all 010-day global period codes indicates that these proposed values will place these codes among the highest valued for codes with similar time values. We are instead using a total-time ratio methodology to propose work RVUs of 3.31 for CPT code 64633 and 3.32 for CPT code 64635. We support these values by noting that they fall between CPT codes 54164 ( Frenulotomy of penis ), with a work RVU of 2.82, and CPT code 68371 ( Harvesting conjunctival allograft, living donor ), with a work RVU of 5.09; these reference codes have total time values that are similar to, and intraservice time values that are identical to those recommended for CPT codes 64633 and 64635.

We proposed the RUC-recommended direct PE inputs without refinement.

Comment: Commenters supported the proposal of the RUC-recommended work RVUs for the add-on codes, CPT codes 64634 and 64636, and the RUC-recommended direct PE inputs for all codes. However, many commenters opposed the proposed work RVUs for CPT codes 64633 and 64635 and urged CMS to finalize the RUC-recommended work RVUs for these codes. According to commenters, the proposed values for these codes placed these services out of rank order with similar services such as the top key reference code, CPT code 64625 ( Radiofrequency ablation, nerves innervating the sacroiliac joint, with image guidance (ie, fluoroscopy or computed tomography ) (work RVU = 3.39, 30 minutes intra-service time and 98 minutes total time)). Commenters stated that CPT codes 64633 and 64635 are slightly more intense and complex than CPT code 64625 due to the anatomical differences in anatomic locations; while CPT code 64625 requires more injections, CPT codes 64633 and 64635 are in a much more clinically complex location, requiring greater clinical expertise. CPT codes 64633 and 64635 also require more total time than 64625 and the RUC-recommended median work RVU of 3.42 maintains the proper rank order between these services. Commenters stated that CMS' time ratio calculation ignored magnitude estimates as indicated by physicians who perform these services and compromises the correct relativity of these services. Commenters also stated that CMS' calculation also ignored the intensity of these services and discounted it by arriving at a value by calculation. The RUC requested that CMS provide clinical rationale on why CPT codes 64633 and 64635 require less physician work or intensity than other similar services. The RUC recommended that the work RVU for CPT codes 64633 and 64635 be the same. According to commenters, the CMS references to CPT codes 54164 and CPT code 68371 are inappropriate as they describe procedures that are too clinically different.

Response: We disagree that our time ratio calculation is inaccurate and we continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys which suggests that the amount of time involved in furnishing the service has changed significantly. We have responded to concerns about our methodology earlier in this section. For additional information regarding the use of old work time values that were established many years ago and have not since been reviewed in our methodology, we refer readers to our discussion of the subject in the Methodology for Establishing Work RVUs section of this final rule (section II.E.2.), as well as a detailed discussion in the CY 2017 PFS final rule (81 FR 80273 through 80274). We do not agree that the proposed work RVU for CPT code 64633 would create a rank order anomaly with CPT code 64625, as the proposed value for CPT code 64633 recognizes that this is a higher intensity procedure than CPT code 64625. We understand that the RUC asserts that CPT code 64633 and 64635 describe services of similar intensity, and therefore, we are finalizing work RVUs of 3.32 for both codes, rather than 3.31 for CPT code 64633 and 3.32 for CPT code 64635 as proposed. Given the identical intensity of these two services, we used total time ratios to estimate a value that we believe more accurately captures the time as proposed, then we used the relative relationship between the two codes to further refine the value for 64633 from 3.31 to 3.32. With regard to the invocation of clinically relevant relationships by the commenters, we emphasize that we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that they are necessarily more appropriate crosswalks. We disagree that our proposed RVUs undervalued these codes in reference to other similar procedures, and we note that even considering our proposed work RVUs reductions, these codes would still be among the highest valued of all 010-day global period codes.

After consideration of the comments, we are finalizing the proposed work RVUs for CPT codes 64634, 64635, and 64636, as proposed. For CPT code 64633, we are instead finalizing a work RVU of 3.32 to match the work RVU of CPT code 64635. We are also finalizing the RUC-recommended direct PE inputs for these codes as proposed without refinement.

(19) Destruction of Intraosseous Basivertebral Nerve (CPT Codes 64628 and 64629)

In October 2020, the CPT Editorial Panel added two Category I codes to report thermal destruction of intraosseous basivertebral nerve, inclusive of all imaging guidance for the first two vertebral bodies (lumbar or sacral) and for each additional vertebral body (lumbar or sacral).

We did not propose the RUC-recommended work value of 8.25 for CPT code 64628 ( Thermal destruction of intraosseous basivertebral nerve, inclusive of all imaging guidance; first two vertebral bodies, lumbar or sacral ). When we reviewed CPT code 64628, we found that the RUC-recommended work RVU was higher than codes with the same 10-day global period, same intraservice time and similar total times. The RUC-recommended work RVU of 8.25 would value CPT code 64628 at the 90th percentile of comparable 10-day global and we do not agree that it will be typical to value this code so much higher than services with similar work time values. We believed it would be more accurate to propose a work RVU of 7.15 based on a crosswalk to CPT code 63650 ( Percutaneous implantation of neurostimulator electrode array, epidural ) with a work RVU of 7.15, identical intraservice time of 60, and similar total time of 170. We believe the crosswalk to CPT code 63650 serves as a more accurate valuation for CPT code 64628.

We also did not propose the RUC-recommended work value of 4.87 for CPT code 64629 ( Thermal destruction of intraosseous basivertebral nerve, inclusive of all imaging guidance; each additional vertebral body, lumbar or sacral (List separately in addition to code for primary procedure) ). Although we disagree with the RUC-recommended work RVU, we concur that the relative difference in work between CPT codes 64628 and 64629 is equivalent to the recommended increment of −3.38 RVUs. However, since the recommended work RVU of code 64628 was higher than other codes with the same 10-day global period, same intraservice time, and similar total times, we refined the work RVU for code 64629 to preserve the incremental difference between the two codes. We believe that these refinements maintain the relationship between the two codes in the family while better preserving relativity with other similar 10-day global codes on the wider PFS. We believe the use of an incremental difference between these CPT codes is a valid methodology for setting values, especially in valuing services within a family of codes where it is important to maintain an appropriate intra-family relativity. Therefore, we proposed a work RVU of 3.77 for CPT code 64629 based on the recommended increment of 3.38 RVUs below our proposed work RVU of 7.15 for CPT code 64628.

We proposed the RUC-recommended direct PE inputs without refinements for CPT code 64628. CPT code 64629 is an add-on code and does not have any direct PE inputs.

Comment: Several commenters including the RUC urged CMS to finalize the RUC-recommended work RVU of 8.25 for CPT code 64628 and 4.87 for CPT code 64629 which are both based on the survey 25th percentile. The commenters disagreed that the proposed crosswalk to CPT code 63650 serves as a more accurate valuation for CPT code 64628 and supports the RUC's recommendation for code 64628 with comparisons to the reference CPT code 22514 ( Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g., kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; lumbar ) with a work RVU of 7.99, and CPT code 22513 ( Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g., kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; thoracic ) with a work RVU of 8.65. The commenters suggested that CMS proposals and methodology consider survey data, review by specialty societies and cross-specialty comparison. A commenter urged CMS to finalize a work RVU of 9.75 for CPT code 64628 and 4.87 for 64629. Another commenter urged CMS to finalize a work RVU of 10.40 for the base CPT code 64628, and agreed that the additional level code, CPT code 64629, should have a work RVU of approximately 50 percent of the base code, and be assigned a work RVU of 5.20. A few commenters noted that CMS' proposal does not accurately reimburse physicians for their work and that the proposed values will negatively impact access to care. For CPT code 64629, commenters including the RUC urged CMS to finalize a work RVU of 4.87 based on the survey 25th percentile for this add-on code. A few commenters disagreed with CMS utilizing incremental differences for valuing services.

Response: We appreciate the feedback from commenters, and we are sensitive to the need for appropriate payment under the PFS to ensure that beneficiaries maintain access to care. However, we disagree with the commenters that the RUC's recommended 25th percentile bracketed to CPT codes 22514 and 22513 is a more accurate choice than our proposed reference code CPT code 63650. We continue to believe that CPT code 63650 is a more accurate reference code for 64628, and note that the CPT Editorial Panel assigned the Destruction of Intraosseous Basivertebral Nerve family to the 60000 series.

We continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate code comparison or an appropriate crosswalk.

Additionally, we believe the use of an incremental difference between the work RVUs of codes is a valid methodology for setting values, especially in valuing services within a family. Historically, we have frequently utilized an incremental methodology in which we value a code based upon the incremental work RVU difference between the code and another code or another family of codes. We note that the RUC has also used the same incremental methodology on occasion when it was unable to produce valid survey data for a service. We have no evidence to suggest that the use of an incremental difference between the work RVUs of codes conflicts with the statute's definition of the work component as the resources in time and intensity required in furnishing the service. We do consider clinical information associated with physician work intensity provided by the RUC and other stakeholders as part of our review process, although we remind readers again that we do not believe that it is necessary for codes to share the same site of service, patient population, or utilization level in order to serve as an appropriate crosswalk.

Comment: Some commenters supported CMS proposing the RUC-recommended direct PE inputs without refinements for CPT code 64628.

Response: We appreciate the support for our proposed direct PE inputs.

After consideration of the comments, we are finalizing a work RVU of 7.15 for CPT code 64628 and 3.77 for CPT code 64629, as proposed. We are also finalizing the RUC-recommended direct PE inputs as proposed without refinement for CPT code 64628.

(20) Dilation of Aqueous Outflow Canal (CPT Codes 66174 and 66175)

These services were identified through the New Technology/New Services List. In January 2020, the specialty societies submitted an action plan and the RUC recommended referral to the CPT Editorial Panel in 2020 to possibly revise the descriptor and add exclusionary parentheticals for CPT code 66174 ( Transluminal dilation of aqueous outflow canal; without retention of device or stent ). In October 2020, the CPT Editorial Panel revised this code to add a parenthetical to restrict reporting this code in conjunction with CPT code 65820 ( Goniotomy ).

We did not propose the RUC-recommended work RVUs of 8.53 for CPT code 66174 and 10.25 for CPT code 66175 ( Transluminal dilation of aqueous outflow canal; with retention of device or stent ), as we believe these values do not adequately reflect the surveyed reductions in physician time. These RVUs will rank these codes among the highest valued 090-day global period codes of similar time values. We proposed a work RVU of 9.34 for CPT code 66175 using a reverse building block methodology. We then subtract the incremental difference between the two RUC-recommended work RVUs, an increment of 1.72, from our proposed work RVU of 9.34 for CPT code 66175 to propose a work RVU of 7.62 for CPT code 66174. We believe this approach is consistent with the RUC's assumption that the intensity and complexity of CPT code 66174 is the same as that of CPT code 66175, the only difference between the two procedures being the additional intraservice time associated with placement of the stent. As further support for these values, we note that they fall between CPT code 66984 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification); without endoscopic cyclophotocoagulation ), with 7.35 work RVUs, and CPT code 15150 ( Tissue cultured skin autograft, trunk, arms, legs; first 25 sq cm or less ), with 9.39 work RVUs.

We proposed the RUC-recommended PE inputs without refinement.

Comment: The RUC urged CMS to accept a work RVU of 8.53 for CPT code 66174 and 10.25 for CPT code 66175. The RUC disagreed with CMS utilizing reverse building block methodology for valuing services and stated that both CMS recommended work values are below the survey 25th percentile and well below the current values. The RUC stated that the reverse building block methodology, or any other purely formulaic approach, should not be used as the primary methodology to value services. Commenters stated that this was inappropriate as magnitude estimation has been used to establish work RVUs for services since the publication of the first Medicare PFS in 1992.

Response: We disagree with the commenter regarding the validity of the building block methodology. We note that our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). We believe an alternative valuation methodology, in this case the building block methodology, more accurately reflects the reductions in physician time values.

We continue to believe that our proposed values more accurately reflect both the surveyed physician time, as well as the relative relationship among these codes and other services of similar time values as compared to the RUC-recommended values, which would overvalue these codes relative to other 090-day global period codes. The proposed work RVUs for CPT codes 66174 and 66175 are among the highest of 90-day global period codes with these time values. Therefore, we are finalizing work RVUs of 7.62 for CPT code 66174 and 9.34 for CPT code 66175, as proposed. We are finalizing the RUC-recommended direct PE inputs without refinement.

(21) Cataract Removal With Drainage Device Insertion (CPT Codes 66989, 66991, 66982, 66984, 66987, 66988, and 0671T)

The RUC identified CPT code 0191T ( Insertion of anterior segment aqueous drainage device, without extraocular reservoir, internal approach, into the trabecular meshwork; initial insertion ) via the Category III codes with High Utilization screen (2018 estimated Medicare utilization over 1,000). In January 2020, the RUC recommended that the specialty societies develop a coding application for Category I status for CPT code 0191T and CPT code 0376T ( each additional device insertion (List separately in addition to code for primary procedure ). In October 2020, the CPT Editorial Panel replaced two Category III codes (CPT codes 0191T and 0376T) with two new codes, CPT codes 66989 and 66991, to report extracapsular cataract removal with insertion of intraocular lens prosthesis and one Category III code to report insertion of anterior segment aqueous drainage device without concomitant cataract removal.

The RUC recommended a work RVU of 12.13 for CPT code 66989 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more ) based on the survey 25th percentile.

In its recommendation, the RUC noted that the recommended intraservice time of 28 minutes for CPT code 66989 is 2 minutes less than the intraservice time of 30 minutes associated with CPT code 66982 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; without endoscopic cyclophotocoagulation ). The RUC further noted this should not be the case, as the insertion of the intraocular lens prosthesis should take the same amount of time and be represented by the same relative work for both procedures and that it is counterintuitive that the intraservice time for CPT code 66989 will be lower than the intraservice time for CPT code 66982, as CPT code 66989 includes both complex cataract surgery and the insertion of the intraocular anterior segment aqueous drainage device. The specialty society that surveyed the codes explained that this is likely because the early adopters of this new technology service are highly skilled surgeons who will likely perform these procedures quickly. They stated that as this procedure diffuses into the wider population of ophthalmologic surgeons over the next few years, the intraservice time will likely rise above the intraservice time associated with CPT codes 66982 and 66984 and will come in line for both CPT codes 66989 and 66991.

CPT code 69982 has a work RVU of 10.25, 125 minutes of total time and 30 minutes of intraservice time. CPT code 66989 has a RUC-recommended work RVU of 12.13, 176 minutes of total time and 28 minutes of intraservice time. We agree with the RUC assessment that both procedures, CPT code 66982 and CPT code 66989, are almost identical in time and intensity. However, we disagree with the RUC-recommended work RVU of 12.13 for CPT code 66989 noting that CPT code 66982 has a work RUV of 10.25. We proposed a work RVU of 10.31 based on the current total time ratio of CPT code 66982 compared to the RUC-recommended total time for CPT code 66989.

For CPT code 66991, the RUC recommended a work RVU of 9.23. The RUC determined that it would be appropriate to use the increment between the 25th percentile work RVU value for CPT code 66989 and the current RUC-reviewed work RVU value for CPT code 66982 to build a work RVU recommendation for CPT code 66991. The RUC determined that the increment between the 25th percentile work RVU value for CPT code 66989 (work RVU = 12.13) and the current RUC-reviewed work RVU value for CPT code 66982 (work RVU = 10.25) will yield an increment between those two codes of 1.88. The RUC added the 1.88 increment to 7.35, the current work RVU for 66984, which yields a RUC-recommended work RVU value of 9.23. This comparison results in a work RVU recommendation of 9.23 for CPT code 66991. We proposed a work RVU of 7.41, which is the increment between the current RUC-reviewed work RVU value for CPT code 66982 and CPT code 66984. The increment between CPT code 66982 (work RVU = 10.25) and CPT code 66984 (work RVU = 7.35) yields a work RUV of 2.90. We subtracted this 2.90 increment from 10.31, to determine our proposed work RVU of 7.41 for CPT code 66989.

We proposed the RUC-recommended indirect PE values for CPT codes 66989 and 66991.

We did not propose any new valuations but reaffirmed the work RVUs and direct PE inputs that we previously finalized for CPT codes 66982 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; without endoscopic cyclophotocoagulation ) and 66984 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification); without endoscopic cyclophotocoagulation ). For CPT codes 66987 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), complex, requiring devices or techniques not generally used in routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or primary posterior capsulorrhexis) or performed on patients in the amblyogenic developmental stage; with endoscopic cyclophotocoagulation ) and 66988 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (1-stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification); with endoscopic cyclophotocoagulation ) we continue to believe these services should be contractor priced.

Comment: One commenter urged CMS to finalize its proposed valuation for CPT codes 66989 and 66991, stating that these new services are overpriced and underperformed.

Response: We appreciate the commenter's feedback.

Comment: Commenters requested that CMS finalize the RUC-recommended work RVU of 12.13 for CPT code 66989 and the RUC-recommended work RVU of 9.23 for CPT code 66991. The commenters urged CMS to consider the intensity of CPT code 66989 and to also provide clinical rationale on why CPT code 66989 should only be valued 0.06 more work RVUs than CPT code 66982. Commenters stated that CMS is only focusing on time and not the clinical work and intensity required to perform CPT code 66989. Furthermore, this code is more intense than CPT code 66982 because it includes both complex cataract surgery and the insertion of the intraocular anterior segment aqueous drainage device. The commenters stated that CMS' proposed value for CPT code 66991 assumes that the CMS proposed value for CPT code 66989 is appropriate and commenters disagreed that the proposed value for CPT code 66989 is correct as indicated above.

Response: We appreciate the additional information supplied by commenters regarding the clinical work and intensity required to perform CPT codes 66989 and 66991, particularly their relationship in terms of intensity with CPT code 66982. After consideration of these comments, we are not finalizing our proposed work RVUs and will instead finalize the RUC-recommended work RVU for both codes.

Comment: Commenters requested that CMS finalize the RUC-recommended work RVU of 13.15 for CPT code 66987 and 10.25 for CPT code 66988. They note that these services will be reported more than 7,000 times per year and contractor pricing, as proposed, is burdensome.

Response: We appreciate commenters' feedback. However, we continue to believe that CPT codes 66987 and 66988 should be contractor priced. We previously finalized the use of contractor pricing in the CY 2020 PFS final rule due to a lack of survey data and crosswalks to support the RUC-recommended work RVUs (84 FR 62751-62753). Since the RUC and commenters merely reaffirmed the same work RVUs from CY 2020 without providing new information, we continue to believe that contractor pricing is the most appropriate choice for these codes.

Comment: Many commenters expressed concern that the proposed change to bundle minimally invasive glaucoma surgery (MIGS) procedures with cataract surgery would make the reimbursement rate too low for providers to offer the procedure which could impact beneficiary access to the service.

Response: We agree with commenters concerns regarding the payment rate of these services. We are concerned that the recommended values of these new services might not fit within the family of services as currently valued given concerns raised by stakeholders. In consideration of stakeholder concerns, including early feedback on how the instraservice time for these services may not be reflective of what will be considered typical in how these services may be furnished, we encourage the RUC and other stakeholders to reconsider the valuation of the cataract procedure family as a whole, including the new codes, in the near term.

After consideration of comments we are finalizing the RUC-recommended work RVUs of 12.13 and 9.23 for CPT codes 66989 and 66991; respectively. We are finalizing the proposal to maintain contractor pricing for CPT codes 66987 and 66988. We are also finalizing the RUC-recommended direct PE inputs as proposed for this code family.

(22) Retinal Detachment Prophylaxis (CPT Codes 67141 and 67145)

CPT code 67145 ( Prophylaxis of retinal detachment (e.g., retinal break, lattice degeneration) without drainage, 1 or more sessions; photocoagulation (laser or xenon arc) ) was identified in October 2019 as a Harvard Valued service with utilization over 30,000. In January 2020, the RUC agreed with the specialty societies that surveyed the service and recommended that CPT code 67145, as well as its parent CPT code 67141 ( Prophylaxis of retinal detachment (e.g., retinal break, lattice degeneration) without drainage, 1 or more sessions; cryotherapy, diathermy ), be referred to the CPT Editorial Panel for a descriptor and global period change. The codes were edited to remove the reference to “1 or more sessions” so that the services may be valued as a 010-day procedure versus the current 090-day global. At the May 2020 CPT Editorial Panel meeting, the Panel approved revision of the two codes to remove “1 or more sessions” from the descriptors and deletion of the Eye and Ocular Adnexa Prophylaxis guidelines.

For CY 2022, we proposed the RUC-recommended work RVU of 2.53 for CPT codes 67141 and 67145. We also proposed the RUC-recommended direct PE inputs without refinements.

Comment: One commenter urged CMS to adopt the 25th percentile survey work values reviewed by the RUC and recommended to CMS.

Response: We appreciate the commenters feedback. For CPT codes 67141 and 67145, we are finalizing the RUC-recommended work RVU of 2.53 for CPT codes 67141 and 67145 and the RUC-recommended direct PE inputs without refinements, as proposed.

(23) Strabismus Surgery (CPT Codes 67311, 67312, 67314, 67316, 67318, 67320, 67331, 67332, 67334, 67335, and 67340)

In April 2020, The RUC recommend that add-on CPT codes 67320, 67331, 67332, 67334, 67335, and 67340 be surveyed along with the base codes in which these services are typically reported (CPT codes 67311, 67312, 67314, 67316 and 67318). When AMA staff compiled a list of 010-day and 090-day services for increases in physician work and time during the surgical global period, they noticed that several low volume codes that were converted to ZZZ global periods in 1999 still included office visits (specifically CPT codes 67320, 67331, 67332, 67334, 67340). It appeared that these office visits may not be appropriate for these services. This issue was deferred until October 2020.

We proposed the RUC-recommended work RVUs for all base codes within this family. This includes a work RVU of 5.93 for CPT code 67311 ( Strabismus surgery, recession or resection procedure; 1 horizontal muscle ), 9.50 for CPT code 67312 ( Strabismus surgery, recession or resection procedure; 2 horizontal muscles ), 5.93 for CPT code 67314 ( Strabismus surgery, recession or resection procedure; 1 vertical muscle (excluding superior oblique) ), 10.31 for CPT code 67316 ( Strabismus surgery, recession or resection procedure; 2 or more vertical muscles (excluding superior oblique) ), and 9.80 for CPT code 67318 ( Strabismus surgery, any procedure, superior oblique muscle ).

We also proposed the RUC-recommend work RVUs for all of the add-on codes within this family. This includes a work RVU of 3.00 for CPT code 67320 ( Transposition procedure (e.g., for paretic extraocular muscle), any extraocular muscle (specify)(List separately in addition to code) ), 2.00 for CPT code 67331 ( Strabismus surgery on patient with previous eye surgery or injury that did not involve the extraocular muscles (List separately in addition to code for primary procedure) ), 3.50 for CPT code 67332 ( Strabismus surgery on patient with scarring of extraocular muscles (e.g., prior ocular injury, strabismus or retinal detachment surgery) or restrictive myopathy (e.g., dysthyroid opthalmopathy) (List separately in addition to code for primary procedure) ), 2.06 for CPT code 67334 ( Strabismus surgery by posterior fixation suture technique, with or without muscle recession (List separately in addition to code for primary procedure) ), 3.23 for CPT code 67335 ( Strabismus surgery by posterior fixation suture technique, with or without muscle recession (List separately in addition to code for primary procedure) ), and 5.00 for CPT code 67340 ( Strabismus surgery by posterior fixation suture technique, with or without muscle recession (List separately in addition to code for primary procedure) ).

We proposed the RUC-recommended direct PE inputs for this code family without refinements.

Comment: Commenters unanimously opposed the RUC-recommended RVUs for every code in this family. Commenters did not agree with the reference codes used by the RUC to support their recommended values. They stated that they believe it is inappropriate to use reference codes to support a valuation that is lower than the 25th percentile survey result for CPT code 67311, CPT code 67314, and CPT code 67320, while valuing all other CPT codes within the family at the 25th percentile. Commenters asked that CMS raise the RVUs for these CPT codes to also be the 25th percentile survey result, which would make the family consistently valued. Commenters also asked that the reduction in RVUs be phased in over a 3 to 5-year timeframe instead of the statutory 2 years.

Response: We generally agree that there should be consistency within code families. The recommendations presented to us by the RUC for this CPT code family, however, include a review of surveys for time changes, intensity, clinical aspects, and a thoughtful review of survey results with the intent for the revaluation to minimize rank order anomalies and have valuations consistent with and accounting for the reductions in intraservice and total times for each CPT code. In regards to the possibility of an extended phase-in, section 1848(c)(7) of the Act, as added by section 220(e) of the PAMA, specifies that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased-in over a 2-year period. CPT codes 67311, 67314, 67320, 67331, 67332, and 67334 were subject to the phase-in transition and it was applied in calculating their proposed RVUs; we direct readers to the Codes Subject to Phase-In public use file for the CY 2022 PFS proposed rule for additional details. The statute defines the phase-in transition as taking place over 2 years. For additional information regarding the phase-in of significant RVU reductions, we direct readers to the CY 2016 PFS final rule with comment period (80 FR 70927 through 70929).

Comment: Commenters stated that CMS should revise the policy finalized in the 2021 PFS final rule (85 FR 84472) that revalued E/M office visits but excluded the valuations from 90 and 10-day postoperative global surgery packages. Commenters requested the revised values be applied to the postoperative visits in global surgery CPT code families as well, and they noted this is particularly relevant to this and other CPT code families.

Response: We did not address the exclusion of postoperative office visits within global surgery packages from the E/M revaluation for this service, or other services, in the proposed rule. Therefore, this policy is out of scope for the CY 2022 PFS proposed and final rules. We refer readers to our discussion on this topic in the CY 2021 PFS final rule (84 FR 84472).

Comment: Commenters raised several concerns about potential impacts on clinicians, as well as beneficiaries due to the large reduction in work RVUs for each code. Commenters were also concerned about a further reduction in the surgical ophthalmology workforce which they say suffers an existing shortage. The commenters stated that the further reduction could be caused by the proposed reimbursement cuts, low reimbursement compared to other ophthalmology services, and lingering financial impacts from the PHE. Commenters also stated that a reduction will disproportionately impact pediatric beneficiaries, minorities, and rural areas. They also stated that it could increase health disparities, generally, because the patient population for this service is primarily comprised of children insured by Medicaid. Commenters were concerned that Medicaid and private insurance payers will follow Medicare reimbursement and reduce payment for these services as well.

Response: We remain committed to minimizing health disparities and increasing health equity across all patient populations and demographics. We also are committed to minimizing impacts on clinicians as they relate to burden and workforce shortage. We acknowledge that impacts could potentially occur to special populations outside of Medicare as a result of reimbursement cuts to certain covered services. We appreciate that stakeholders have raised concerns about these CPT codes and we believe that it would be worthwhile for stakeholders, including the RUC to review these services in light of the concerns that stakeholders presented. We are also interested in engaging with stakeholders in light of concerns about beneficiary access to these services.

After consideration of these public comments, we are finalizing the work RVUs and direct PE inputs for the Strabismus Surgery CPT code family as proposed.

(24) Lacrimal Canaliculus Drug Eluding Implant Insertion (CPT Codes 68841)

CPT code 68841 ( Insertion of drug-eluting implant, including punctal dilation, when performed, into lacrimal canaliculus, each ) was recommended for RUC review in October 2020 since the CPT Editorial Panel replaced CPT Category III (temporary) code 0356T with a new CPT Category I code to report the insertion of a drug eluting implant into the lacrimal canaliculus. We proposed the RUC-recommended work RVU of 0.49 for CPT code 68841.

For the direct PE inputs, we proposed to refine the equipment time for the “lane, screening (oph)” (EL006) from the RUC-recommended 9 minutes of equipment time to the 5-minute equipment standard for CPT code 68841. Five minutes is the standard equipment time associated with EL006 for this procedure. The recommended materials for this code family from the RUC state that the screening lane is used for the duration of setup, procedure, cleaning, and counselling post procedure and that the standard formulas are applied. We believe that the RUC inadvertently failed to update the equipment time associated with this procedure when CPT code 68841 was reviewed. The recommended materials for CPT code 68841 state the standard equipment time formula will be typical for this service, which will be 5 minutes in this case (the CA013 and CA024 equipment times are included but not the CA035 equipment time). We proposed to refine the equipment time for the equipment item lane, screening (oph) (EL006) from 9 minutes to 5 minutes to match this change in equipment time and solicited additional comments from stakeholders regarding the RUC-recommended non-standard equipment time of 9 minutes. We do not agree that it would be typical for CPT code 68841 to require an additional 4 minutes of equipment time totaling 9 minutes.

Comment: Several commenters opposed the proposed work RVU of 0.49 for CPT code 68841, stating that the payment is too low and much lower than what they were paid under the temporary CPT category III code 0356T, when carrier-priced. Commenters suggested that CMS return to using the temporary CPT category III code 0356T and its same payments for CY 2022.

Response: Since CPT has established a category I code—CPT code 68841—to replace the temporary CPT category III code 0356T, this temporary code will be replaced by the new category I CPT code 68841, so maintaining payment for CPT category III code 0356T is not possible.

Comment: Commenters urged CMS to withdraw the proposed RUC-recommended value of 0.49 work RVUs for CPT code 68841 and offered a series of other possible CPT codes with higher work RVU values as crosswalks for CPT code 68841. Some commenters also asked that the 4 minutes of equipment time for the “lane, screening (oph)” (EL006) be restored to the total of 9 minutes. Another commenter thanked CMS for correcting the equipment time to 5 minutes.

Response: After reviewing the procedure itself, its intra-service time and the RUC-recommended work RVUs for this service, we believe that this work is appropriate and maintains a proper relativity to similar codes within the PFS. After considering all the suggestions from commenters and reviewing the RUC-recommended work RVUs with the RUC-recommended physician times for this CPT code, and re-examining the surveyed work RVU of 0.74 at the 25th percentile with 3 minutes of intraservice physician time and 11 minutes of total time, we are finalizing the work and PE inputs for CPT code 68841 as proposed.

(25) Transcutaneous Passive Implant-Temporal Bone (CPT Codes 69714, 69717, 69716, 69719, 69726, and 69727)

In October 2020, the CPT Editorial Panel deleted two codes used for mastoidectomy and replaced them with four new codes for magnetic transcutaneous attachment to external speech processor. The CPT Editorial Panel made additional revisions to differentiate implantation, removal, and replacement of the implants.

We proposed the RUC-recommended work RVU for all six of the codes in this family. We proposed a work RVU of 8.69 for CPT code 69714 ( Implantation, osseointegrated implant, skull; with percutaneous attachment to external speech processor ), a work RVU of 9.77 for CPT code 69716 ( Implantation, osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor ), a work RVU of 8.80 for CPT code 69717 ( Revision/replacement (including removal of existing device), osseointegrated implant, skull; with percutaneous attachment to external speech processor ), a work RVU of 9.77 for CPT code 69719 ( Revision/replacement (including removal of existing device), osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor ), a work RVU of 5.93 for CPT code 69726 ( Removal, osseointegrated implant, skull; with percutaneous attachment to external speech processor ), and a work RVU of 7.13 for CPT code 69727 ( Removal, osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor ).

For the direct PE inputs, we proposed to refine the clinical labor time for the “Post-operative visits (total time)” (CA039) activity from the RUC-recommended 108 minutes to 99 minutes for CPT codes 69714 and 69717. 99 minutes is the clinical labor time associated with one Level 2 postoperative office visit and two Level 3 postoperative office visits; we believe that the RUC inadvertently failed to update the clinical labor time associated with these postoperative office visits when CPT codes 69714 and 69717 were reviewed. We also proposed to refine the equipment time for all equipment items other than the basic instrument pack (EQ137) from 108 minutes to 99 minutes to match this change in clinical labor time.

Comment: Several commenters stated that they supported the proposed work RVUs for all six codes in the family. Commenters noted that the work RVUs recommended by the RUC were interim and updated work RVUs will be submitted following an upcoming RUC meeting.

Response: We appreciate the support for our proposed work RVUs; we will consider any future RUC recommendations when they are submitted.

Comment: Several commenters stated that they agreed with the direct PE refinements.

Response: We appreciate the support for our proposed direct PE refinements.

After consideration of the comments, we are finalizing the work RVUs and direct PE inputs as proposed for all six of the codes in the family.

(26) X-Rays at Surgery Add-On (CPT Code 74301)

The RUC recommended that CPT code 74301 ( Cholangiography and/or pancreatography; additional set intraoperative, radiological supervision and interpretation (List separately in addition to code for primary procedure) ) be deleted for October 2020. The specialty societies that typically bill for this service submitted a code change application to delete CPT code 74301 at the February 2020 CPT meeting. However, the specialty societies withdrew the deletion request after receiving feedback from the dominant provider of CPT code 74301 (general surgery), indicating the code is still necessary and should not be deleted. The RUC recommended to maintain the work RVU of 0.21 for CPT code 74301. The specialty societies did not resurvey CPT code 74301 due to its low utilization (2019 Medicare utilization = 63) and the difficulty of obtaining 30 survey responses from service providers with experience in the past 12 months. Since there was no survey done, there is no new information and the RUC recommended to maintain the current value. The work RVU suggested by the RUC is a reaffirmation of the current value.

We proposed the RUC-recommended work RVU of 0.21 for CPT code 74301. This is an add-on code with no direct PE inputs.

Comment: The commenters appreciated that CMS proposed the RUC-recommended work RVU for CPT code 74301.

Response: We thank the commenters for their support.

We are finalizing the proposed work RVU of 0.21 for CPT code 74301. We did not propose and we are not finalizing any direct PE inputs.

(27) Trabecular Bone Score (TBS) (CPT Codes 77089, 77090, 77091, and 77092)

We proposed the RUC-recommended work RVUs of 0.20 for CPT codes 77089 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk) and 77092 (Trabecular bone score (TBS), structural condition of the bone microarchitecture; using dual X-ray absorptiometry (DXA) or other imaging data on gray-scale variogram, calculation, with interpretation and report on fracture risk interpretation and report on fracture risk only, by other qualified health care professional ). CPT codes 77090 ( Trabecular bone score (TBS), structural condition of the bone microarchitecture; technical preparation and transmission of data for analysis to be performed elsewhere) and 77091 (Trabecular bone score (TBS), structural condition of the bone microarchitecture; technical calculation only ) are PE only codes; the RUC did not recommend and we did not propose a work RVU for these codes.

The RUC PE recommendations for CPT codes 77089 and 77091 include a new “TBS iNsight Software” supply input. The submitted invoice for this supply indicates that it is a licensing fee associated with the use of the software, which is not typically considered to be a form of direct PE under our methodology. Historically, we have considered most computer software and associated licensing fees to be indirect costs tied to associated costs for hardware considered to be medical equipment. However, as we noted in II.B of this final rule, stakeholders have routinely expressed concerns with this policy, especially for evolving technologies that rely primarily on software and licensing fees with minimal costs in equipment or hardware. Most of the recommended resource costs for CPT codes 77089 and 77091 are for this analysis fee and these costs are not well accommodated by the PE methodology since these sorts of technological applications did not exist when the data that underlie the PE allocation was last collected in 2007 through 2008.

Therefore, we proposed to value the PE for CPT codes 77089 and 77091 through the use of a crosswalk to a comparable service, CPT code 71101 ( Radiologic examination, ribs, unilateral; including posteroanterior chest, minimum of 3 views ), which, for CY 2021, had a PE RVU of 0.94. We proposed that the PE RVU for CPT code 77091 equals the PE RVU from code 77089 minus the PE RVU from codes 77090 and 77092 so that the three codes sum to the valuation of code 77089. (CPT code 77089 is the global code in this family and CPT codes 77090, 77091, and 77092 must sum together to equal the value of 77089.) CPT code 71101 is another type of bone imaging procedure that we believe reflects codes 77089 and 77091 similar direct PE resource costs as CPT codes 77089 and 77091. We recognize that the services being performed in this crosswalk code are not the same as the services in CPT codes 77089 and 77091, however; we believe that the direct resource costs will typically be analogous across these codes. We believe that this is the most accurate way to incorporate the costs of the software employed in CPT codes 77089 and 77091 which will not typically be considered direct PE under our current methodology. We solicited comments, both on the specific proposal for the Trabecular Bone Score codes, as well as our broader discussion of this topic in section B of this final rule.

Comment: Some commenters supported our proposed methodology of calculating PE RVU values for CPT codes 77089 and 77091 through the use of a crosswalk to CPT code 71101, stating that this is a reasonable interim solution until CMS' PE methodology is updated to better account for these technologies. Other commenters did not support our proposed approach, urging CMS to accept the RUC-recommended direct PE inputs for CPT codes 77089 and 77091, which include the TBS iNsight Software supply input. These commenters stated that the TBS iNsight Software is currently sold “per click” or per scan. The invoice submitted by the RUC depicts a TBS iNsight 1-year License and covers a total of 100 scans. The total unit price for the license is $2,500; therefore, the cost is estimated to be $25 per patient (or scan). As this is a single-use item used per patient encounter, the RUC included it as a direct expense supply item, not an equipment item, which is typically accounted for by minutes used. One commenter disagreed with our assertion that software costs would not typically be considered direct PE, as there are many codes including “software” direct inputs, and noted that CMS would therefore not be setting a precedent by potentially including software as a direct input in the work RVUs for CPT codes 77089 and 77091.

Response: We are finalizing as proposed the RUC-recommended work RVUs of 0.20 for CPT code 77089 and 77092, as well as direct PE inputs for CPT codes 77089 and 77091 based on a crosswalk approach to CPT code 71101. As we stated in the CY 2019 PFS final rule (83 FR 59557), we have considered most computer software and associated analysis and licensing fees to be indirect costs tied to costs for associated hardware that is considered to be medical equipment, and we continue to consider that to be the case for these CPT codes 77089 and 77091. We refer readers to section II.B of this final rule (the PE section) for a comprehensive discussion of our policy for accounting for computer software and associated licensing fees in the PE methodology.

(28) Pathology Clinical Consult (CPT Codes 80503, 80504, 80505, and 80506)

The Relativity Assessment Workgroup identified CPT code 80500 ( Clinical pathology consultation; limited, without review of patient's history and medical records ) via the CMS/Other source codes with the Medicare utilization over 20,000 screen. In October 2019, the RUC referred this issue to the CPT Editorial Panel to define this service more specifically as the current descriptor is vague. In October 2020, the CPT Editorial Panel replaced CPT codes 80500 and 80502 ( Clinical pathology consultation; comprehensive, for a complex diagnostic problem, with review of patient's history and medical record s) with four new codes, CPT codes 80503 ( Pathology clinical consultation; for a clinical problem with limited review of patient's history and medical records and straightforward medical decision making. When using time for code selection, 5-20 minutes of total time is spent on the date of the consultation. (For consultations involving the examination and evaluation of the patient, see 99241, 99242, 99243, 99244, 99245, 99251, 99252, 99253, 99254, 99255)), 80504 (for a moderately complex clinical problem, with review of patient's history and medical records and moderate level of medical decision making. When using time for code selection, 21-40 minutes of total time is spent on the date of the consultation), 80505 (for a highly complex clinical problem, with comprehensive review of patient's history and medical records and high level of medical decision making. When using time for code selection, 41-60 minutes of total time is spent on the date of the consultation), and 80506 (prolonged service, each additional 30 minutes (List separately in addition to code for primary procedure)(Use 80506 in conjunction with 80505)(Do not report 80503, 80504, 80505, 80506 in conjunction with 88321, 88323, 88325) (Prolonged pathology clinical consultation service of less than 15 additional minutes is not reported separately) (For consultations involving the examination and evaluation of the patient, see 99241-99255) ) to report pathology clinical consultation and creation of guidelines to select and document the appropriate level of service.

The RUC recommended a work RVU of 0.50 for CPT code 80503 based on the 25th percentile of the survey. The RUC-recommended 15 minutes of intraservice and total times for CPT code 80503 are 2 minutes above the current instraservice and total times for CPT code 80500. This represents a 15 percent increase in the respective times. However, the RUC-recommended work RVU of 0.50 is 35 percent higher than the current work RVU of 0.37 for CPT code 80500. We believe that the increase or decrease in times should be commensurate with the increase or decrease in the work RVU. Therefore, we proposed a work RVU of 0.43. This represents the ratio of total time between the current total time of CPT code 80500 and the proposed total time of CPT code 80503 (0.15) applied to the current value of CPT code 80500 (0.37 × 0.15 = 0.43).

We proposed the RUC-recommended work RVU of 0.91 without refinements for CPT code 80504.

The RUC recommended a work RVU of 1.80 for CPT code 80505 based on the 25th percentile of the survey. The current intraservice and total times for CPT code 80502 are 42 minutes. The RUC-recommended times for CPT code 80505 are 54 minutes. Similar to the scenario described above for CPT code 80503, the intraservice and total times for CPT code 80505 increased 28.6 percent while the work RVU increased 35 percent. As stated above, we believe the increase or decrease in time should be commensurate with the increase or decrease in the work RVU. Therefore, for CPT code 80505 we proposed a work RVU of 1.71, which is the current total time ratio of CPT code 80502 compared to the RUC-recommended total time for CPT code 80505.

We proposed the RUC-recommended work RVU of 0.80 for CPT code 80506 without refinement.

For the direct PE inputs of CPT codes 80503, 80504, and 80505, we proposed to refine the time associated with the clinical labor activity PA001 (Accession and enter information) from the RUC-recommended time of 4 minutes to 0 minutes as we believe the time is duplicative with clinical labor activity PA008 (File specimen, supplies, and other materials).

The RUC recommended 15, 30, 54, and 30 minutes of equipment time for EP024 (microscope, compound) for CPT codes 80503, 80504, 80505, and 80506, respectively. We note that there is no indication from the code descriptors that the pathologist is reviewing physical slides. The code descriptor and description of work indicate that the pathologist is reviewing paper records and/or electronic health record (EHR), and therefore, we proposed to remove the equipment time associated with EP024 (microscope, compound) from CPT codes 80503, 80504, 80505, and 80506.

Additionally, the proposed Levels of Decision Making for Table for Pathology Clinical Consult codes includes “Assessment requiring an independent historian(s)” as an element of “Amount and/or Complexity of Data to be Reviewed and Analyzed *—Each unique test, order, or document contributes to the combination of 2 or combination of 3 in Category 1 below.” Neither the code descriptors nor the descriptions of work indicate that this type of assessment is typical in a pathology clinical consult as was discussed for the office visit Levels of Decision Making table. For these reasons, CMS proposes that this element not be included as an element that we will recognize as an element of medical decision making. We note that CMS will monitor the use of these replacement codes per our usual practice to ensure appropriate billing and inform future rulemaking as needed. We also solicited comments on how these replacement codes will most typically be billed relative to use of existing pathology coding. Such information will also inform future rulemaking as needed.

Comment: A commenter urged CMS to accept the RUC-recommended work RVU of 0.50 for 80503 and 1.80 for 80505. The commenter stated CMS' use of a total time ratios to value 80503 and 80505 was flawed as the predecessor code 80500 was deleted and split out into three base codes and one add-on code with different reporting requirements. The commenter stated CMS should not compare the time of 80503 to the deleted code 80500 because the code descriptor for 80503, in contrast to 80500, includes the review of patient's history and medical records. The commenter also noted that the descriptor for 80502 described a clinical pathology consultation for a “complex diagnostic problem”, whereas new code 80505 describes a “highly complex clinical problem”.

Response: In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalk to key reference or similar codes, and magnitude estimation. As we have previously stated, section 1848(c)(1)(A) of the Act requires CMS to consider time and intensity when developing work RVUs. Therefore, we believe it is appropriate to compare CPT code 80503 to CPT code 80500 and CPT code 80505 to code 80502, which CPT code 80505 replaced, as the PFS is a relative value system. We continue to believe that the increases or decreases in work times should be commensurate with the increase or decrease in the work RVU, which is why we proposed a work RVU of 0.43 for CPT code 80503 and a work RVU of 1.71 for CPT code 80505 based on the time methodology detailed above.

Comment: Several commenters disagreed with the proposal to remove the equipment time associated with EP024 (microscope, compound) from CPT codes 80503, 80504, 80505, and 80506. Commenters noted that the RUC's Summary of Recommendation (SOR) states that a patient's medical record is reviewed focusing on recent and relevant remote clinical and diagnostic findings and all applicable diagnostic material, slides, primary analytical data are retrieved/unarchived for the pathologist's examination and review. Commenters stated it is typical for a consulting pathologist performing CPT codes 80503-80506 to review all relevant information about the patient that is available, and a physical component of the patient material within the case review is the patient's specimen slides. Commenters stated that these slides are typically reviewed on a high grade professional microscope at the pathologist's workstation and during the service, the microscope itself is not available for other personnel to use on other patients, as the pathologist may review the slides multiple times during the service. Commenters stated that the RUC understood that pathologists require a microscope to perform this and numerous other pathology related professional services which is why the RUC included equipment time for the EP024 compound microscope in its recommendations. Therefore, commenters urged CMS to accept and implement the RUC-recommended times of 15, 30, 54, and 30 minutes of equipment time for EP024 (microscope, compound) for CPT codes 80503, 80504, 80505, and 80506.

Response: We appreciate the additional information provided by commenters. We found the affirmation from commenters that pathologists typically review the patient's specimen slides compelling, and we agree that the use of the EP024 microscope would be typical for these codes based on this additional information. Therefore, we are finalizing a policy to restore the RUC-recommended times of 15, 30, 54, and 30 minutes of equipment time for EP024 (microscope, compound) for CPT codes 80503, 80504, 80505, and 80506.

Comment: Commenters urged CMS to accept and implement the RUC-recommended time of 4 minutes for clinical labor activity PA001 for CPT codes 80503, 80504, and 80505. Commenters stated for these services, accessioning and entering information on the patient case is a preservice clinical labor task that is not duplicative with the post service work of filing specimen slides, filing reports and all relevant patient information retrieved for the pathologist to review. The preservice clinical labor work here involves the careful documentation of the connection between the requesting physician and the pathologist onto a worksheet or accession form. The form is used to transcribe the request for consult, the primary complaint, patient encounter, and other related information so that it becomes part of the patient's EHR. This is one of the first steps of the complete service.

Response: We thank commenters for the additional information. However, we believe the majority of the accessioning tasks performed in the PA001 activity constitute forms of indirect PE. Although we agree that the unique nature of pathology and laboratory services can make comparisons across codes more difficult than for other services, we believe the comparison of similar clinical labor activities across different services is important to maintaining the relativity of the direct PE inputs. As we stated in the CY 2017 PFS final rule (81 FR 80324), we agree with the commenters that patient documentation and entering patient data into information systems is an important task, and we agree that these would take more than zero minutes to perform. However, we continue to believe that these activities are correctly categorized as indirect PE as administrative functions, and therefore, we do not recognize the entry of patient data as direct PE inputs, and we do not consider this task as typically performed by clinical labor on a per-service basis. While we do not agree that the data entry tasks described in this activity would constitute direct PE, we note that the recommended materials for these codes state that multiple existing forms of data will need to be identified and incorporated into this accession. We believe that these interpretive tasks do constitute a form of direct PE as they are individually allocable to a particular patient for a particular service. Therefore, we are finalizing 1 minute of clinical labor activity associated with PA001 for CPT codes 80503, 80504, and 80505 to capture the labor performed in these interpretive tasks. We note that we have also previously finalized 1 minute for the PA001 clinical labor activity in other pathology services such as CPT codes 88360 and 88361.

For CY 2022, we are finalizing the work RVUs of 0.43, 0.91, 1.71, and 0.80 for 80503, 80504, 80505, and 80506 as proposed. For the direct PE, we are finalizing a policy to restore the RUC-recommended times of 15, 30, 54, and 30 minutes of equipment time for EP024 (microscope, compound) for CPT codes 80503, 80504, 80505, and 80506 and 1 minute of clinical labor activity associated with PA001 for CPT codes 80503, 80504, and 80505 to capture the labor performed in these interpretive tasks.

We reiterate that CMS will monitor the use of these replacement codes per our usual practice to ensure appropriate billing and inform future rulemaking as needed. We continue to look for stakeholder input on how these replacement codes will most typically be billed relative to use of existing pathology coding. Such information will also inform future rulemaking as needed.

(29) Revaluing End-Stage Renal Disease (ESRD) Monthly Capitation Payment Services (MCP) (CPT Code 90954)

In the CY 2021 PFS final rule (85 FR 84551 through 84554), we revalued most, but not all, of the ESRD MCP services. We finalized an increase in valuations for those ESRD MCP codes with values tied to the values of Outpatient/Office Evaluation and Management (O/O E/M) codes. We did not revalue CPT code 90954 ( End-stage renal disease (ESRD) related services monthly, for patients 2-11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 4 or more face-to-face visits by a physician or other qualified health care professional per month ) because it was originally valued by a crosswalk.

Stakeholders stated that CPT code 90954 was different from the other ESRD MCP codes. Rather than using an O/O E/M code building block methodology as had been used originally to value the other ESRD MCP codes, CPT code 90954 was valued based upon a crosswalk to CPT code 99293 ( Inpatient pediatric critical care provided for children age 29 days through 24 months old, per day ). When CPT code 99293 was deleted, the value of CPT code 90954 was crosswalked to a replacement code, CPT code 99471 ( Initial inpatient pediatric critical care, per day, for the evaluation and management of a critically ill infant or young child, 29 days through 24 months of age ). By crosswalking CPT code 90954 to CPT code 99471, the rank order across the ESRD MCP code family at that time was preserved.

Since we finalized the revalued ESRD MCP values for CY 2021, stakeholders have requested that we revalue CPT code 90954 because by not updating it, we created a rank order anomaly for work RVUs and time within the ESRD MCP code family. A stakeholder suggested that we address the rank order anomaly by revaluing CPT code 90954 based upon a new crosswalk to CPT code 33977 ( Removal of a ventricular assist device; extracorporeal, single ventricle ). The stakeholder stated that CPT code 33977 more appropriately represented the time and effort of the service provided over one month than the existing crosswalk to CPT code 99471 relative to the revalued services within the MCP code family.

In response to stakeholder requests to update the value of CPT code 90954, we proposed to increase the value of CPT code 90954, a global code with a current work RVU of 15.98, by crosswalking it to CPT code 33977, a 090 day procedural code with a work RVU of 20.86 to preserve relativity within the ESRD MCP family. We also solicited comments on our proposal to increase the value of CPT code 90954.

Comment: A few commenters supported our proposal to increase the value of the ESRD MCP CPT code 90954.

Response: We appreciate the support of the commenters.

Comment: One commenter stated that it was unfair and inconsistent to increase the value of CPT code 90954 in order to eliminate a rank order anomaly that resulted from our having revalued the other ESRD MCP codes in the CY 2021 PFS final rule. The commenter noted that as a global code, CPT code 90954 was initially valued based upon magnitude estimation with additional negotiations at the RUC. The commenter concluded that all the global codes should thus be revalued using the same methodology.

Response: We understand that some commenters disagree with our revaluation of CPT code 90954. We maintain that revaluing CPT code 90954 was important to maintaining rank order within the ESRD MCP family. The code identifies ESRD services for our youngest beneficiaries, infants and toddlers diagnosed with ESRD. We note that CPT code 90954 is not a global code. Nevertheless, we concur with the commenter that the group of global codes demands further review and possibly revaluation in the future as we come to better understand the nature of the services furnished during global periods.

In response to the majority of commenters and because of our desire to eliminate a rank order anomaly, we are finalizing our proposal to increase the value of CPT code 90954 to a work RVU of 20.86 in order to preserve relativity within the ESRD MCP family. In future rules, we will likely revisit the valuing of global codes.

(30) Colon Capsule Endoscopy (CPT Codes 91110, 91111, and 91113)

In October 2020, the CPT Editorial Panel replaced Category III code 0355T ( Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), colon, with interpretation and report) with a new Category I code 91113 (Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), colon, with interpretation and report ) to report gastrointestinal tract imaging. CPT codes 91110 ( Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), esophagus through ileum, with interpretation and report ) and 91111 ( Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), esophagus with interpretation and report ) were added as part of the family and surveyed for the January 2021 RUC meeting.

We proposed the RUC-recommended work RVU for two of the codes in this family. We proposed a work RVU of 2.24 for CPT code 91110 and a work RVU of 2.41 for CPT code 91113 as recommended by the RUC in both cases. For CPT code 91111, we disagree with the RUC-recommended work RVU of 1.00 and we proposed a work RVU of 0.90 based on a crosswalk to CPT code 95923 ( Testing of autonomic nervous system function; sudomotor, including 1 or more of the following: quantitative sudomotor axon reflex test (QSART), silastic sweat imprint, thermoregulatory sweat test, and changes in sympathetic skin potential ). CPT code 95923 is an autonomic nervous system testing procedure that shares the identical intraservice work time of 15 minutes with CPT code 91111 and has 5 additional minutes of immediate postservice work time. When we reviewed CPT code 91111, we noted that the surveyed intraservice work time had decreased by 3 minutes, from 18 minutes to 15 minutes, while the RUC recommended maintaining the current work RVU of 1.00. Although we do not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in the valuation of work RVUs, we believe that since the two components of work are time and intensity, decreases in time should typically be reflected in decreases to work RVUs. In the case of CPT code 91111, we believe that it will be more accurate to propose a work RVU of 0.90 based on a crosswalk to CPT code 95923 to account for these decreases in the surveyed work time.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from the RUC-recommended 9 minutes to 6 minutes for CPT code 91111. The recommended materials for this code family state that the 6 minutes for the CA016 activity are used to connect the equipment, fit belt to patient, put data recorder on patient, and sync capsule to each sensor on belt. This description of this clinical labor activity is identical for CPT codes 91110 and 91113 and each code has the same recommended time of 6 minutes. However, the recommended materials for CPT code 91111 state that 6 minutes are used to connect the equipment, fit belt, put data recorder on patient, sync capsule to each sensor and then an additional 3 minutes are used to position the patient (assist patient onto table lying down on right side and then into a sitting position after the capsule is swallowed). We do not agree that it will be typical for CPT code 91111 to require an additional 3 minutes for positioning as compared with the other codes in the family, particularly in light of the clinical similarities between these services. We are refining the clinical labor time to 6 minutes for CPT code 91111 to maintain relativity within the family.

We also proposed to refine the equipment time for the capsule endoscopy recorder kit (EQ146) from 64 minutes to 61 minutes and the exam table (EF023) from 44 minutes to 41 minutes to match this change in clinical labor time for CPT code 91111.

Comment: A commenter disagreed that the work time had decreased for CPT code 91111. The commenter stated that although there was a minor reduction in intra-service time, the total time reported by the survey takers was 7 minutes greater than the current total time even though this time was ultimately not added to pre- and post-service time. Therefore, the commenter stated that in practice CPT code 91111 does not take less total time than in the past.

Response: We disagree with the commenter that the work time for CPT code 91111 has not decreased. The survey showed a decrease of 3 minutes in the intra-service work time from 18 minutes to 15 minutes and the RUC recommended maintaining the same pre-service and post-service work time of 5 minutes. The RUC routinely makes adjustments to pre-service and post-service surveyed work times in its recommendations as it did here for CPT code 91111. We agree with the RUC that the typical pre-service and post-service work time has not increased for CPT code 91111 which results in an overall decrease for the code.

Comment: Several commenters disagreed with the CMS proposed work RVU of 0.90 for CPT code 91111 and stated that CMS should instead finalize the RUC-recommended work RVU of 1.00. Commenters disagreed with the CMS crosswalk to CPT code 95923 and stated that although there was a decrease in surveyed work time for CPT code 91111, the intensity level required to perform the service has stayed the same. Commenters stated that the decrease of 3 minutes of work time for CPT code 91111 may be due to efficiencies in the healthcare setting, not with the overall complexity of delivering the service. Commenters stated that the intra-service time, intensity level, and RUC-recommended RVU of 1.00 properly fell within a relative range compared to similar codes. Commenters compared the work of CPT code 91111 to CPT codes 70470 ( Computed tomography, head or brain; without contrast material, followed by contrast material(s) and further sections ) and 76391 ( Magnetic resonance (e.g., vibration) elastography) and 95819 (Electroencephalogram (EEG); including recording awake and asleep ) to support their belief that the intensity relativity is appropriate and that the recommended current work value of 1.00 placed the survey code well within the relativity of the family.

Response: We disagree with the commenters and continue to believe that the proposed work RVU of 0.90 is a more accurate choice for CPT code 91111. As we stated in the proposed rule, since the two components of work are time and intensity, decreases in time should typically be reflected in decreases to work RVUs. The survey for CPT code 91111 found that the typical intraservice time required to perform the procedure had decreased by 3 minutes and we believe that this decrease in work time should be reflected in the work RVU. Even if the decrease in work time was due to greater efficiencies in delivering the service, this decrease in work time should be reflected in the work RVU for the service in question.

We do not agree with commenters that there has been a corresponding increase in intensity for CPT code 91111 which would justify maintaining the work RVU at 1.00 despite this surveyed decrease in work time. The CPT Editorial Panel did not revise the code descriptor for CPT code 91111 and both the survey vignette and the clinical description of work remain unchanged for CY 2022. Our proposed work RVU of 0.90 maintains the current intensity of the procedure, and we also note that the intensity of this procedure would be noticeably higher than the rest of the code family at the recommended work RVU of 1.00 which we do not believe would serve the interests of relativity. We also note that our proposed work RVU of 0.90 does reflect a small increase in the intensity of this service as compared to its previous intensity.

We also disagree that the work RVU of CPT codes 70470, 76391, or 95819 would be more appropriate comparisons for CPT code 91111. All of these procedures have similar work times but employ more complex forms of imaging such as CT imaging or magnetic resonance imaging. For example, CPT code 76391 makes use of an MR room (EL008) equipment item with a cost over $1.5 million in comparison to the capsule endoscopy video system (ES029) used in CPT code 91111 which costs approximately $10,000. While we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another, we believe that CPT code 95923 is a more accurate crosswalk for CPT code 91111.

Comment: Several commenters disagreed with the CMS proposal to refine the clinical labor time for the “Prepare, set-up and start IV, initial positioning and monitoring of patient” (CA016) activity from the RUC-recommended 9 minutes to 6 minutes for CPT code 91111. Commenters stated that there had been a detailed accounting of time for clinical labor activities included with the recommended materials for the code family. Commenters stated that for capsule endoscopy of the esophagus (CPT code 91111), clinical staff position the patient on the bed with a pillow (6 cm or 2.5 inches high) under the head to facilitate drinking and ingestion. The patient is typically assisted from supine to the left side to delay capsule transit across the gastroesophageal junction and then into a sitting position after the capsule is swallowed. Commenters stated that capsule endoscopy of the gastrointestinal tract (CPT code 91110) and colon (CPT code 91113) do not require these additional steps for positioning, as noted in the recommended materials.

Response: We appreciate the additional information provided by the commenters clarifying the clinical labor tasks taking place during the CA016 activity for CPT code 91111. The commenters explained that for CPT code 91111 the patient is typically assisted from supine to the left side to delay capsule transit across the gastroesophageal junction and then into a sitting position after the capsule is swallowed, which justifies the additional 3 minutes of clinical labor time recommended by the RUC. We are therefore not finalizing our proposed refinement to the clinical labor time and will instead finalize the RUC-recommended time of 9 minutes for this activity. We are correspondingly also not finalizing our proposed refinements the equipment time for the capsule endoscopy recorder kit (EQ146) and the exam table (EF023) for CPT code 91111; we are finalizing the RUC-recommended equipment time of 64 minutes and 44 minutes respectively.

After consideration of the comments, we are finalizing our proposed work RVUs for all three codes in the family. We are not finalizing our proposed direct PE refinements and are instead finalizing the RUC-recommended direct PE inputs for all three codes.

(31) External Cardiovascular Device Monitoring (CPT Codes 93228 and 93229)

For CPT code 93228 ( External mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ECG data storage (retrievable with query) with ECG triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; review and interpretation with report by a physician or other qualified health care professional ), we disagreed with the RUC-recommended work RVU of 0.52, and we proposed a work RVU of 0.43. The proposed work RVU is based on an intraservice time ratio between the current and RUC-recommended intraservice times for CPT code 93228 ((10 minutes/12 minutes)*0.52), yielding a work RVU of 0.43. This proposed work RVU reflects the decrease in total time and is a direct work RVU crosswalk to CPT code 93290 ( Interrogation device evaluation (in person) with analysis, review and report by a physician or other qualified health care professional, includes connection, recording and disconnection per patient encounter; implantable cardiovascular physiologic monitor system, including analysis of 1 or more recorded physiologic cardiovascular data elements from all internal and external sensors ). CPT code 93290 has the same pre-, intra-, and postservice times as the survey times for CPT code 93228 and was reviewed in October 2016. While we recognize that the number of ECG tracings and daily reports have increased because of the increase in average wear time from 14 days to 20 days, the specialty societies and the RUC contend that this is offset by technology advancements, integrations with EHRs, and online portals that make it easier to manage and review the data in a chronological and efficient manner. Therefore, we proposed a work RVU that accounts for decrease in total time to provide this service, given that the increased tracings and daily reports are offset by the efficiencies gained by technological advancements.

The RUC recommended 10 minutes for “Provide education/obtain consent” (CA011) for CPT code 93228, based on a direct crosswalk and duplication of CPT code 93229 ( External mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ECG data storage (retrievable with query) with ECG triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; review and interpretation with report by a physician or other qualified health care professional ). We disagree with the RUC-recommended duplication of clinical labor to provide education that the patient will hear for a second time from the IDTF technician. While we understand that the duplication is by design, we do not agree with a direct crosswalk from CPT code 93229, because the provider of CPT code 93229 will likely have more in-depth education, specific to the patient, including materials and instructions for the patient to review. Therefore, we proposed the standard 2 minutes for CA011 in the non-facility for CPT code 93228.

The RUC recommended the addition of 24 minutes for quality assurance “overread” done by a second, senior technician, Clinical Activity Code CA021, Line 67 on the RUC-recommended PE Spreadsheet, for CPT code 93229. This is a new clinical activity for CPT code 93228, and we solicited public comments about the typicality of a second senior technician. We requested additional information about the IDTF's current quality assurance measures and parameters within the ECG recording program that should act as some degree of quality assurance. We also solicited additional information from IDTFs about the current error rate for improperly transmitted tracings to the physician that would indicate that it is typical for a second, senior technician to perform “overread.” We proposed 0 minutes for Clinical Activity Code CA021, Line 67 on the RUC-recommended PE Spreadsheet, unless commenters could provide compelling information that a second, senior technician typically performs quality assurance measures. Otherwise, we agree with the RUC-recommended direct PE inputs and proposed the refinements as recommended.

In addition to the proposed work RVU and direct PE input refinements, we requested additional information about the acquisition costs for equipment item EQ340 Patient Worn Telemetry System. Due to the proprietary nature of this equipment, invoices were unattainable to update this equipment item. Substantial technological improvements have been made to these devices since the last update in 2008, but they are proprietary devices, owned and manufactured for each IDTF. We solicited public comments on the manufacturing costs and other information to help update the equipment item for CY 2022. Second, we requested additional information about the useful lifetime of EQ340. We currently assign 3 years of useful life to EQ340, but the RUC notes that this is the only equipment item and CPT code 93228 is the only CPT code with an equipment item that has more than 500 minutes of equipment time and a useful life of 3 years or less. We solicited public comments to help update the useful life of EQ340, as it has not been updated since 2008, and the device has experienced significant technological changes.

Comment: Commenters disagreed with our use of the intraservice time ratio to value CPT code 93228, claiming it disproportionately decreased the work RVU by 17 percent, whereas the total time only decreased by 8 percent. Commenters also disagreed with the choice of reference CPT code 93920, stating that CPT code 93920 is often performed parallel to a separately reported pacemaker interrogation and wearable defibrillator interrogation service, thus making it less intense than CPT code 93229, which is usually performed without any separately reported services. Commenters stated that treating all components of physician time (preservice, intraservice, postservice and post-operative visits) as having identical intensity is incorrect, and inconsistently applying it to only certain services under review creates inherent payment disparities in a payment system, which is based on relative valuation. Commenters stated that in many scenarios, CMS selects an arbitrary combination of inputs to apply rather than seeking a valid clinically relevant relationship that would preserve relativity. Commenters suggested that CMS determine the work valuation for each code based not only on surveyed work times, but also the intensity and complexity of the service and relativity to other similar services, rather than basing the work value entirely on time.

Response: We disagree and continue to believe that the use of time ratios is one of several appropriate methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values recommended by the RUC and other commenters do not account for information provided by surveys that suggests the intensity has not changed or the amount of time involved in furnishing the service has changed. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values reveals that changes in time have been unaccounted for in a recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. Given the well-established assertion in the RUC recommendations that the increased tracings and daily reports from the increased average wear time (from 14 to 20 days) is offset by the fact that the technology has advanced to make it easier to manage and review the data, resulting in a net zero change in intensity, we are obligated to account for the change in time. We also clarify for the commenters that our review process is not arbitrary in nature. Our reviews of recommended work RVUs and time inputs generally include, but have not been limited to, a review of information provided by the RUC, the HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). With regard to the invocation of clinically relevant relationships by the commenters, we emphasize that we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk.

Comment: Some commenters stated that the proposed work RVU for CPT code 93228 would result in an intensity that is dramatically lower than the intensity assigned to a level 1 established patient office visit, CPT code 99211 (Office or other outpatient visit for the evaluation and management of an established patient, that may not require the presence of a physician or other qualified health care professional. Usually, the presenting problem(s) are minimal.), which does not require the presence of a physician or other qualified healthcare professional.

Response: The RUC-recommended work RVU of 0.52 also assigns CPT code 93228 a lower intensity than code CPT code 99211; therefore, we do not agree that the proposed work RVU for CPT code 93228 would create a rank order anomaly. We agree with the RUC that CPT code 93228 is more accurately valued at a lower intensity than CPT code 99211. We also agree with the RUC that CPT code 93228 should have a lower intensity than key reference CPT codes 93298 (Interrogation device evaluation(s), (remote) up to 30 days; subcutaneous cardiac rhythm monitor system, including analysis of recorded heart rhythm data, analysis, review(s) and report(s) by a physician or other qualified health care professional) and 93015 (Cardiovascular stress test using maximal or submaximal treadmill or bicycle exercise, continuous electrocardiographic monitoring, and/or pharmacological stress; with supervision, interpretation and report) from the survey.

Comment: One commenter stated that while technology has advanced to negate some low intensity work, making review and management of data more efficient, the RUC-recommended RVU for CPT code 93228 accurately reflects the average wear time increasing from 14 to 20 days, the number of ECG tracings, and the increased daily reports.

Response: We agree with the initial statements in the RUC recommendations, such as that increased tracings and daily reports from the increased average wear time from 14 to 20 days are offset by the fact that the technology has advanced to make it easier to manage and review the data. The RUC and specialty societies stated that technology has advanced to make it easier to manage and review the data, which accounts for the reduced intra-service time. The interface for physician interaction with the reports has moved from primarily a fax and paper-based system, which resulted in large amounts of paper reports, to more streamlined digital reports with better organized and more easily accessible data. The number of episodes that the physician reviews and adjudicates have increased due to the increased wear time but the RUC agreed that the increased amount of data and the efficiency gained in reviewing that data directly offset each other. This supports the assertion that intensity of the service has not changed, given the offset discussed in the RUC recommendations. We believe the offset yields a net zero change in intensity, which is supported by the RUC and specialty societies' statements in the recommendations.

After consideration of public comments, we are finalizing a work RVU of 0.48 for CPT code 93228 based on a total time ratio between the current and RUC-recommended total times for CPT code 93228 ((23 minutes/25 minutes)*0.52). The finalized work RVU addresses commenters' concerns that the proposed work RVU was disproportionately decreased compared to the decrease in total time. The finalized work RVU also maintains the same intensity, which is supported by the statements in the RUC's recommendations that the increased amount of data and the efficiency gained in reviewing that data offset each other, yielding a net zero change in intensity. Based on this well-established assertion in the RUC recommendations, we believe it is appropriate to maintain the same intensity.

Comment: One commenter expressed concern with the proposed standard 2 minutes for “Provide education/obtain consent” (CA011) in the non-facility for CPT code 93228, and recommended a crosswalk of 5 minutes for this activity, similar to extended external ECG recording codes 93225, 93242, and 93246. The commenter stated that they believe the standard 2 minutes would be inadequate for clinical staff to explain next steps with the IDTF, to obtain the monitor, explain the goals and use of the device, and answer technology questions asked by this elderly population.

Response: The RUC recommended 10 minutes for “Provide education/obtain consent” (CA011) for CPT code 93228 based on a direct crosswalk and duplication of CPT code 93229. We continue to disagree with the RUC-recommended duplication of clinical labor because the patient will hear the same information from the IDTF technician and the provider of CPT code 93229 will likely have more in-depth education, specific to the patient, including materials and instructions for the patient to review. We are compelled by the additional information provided by the commenter and the provision of 5 minutes of clinal staff time to provide education and obtain consent (CA011) in some external extended ECG codes, particularly for CPT code 93224 ( External electrocardiographic recording up to 48 hours by continuous rhythm recording and storage; includes recording, scanning analysis with report, review and interpretation by a physician or other qualified health care professional ), as this is a code for review and interpretation by a physician or qualified healthcare professional similar to CPT code 93228.

After consideration of public comments, we are finalizing 5 minutes for CA011 in the non-facility for CPT code 93228 based on a crosswalk to the extended external ECG recording codes.

Comment: Commenters reiterated that the recommendation of the addition of 24 minutes for quality assurance “overread” done by a second, senior technician, Clinical Activity Code CA021, Line 67 on the RUC-recommended PE Spreadsheet, for CPT code 93229 was based on two separate training/process documents that specifically discuss the role of a “Senior Monitoring Technician” and the typicality of this clinical labor activity. Commenters also corroborated the assertion in the Moran materials that a senior technician is contacted when the initial read of the transmitted data is unable to confirm the accuracy of the arrhythmias detected by the software algorithms. One commenter stated that an “overread” by a senior technician occurs for well over 50 percent of the services provided and that on average, the second “read” takes approximately 25 minutes of clinical staff time. The commenter gave the following two examples of when a second “read” is necessary: (1) There is enough motion artifact to interfere with the algorithm's ability to definitively identify arrhythmias; and (2) the occurrence of a complex arrhythmia that was not properly identified by the algorithm or the initial reviewer is high.

Response: We appreciate the additional information provided by the commenters. After consideration of the public comments, we agree with the commenters and are finalizing the RUC-recommended 24 minutes for CA021 for CPT code 93229.

Comment: In response to the request for additional information about the acquisition costs and useful life of equipment item EQ340 Patient Worn Telemetry System, commenters reiterated the uniqueness of mobile cardiac telemetry (MCT) and agreed that invoices were unattainable because the companies that furnish MCT manufacture their own devices and systems, so the equipment is not bought or sold in the marketplace. Commenters disagreed with the RUC's assertion that EQ340 has not been evaluated since 2008 and reiterated that the price was adjusted in the 2019 PFS final rule (83 FR 59478). Commenters opined that EQ340 has a relatively short life-span because it is worn continuously for several weeks, resulting in a high degree of wear, tear, damage, and loss. Commenters urged CMS to retain its current pricing and useful life for EQ340. One commenter urged consideration of the granularity of equipment input in comparison to other patient worn cardiac device monitoring systems. Other comments disagreed with the recommendation to consider granularity given the uniqueness of CPT code 93228.

Response: We believe that the additional information supplied by commenters reinforces that the current pricing and useful life of the EQ340 equipment item are accurate. We are maintaining the current price of $23,494 and useful life of 3 years for the EQ340 equipment item.

After consideration of the public comments, we are finalizing a work RVU of 0.48 for CPT code 93228, which is an increase from our proposed work RVU of 0.43. We are finalizing a clinical labor time of 5 minutes for the CA011 activity for CPT code 93228, an increase from our proposed clinical labor time of 2 minutes for this activity. We are finalizing the RUC-recommended direct PE inputs for CPT code 93229 without refinement.

(32) Electrophysiologic Evaluation (CPT Code 93621)

In October 2019, the RUC identified CPT code 93621 ( Comprehensive electrophysiologic evaluation including insertion and repositioning of multiple electrode catheters with induction or attempted induction of arrhythmia; with left atrial pacing and recording from coronary sinus or left atrium (List separately in addition to code for primary procedure ) as a high-growth service. It is an add-on code that can be used with several different procedures—base codes or other add-on codes, diagnostic, as well as therapeutic. CPT code 93621 is furnished in the facility only and thus has no direct PE inputs.

We disagree with the RUC-recommended work RVU of 1.75 based on a crosswalk to CPT code 36483 ( Endovenous ablation therapy of incompetent vein, extremity, by transcatheter delivery of a chemical adhesive (e.g., cyanoacrylate) remote from the access site, inclusive of all imaging guidance and monitoring, percutaneous; subsequent vein(s) treated in a single extremity, each through separate access sites (List separately in addition to code for primary procedure ). We proposed a work RVU of 1.50 based on a crosswalk to CPT code 16036 ( Escharotomy; each additional incision ). CPT code 16036 is also an add-on code for a surgical incision that shares both an identical intraservice work time and a total time of 20 minutes with CPT code 93621. While the RUC's recommended crosswalk code also has 20 minutes of intraservice and total time, CPT code 36483 is more intense than CPT code 93621, whereas CPT code 16036 has a similar level of intensity as CPT code 93621.

The RUC did not recommend and we did not propose any direct PE inputs for CPT code 93621.

Comment: Several commenters disagreed with the CMS proposed work RVU of 1.50 for CPT code 93621 and stated that CMS should instead finalize the RUC-recommended work RVU of 1.75. Commenters stated that the crosswalk to CPT code 36483 that the RUC recommended was based on discussions among the RUC reviewers and accounted for similarities between services that both rely upon catheters to execute complex maneuvers inside the cardiovascular system. Commenters stated that the proposed crosswalk was problematic because CPT code 16036 is completely different from cardiac procedures and can be billed multiple times. Commenters stated that the RUC-recommended crosswalk code (CPT code 36483) is a cardiovascular procedure and carries similar intensity of work to CPT code 93621.

Response: We disagree with the commenters that the RUC's recommended crosswalk to CPT code 36483 is a more accurate choice than our proposed crosswalk to CPT code 16036. We note that all three of the codes in question share the identical intraservice and total work time of 20 minutes, and therefore, differ only in their work RVUs and intensities. Commenters largely objected to the use of CPT code 16036 as a crosswalk code because it is an escharotomy procedure instead of a cardiovascular procedure. However, we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, utilization level, or (in this case) number of times billable per day to serve as an appropriate crosswalk.

We disagree that CPT code 36483 at a work RVU of 1.75 was the most accurate choice to use as a crosswalk for CPT code 93621; though this was the RUC's recommended work RVU, using it would have resulted in a substantial increase in intensity for CPT code 93621. We note that the CPT Editorial Panel did not revise the code descriptor for CPT code 93621 and the two surveys conducted on this code (at the 2020 April and October RUC meetings) both indicated that the work time had decreased from 30 minutes to 20 minutes. While we recognize that there have been several changes in technique since CPT code 93621 was last surveyed in 2001, we do not agree that these changes have resulted in a substantial increase in the intensity of the service, especially given that the work time typically required to perform the service has fallen by a third. We were also concerned that the intensity for add-on CPT code 93621 would potentially be higher than the base codes that it is reported with. Although we agree that this can occur in some rare cases, we continue to believe that it is more accurate to value CPT code 93621 at a work RVU of 1.50. Our proposed valuation represents a modest increase in intensity rather than the large increase in intensity resulting from the recommended work RVU of 1.75, which we believe more accurately captures the typical case for this service.

After consideration of the comments, we are finalizing the proposed work RVU of 1.50 for CPT code 93621. The RUC did not recommend and we are not finalizing any direct PE inputs for CPT code 93621.

(33) Cardiac Ablation Services Bundling (CPT Codes 93653, 93654, 93655, 93656, and 93657)

The technologies and clinical practices associated with Cardiac Ablation Services have changed enough over the past decade (since 2011 when they were first developed) that the specialty societies recommended referring theses codes to CPT Editorial Panel to have the code descriptors for Cardiac Ablation Services updated to create new and more complete descriptors reflecting the fact that many of these services are commonly performed together and should be incorporated and bundled. In October 2020, the CPT Editorial Panel revised the three existing cardiac ablation codes to be bundled with 3D mapping and to include “induction or attempted induction of an arrhythmia with right atrial pacing and recording, and catheter ablation of arrhythmogenic focus,” and “left atrial pacing and recording from coronary sinus or left atrium” and “intracardiac echocardiography including imaging supervision and interpretation” into their descriptors.

A survey of the Cardiac Ablation Services was sent out using the newly revised CPT code descriptors asking cardiac electrophysiologists about the revised language in the existing CPT codes. From the survey results, the RUC advisory committee believes that many of the survey respondents may not have realized that the code descriptors had been substantially revised and that they may not have read the updated code descriptors thoroughly enough to understand that services that are separately billed, were now combined into the existing codes (since CPT did not issue new codes for the revised descriptors). The RUC recommended that these services be valued as interim to allow for re-survey and subsequent review at the April 2021 RUC meeting.

CPT code 93653 ( Comprehensive electrophysiologic evaluation with insertion and repositioning of multiple electrode catheters, induction or attempted induction of an arrhythmia with right atrial pacing and recording, and catheter ablation of arrhythmogenic focus, including intracardiac electrophysiologic 3-dimensional mapping, right ventricular pacing and recording, left atrial pacing and recording from coronary sinus or left atrium, and His bundle recording, when performed; treatment of supraventricular tachycardia by ablation of fast or slow atrioventricular pathway, accessory atrioventricular connection, cavo-tricuspid isthmus or other single atrial focus or source of atrial re-entry ) (previous work RVU of 14.75 with 000-day global) is now bundled with the add-on CPT codes 93613 ( Intracardiac electrophysiologic 3-dimensional mapping (List separately in addition to code for primary procedure) ) (work RVU of 5.23 with 90 minutes of intraservice time) and the add-on CPT code 93621 ( Comprehensive electrophysiologic evaluation including insertion and repositioning of multiple electrode catheters with induction or attempted induction of arrhythmia; with left atrial pacing and recording from coronary sinus or left atrium (List separately in addition to code for primary procedure) ) (work RVU of 2.10 with 30 minutes of intraservice time). The RUC-recommended work RVU for CPT code 93653 is 18.49, with 40 minutes of preservice evaluation, 3 minutes of preservice positioning, 15 minutes of preservice scrub/dress/wait time, 125 minutes of intraservice time and 30 minutes of immediate postservice time.

Since the two add-on codes are combined with the primary CPT code 93653, one would expect the intraservice time to have increased or remained similar to the current 180 minutes. Instead, the RUC-recommended intraservice time has decreased to 125 minutes. Accounting for changes in technologies and clinical practices from over 10 years since this code family's last review, we will expect better efficiencies and reductions in work times, but with the addition of two add-on codes whose work is mostly, if not all, added to the intraservice time, one would not expect a net decrease in minutes. This is not what the collected responses from this survey show and it is a concern. Some of CPT code 93653 add-on service times may have shifted over to the increases in preservice times, but there does appear to be a collective misunderstanding in the survey's work RVUs and physician work time responses.

In light of the RUC's intention to resurvey and re-review CPT code 93653 (and this family of codes) at the April 2021 RUC meeting, and to resolve any flaws from the initial survey, such as survey respondents probably not realizing that a new descriptor describing the inclusion of services is now bundled to the existing CPT code (and not a newly issued CPT code), we proposed to maintain the current physician times and current work RVU of 14.75, until the AMA RUC returns with a more definitive and accurate valuation.

For CPT code 93654 ( Comprehensive electrophysiologic evaluation with insertion and repositioning of multiple electrode catheters, induction or attempted induction of an arrhythmia with right atrial pacing and recording, and catheter ablation of arrhythmogenic focus, including intracardiac electrophysiologic 3-dimensional mapping, right ventricular pacing and recording, left atrial pacing and recording from coronary sinus or left atrium, and His bundle recording, when performed; with treatment of ventricular tachycardia or focus of ventricular ectopy including left ventricular pacing and recording, when performed ) (work RVU of 19.75), the RUC recommends 40 minutes of preservice evaluation, 3 minutes of preservice positioning, 20 minutes of preservice scrub/dress/wait time, 240 minutes of intraservice time and 33 minutes of immediate postservice time for a total of 336 minutes, an increase to the code's current 309 total minutes. Unlike CPT codes 93653 and 93656, CPT code 93654 already accounts for the work RVUs and physician times for 3-dimensional mapping of add-on CPT code 93613. The RUC recommended maintaining the current work RVU value of 19.75. We proposed the RUC-recommended updates to the physician times (net increase in total minutes) and to maintain the same work RVUs for CPT code 93654 for CY 2022.

CPT code 93655 ( Intracardiac catheter ablation of a discrete mechanism of arrhythmia which is distinct from the primary ablated mechanism, including repeat diagnostic maneuvers, to treat a spontaneous or induced arrhythmia (List separately in addition to code for primary procedure) ) has a current work RVU of 7.50 with a physician intraservice time of 90 minutes. The RUC recommended a revised intraservice time of 60 minutes and 6.50 work RVUs. The primary change to CPT code 93655 is the reduction of the intraservice time of about 67 percent, which we use as a guide to determine a work RVU. We compare add-on CPT code 22854 ( Insertion of intervertebral biomechanical device(s) ( e.g., synthetic cage, mesh) with integral anterior instrumentation for device anchoring ( e.g., screws, flanges ), when performed, to vertebral corpectomy(ies) (vertebral body resection, partial or complete) defect, in conjunction with interbody arthrodesis, each contiguous defect (List separately in addition to code for primary procedure)) also with 60 minutes of intraservice and total time and a work RVU of 5.50 to CPT code 93655 and we believe that this is a more accurate valuation than the RUC's work RVU crosswalk to CPT code 34709 ( Placement of extension prosthesis(es) distal to the common iliac artery(ies) or proximal to the renal artery(ies) for endovascular repair of infrarenal abdominal aortic or iliac aneurysm, false aneurysm, dissection, penetrating ulcer, including pre-procedure sizing and device selection, all nonselective catheterization(s), all associated radiological supervision and interpretation, and treatment zone angioplasty/stenting, when performed, per vessel treated (List separately in addition to code for primary procedure) ) with a work RVU of 6.50 and an intraservice and total time of 60 minutes because the proportional reduction in physician time should also reflect a similar proportional reduction in work RVUs. We proposed the RUC-recommended 60 minutes of intraservice and total time, but instead proposed a work RVU of 5.50 for CPT code 93655.

CPT code 93656 ( Comprehensive electrophysiologic evaluation including transseptal catheterizations, insertion and repositioning of multiple electrode catheters with intracardiac catheter ablation of atrial fibrillation by pulmonary vein isolation, including intracardiac electrophysiologic 3-dimensional mapping, intracardiac echocardiography including imaging supervision and interpretation, induction or attempted induction of an arrhythmia including left or right atrial pacing/recording, right ventricular pacing/recording, and His bundle recording, when performed ) is now bundled with the add-on CPT codes 93613 ( Intracardiac electrophysiologic 3-dimensional mapping (List separately in addition to code for primary procedure) ) (work RVU of 5.23 with 90 minutes of intraservice time) and the add-on CPT code 93662 ( Intracardiac echocardiography during therapeutic/diagnostic intervention, including imaging supervision and interpretation (List separately in addition to code for primary procedure ) (work RVU currently carrier-priced with 25 minutes of intraservice time) which previously were separately reported add-on services, similar to above CPT code 93653 and its add-on codes.

The RUC-recommended work RVU for CPT code 93656 is 20.00, with 40 minutes of preservice evaluation, 3 minutes of preservice positioning, 20 minutes of preservice scrub/dress/wait time, 210 minutes of intraservice time and 33 minutes of immediate postservice time, for a total of 306 minutes. The current physician times for CPT code 93656 are 23 minutes of preservice evaluation, 1 minutes of preservice positioning, 5 minutes of preservice scrub/dress/wait time, 240 minutes of intraservice time, and 40 minutes of immediate postservice time, for a total of 309 minutes, which is a net difference of 3 minutes less in the total proposed minutes, and the RUC is recommending a work RVU of 20.00, which is 0.23 more work RVUs than the current work RVU of 19.77.

In light of the RUC's intention to resurvey and review CPT code 93653 (and this family of codes) with its new bundling at their April 2021 RUC meeting to resolve any flaws from the initial survey, where many of the survey respondents may not have realized that the code descriptors had been substantially revised and that they may not have read the updated code descriptors thoroughly enough to respond correctly, we believe CPT code 93656 is in the same situation with its new bundling thus, we proposed the RUC-recommended updates to the physician times (a net decrease of 3 minutes in total time) and to maintain the current work RVU of 19.77.

From the survey of CPT code 93657 ( Additional linear or focal intracardiac catheter ablation of the left or right atrium for treatment of atrial fibrillation remaining after completion of pulmonary vein isolation (List separately in addition to code for primary procedure) ), a value of 8.00 work RVUs was obtained at the 25th percentile for this add-on code. The RUC recommended a work RVU of 6.50, for the 60 minutes of intraservice and total physician time. The current work RVU is 7.50, for 90 minutes of intraservice and total physician time.

We compare add-on CPT code 22854 ( Insertion of intervertebral biomechanical device(s) (e.g., synthetic cage, mesh) with integral anterior instrumentation for device anchoring (e.g., screws, flanges), when performed, to vertebral corpectomy(ies) (vertebral body resection, partial or complete) defect, in conjunction with interbody arthrodesis, each contiguous defect (List separately in addition to code for primary procedure) ) with 60 minutes of intraservice and total time and 5.50 work RVUs to CPT code 93657 and we believe that this is a more accurate valuation, since the primary change to CPT code 93657 is the reduction of the intraservice time of about 67 percent, which we use as a guide to determining a work RVU. The RUC-recommended work RVU is crosswalked from CPT code 34709 ( Placement of extension prosthesis(es) distal to the common iliac artery(ies) or proximal to the renal artery(ies) for endovascular repair of infrarenal abdominal aortic or iliac aneurysm, false aneurysm, dissection, penetrating ulcer, including pre-procedure sizing and device selection, all nonselective catheterization(s), all associated radiological supervision and interpretation, and treatment zone angioplasty/stenting, when performed, per vessel treated (List separately in addition to code for primary procedure) ) with a work RVU of 6.50 and an intraservice and total time of 60 minutes, does not reflect the proportional reductions to the intraservice time and work. For CPT code 93657, we proposed the RUC-recommended 60 minutes of intraservice and total time, and a work RVU of 5.50, crosswalked from CPT code 22854.

There are no direct PE inputs for these facility-only CPT codes.

Comment: In light of the proposed CY 2022 reductions in payment for the Cardiac Ablation codes, commenters were concerned that there will be fewer providers of these services, which could cause beneficiaries to encounter longer waits for atrial fibrillation treatments as there will be fewer Cardiac Electrophysiologists to treat them. Longer waits to schedule for the earliest treatments possible are the exact opposite scenario to be the most effective in prevent strokes, heart failures, acute myocardial infarctions, trachycardia, etc. Some commenters requested that CMS and the AMA RUC withdraw their restructuring of these codes in their bundling. Commenters explained that in the typical progression of Cardiac Ablation treatment services, procedures are employed in a series, that services are additive in nature, and that subsequent services selected by practitioners are dependent on the outcomes of the previous procedures. Different individual patients do not necessarily receive the same group of services in every session of treatment, which is what the bundling of services describes.

Response: We note that the restructuring of these procedures resulted from the AMA CPT deliberative process that CMS does not control. This restructuring was developed because of claims evidence showing that two or more procedures are observed occurring together on the same day, with the same practitioner, for the same beneficiary, frequently enough to justify a bundling of services under one new procedure code; the CPT panel decided to retain the old procedure code and only adjust its descriptor to include the new appended service. This appears to have created the misunderstanding with the survey respondents that yielded the flawed results and why the AMA RUC presented CMS with “interim” work RVUs rather than surveyed values. At this stage in the development of these codes, unbundling these services does not appear possible, so we have decided to maintain the current values where we can for another year, until we have new AMA RUC recommendations for next year, where stakeholders can comment further.

Comment: Some commenters stated that since these Cardiac Ablation services were going to be reviewed, their work RVUs should be increased to reflect more physician time and increases in physician work and work intensities. Instead, code bundling has reduced total payments.

Response: In consideration of concerns about a flaw in the original survey for these codes, CMS proposed to maintain the current work RVUs for some of the Cardiac Ablation services for CY 2022. We will re-review the new and revised AMA RUC recommendations for these codes when they become available and will consider for future rulemaking.

Comment: Commenters noted that the AMA RUC was aware of issues with the survey for these codes, but submitted work RVUs to CMS as recommended “interim values”. Commenters noted that the AMA RUC informed CMS that they also intended to resurvey members of the American College of Cardiology & the Heart Rhythm Society, and to re-review those new survey results in their April 2021 meeting. The new results were discussed at that meeting and the updated work RVUs were proposed for recommendation to CMS at the conclusion of that meeting. The AMA RUC has included those recommendations in comment, and urges CMS to implement those corrected work RVUs for CY 2022, replacing the “interim values” first presented in January 2021.

Response: Stakeholders are aware that in recent years CMS revised its review process to align with our rulemaking timelines and to allow for consistency and transparency throughout the process. We thank the commenters for providing us with information from the April 2021 AMA RUC meeting, but note that these values along with recommendations from the subsequent October 2021 and January 2022 AMA RUC meetings will be considered as part of our CY 2023 PFS rulemaking cycle.

After consideration of comments on these Cardiac Ablation codes, we are finalizing all of the work RVUs as proposed. We did not propose and we are not finalizing any direct PE inputs for these facility-only codes.

(34) 3D Imaging of Cardiac Structures (CPT Code 93319)

In May 2020, the CPT Editorial Panel created one new add-on code to describe the 3D echocardiographic imaging and postprocessing during transesophageal or transthoracic echocardiography for congenital cardiac anomalies for the assessment of cardiac structure(s). The 3D imaging could be performed as a follow-up to a 2D transthoracic echocardiogram.

We proposed the RUC-recommended work RVU of 0.50 for CPT code 93319 ( 3D echocardiographic imaging and postprocessing during transesophageal echocardiography, or during transthoracic echocardiography for congenital cardiac anomalies, for the assessment of cardiac structure(s) (e.g., cardiac chambers and valves, left atrial appendage, interatrial septum, interventricular septum) and function, when performed (List separately in addition to code for echocardiographic imaging ).

While we proposed no refinements to the direct PE inputs, we requested additional information about the 3D echocardiography probe equipment item. The RUC recommended that a 3D probe was required in addition to the base echocardiography machine. We received an invoice for $31,754.30 for this equipment item. It was unclear if the invoice reflected both the 3D probe and the base echocardiography machine or only the probe itself. We solicited additional information to know if this equipment item reflected both the 3D probe and the base echocardiography machine or only the probe.

Comment: Several commenters stated that they supported the proposal of the RUC-recommended work RVU of 0.50 for CPT code 93319.

Response: We appreciate the support for our proposed work RVU from the commenters.

Comment: A commenter stated that they had reviewed the submitted invoice and was able to confirm that the proposed price of $31,754.30 is for the 3D echocardiography probe (ER121) itself, not any other equipment. Another commenter agreed that the $31,754.30 cost on the submitted invoice was for the probe itself and stated that they were including additional invoices which reflected a range of costs between $34,678.00 to $36,556.44 for 3D probes to support this pricing.

Response: We appreciate the clarification of the pricing on the submitted invoice from the commenters. Unfortunately, we were unable to find the additional invoices mentioned by the commenter in their submission, and therefore, we were unable to review them for the stated range of costs between $34,678.00 to $36,556.44. Commenters are encouraged to submit invoices with their public comments or, if outside the notice and comment rulemaking process, via email at PE_Price_Input_Update@cms.hhs.gov.

After consideration of the comments, we are finalizing the proposed work RVU of 0.50 and the proposed direct PE inputs for CPT code 93319. We are also finalizing the proposed price of $31,754.30 for the 3D echocardiography probe (ER121) equipment.

(35) Cardiac Catheterization for Congenital Defects (CPT Codes 93593, 93594, 93595, 93596, 93597, and 93598)

In May 2020, the CPT Editorial Panel replaced a family of four cardiac catheterization codes with five new codes (CPT codes 93593-93597) to describe cardiac catheterization for congenital cardiac defect(s). The CPT Editorial Panel also replaced two cardiac output measurement codes with one new add-on code (CPT code 93598) to report cardiac output measurement(s), performed during cardiac catheterization for congenital cardiac defects.

We proposed the RUC-recommended work RVU for two of the codes in this family. We proposed a work RVU of 3.99 for CPT code 93593 ( Right heart catheterization for congenital heart defect(s) including imaging guidance by the proceduralist to advance the catheter to the target zone; normal native connections ) and a work RVU of 6.10 for CPT code 93594 ( Right heart catheterization for congenital heart defect(s) including imaging guidance by the proceduralist to advance the catheter to the target zone; abnormal native connections ) as recommended by the RUC in both cases.

For CPT code 93595 ( Left heart catheterization for congenital heart defect(s) including imaging guidance by the proceduralist to advance the catheter to the target zone, normal or abnormal native connections ), we disagree with the RUC-recommended work RVU of 6.00 and we instead proposed a work RVU of 5.50 based on a crosswalk to CPT code 32607 ( Thoracoscopy; with diagnostic biopsy(ies) of lung infiltrate(s) (e.g., wedge, incisional), unilateral ). CPT code 32607 is a thorascopy procedure with three fewer minutes of intraservice work time (45 minutes) than CPT code 93595 but a higher total work time of 178 minutes. CPT code 93595 has similar surveyed work time to CPT code 93593 but the RUC recommended a work RVU of 3.99 for the first code in the family as compared to 6.00 for CPT code 93595. While we agree that CPT code 93595 is a more intensive procedure, we do not agree that it should be valued more than two full RVUs higher as compared to the first code in the family. We believe that it will be more accurate to propose a work RVU of 5.50 based on the aforementioned crosswalk to CPT code 32607. We note that the intensity of CPT code 93595 remains higher than the first two codes in the family at the proposed work RVU of 5.50.

For CPT code 93596 ( Right and left heart catheterization for congenital heart defect(s) including imaging guidance by the proceduralist to advance the catheter to the target zone(s); normal native connections ), we disagree with the RUC-recommended work RVU of 7.91 and we instead proposed a work RVU of 6.84 based on a crosswalk to CPT code 32608 ( Thoracoscopy; with diagnostic biopsy(ies) of lung nodule(s) or mass(es) (e.g., wedge, incisional), unilateral ). CPT code 32608 is another thorascopy procedure from the same family as CPT code 32607, with the same 60 minutes of intraservice work time as CPT code 93596 and a higher total work time of 195 minutes. In the same fashion as the previous code, CPT code 93596 has similar surveyed work time to CPT code 93594 but the RUC recommended a work RVU of 6.10 for the second code in the family as compared to 7.91 for CPT code 93596. While we agree that CPT code 93596 is a more intensive procedure, we do not agree that it should be valued almost two full RVUs higher as compared to the second code in the family. We believe that it will be more accurate to propose a work RVU of 6.84 based on the aforementioned crosswalk to CPT code 32608. We note that the intensity of CPT code 93596 remains the highest among the first four codes in the family at the proposed work RVU of 6.84. We believe that our proposed RVUs for CPT codes 93595 and 93596 better preserve relativity both within the family and also with other services on the PFS.

For CPT code 93597 ( Right and left heart catheterization for congenital heart defect(s) including imaging guidance by the proceduralist to advance the catheter to the target zone(s); abnormal native connections ), we disagree with the RUC-recommended work RVU of 9.99 and we instead proposed a work RVU of 8.88 based on the median work RVU from the survey. The RUC's recommendation of a work RVU of 9.99, based on maintaining the prior work RVU of deleted CPT code 93532 ( Combined right heart catheterization and transseptal left heart catheterization through intact septum with or without retrograde left heart catheterization, for congenital cardiac anomalies ), was nearly equal to the 75th percentile work RVU from the survey at 10.00. Since the RUC recommended the survey median work RVU for the other four non-measurement codes in the family, we do not understand the recommendation of a value for CPT code 93597 that sits within 0.01 RVUs of the survey 75th percentile. The survey for CPT code 93597 also revealed that it typically requires far less work time to perform as compared with predecessor code 93532 (83 minutes of intraservice work time as compared to 175 minutes for the predecessor code). Although we agree that CPT code 93597 is a more intensive procedure than its predecessor code, we do not believe that the work RVU should remain unchanged given the greatly reduced work time in the new procedure. Since the two components of work are time and intensity, we believe that decreases in time should typically be reflected in decreases to work RVUs. Therefore, we proposed a work RVU of 8.88 for CPT code 93597 based on the survey median outcome. We believe that our proposed RVU more accurately accounts for these changes in surveyed work time and better preserves relativity with the rest of the family.

For CPT code 93598 ( Cardiac output measurement(s), thermodilution or other indicator dilution method, performed during cardiac catheterization for the evaluation of congenital heart defects ), we disagree with the RUC-recommended work RVU of 1.75 and we instead proposed a work RVU of 1.44 based on a crosswalk to CPT code 37253 ( Intravascular ultrasound (noncoronary vessel) during diagnostic evaluation and/or therapeutic intervention, including radiological supervision and interpretation; each additional noncoronary vessel ). CPT code 37253 is an intravascular ultrasound procedure that shares the same intraservice work time of 20 minutes as CPT code 93598 and has 1 additional minute of immediate postservice time. We note that the intensity of CPT code 93598 as recommended by the RUC at a work RVU of 1.75 will be the second-highest in the family, higher than CPT code 93597 for example. We do not agree that this cardiac output measurement code will typically be more intensive to perform than the two types of heart catheterization taking place in CPT code 93597.

We also note that the recommended work RVU for CPT code 93598 was higher than the sum of its two predecessor codes. Former CPT codes 93561 ( Indicator dilution studies such as dye or thermodilution, including arterial and/or venous catheterization; with cardiac output measurement ) and 93562 ( Indicator dilution studies such as dye or thermodilution, including arterial and/or venous catheterization; subsequent measurement of cardiac output ) had CY 2021 work RVUs of 0.95 and 0.77 respectively. These two codes sum together to a work RVU of 1.72 which will be lower than the RUC's recommendation of 1.75 for CPT code 93598. The RUC's recommendation suggests that there will be no efficiencies gained or savings created in the process of creating CPT code 93598; we believe that the survey for the new code indicates otherwise, as the predecessor codes had work times of 15 minutes and 12 minutes respectively (27 minutes total) as compared to 20 minutes of surveyed work time for the new code. This lower work time suggests that the creation of CPT code 93598 has led to greater efficiencies in the service which, under the resource-based nature of the RVU system, lends further support for a reduction in the work RVU as compared to a sum of the predecessor codes. Therefore, we believe that it will be more accurate to a work RVU of 1.44 based on the aforementioned crosswalk to CPT code 37253.

The RUC did not recommend any direct PE inputs for these six codes and we did not propose any direct PE inputs.

Comment: Several commenters disagreed with the proposed valuation for the codes in the Cardiac Catheterization for Congenital Defects family. Commenters stated that CMS did not address compelling evidence for these services. Commenters stated that CMS dismisses the fact that services may change due to technological advances, changes in the patient population, shifts in the specialty of physicians providing services or changes in the physician work or intensity required to perform services, and CMS only proposes blanket reductions instead of considering how a service may have changed or increased. Commenters requested that CMS address the compelling evidence that was submitted with the RUC recommendations when the agency does not propose the RUC's recommended values.

Response: As we stated under Methodology for Establishing Work RVUs near the beginning of this Valuation of Specific Codes section, compelling evidence is a concept developed by the RUC for its review process. Compelling evidence is not part of our statutory framework which requires that the valuation of codes be based on time and intensity. We do consider changes in technology, patient population, etc. insofar as they affect the time and intensity of the service under review. The RUC's criteria for compelling evidence may overlap with our statutory requirement to value services based on time and intensity; for example, new technology may cause a service to become easier or more difficult to perform, with corresponding effects on the time and intensity of the service. However, we are under no obligation to specifically address the RUC's compelling evidence criteria in our rulemaking since it is outside the purview of the code valuation process stipulated by statute. In the context of the codes in the Cardiac Catheterization for Congenital Defects family, we discussed the intensity of the new services at length in the proposed rule, which includes changes that may have been due to technological advances, patient population, etc.

Comment: Several commenters disagreed with the CMS proposed work RVU of 5.50 for CPT code 93595 and stated that CMS should instead finalize the RUC-recommended work RVU of 6.00. Commenters stated that it was unclear what criteria CMS used to reject the RUC recommendation or to select CPT code 32607 as a direct crosswalk. Commenters stated that CMS did not provide any clinical foundation for their proposed alternate value, did not seem to consider the compelling evidence provided in the RUC rationale, and made no acknowledgement that this service is typically for pediatric patients with congenital cardiac defects.

Response: As we stated in the proposed rule, CPT code 32607 is a thorascopy procedure with three fewer minutes of intraservice work time (45 minutes) than CPT code 93595 but a higher total work time of 178 minutes. We believe that the close match in work times between CPT codes 93595 and 32607 makes our proposed crosswalk the most accurate choice for valuing CPT code 93595, and also better preserves relativity within this family of codes as compared to the RUC's recommendation of the survey median work RVU. In more general terms, we continue to believe that the nature of the PFS relative value system is such that all services are appropriately subject to comparisons to one another. Although codes that describe clinically similar services are sometimes stronger comparator codes, we do not agree that codes must share the same site of service, patient population, or utilization level to serve as an appropriate crosswalk. We are aware that the codes in this family are typically performed on pediatric patients with congenital cardiac defects but this in no way exempts them from comparisons to other services on the PFS, each of which has patient populations with their own associated risks. We also note that the crosswalk codes recommended by the RUC for valuation do not always describe clinically similar services, including within this very code family. The RUC recommended using a crosswalk to CPT code 36483 to value CPT code 93598 at a work RVU of 1.75, even though the former code describes endovenous ablation therapy of an incompetent vein while the latter code describes cardiac output measurement(s) performed during cardiac catheterization.

Comment: Several commenters stated that the CMS proposed value for CPT code 93595 would produce a rank order anomaly between CPT codes 93595 and 93594 as the difference in intensities between these two services would not be appropriately reflected. Commenters stated that risk of arterial catheterization is always high due to risks of stroke, bleeding into the brain for infants on heparin, and femoral artery injury for infants. Commenters stated that for an abnormal connection patient, the procedure is more complex, as doctors are now facing crossing arterial shunts or the patent ductus arteriosus (PDA) to evaluate the pulmonary arteries, or evaluating other vascular structures like major aortopulmonary collateral arteries (MAPCAs), which can be multiple. Commenters stated that these procedures require a significantly greater level of diagnostic evaluation, catheter and wire manipulation, and angiography to identify each and every vessel for surgical planning than previously afforded with the non-congenital diagnostic codes, and that due to this the physician work intensity is very high.

Response: We agree with the commenters that the catheterization services described by CPT code 93595 represent an intensive procedure, which is why we proposed a work RVU of 5.50. We agree with the commenters that this code should be valued at a higher intensity than CPT code 93594, which is why we proposed CPT code 93595 at a higher intensity. We do not agree that our proposed valuation creates a rank order anomaly, however; as we stated in the proposed rule, we do not agree that CPT code 93595 should be valued more than two full RVUs higher as compared to the first code in the family. We believe that the RUC's recommended work RVU of 6.00 would do more to create rank order anomalies within the family, as CPT code 93595 would be valued almost identically to CPT code 93594 (6.00 as compared to 6.10) despite having 12 minutes fewer of intraservice work time (48 minutes as compared to 60 minutes). At the RUC's recommended work RVU of 6.00, CPT code 93595 would also be valued 2.01 RVUs higher than the work RVU of 3.99 for CPT code 93593 despite having only 3 additional minutes of intraservice work time (48 minutes as compared to 45 minutes). While we agree that CPT code 93595 is a more intensive code than the first two codes in the family, and we therefore proposed a higher intensity for the code, we do not agree that this intensity is so high as to merit the RUC-recommended work RVU of 6.00.

Comment: Several commenters disagreed with the CMS proposed work RVU of 6.84 for CPT code 93596 and stated that CMS should instead finalize the RUC-recommended work RVU of 7.91. Commenters again stated that CMS does not provide any clinical foundation for their proposed crosswalk to CPT code 32608, did not seem to consider the compelling evidence provided in the RUC rationale, and made no acknowledgement that this service is typically for pediatric patients with congenital defects. Commenters stated that the proposed work RVU would assign CPT code 93596 an intensity that is substantially lower than the top two key reference codes from the survey, even though 3/4ths of the survey respondents that selected those top reference codes indicated that the survey code was a more intense service than either reference code.

Response: As we stated above in the case of CPT code 93595, we believe that the close match in work times between CPT codes 93596 and 32608 makes our proposed crosswalk the most accurate choice for valuing CPT code 93596, and also better preserves relativity within this family of codes than the RUC's recommendation of the survey median work RVU. We direct readers to our previous discussion of compelling evidence and clinical similarity between crosswalk codes addressed above. With regards to the two reference codes from the survey (CPT codes 93460 and 93461), commenters stated that the proposed work RVU of 6.84 would assign CPT code 93596 a lower intensity than both reference codes. However, the RUC's recommended work RVU of 7.91 for CPT code 93596 also assigns a lower intensity than the two reference codes, which indicates that the RUC also believed that CPT code 93596 was appropriately valued at a lower intensity despite what the survey respondents may have indicated. As we stated in the proposed rule, while we agree that CPT code 93596 is a more intensive procedure, we do not agree that it should be valued almost two full RVUs higher as compared to the second code in the family. Commenters did not provide a rationale in their submissions as to why CPT code 93596 should be valued so much higher than CPT code 93594. We again note that the intensity of CPT code 93596 remains the highest among the first four codes in the family at the proposed work RVU of 6.84 and we continue to believe that our proposed RVUs for CPT codes 93595 and 93596 better preserve relativity both within the family and also with other services on the PFS.

Comment: Several commenters disagreed with the CMS proposed work RVU of 8.88 for CPT code 93597 and stated that CMS should instead finalize the RUC-recommended work RVU of 9.99. Commenters stated that CMS did not provide any clinical foundation for their proposed alternate value, did not seem to consider the compelling evidence provided in the RUC rationale, and made no acknowledgement that this service is typically for pediatric patients with congenital defects. Commenters stated that the proposed work RVU would assign this service a similar intensity to CPT code 93596, even though CPT code 93597 is for a more complex patient with an abnormal native connection.

Response: We did not provide a clinical foundation for the proposed work RVU of 8.88 because it was taken from the survey median value; we believe that the commenters may have confused our proposed valuation of CPT code 93597 with the other codes in this family where we employed a crosswalk methodology. We direct readers again to our previous discussion of compelling evidence and clinical similarity between crosswalk codes addressed above. We agree with the commenters that our proposed work RVU of 8.88 would assign CPT code 93597 a similar intensity to CPT code 93596. However, we believe that this is appropriate because the RUC also recommended a similar intensity between the two codes in its own recommendations. The RUC recommended a difference in intensity of 0.003 between the two codes while we proposed a difference in intensity of 0.002; we believe that this provides strong evidence that we are maintaining the relationship between these two codes as recommended by the RUC.

We stated in the proposed rule that the RUC's recommendation of a work RVU of 9.99, based on maintaining the prior work RVU of deleted CPT code 93532, was nearly equal to the 75th percentile work RVU from the survey at 10.00. Since the RUC recommended the survey median work RVU for the other four non-measurement codes in the family, we did not understand the recommendation of a value for CPT code 93597 that sits within 0.01 RVUs of the survey 75th percentile. We noted that the survey for CPT code 93597 also revealed that it typically requires far less work time to perform as compared with predecessor code 93532 (83 minutes of intraservice work time as compared to 175 minutes for the predecessor code), and although we agreed that CPT code 93597 is a more intensive procedure than its predecessor code, we did not believe that the work RVU should remain unchanged given the greatly reduced work time in the new procedure. Commenters did not address these topics that we raised in the proposed rule and did not explain why CPT code 93597 should be valued within 0.01 RVUs of the survey 75th percentile and should maintain the valuation of its predecessor code despite requiring substantially less work time to perform. We continue to believe that our proposed RVU of 8.88 more accurately accounts for these changes in surveyed work time and better preserves relativity with the rest of the family.

Comment: Several commenters disagreed with the CMS proposed work RVU of 1.44 for CPT code 93598 and stated that CMS should instead finalize the RUC-recommended work RVU of 1.75. Commenters stated that CMS did not provide any clinical foundation for their proposed alternate value, did not seem to consider the compelling evidence provided in the RUC rationale, and made no acknowledgement that this service is typically for pediatric patients with congenital defects. Commenters stated that the crosswalk code used for valuing CPT code 93598 (CPT code 37253) is a relatively less intense and less risky service typically performed in the lower extremity of an adult patient, making it an inappropriate crosswalk. Commenters stated that CPT code 93598 is a more intense service typically performed on a more complex pediatric patient, where a Swan Ganz catheter is introduced from the venous sheath, advanced through the right heart, and placed into the pulmonary artery for purpose of assessing cardiac output by thermodilution.

Response: As we stated above in the case of CPT codes 93595 and 93596, we believe that the close match in work times between CPT codes 93598 and 37253 makes our proposed crosswalk the most accurate choice for valuing CPT code 93598, and also better preserves relativity within this family of codes than the RUC's recommendation of a crosswalk to CPT code 36483. All three of these codes in question (93598 and the two crosswalks to 37253 and 36483) share the identical intraservice work time of 20 minutes, however we believe that our proposed crosswalk to CPT code 37253 is a more accurate choice for valuation. As we stated in the proposed rule, the intensity of CPT code 93598 as recommended by the RUC at a work RVU of 1.75 would be the second highest in the family, higher than CPT code 93597 for example. We do not agree that this cardiac output measurement code would typically be more intensive to perform than the two types of heart catheterization taking place in CPT code 93597. We also noted in the proposed rule that the recommended work RVU for CPT code 93598 was higher than the sum of its two predecessor codes (CPT codes 93561 and 93562) which had CY 2021 work RVUs of 0.95 and 0.77 respectively. These two codes sum together to a work RVU of 1.72 which would be lower than the RUC's recommendation of 1.75 for CPT code 93598. We noted in the proposed rule that the RUC's recommendation suggested that there would be no efficiencies gained or savings created in the process of creating CPT code 93598, which the surveyed work times for the new code indicated otherwise. Commenters did not address these topics that we raised in the proposed rule and did not explain why CPT code 93598 should have the second-highest intensity in the family or why CPT code 93598 should be valued higher than the sum of its two predecessor codes. We therefore continue to believe a work RVU of 1.44 for CPT code 93598 would be more accurate, based on the aforementioned crosswalk to CPT code 37253.

After consideration of the comments, we are finalizing our proposed work RVUs for all six codes in the Cardiac Catheterization for Congenital Defects family. The RUC did not recommend any direct PE inputs for these six codes and we are not finalizing any direct PE inputs.

(36) Outpatient Pulmonary Rehabilitation Services (CPT Codes 94625 and 94626)

CPT code 94625 ( Physician or other qualified health care professional services for outpatient pulmonary rehabilitation; without continuous oximetry monitoring (per session) ) and CPT code 94626 ( Physician or other qualified health care professional services for outpatient pulmonary rehabilitation; with continuous oximetry monitoring (per session) (Do not report 94625, 94626 in conjunction with 94760, 94761) ) are two new codes created by the CPT Editorial Panel to replace HCPCS G code G0424 ( Pulmonary rehabilitation, including exercise (includes monitoring), one hour, per session, up to two sessions per day ), which was created by CMS in 2010. The RUC-recommended work RVUs for CPT codes 94625 and 946226 were 0.55 and 0.69, respectively.

We disagreed with the RUC-recommended work RVUs for both CPT code 94625 and 94626. Although the pulmonary rehabilitation services as described did not change, the RUC recommended an increase in intraservice work time for the services.

Based upon a comparison of intraservice time for the current HCPCS code G0424 relative to the RUC-recommended values, we proposed a work RVU of 0.36 for CPT code 94625 and a work RVU of 0.56 for CPT code 94626, both of which represent an increase to the work RVUs from the current HCPCS code G0424, the code that these two new codes are replacing. Our proposed RVU values reflect a commensurate increase in work relative to the increase in intraservice time.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Provide education/obtain consent” (CA011) activity from the RUC-recommended 15 minutes to 2 minutes for both CPT codes 94625 and 94626. The recommended activities for the two codes include 15 minutes for the CA011 activity used for education. Education is provided at each session and according to RUC documents follows a curriculum outlined in the pulmonary rehabilitation guidelines.

We disagreed that it would be typical for CPT codes 94625 and 94626 to require an additional 13 minutes for education and consent given that the patient is seen two or three times a week for pulmonary rehabilitation and the educational activities are covered during those sessions. We stated that the educational activities would be done during the “Perform procedure/service—NOT directly related to physician work time” (CA021). Thus, we refined the clinical labor time to 2 minutes for both CPT codes 94625 and 94626 to maintain relativity, particularly in light of the clinical similarities between the services.

We also proposed to refine the equipment time by lowering the pulse oximeter w-printer (EQ211) and exercise equipment (treadmill, bike, stepper, UBE, pulleys, balance board) (EQ118) equipment times from 93 minutes to 80 minutes to match the change in clinical labor time for CPT codes 94625 and 94626.

Finally, we proposed to revise the utilization that is used to set rates for CPT code 94626 to reflect our understanding that pulmonary rehabilitation is always done with pulse oximetry. Thus, we proposed to update our analytic crosswalk to reflect our belief that 100 percent of the utilization for the pulmonary rehabilitation services currently billed using HCPCS code G0424 will now be billed using CPT code 94626. We stated that it is unlikely that the outpatient pulmonary rehabilitation services would be billed using CPT code 94625 because it is our understanding that pulmonary rehabilitation is typically provided with pulse oximetry, and therefore, we expected little or no utilization for CPT code 94625. We sought comment from stakeholders on our proposal to revise the utilization as stated.

The following is a summary of the comments we received and our responses.

Comment: Commenters expressed concern about the values we proposed for the two new outpatient pulmonary rehabilitation codes. They stated HCPCS G0424 is not the same service as the two new codes, therefore, the intraservice work should not be compared to HCPCS G0424. Commenters noted that the more recently developed clinical guidelines for pulmonary rehabilitation were not captured or valued in HCPCS code G0424. Additionally, the commenters stated that the valuation of HCPCS G0424 was based upon incorrect assumptions/flawed methodology of the CMS/Other valuation because the code was not surveyed by pulmonary medicine physicians.

Response: We appreciate the concerns of commenters. We understand from stakeholders that the services of the two new CPT codes are not described exactly the same as the service of HCPCS code G0424. We also understand that commenters found our approach to valuing the new codes, by using the current value of HCPCS G0424, flawed. We continue to believe, however, that the services of all the codes remain fundamentally the same, and as such, our use of time ratios is an appropriate method for identifying potential work RVUs for particular PFS services, especially when alternative recommended values do not provide a rationale for the need for additional time. Our review of the recommended work RVUs and time inputs included, but was not limited to, a review of information provided by the RUC, other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the Federal Government, as well as Medicare claims data. We also assessed the methodology and data used to develop the recommendations submitted to us by the RUC and the rationale for the recommendations.

Comment: A couple of commenters stated that pulse oximetry may be assessed intermittently, as needed, or continuously.

Response: We thank the commenters for their insights into the utilization of the two codes and will consider this information going forward.

After consideration of the comments, we are finalizing the proposed values for CPT codes 94625 and 94626 and will delete HCPCS code G0424. We are also finalizing the proposed refinements to the direct PE inputs and our proposal to update our analytic crosswalk to reflect our belief that 100 percent of the utilization for the pulmonary rehabilitation services currently billed using HCPCS code G0424 will now be billed using CPT code 94626.

(37) Remote Therapeutic Monitoring/Treatment Management (CPT Codes 98975, 98976, 98977, 98980, and 98981)

Remote Therapeutic Monitoring (RTM) is a family of five codes created by the CPT Editorial Panel in October 2020 and valued by the RUC at its January 2021 meeting. The RTM family includes three PE-only codes and two codes that include professional work.

In recent years, we have finalized seven codes in the Remote Physiological Monitoring (RPM) family that include services similar to the new RTM codes. (See the CY 2021 PFS final rule at 85 FR 84542 through 84546 for more information.) Based upon our analysis, the services and code structure of RTM resemble those of RPM. For example, the RTM codes reflect similar staff and physician work, although the specific equipment used is different because the data being monitored are non-physiologic rather than physiologic as they are with RPM.

While there are notable similarities between the two sets of code descriptors, there are two primary differences. One difference, based upon our review of the RUC-recommended valuation materials for these codes, is that the primary billers of RTM codes are projected to be physiatrists, NPs, and physical therapists. Stakeholders have suggested that the new RTM coding was created to allow practitioners who cannot bill RPM codes, to furnish and bill for services that are similar to those described by the RPM codes. RPM services are considered to be E/M services and physical therapists, for example, are not permitted to furnish E/M services. In the CY 2020 PFS final rule, we designated the two RPM treatment codes (that is, CPT codes 99457 and 99458) as care management services (84 FR 62697 through 62698). We designated the incident to services in the RPM treatment management codes as care management services. As care management services, the clinical labor in the PE of the two RPM treatment management codes, CPT codes 99457 and 99458, can be provided under general supervision rather than direct supervision, as required for incident to services.

In our review of the new RTM codes for the proposed rule, we stated that we had identified an issue that we believed would disallow therapists and other qualified healthcare professionals from billing the RTM codes. Specifically, we were concerned that by modeling the new RTM codes on the RPM codes, the clinical labor that is part of the direct PE of the PE only code CPT code 98975, as well as the two professional work codes, CPT codes 98980 and 98981, could be viewed as clinical labor incident to the professional services of the billing practitioner. It has been our understanding that there is no incident to benefit for therapists (that is, physical therapists, occupational therapists, and speech-language pathologists). As a result, we sought public comment on how we might remedy the issues related to the RTM code construction in order to permit practitioners who are not physicians or NPPs to bill and be paid for furnishing RTM services.

The second primary difference between the RTM and RPM codes is the nature of the data to be collected and how the data are collected. According to the code descriptors, RTM codes monitor health conditions, including musculoskeletal system status, respiratory system status, therapy (for example, medication) adherence, and therapy (for example, medication) response, and as such, allow non-physiologic data to be collected. Reportedly, RTM data can be patient reported, as well as digitally uploaded while RPM requires that data be physiologic and be digitally uploaded. We note that, for both sets of codes, the device used must meet the FDA definition of a device as described in section 201(h) of the Federal Food, Drug and Cosmetic Act (FFDCA). We sought public comment on the typical type of device(s) and associated costs of the device(s) that might be used to collect the various kinds of data included in the code descriptors (that is, what devices would be used to collect data to monitor respiratory system status, musculoskeletal status, medication adherence, pain) for the RTM services.

Based upon our review of the RUC recommendations for these codes, we proposed the RUC-recommended work RVU of 0.62 for CPT code 98980 ( Remote therapeutic monitoring treatment management services, physician/other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month; first 20 minutes ) and the RUC-recommended work RVU of 0.61 for its add-on code, CPT code 98981 ( Remote therapeutic monitoring treatment management services, physician/other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month; each additional 20 minutes (List separately in addition to code for primary procedure) ) as a means of maintaining parity with the two RPM treatment management codes (CPT codes 99457 and 99458) upon which the two RTM codes are based. We proposed the RUC-recommended direct PE inputs for the two treatment management codes, CPT codes 98980 and 98981, without refinement.

We proposed to refine the direct PE inputs for the three PE-only RTM codes: CPT code 98975 ( Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); initial set-up and patient education on use of equipment ), CPT code 98976 ( Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); device(s) supply with scheduled e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor respiratory system, each 30 days ), and CPT code 98977 ( Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); device(s) supply with scheduled (e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor musculoskeletal system, each 30 days ). We proposed to value the PE for CPT code 98975 by crosswalking to the PE RVU for RPM code 99453 upon which the new RTM code was based. We also proposed to value the PE for CPT codes 98976 and 98977 by crosswalking to the PE RVU for comparable RPM code 99454, a code that includes payment for the medical device used to collect and transmit data. We noted that the only input to CPT code 98976 is a monthly fee of $25, which would not be paid as a direct cost under the PFS. Historically, we have considered most computer software and associated licensing fees to be indirect costs. However, as we noted in section II.B. of this final rule (the PE section), stakeholders have routinely expressed concern with this policy, especially for evolving technologies that rely primarily on software and licensing fees with minimal costs in equipment or hardware. As noted in that section of this rule, CMS continues to consider how best to reflect such costs under our current PE methodology.

We received many comments from interested stakeholders regarding our requests and proposal related to the new Remote Therapeutic Monitoring/Treatment Management codes.

Comment: The majority of commenters disagreed with our determination that physical therapists are not permitted to bill remote therapeutic monitoring codes. They stated that although the services may be performed incident to the services of a billing physician or practitioner, they would not represent “incident to” services when billed by physical therapists. Commenters encouraged us to reevaluate our interpretation of the codes to permit physical therapists to bill and be paid for these services.

Response: We appreciate the insights of the commenters and understand their concerns. We agree that the new RTM codes are general medicine codes. However, we continue to be concerned about the construction of the codes.

We questioned in the proposed rule whether the RTM codes as constructed could be used by therapists because the Medicare benefit does not include services provided incident to the services of a therapist. We viewed the clinical labor described in the RTM codes as being services incident to the billing practitioner's professional services. In the proposed rule, we focused on therapists as providers of RTM services because we heard from stakeholders that the codes were developed in response to the needs of physical therapists. We note here, however, that speech-language pathologists, clinical social workers, registered dietitians, nutrition professionals, and CRNAs also have Medicare benefits that do not include incident to services.

Despite our concerns about the construction of the codes, we believe the services described by the codes are important to beneficiaries. Thus, we are finalizing a policy that permits therapists and other qualified healthcare professionals to bill the RTM codes as described. However, where the practitioner's Medicare benefit does not include services furnished incident to their professional services, the items and services described by these codes must be furnished directly by the billing practitioner or, in the case of a PT or OT, by a therapy assistant under the PT's or OT's supervision.

Comment: Some commenters recommended that we implement the new RTM codes as constructed so that non-physicians who cannot bill E/M services can bill for RTM services.

Response: We thank commenters for their recommendation.

Comment: Commenters identified various issues with the proposed RTM codes and offered solutions. For example, commenters described a problem with supervision of clinical staff activities. Stakeholders noted that the clinical labor in the direct PE of the two RTM treatment management codes (that is, CPT codes 98980 and 98981) would have to be directly supervised unlike the similar RPM codes (that is CPT code 99457 and 99458), which as care management codes allow general supervision by physicians and NPPs. Commenters expressed concerns that physicians and NPPs would be unlikely to use the new RTM codes if they had to directly supervise the clinical staff activities associated with the codes. To remedy the situation, commenters suggested that CMS designate the two RTM treatment management codes as care management services. By designating the clinical services of the two codes as care management services, physicians and NPPs would be able to supervise clinical staff activities under general supervision. Stakeholders offered alternatively that CMS develop HCPCS G codes with designated care management services to allow general, rather than direct, supervision.

We received other suggestions for developing G codes. Several commenters suggested that CMS create new codes that would allow a greater array of practitioners to offer RTM services as intended. They proposed that HCPCS G codes mirroring CPT codes 98980 and 98981 be created just as CMS did with HCPCS codes G2061, G2062, and G2063 for e-visits. The three e-visit HCPCS G codes mirror the original CPT codes for e-visit codes that can be billed only by physicians and NPPs.

Some commenters suggested that we consider developing HCPCS G codes that mirror CPT codes 99457 and 99458 for RPM but construct them specifically to allow qualified healthcare professionals such as physical therapists to offer RPM treatment management services.

Response: We thank commenters for their investment in identifying issues and solutions related to the construction of the RTM codes. We look forward to further discussions about the coding and structure of these services. We believe this topic is worthy of ongoing collaboration among stakeholders.

Comment: Several commenters wrote in support of our decision to crosswalk the values of CPT codes 98976 and 98977 to the RPM device-supply code, CPT code 99454. Other commenters urged us to consider creating a single temporary HCPCS code similar to CPT code 99454, but in addition to CPT codes 98976 and 98977, to serve as a PE-only code to facilitate the use of RTM. Commenters offered a list of the types of data (for example, motion, gait, balance, breathing regulation, sleep patterns, daily symptom reporting) that could be collected if there were a general device code available for use.

Response: We appreciate the support of commenters, as well as the descriptions about the value of having a generic code for devices. We also thank commenters for the information provided regarding the kinds of data that could be collected remotely if a generic code were available.

Comment: Commenters expressed enthusiasm for the new coding and our willingness to establish values and pay for the RTM services. The commenters requested that we finalize the codes so healthcare professionals would be able to provide and bill for RTM services.

Response: We thank stakeholders for the comments. We note that we received comments on topics that were outside the scope for this rule and, as a result, we did not address them here. Instead, we may consider the comments in future rulemaking.

After considering the comments, we are finalizing our proposed adoption of the RTM codes and our proposed valuations for the services. We heard commenters express concern about billing the new RTM codes. Comments covered the range of possible outcomes—from accepting the CPT codes to revising or developing new codes. Our decision to finalize the proposed RTM codes and our proposed valuations for the services strikes a balance between supporting beneficiary access to care that these services describe and allowing for non-E/M billing practitioners to furnish and bill for these services. We acknowledge the major themes that emerged in the comments from stakeholders about broadening the base of practitioners that could furnish the RTM and RPM services, as well as maximizing the efficiency with which these services could be furnished.

In the interest of coding efficiency for these services, we hope to continue to engage in dialogue with stakeholders, including the AMA CPT, in the immediate future on how best to refine the coding for the RTM services to address some of the specific concerns raised by stakeholders. We note that as general medicine codes, these codes can be billed by physicians and other qualified health care professionals. We also note that the five RTM codes will be designated as “sometimes therapy” codes, which means that the services can be billed outside a therapy plan of care by a physician and certain NPPs, but only when appropriate. While therapists' services must always be provided under therapy plans of care, RTM services that relate to devices specific to therapy services, such as the ARIA Physical Therapy device (CPT code 98977), should always be furnished under a therapy plan of care. We are also clarifying that the two device codes, CPT codes 98976 and 98977, are not subject to the de minimis standard that establishes the threshold for the statutorily required payment adjustment that applies to therapy services provided in whole or in part by therapy assistants. However, the initial set-up and patient education services represented by CPT code 98975 is subject to the de minimis policy. For more information about how the de minimis policy is applied for services provided in whole or in part by therapy assistants, see the Therapy pages at section II.H.1. of this final rule.

We thank the many stakeholders for their thoughtful comments regarding the new RTM coding. We will continue to consider the issues raised about this set of codes in the context of potential future rulemaking.

(38) Principal Care Management and Chronic Care Management (CPT Codes 99490, 99439, 99491, 99437, 99487, 99489, 99424, 99425, 99426, and 99427)

In recent years, we have engaged in efforts to update and improve the relative value of care management and coordination services within the PFS by identifying gaps in payment and coding. One of those PFS services is Chronic Care Management (CCM). CCM services, which include management and support services provided by clinical staff under the supervision of a physician or NPP or services provided personally by a physician or NPP, have received ongoing refinements related to payment and coding since CY 2013.

Beginning in the CY 2014 PFS final rule (78 FR 74414 through 74427), we noted that physicians and NPPs who furnish care to patients with multiple chronic conditions require greater resources than are required to support patient care in a typical E/M service. In response, we finalized a separately payable HCPCS code, GXXX1 ( Chronic Care Management (CCM) services furnished to patients with multiple (2 or more) chronic condition expected to last at least 12 months, or until the death of the patient; 20 minutes or more per in 30 days of chronic care management services provided by clinical staff and directed by a physician or other qualified health care practitioner ). For CY 2015 (79 FR 67715 through 67730), we refined aspects of the existing CCM policies and adopted separate payment for CCM services under CPT code 99490 ( Chronic care management services (CCM), at least 20 minutes of clinical staff time directed by a physician or other qualified health professional, per calendar month, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; Chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; Comprehensive care plan established, implemented, revised, or monitored ). For CY 2017 (81 FR 80244), we adopted CPT codes 99487 ( Complex chronic care management (CCCM) services with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, comprehensive care plan established, implemented, revised, or monitored, moderate or high complexity medical decision making; first 60 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month ) and 99489 ( CCCM services with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline, comprehensive care plan established, implemented, revised, or monitored, moderate or high complexity medical decision making; each additional 30 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month (List separately in addition to code for primary procedure) ). Then, in the CY 2019 PFS final rule (83 FR 59577), we adopted a new CPT code, 99491 ( CCM services, provided personally by a physician or other qualified health care professional, at least 30 minutes of physician or other qualified health care professional time, per calendar month, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised, or monitored ), to describe at least 30 minutes of CCM services performed personally by a physician or NPP. In the CY 2020 PFS final rule (84 FR 62690), we established payment for an add-on code to CPT code 99490 by creating HCPCS code G2058 ( CCM services, each additional 20 minutes of clinical staff time directed by a physician or other qualified healthcare professional, per calendar month ). We also created two new HCPCS G codes, G2064 and G2065 (84 FR 62692 through 62694), representing comprehensive services for a single high-risk disease (that is, principal care management). In the CY 2021 PFS final rule (85 FR 84639), we finalized a RUC-recommended replacement code for HCPCS code G2058, CPT code 99439, which was given the same valuation and the identical descriptor as G2058.

For CY 2022, the RUC resurveyed the CCM code family, including CCCM and Principal Care Management (PCM), and added five new CPT codes: 99437 ( CCM services each additional 30 minutes by a physician or other qualified health care professional, per calendar month (List separately in addition to code for primary procedure) ), 99424 ( PCM services for a single high-risk disease first 30 minutes provided personally by a physician or other qualified health care professional, per calendar month ), 99425 ( PCM services for a single high-risk disease each additional 30 minutes provided personally by a physician or other qualified health care professional, per calendar month (List separately in addition to code for primary procedure ), 99426 ( PCM, for a single high-risk disease first 30 minutes of clinical staff time directed by physician or other qualified health care professional, per calendar month ), and 99427 ( PCM services, for a single high-risk disease each additional 30 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month (List separately in addition to code for primary procedure) ).

The CCM/CCCM/PCM code family now includes five sets of codes, each set with a base code and an add-on code. The sets vary by the degree of complexity of care (that is, CCM, CCCM, or PCM), who furnishes the care (that is, clinical staff or the physician or NPP), and the time allocated for the services. The RUC-recommended values for work RVUs and direct PE inputs for CY 2022 derive from the recent RUC specialty society survey.

We reviewed the RUC-recommended values for the 10 codes in the CCM family and proposed the recommended work values for the codes. We proposed the RUC-recommended direct PE inputs without refinements. We stated that accepting the updated values was consistent with our goals of ensuring continued and consistent access to these crucial care management services and acknowledges our longstanding concern about undervaluation of care management under the PFS. We solicited comments, however, on whether keeping professional PCM and CCM at the same value creates an incentive to bill CCM instead of billing PCM when appropriate.

In addition to the proposals on the values for CCM codes, we expressed interest in understanding the standard practice used by practitioners to obtain beneficiary consent for care management services. We stated that we had received questions from stakeholders regarding the consent requirements for CCM services. We stated in the proposed rule that we believed the questions arose because of the many flexibilities allowed in response to the PHE for COVID-19. In particular, during the PHE for COVID-19, we allowed stakeholders to obtain beneficiary consent for certain services under general supervision (85 FR 19230, April 6, 2020). Before the PHE for COVID-19, we required that beneficiary consent be obtained either by or under the direct supervision of the primary care practitioner. This requirement is consistent with the conditions of payment for this service under the PFS. In considering the various policies implemented during the PHE for COVID-19, we wondered what policies should remain in effect beyond the PHE. We asked how billing practitioners furnishing CCM at different service sites (for example, physician office settings, RHCs, FQHCs) obtained beneficiary consent over the past year and how different levels of supervision impact this activity. We asked for public comment on the level of supervision that is necessary to obtain beneficiary consent when furnishing care management services and stated we would consider such comments in future rulemaking.

We also proposed to adopt CPT codes 99424 ( PCM First 30 minutes provided personally by a physician or other qualified health care professional, per calendar month) and 99426 (PCM First 30 minutes of clinical staff time directed by physician or other qualified health care professional, per calendar month ) to replace HCPCS codes G2064 and G2065 in the calculation of the rate for HCPCS code G0511 for General Care Management services billed by RHCs and FQHCs. The payment rate for HCPCS code G0511 is calculated based on the average of the national non-facility PFS payment rate for care management and general behavioral health integration codes (CPT codes 99484, 99487, 99490, and 99491), as well as HCPCS codes G2064 and G2065 which describe PCM services billed under the PFS. The payment rate for HCPCS code G0511 is updated annually based on the PFS amounts for these codes.

We received many comments regarding our proposals and request for information related the CCM/CCCM/PCM code family. The following comments are a summary of the comments we received.

Comment: The majority of commenters supported our proposal to accept the RUC-recommended values for the CC/CCCM/PCM code family.

Response: We continue to believe that to accept these updated values is consistent with our goals of ensuring continued and consistent beneficiary access to these crucial care management services.

Comment: Many stakeholders responded to our request for more information about obtaining beneficiary consent when furnishing care management services. Commenters requested that they be able to continue to obtain beneficiary consent under the general supervision of the treating physician or NPP, as it has been during the PHE for COVID-19.

Response: We thank the stakeholders for their insights related to this request. We appreciate the comments and will consider them in future rulemaking.

Comment: One commenter stated that keeping professional PCM and CCM at the same value would not create an incentive to bill CCM instead of PCM. Specialty care practitioners often care for patients with a single high-risk disease and do not meet the criteria for reporting other types of care management services that require management of multiple conditions.

Response: We thank stakeholders for their comments regarding professional PCM and CCM billing.

Comment: We received several comments that we viewed as out-of-scope. Topics of the comments included eliminating copayments for care management services, reviewing “30-day” global codes including care management codes, giving CPT code 99072 an active status, and deleting HCPCS G0506.

Response: We may consider these topics in future rulemaking.

After consideration of the comments, we are finalizing the proposed values for the 10 CCM/CCCM/PCM codes, which includes finalizing the same values for professional PCM and CCM services.

We are also finalizing adoption of the CPT codes 99424 ( PCM First 30 minutes provided personally by a physician or other qualified health care professional, per calendar month ) and 99426 ( PCM First 30 minutes of clinical staff time directed by physician or other qualified health care professional, per calendar month ) to replace HCPCS codes G2064 and G2065 in the calculation of the rate for HCPCS code G0511 for General Care Management services billed by RHCs and FQHCs. The payment rate for HCPCS code G0511 is calculated based on the average of the national non-facility PFS payment rate for care management and general behavioral health integration codes (CPT codes 99484, 99487, 99490, and 99491) and will now include CPT codes 99424 and 99426 which describe PCM services billed under the PFS. The payment rate for HCPCS code G0511 is updated annually based on the PFS amounts for these codes.

(39) Moderate Sedation (HCPCS Code G0500)

Following the publication of the CY 2021 PFS final rule, a stakeholder contacted us regarding what they believed to be an error in the intraservice work time for HCPCS code G0500 ( Moderate sedation services provided by the same physician or other qualified health care professional performing a gastrointestinal endoscopic service that sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient's level of consciousness and physiological status; initial 15 minutes of intra-service time; patient age 5 years or older (additional time may be reported with 99153, as appropriate) ). We established HCPCS code G0500 in CY 2017 to more accurately capture the work of administering moderate sedation for gastrointestinal endoscopic procedures for patients 5 years of age or older. We based the physician work and time for HCPCS code G0500 on data from the 100 gastroenterologists who completed the survey of CPT code 99152 ( Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient's level of consciousness and physiological status; initial 15 minutes of intraservice time, patient age 5 years or older ) presented at the October 2015 RUC meeting. The survey data for CPT code 99152 showed a significant bimodal distribution with data from gastroenterologists performing endoscopic procedures demonstrating a markedly different and lesser amount of physician work for moderate sedation compared to other specialties. The stakeholder stated that the finalization of 12 minutes of intraservice work time for HCPCS G0500 appeared to be an error and asked CMS to correct it to reflect the 5 minutes of intraservice work time indicated by survey data when gastroenterologists performed endoscopic procedures.

While we appreciate the feedback from the stakeholder, we disagreed in the proposed rule that the finalization of 12 minutes of intraservice work time for HCPCS code G0500 (matching CPT code 99152) was an error. The work time for HCPCS code G0500 was proposed and finalized at 12 minutes in CY 2017, with the intention that it would match the work time for CPT code 99152. This was the rationale behind the descriptor for HCPCS code G0500 listing that the code was intended for the initial 15 minutes of intraservice time. Furthermore, several commenters questioned the work time for HCPCS code G0500 in the CY 2017 PFS final rule (81 FR 80341) and we stated in response that we expected that practitioners would report the appropriate CPT or HCPCS code that most accurately described the services performed during a patient encounter, including those services performed concurrently and in support of a procedural service consistent with CPT guidance. We noted that the commenters referred to the time for moderate sedation in the survey data, while the time thresholds for the moderate sedation codes were intended to match the intraservice time of the procedure itself. For a full discussion of this topic, we refer readers to the CY 2017 PFS final rule (81 FR 80339 through 80349).

Although we did not propose a change in the work time for HCPCS code G0500, we solicited comments on this issue in the interest of gaining additional information about the typical use of this procedure. We did not receive any comments regarding the work time for HCPCS code G0500; we believe that this indicates that we were able to clarify this issue in the proposed rule.

(40) Payment for Synthetic Skin Substitutes (HCPCS Codes GXXAB, GXXAC, GXXAD, GXXAE, GXXAF, GXXAG, GXXAH, and GXXAI)

On July 1, 2020, Medicare implemented HCPCS code C1849 ( Skin substitute, synthetic, resorbable, per square centimeter ) and made it payable under the OPPS. In the CY 2021 OPPS final rule (85 FR 86064 through 86067) Medicare finalized payment for C1849—and the associated synthetic skin substitute products—allowing it to be billed with graft skin substitute procedure CPT codes 15271 through 15278. We note that under the OPPS, payment for C1849 is packaged into the payment for the graft skin substitute procedure, and its costs are reflected in the development of the payment rates for those services. The creation of the C-code and the CY 2021 OPPS rulemaking addressed the need for a mechanism to pay for graft skin substitute application services performed with synthetic graft substitute products in the outpatient hospital setting, which is comparable to how Medicare pays for graft skin substitute application services performed with graft skin substitutes that are regulated by the Food and Drug Administration (FDA) under its regulatory framework for human cells, tissues, and cellular and tissue-based products (HCT/Ps). We clarify that the availability of a HCPCS code for a particular HCT/P does not mean that the product is appropriately regulated solely under section 361 of the PHS Act and the FDA regulations in 21 CFR part 1271. Manufacturers of HCT/Ps should consult with the FDA Tissue Reference Group (TRG) or obtain a determination through a Request for Designation (RFD) on whether their HCT/Ps are appropriately regulated solely under section 361 of the PHS Act and the regulations in 21 CFR part 1271 (85 FR 86058). We note that in a response to the CY 2021 OPPS proposal, a commenter noted that the use of a C-code meant that synthetic graft skin substitute products would only be payable under the OPPS, and would not be able to be reported for graft skin substitute services using a synthetic product in the physician office setting (85 FR 86066).

Currently, graft skin substitute application services are paid separately from the HCT/Ps skin substitutes under the PFS. Specifically, when a physician or NPP furnishes a surgical service to apply a (HCT/Ps) skin substitute in a non-facility setting, they may bill Medicare for the surgical service (as described by CPT codes 15271 through 15278), and separately bill for the (HCT/Ps) skin substitute. For CY 2022, in order to reconcile the gap in payment for synthetic products in the physician office setting, we proposed to create ten HCPCS codes (parallel to the aforementioned existing surgical codes) that would include the synthetic graft skin substitute product as a supply cost in determining the PFS rate. We indicated that we believe it would be appropriate to consider these products as incident to supplies in the office setting, and as such they should be built in as a supply cost in calculating the PFS rate. Therefore, we proposed to consider these products as incident to supplies in the office setting.

The codes and long descriptors for the proposed synthetic graft skin substitute services are:

• HCPCS Code GXXAB: Application of synthetic skin substitute graft to trunk, arms, legs, total wound surface area up to 100 sq cm, including provision of synthetic skin substitute; first 25 sq cm or less wound surface area.

• HCPCS Code GXXAC: Application of synthetic skin substitute graft to trunk, arms, legs, total wound surface area up to 100 sq cm, including provision of synthetic skin substitute; each additional 25 sq cm wound surface area, or part thereof (List separately in addition to code for primary procedure).

• HCPCS Code GXXAD: Application of synthetic skin substitute graft to trunk, arms, legs, total wound surface area greater than or equal to 100 sq cm, including provision of synthetic skin substitute; first 100 sq cm wound surface area, or 1% of body area of infants and children.

• HCPCS Code GXXAE: Application of synthetic skin substitute graft to trunk, arms, legs, total wound surface area greater than or equal to 100 sq cm, including provision of synthetic skin substitute; each additional 100 sq cm wound surface area, or part thereof, or each additional 1% of body area of infants and children, or part thereof (List separately in addition to code for primary procedure).

• HCPCS Code GXXAF: Application of synthetic skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area up to 100 sq cm, including provision of synthetic skin substitute; first 25 sq cm or less wound surface area.

• HCPCS Code GXXAG: Application of synthetic skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area up to 100 sq cm, including provision of synthetic skin substitute; each additional 25 sq cm wound surface area, or part thereof (List separately in addition to code for primary procedure).

• HCPCS Code GXXAH: Application of synthetic skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area greater than or equal to 100 sq cm, including provision of synthetic skin substitute; first 100 sq cm wound surface area, or 1% of body area of infants and children.

• HCPCS Code GXXAI: Application of synthetic skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area greater than or equal to 100 sq cm, including provision of synthetic skin substitute; each additional 100 sq cm wound surface area, or part thereof, or each additional 1% of body area of infants and children, or part thereof (List separately in addition to code for primary procedure).

We proposed contractor pricing for these codes for CY 2022; we note that there is limited data available on the cost of synthetic skin substitute products in physician offices, so we also solicited comments and documentation regarding the appropriate values for these services for consideration of national pricing in future rulemaking.

Though we proposed contractor pricing, we also considered an alternative approach that would use crosswalks to value these services in the physician office setting in a way that is commensurate with the rates paid under the OPPS. Though there is only limited data on the cost of graft synthetic skin substitute products in physician offices, hospitals began reporting costs associated with synthetic skin substitute products in CY 2020 after C1849 became effective and payable under the OPPS starting in July, 2020. We analyzed CY 2020 OPPS claims data and estimate HOPD costs for graft synthetic skin substitute products averaged $1500. We note that under the OPPS, outpatient departments are paid separately for the primary surgical application codes (CPT codes 15271, 15273, 15275, 15277), and the costs associated with the synthetic products, as well as the add-on services (described by CPT codes 15272, 15274, 15276, 15278) are packaged into the payment for the primary procedure.

Under this alternative, we considered following an approach similar to that use under the OPPS where the cost of the supply would be included in the primary codes (described by HCPCS GXXAB, GXXAD, GXXAF, and GXXAH) and not the add-on codes (described by HCPCS GXXAC, GXXAE, GXXAG, and GXXAI), though the add-on would continue to be reported and paid separately. Specifically, we would use direct crosswalks for the work RVUs, MP RVUs, and facility PE RVUs from the current surgical application codes (that is, CPT codes 15271 through 15278) as we believe that these payment components for the synthetic graft skin substitute services, described by the aforementioned HCPCS codes, would be similar.

However, with regard to the non-facility PE RVUs, we recognize that there are significant supply costs associated with synthetic skin substitute products. As described previously, we estimate that hospitals face average costs associated with synthetic skin substitute products of $1500. We note that the PE methodology, which relies on the allocation of indirect costs based on the magnitude of direct costs, may not be appropriate for these types of services because the specialists that typically furnish these types of services do not typically have significant supply costs within the methodology. As such, we used the hospital reported costs and we looked to other codes where specialists frequently have similarly high supply costs in order to crosswalk the non-facility PE RVUs. We considered services that have a significant proportion of supply costs and are furnished by specialists who typically have higher supply costs as potential crosswalks for the non-facility PE RVUs. For example, we considered a crosswalk to CPT code 21461 ( Open treatment of mandibular fracture; without interdental fixation ) for HCPCS codes GXXAB and GXXAF, and a crosswalk to CPT code 21462 ( Open treatment of mandibular fracture; with interdental fixation ) for HCPCS codes GXXAD and GXXAH. As an estimate of non-facility PE, we believe these would be appropriate codes for crosswalking non-facility PE RVUs.

As previously discussed in the proposed rule, for the purposes of the work RVUs, MP RVUs, and facility PE RVUs, we believed direct crosswalks to the current surgical application codes would be appropriate as those values would generally not be impacted by the addition of a synthetic skin substitute product. We realized this alternative considered would follow a similar coding and payment approach established under the OPPS, and that potential adoption of this alternative would mean that the cost of the products is included in the primary codes and not included in the add-on codes. We welcomed feedback on our proposal to treat synthetic skin substitute products as incident to supplies in the physician office, the proposal to have contractor pricing for these codes, and other ways we could obtain detailed and reliable cost information on synthetic skin substitutes that are furnished in the non-facility setting. We also solicited comment on the alternative approach that we considered (using crosswalks to value these services in the physician office setting). Additionally, we solicited comment on potential ways to reconcile these coding and payment differences across settings to yield a more consistent and rational payment approach for synthetic and HCT/P graft skin substitutes.

Comment: One commenter agreed with the proposal to create eight HCPCS codes for these services citing their previous position regarding high-cost disposable supplies, and that they had urged CMS to consider separately identifying and paying for services with disposable supplies over $500. The commenter disagreed with the proposed alternatives considered whereby instead of contractor pricing, we could alternatively utilize crosswalks to value these services in the physician office setting in a way commensurate with the rates paid under the OPPS. The commenter asserted that any use of the relativity of hospital charge data to determine the relativity of practice costs within the physician office setting is inconsistent with the statutory provisions articulated in Medicare statutory authority for the PFS. The commenter stated that the new procedure codes need to go through the CPT and RUC processes like all other services.

Response: With regard to the commenter's concerns regarding the proposed alternatives considered, we note that section 1848(c)(2)(N) of the Act authorizes us to use alternative approaches to establishing or adjusting PE RVUs using cost, charge, or other data from suppliers or providers of services in order to ensure accurate valuation of services under the PFS. Additionally, we reiterate that we continually engage with stakeholders, including the RUC, with regard to our approach for accurately valuing codes, and as we prioritize our obligation to value new, revised, and potentially misvalued codes. We continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process.

Comment: One commenter requested clarification on how CMS intends to determine payment for proposed synthetic skin substitutes.

Response: We note that we discussed in the proposed rule that the eight new HCPCS codes would be contractor priced, and also discussed an alternative approach we considered whereby we would use direct crosswalks to the current surgical application codes for the work RVUs, MP RVUs, and facility PE RVUs as those generally would not be impacted by the addition of a synthetic skin substitute product; and with regard to the proposal to determine the non-facility PE RVUs for the eight new proposed HCPCS codes we would use crosswalks to other codes for which there are frequently similarly high supply costs.

Comment: Several commenters stated that they appreciate CMS' recognition of the need to develop appropriate payment mechanisms for synthetic skin substitute products in the physician office setting; however, the commenters urged CMS to not finalize the proposal to treat synthetic skin substitutes as incident to supplies in the physician office setting, and to instead adopt a uniform and consistent policy to treat all skin substitutes, including synthetic skin substitutes, in the same manner. Specifically, the commenters stated that CMS should pay separately for the procedure using the existing graft skin substitute application codes (CPT codes 15271-15278) and establish specific HCPCS codes for each distinct synthetic skin substitute product; some commenters noted that new synthetic skin substitutes will have variable costs and pricing and for that reason they believe unique HCPCS coding is necessary to provide identification to payers on claims, and track each product's cost. Some commenters also stated that synthetic skin substitutes are not supplies and mention that all other skin substitutes are not considered incident to supplies in any setting including the physician office setting. Therefore, they believe it is illogical that CMS would propose that synthetic skin substitutes be treated as incident to supplies in the physician office. The commenters stated that the proposal would create inconsistencies across treatment settings, and any policy differences between the OPPS and PFS will cause considerable confusion and unnecessary administrative burden. A few commenters stated that alternatively, CMS could mirror the methodology used in the outpatient department setting by assigning synthetic skin substitutes to a high or low-cost category and establish a single payment rate for each category, which would also require CMS to develop unique HCPCS coding for each synthetic skin substitute product.

Response: We thank commenters for their thoughtful comments and note that they highlighted several important factors that must be addressed as we consider payment for synthetic skin substitutes. We appreciate that there is a great deal of information and additional considerations we need to further examine in order to more comprehensively address our goal of establishing a consistent and rational payment approach for synthetic (as well as HCT/P) graft skin substitutes across settings. After consideration of the public comments, we acknowledge that the policy as proposed could contribute to continued differing treatment of synthetic skin substitutes in the physician office setting as compared to the hospital setting. However, we also recognize that currently there is no payment mechanism which makes use of synthetic skin substitute products payable under the PFS, and we acknowledge the need to reconcile the gap in payment for synthetic products in the physician office setting without delay. Therefore, in order to address this need, and to be responsive to the feedback we received from commenters, we are establishing a unique HCPCS Level II code for each of 10 products for which we have received a HCPCS Level II coding application and then, though this final rule, finalizing that these products will be payable in the physician office setting as contractor priced products that are billed separately from the procedure to apply them. The ten products are as follows: NovoSorb SynPath, Restrata Wound Matrix, Symphony, InnovaMatrix AC, Mirragen Advanced Wound Matrix, bio-ConneKt Wound Matrix, TheraGenesis, XCelliStem, Microlyte Matrix, and Apis. We note that we are taking a closer look at our approach to HCPCS Level II coding for a broad range of skin substitute products, also referred to as wound dressings, and that our decision on the ten applications for synthetic skin substitutes noted above is part of that ongoing work. These ten applications were received over the course of several quarterly and biannual coding cycles in 2020 and 2021. With the exception of the timing, the process we used to decide that we will establish a unique HCPCS Level II code for each the ten products that we are announcing in this final rule was the same process we currently use to decide other HCPCS Level II coding applications submitted during our quarterly and biannual coding cycles. Under that process, CMS staff review and make recommendations to agency leadership regarding whether to approve the applications. We post our coding decisions for drugs and biologicals on a quarterly basis. For our quarterly cycles for drugs and biologicals, we do not routinely review those applications at a HCPCS public meeting. For non-drugs and non-biologicals, we post our coding decisions on a biannual basis. For our biannual cycles for non-drugs and non-biologicals, we post preliminary coding decisions, then invite stakeholders to react to those preliminary coding decisions at a biannual HCPCS public meeting. After the HCPCS public meetings, we post the final coding decisions. We do not have a formal process for consulting with an outside committee as part of our evaluation of HCPCS Level II coding applications. Around early November 2021, we will post information about these new HCPCS Level II codes on our website at https://www.cms.gov/medicare/coding/medhcpcsgeninfo. We are finalizing a policy to allow these HCPCS codes to be billed as add-on codes to the appropriate existing surgical application codes (CPT codes 15271-15278); this is consistent with the current treatment for other skin substitutes under the PFS. This approach differs from the original proposal in that the payment for the product is coded separately from the procedure to apply it, and it is consistent with the approach several of the commenters urged us to adopt instead. This approach will allow us to address the gap in payment for synthetic skin substitutes under the PFS, while also allowing us to take the necessary additional time to determine the most appropriate way to handle skin substitutes more comprehensively under the Medicare program. We anticipate addressing this matter more extensively in future rulemaking.

Comment: A few commenters stated that several refinements would be needed if the proposed G-codes are finalized. One commenter noted that the proposed alternative crosswalks for HCPCS codes GXXAB, GXXAD, GXXAF and GXXAH were inadequate, and provided alternate potential crosswalks for consideration. Additionally, a few commenters stated that CMS should not package payment for add-on codes, as proposed—whereby the cost of the supply would be included in the primary codes but not the add-on codes. The commenters also expressed that they believe this approach is also inappropriate under the OPPS where it was previously finalized, some stating that it overpays for treatment of smaller wounds and creates barriers to treating larger wounds in the HOPD. The commenters reference the August 23, 2021 Advisory Panel on Hospital Outpatient Payment stating that the panel unanimously approved recommendations to allow for payment for the existing skin substitute application add-on codes, and to assign similar APCs for skin substitute applications regardless of anatomical location on the body. The commenters stated that prior to adopting the proposed G-codes for payment in the physician office setting, these recommendations would need to be taken into consideration.

Response: As stated above, we are not finalizing the proposal to create G-codes that would treat the synthetic skin substitutes as incident to supplies, and instead are finalizing a modification to our proposal whereby we will establish product specific HCPCS codes that will be payable in the physician office setting. We appreciate the information regarding the recommendation to allow for payment of skin substitute application add-on codes under the OPPS, and will consider it in our ongoing review of all skin substitutes.

Comment: A few commenters urged CMS to re-evaluate the CY 2021 decision to issue HCPCS code C1849 for payment for synthetic skin substitute products under the OPPS and replace that generic code with unique product specific Q-codes similar to what occurs for all other skin substitutes.

Response: This comment regarding a policy finalized under the OPPS for CY 2021 is outside of the scope of this final rule.

Comment: One commenter stated that CMS had consistent policy for skin substitutes across the PFS and OPPS prior to CY 2014 when all products were paid separately as biologicals, and beginning in CY 2014 CMS began a policy of packaging skin substitutes under the OPPS while continuing to make separate payment under the PFS. The commenter stated that CMS could re-establish the old policy by reverting to separate payment for skin substitutes as CMS did prior to CY 2014.

Response: We appreciate the commenter's feedback, though the comment with regard to a policy established under the OPPS in CY 2014 is outside of the scope of this final rule; however, we would refer interested parties to the CY 2014 OPPS/ASC final rule with comment period (78 FR 74938) for the discussion regarding how the policy to package skin substitutes was part of a broader policy to package all drugs and biologicals that function as supplies when used in a surgical procedure.

Comment: One commenter stated that they agree with the proposal to establish G-codes for synthetic skin substitutes in the office setting and if the proposed G-codes incorporate a high enough reimbursement level that considers the application of small to larger sizes and is also inclusive of existing in-office site preparation codes currently utilized today, then the proposed G-codes would be a positive step forward. The commenter stated that they do not agree with the industry commentary to consider utilization of Q-codes during the early adoption of such policy.

Response: We appreciate the commenters feedback regarding our proposal.

Comment: One commenter stated that the miscellaneous HCPCS code Q4100 could be used for the synthetic skin substitute product until specific HCPCS codes can be established through the usual HCPCS coding process that all other skin substitute products go through, and could be billed along with the existing application codes.

Response: We appreciate the commenter's feedback. As previously discussed, we are finalizing a policy to make synthetic skin substitute products payable under the PFS.

Comment: One commenter stated that there is no universal definition of what constitutes a synthetic product and that neither CMS nor the industry have clearly defined what a synthetic product is. The commenter noted that they believe a definition is a critical first step in determining the cost and other benefits to patients of new and advanced technology. Another commenter stated that synthetic skin substitute manufacturers should be given the opportunity to apply for a unique HCPCS codes as has been the process for all non-synthetic products rather than establish new HCPCS codes. The commenter stated that as the codes are evaluated by the HCPCS committee, the product should meet the significant therapeutic distinction criterion and demonstrate that the product heals wounds with statistical significance, and not simply act as a dressing or barrier for normal healing, and is only used when wounds become chronic. The commenter stated that the current proposal does not adequately account for variations in technology, stating that creating different coding and reimbursement methodologies does not account for the increasing intersection between biological, bioengineered, and synthetic components, as skin substitutes are a heterogenous group and that the materials used to produce skin substitutes are either natural, synthetic, or both. The commenter indicated that CMS previously assigned HCPCS code Q4117 to a product considered to be a synthetic skin substitute, which demonstrates that synthetic skin substitutes can function within the current coding under both the PFS and OPPS frameworks. The commenter stated that it would be better for CMS to judiciously assign HCPCS codes to synthetic products that meet the HCPCS coding application requirements of significant therapeutic distinction. The commenter also stated that the proposed introduction of eight new HCPCS codes would be confusing because if materials used to produce the skin substitute are either natural, synthetic, or both it would be difficult for the provider to know which skin substitutes are synthetic and which are not, or if the product has both synthetic and natural components; and these uncertainties may cause potential delays or errors for providers and may have unintentional effect of increased patient responsibility if not coded correctly.

Response: We will take these comments into consideration for possible future rulemaking as we continue our work to address payment for all skin substitutes across settings, taking into account the intersection between biological, bioengineered, and synthetic components of these products. We also plan to further evaluate these components of products with an existing Q-code for future rulemaking to, in a similar manner, address payment policies for all skin substitutes across settings in a consistent manner along with products discussed in this rule. As indicated above we are finalizing a policy to create product specific HCPCS Level II codes that will be payable under the PFS. Additionally, we note that the definition of skin substitutes was clarified in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86058), but we certainly appreciate that the definitional issues raised in a comment on the CY 2022 PFS proposed rule are challenging, and we acknowledge that it will be important to develop the appropriate terminology for these products going forward. We expect this to be an evolving issue as we address this topic in future rulemaking.

Comment: One commenter stated that the proposed synthetic skin substitute HCPCS codes should include both resorbable, and non-resorbable synthetic skin substitutes, as well as resorbable and non-resorbable bio-synthetic skin substitutes. The commenter stated that the G-code descriptors should be modified to include “bio-synthetic” and clarify that the proposed G-codes can be reported for both synthetic and bio-synthetic skin substitute products that are either resorbable or non-resorbable. The commenter also stated that if CMS would like to distinguish between resorbable and non-resorbable, as well as bio-synthetic, that CMS should create several code sets that would make these distinctions.

Response: We appreciate the commenter's feedback and will take these comments into consideration for future rulemaking as we continue our work to address payment for all skin substitutes across settings.

Comment: A few commenters questioned the inclusion of the language which had previously been included in the CY 2021 OPPS/ASC final rule (85 FR 86058) stating that manufacturers of human cells, tissues, and cellular and tissue-based products should consult with the FDA Tissue Reference Group or obtain a determination through a Request for Designation on whether their HCT/Ps are appropriately regulated solely under section 361 of PHS Act and the regulations in 21 CFR part 1271. The commenters questioned why this information was included relating to synthetic resorbable skin substitutes since most of them have gone through the FDA's 510(k) process and received 510(k) clearance, and they are not considered HCT/Ps and thus should not be required to obtain another determination from the FDA TRG or RFD from FDA. The commenters stated that CMS should provide additional clarification and state which products must obtain a determination from the TRG or an RFD from FDA and remove any reference regarding consulting with the FDA TRG or obtaining a determination through an RFD from the discussion of synthetic skin substitutes since this information is not pertinent to these products.

Response: As indicated in the preamble to the CY 2022 PFS proposed rule (86 FR 39177), CMS established a policy with regard to payment for graft skin substitute application services performed with synthetic graft substitute products under the OPPS that is comparable to the way Medicare pays for graft skin substitute application services performed with HCT/P skin substitutes. We included the information about HCT/P skin substitutes in order to provide background and context for the policies we proposed when synthetic graft substitute products are furnished in the physician office setting. Similarly, our statement about consulting with the FDA TRG and the RFD process was intended to provide further background on CMS' overall approach to skin substitute products, and should not be interpreted as applying to products that received 510(k) clearance.

After consideration of the public comments, in order to address the need to establish a payment mechanism for synthetic skin substitutes in the physician office setting without further delay, and to be responsive to the feedback we received from commenters, we are creating the following unique HCPCS Level II codes for the following products: NovoSorb SynPath, Restrata Wound Matrix, Symphony, InnovaMatrix AC, Mirragen Advanced Wound Matrix, bio-ConneKt Wound Matrix, TheraGenesis, XCelliStem, Microlyte Matrix, and Apis; and are also finalizing that these synthetic skin substitutes will be payable with physician services in the office setting. Around early November 2021, CMS will post information about these new HCPCS Level II codes on its website at https://www.cms.gov/medicare/coding/medhcpcsgeninfo. These HCPCS Level II codes may be billed as add-on codes to the appropriate existing surgical application codes (CPT codes 15271-15278), and will be contractor priced.

(41) External Extended ECG Monitoring (CPT Codes 93241, 93242, 93243, 93244, 93245, 93246, 93247, and 93248)

In the CY 2021 PFS proposed rule (85 FR 50164), we proposed to adopt the RUC recommendations for CPT codes 93241 ( External electrocardiographic recording for more than 48 hours up to 7 days by continuous rhythm recording and storage; includes recording, scanning analysis with report, review and interpretation ), 93242 ( External electrocardiographic recording for more than 48 hours up to 7 days by continuous rhythm recording and storage; recording (includes connection and initial recording) ), 93243 ( External electrocardiographic recording for more than 48 hours up to 7 days by continuous rhythm recording and storage; scanning analysis with report ), 93244 ( External electrocardiographic recording for more than 48 hours up to 7 days by continuous rhythm recording and storage; review and interpretation ), 93245 ( External electrocardiographic recording for more than 7 days up to 15 days by continuous rhythm recording and storage; includes recording, scanning analysis with report, review and interpretation ), 93246 ( External electrocardiographic recording for more than 7 days up to 15 days by continuous rhythm recording and storage; recording (includes connection and initial recording) ), 93247 ( External electrocardiographic recording for more than 7 days up to 15 days by continuous rhythm recording and storage; scanning analysis with report ), and 93248 ( External electrocardiographic recording for more than 7 days up to 15 days by continuous rhythm recording and storage; review and interpretation ).

We noted that the recommendations for this family of codes contain one new supply item, the “extended external ECG patch, medical magnetic tape recorder” (SD339). We did not receive a traditional invoice to establish a price for this supply item. Instead we received pricing information from two sources: A weighted median of claims data with the cost of the other direct PE inputs removed, and a top-down approach calculating the cost of the supply per service based on summing the total costs of the health care provider and dividing by the total number of tests furnished. The former methodology yielded a supply price of approximately $440 while the latter methodology produced an estimated supply price of $416.85. Stakeholders also submitted a series of invoices from the clinical study marketplace with a price of $595, which we rejected as we typically require an invoice representative of commercial market pricing to establish a national price for a new supply or equipment item.

After consideration of the information, we proposed to employ a crosswalk to an existing supply for use as a proxy price until we received pricing information to use for the “extended external ECG patch, medical magnetic tape recorder” item. We proposed to use the “kit, percutaneous neuro test stimulation” (SA022) supply as our proxy item at a price of $413.24. We believed the kit to be the closest match from a pricing perspective to employ as a proxy until we would be able to arrive at an invoice that is representative of commercial market pricing. We welcomed the submission of invoices or other additional information for use in pricing the “extended external ECG patch, medical magnetic tape recorder” supply. In response to our proposal, we received conflicting information from commenters and in the CY 2021 PFS final rule (85 FR 84631), we ultimately finalized contractor pricing for CY 2021 for the four codes that include this supply input (CPT codes 93241, 93243, 93245, and 93247) to allow additional time to receive more pricing information.

We note that stakeholders have continued to engage with CMS and the MACs on payment for this service. We remain concerned that we continue to hear that the supply costs as initially considered in our CY 2021 PFS proposal are much higher than they should be. At the same time, we also have heard that the resource costs, as reflected in the contractor based payments do not adequately cover the incurred cost for the SD339 supply that is used to furnish these services. In consideration of continued access to these services for Medicare beneficiaries, we once again solicited public comments and information to support CMS' future rulemaking to establish a uniform national payment that appropriately reflects the PE that are used to furnish these services. As previously stated, invoices or other additional information, including for example, which proxy supply items could be used to establish cost for the SD339 supply, information on use/application and potential alternatives (as appropriate) to the supply items, will be ideal for us to use in establishing fair and stable pricing for these services. We note that in the absence of such additional and actionable information (that is, information that provides further context to information that has already been considered) we proposed to maintain contractor pricing for these services.

Comment: Many commenters supported establishing national payment rates in CY 2022 for CPT codes 93241, 93243, 93245, and 93247. Commenters stated that the establishment of national payment rates would enable Medicare beneficiaries to access these technologies at fair and stable rates representing relative resources typically used to furnish these services. Commenters detailed the clinical benefits associated with the use of extended ECG monitoring and stated that the establishment of national pricing would ensure payment stability and increase beneficiary access to this form of care.

Response: We agree with the commenters that establishing national payment rates for CPT codes 93241, 93243, 93245, and 93247 would help remove disparities in pricing for these services and could potentially increase access to extended ECG monitoring services. However, we were previously unable to determine accurate pricing for the “extended external ECG patch, medical magnetic tape recorder” (SD339) supply due to conflicting information. Because this supply makes up a disproportionate amount of the costs associated with CPT codes 93241, 93243, 93245, and 93247, we were unable to finalize national payment rates in CY 2021. We believe that we require accurate pricing of the relative resource costs associated with this supply item before we can finalize national payment for these services. Additionally, we note that we did not receive public comments requesting that CMS maintain contractor pricing for these codes.

Comment: Several commenters submitted invoices for use in pricing the SD339 supply item. We received ten invoices in total describing several different types of patches that commenters stated were analogous to the pricing of the SD339 supply. These invoices averaged out to a price of $200.15. Some commenters requested that CMS use the submitted invoices to establish appropriate national payment for CPT codes 93241, 93243, 93245, and 93247; other commenters requested that CMS identify an appropriate proxy supply item from a list of supplies that they provided. One commenter suggested crosswalking the price of the SD339 supply to the catheter, balloon, esophageal or rectal (graded distention test) (SD214) supply at its CY 2021 price of $325.98.

Response: We appreciate the submission of invoices and additional information for use in pricing the SD339 supply from the commenters. Based on the information in the submitted invoices, we are finalizing an updated price of $200.15 for the extended external ECG patch, medical magnetic tape recorder” (SD339) supply based on the average of the ten invoices we received. We believe that the invoice data for this supply item, which ranged from a minimum price of $179.80 to a maximum price of $241.99, suggests that our updated price of $200.15 is more accurate than the suggested crosswalk to the SD214 supply at a price of $325.98.

Comment: Several commenters requested that CMS add additional clinical labor and equipment time to CPT codes 93241, 93243, 93245, and 93247 above what the RUC recommended and CMS proposed in CY 2021. Commenters stated that the clinical labor inputs recommended by the RUC and proposed by CMS understate what is needed to perform the data analysis and report generation for extended ECG monitoring and requested additional clinical labor time to review the data obtained during the service. Commenters also stated that the equipment time recommended by the RUC and proposed by CMS understated the proprietary software and visualization technologies used to improve the accuracy and reproducibility of the human work. One commenter requested adding 104 minutes of equipment time for both the CEM system (EQ297) and the EEG analysis software (EQ013) equipment. A different commenter requested an increase to the equipment costs by using as proxies the equipment costs used in other cardiac monitoring and described by the Holter analysis system (EQ309) and the patient worn telemetry system (EQ340).

Response: We do not agree with the commenters that there are additional clinical labor and equipment costs above what the RUC recommended and we proposed in CY 2021 for CPT codes 93241, 93243, 93245, and 93247. In the CY 2022 PFS proposed rule, we requested invoices or other additional information regarding supply costs, including for example which proxy supply items could be used to establish cost for the SD339 supply, for use in establishing fair and stable pricing for these services; we did not request information regarding clinical labor or equipment inputs. We continue to believe that the other direct PE inputs proposed in CY 2021 are accurate for CPT codes 93241, 93243, 93245, and 93247; for a full discussion of this topic, we direct readers to the CY 2021 PFS proposed rule (85 FR 50164) and our responses to commenters in the CY 2021 PFS final rule (85 FR 84631).

After consideration of the comments, we are finalizing an updated price of $200.15 for the extended external ECG patch, medical magnetic tape recorder” (SD339) supply based on the average of the 10 invoices we received. Although we did request and receive pricing information as requested from stakeholders, we note that these services have a high utilization, and as a result any changes to the PE for these services would noticeably impact our BN adjustments for CY 2022. We believe that in light of a potential impact to payment for other services under the PFS, a proposal to establish national payment for these services based on this new pricing information should take into account broader stakeholder feedback. Therefore, we are not finalizing national pricing at this time and are finalizing our proposal to maintain contractor pricing for CPT codes 93241, 93243, 93245, and 93247 for CY 2022. However, we encourage stakeholders to continue to provide feedback regarding invoices or other additional information which could be used to establish pricing for the SD339 supply to assist CMS in setting national prices for these CPT codes for the CY 2023 rulemaking cycle. Stakeholders are encouraged to submit invoices with their public comments or, if outside the notice and comment rulemaking process, via email at PE_Price_Input_Update@cms.hhs.gov .

(42) Comment Solicitation for Impact of Infectious Disease on Codes and Ratesetting

During the PHE for COVID-19, several stakeholders have contacted CMS with concerns about the additional costs borne by physician and NPPs due to the pandemic that may impact the professional services furnished to Medicare beneficiaries. For example, we have heard from stakeholders about higher costs due to additional supplies, such as personal protective equipment, and increased time that physicians, NPPs and their clinical staff may spend with patients to mitigate further spread of infection when, for example, stakeholders are working to rule out a COVID-19 infection, or furnishing other services to a patient with a confirmed COVID-19 infection. While costs such as these may diffuse into Medicare payment rates over a period of time, our payment systems, including the PFS, are not generally designed to accommodate more acute increases in resource costs, even if they are widespread. We acknowledge the circumstances stakeholders have identified that may lead to additional costs borne by physicians and NPPs during the PHE, and we have developed and implemented policies, as appropriate and where possible, to maintain beneficiary access to necessary services during the PHE. We are continuing to think broadly about the concerns raised, and specifically about the types of resource costs that may not be fully reflected in payment rates for existing services, or costs that could be accounted for by establishing new payment rates for new services. We were interested in feedback from stakeholders about additional strategies to account for PHE-related costs, including feedback on the specific types of services and costs that may benefit from further review, such as infectious disease control measures, research-related activities and services, or PHE-related preventive or therapeutic counseling services. We were interested in detailed feedback from stakeholders to help inform whether we should consider making changes to payments for services or develop separate payments for such services in future rulemaking.

Comment: Many commenters suggested the use of a new modifier that infectious disease physicians and other clinicians could append to current E/M codes that would help ensure that resources are available for the increased work associated with care during an outbreak. Commenters noted that the use of a modifier would provide CMS with two useful safeguards: (1) CMS could set documentation requirements regarding the existence of the outbreak (for example, parameters associated with the timeframe that public health officials have declared an infectious disease/public health emergency (PHE) or reporting associated diagnosis codes); and (2) CMS could set documentation requirements to justify the enhanced services that were provided during the outbreak (for example, evidence in the medical record that one or more of the aforementioned activities were delivered or influenced care). Commenters noted that there are other mechanisms that could achieve the same policy goals, but a mechanism such as a modifier would allow CMS to more narrowly tailor the directing of resources based on cases where the enhanced care is delivered in a way that supports program integrity. Commenters stated that a payment modifier would ensure that physicians, regardless of specialty designation, receive reimbursement commensurate with the atypical activities associated with treating patients during an outbreak or pandemic.

Commenters noted that a permanent mechanism or “outbreak activation” policy to reimburse clinicians for critical activities associated with managing future infectious disease outbreaks would promote certainty for both physicians and CMS, and facilitate rapid responses at the beginning of an outbreak when speed is critical to stop the spread of infections and save lives. Commenters noted that the payment enhancements made to address the current resource challenge were not predictable, were temporary in nature, and are specific to the COVID-19 outbreak, and therefore, cannot be used as a base for a permanent mechanism.

Response: We appreciate the commenters' feedback and will consider this feedback in the context of potential future rulemaking.

Comment: Many commenters urged CMS to implement and pay for CPT code 99072 ( Additional supplies, materials, and clinical staff time over and above those usually included in an office visit or other non-facility service(s), when performed during a Public Health Emergency, as defined by law, due to respiratory-transmitted infectious disease ) to compensate practices for the additional staffing and personal protection equipment (PPE) and other supplies needed during the COVID-19 pandemic, without patient cost-sharing or BN adjustments. Some commenters expressed urgency as physicians continue to incur increased expenses in an effort to safely care for patients during the PHE, and the commenters encouraged the issuance of an interim final rule to separately pay for CPT code 99072. Other commenters stated that CPT code 99072 does not capture the myriad of activities and tasks that are required of hospitalists and other types of physicians during a pandemic and that even if CMS were to assign a value to this code, it still would not meet the needs of the physician community as it would not account for specific services provided during a pandemic. One commenter suggested that CPT code 99483 ( Assessment of and care planning for a patient with cognitive impairment, requiring an independent historian, in the office or other outpatient, home or domiciliary or rest home, with all of the following required elements: Cognition-focused evaluation including a pertinent history and examination; Medical decision making of moderate or high complexity; Functional assessment (e.g., basic and instrumental activities of daily living), including decision-making capacity; Use of standardized instruments for staging of dementia (e.g., functional assessment staging test [FAST], clinical dementia rating [CDR]); Medication reconciliation and review for high-risk medications; Evaluation for neuropsychiatric and behavioral symptoms, including depression, including use of standardized screening instrument(s); Evaluation of safety (e.g., home), including motor vehicle operation; Identification of caregiver(s), caregiver knowledge, caregiver needs, social supports, and the willingness of caregiver to take on caregiving tasks; Development, updating or revision, or review of an Advance Care Plan; Creation of a written care plan, including initial plans to address any neuropsychiatric symptoms, neuro-cognitive symptoms, functional limitations, and referral to community resources as needed (e.g., rehabilitation services, adult day programs, support groups) shared with the patient and/or caregiver with initial education and support. Typically, 50 minutes are spent face-to-face with the patient and/or family or caregiver. ), HCPCS code G2064 ( Comprehensive care management services for a single high-risk disease, e.g., principal care management, at least 30 minutes of physician or other qualified health care professional time per calendar month with the following elements: One complex chronic condition lasting at least 3 months, which is the focus of the care plan, the condition is of sufficient severity to place patient at risk of hospitalization or have been the cause of a recent hospitalization, the condition requires development or revision of disease-specific care plan, the condition requires frequent adjustments in the medication regimen, and/or the management of the condition is unusually complex due to comorbidities ), and HCPCS code G0108 ( Diabetes outpatient self-management training services, individual, per 30 minutes ) would be appropriate crosswalk codes for valuation and inputs.

Response: We appreciate the commenters' feedback and will consider this feedback in the context of potential future rulemaking.

Comment: One commenter suggested separate, additional payment for pandemic costs that are free from BN considerations. The commenter noted that CMS could pay for CPT code 99072, or create a pandemic “pack” of standardized inputs for services, similar to the E/M supply pack.

Response: We appreciate the commenters' feedback and will consider this feedback and our regulatory and statutory authority in future rulemaking.

(43) Comment Solicitation on Separate PFS Coding and Payment for Chronic Pain Management

Adequate treatment of pain is a significant public health challenge. Centers for Disease Control and Prevention (CDC) data indicate 50 million adults in the United States have chronic daily pain, with nearly 20 million experiencing high impact pain that interferes with daily life or work. Pain is the most common reason individuals seek medical care, and more than 20 percent of office visits are associated with pain. In the United States, 42.6 percent of adults report having pain on some days in the past 6 months, and chronic pain and high-impact chronic pain are experienced by 20.4 percent and 8 percent of adults, respectively. The high prevalence of pain exacts a substantial economic toll: Medical expenditures and lost productivity related to pain result in a cost to the United States estimated at up to $635 billion.

In 2010, HHS, through the National Institutes of Health (NIH), contracted with the Institute of Medicine to make recommendations “to increase the recognition of pain as a significant public health problem in the United States.” In its 2011 report entitled Relieving Pain in America: A Blueprint for Transforming Prevention, Care, Education, and Research, the Institute of Medicine, through a study mandated by Congress, recommended significant improvements in pain prevention, care, education, and research and development of a population health-level strategy to address pain care. The report described that the unique experience of pain requires a combination of person-centered therapies and coping techniques influenced by genes, cultural attitudes, stress, depression, ability to understand health information, and other behavioral, cultural, and emotional factors. It noted that individualized care can require adequate extra time to counsel patients and caregivers, promote self-management, and consult with other health care providers, but current reimbursement systems are not designed to efficiently pay for this approach. HHS subsequently convened an expert committee to oversee creation of the National Pain Strategy (NPS), issued in 2016. The NPS addressed six key areas of care: Population research, prevention and care, disparities, service delivery and payment, professional education and training, and public education/communication. In this report, NPS' vision is to “decrease the prevalence of pain across its continuum from acute to high-impact chronic pain and its associated morbidity and disability across the lifespan,” and aim “to reduce the burden of pain for individuals, their families, and society as a whole.”

This work was followed by HHS' 2019 release of its Pain Management Best Practices Inter-Agency Task Force Report: Updates, Gaps, Inconsistencies, and Recommendations (PMTF Report) . The PMTF Report focuses on the development of patient-centered pain treatment plans to establish diagnosis and set measurable outcomes such as improvements in quality of life, function, and activities of daily living. It emphasized multi-modal, multi-disciplinary approaches that include various modalities for acute and chronic pain. The PMTF Report also identified five broad treatment categories: Medications including opioids and non-opioids, restorative therapies, interventional approaches, behavioral approaches, and complementary and integrative health. It stressed the importance of special populations including older adults and persons with relapsing conditions, Veterans, and people who receive palliative care. The PMTF Report recognized the importance of proper opioid stewardship for individuals who need opioids to effectively manage their pain. As the Task Force noted, there are ongoing concerns regarding suicide and suicidal ideation due to pain, and a lack of access to pain treatment, including appropriate access to opioid medications. The PMTF Report noted that management of pain conditions often requires multidisciplinary coordination among health care professionals, and that the experience of pain can intensify other health issues such as delayed recovery from surgery, or exacerbate behavioral health conditions. Many health care professionals, including primary care providers, have opted out entirely in treating pain, worsening an existing shortage of pain specialists and making chronic pain care hard to access, including for people who frequently experience disparities in pain care such as rural dwellers, racial/ethnic minorities, and people with disabilities. The COVID-19 PHE has also had an impact on the ability of many older adults and people with disabilities' access to care, although telehealth modalities have shown promise in broadening access to services and supports.

At the same time individuals are experiencing difficulties finding pain care, the country is also coping with a worsening opioid and SUD crisis. The current environment involves shifting “waves” of overdose deaths associated with heroin, synthetic opioids, and prescription drugs, and intensifying stimulant and polysubstance use. Preliminary Centers for Disease Control and Prevention data released in April 2021 show a 29 percent rise in overdose deaths from October 2019 through September 2020—the most recent data available—compared with the previous 12-month period. Illicitly manufactured fentanyl and other synthetic opioids were the primary drivers, although many fatal overdoses have also involved stimulant drugs, particularly methamphetamine. In December 2020, the Substance Abuse and Mental Health Services Administration (SAMHSA) released a preliminary report from its Drug Abuse Warning Network, which captures data on emergency department (ED) visits related to recent substance use and misuse such as alcohol use, illicit drug use, suicide attempts, and nonmedical use of pharmaceuticals. Most commonly associated with ED visits in the participating hospitals are illicit substances and central nervous system agents. Among illicit drugs, stimulants (including methamphetamine and illicit amphetamine) are the most common, followed by cannabinoids (including marijuana and synthetic cannabinoids).

The PMTF Report urged clinicians to use a comprehensive, individualized, person-centered approach to the diagnosis and treatment of pain featuring multiple therapeutic modalities. The uptake of this approach is an urgent concern as growing numbers of older adults are enrolling in Medicare. Some estimates indicate about half of older adults have pain that interferes with function. Primary care clinicians and specialists are already facing challenges in treating pain and associated chronic disease in the Medicare population, where conditions such as arthritis, bone/joint disorders, back and neck pain, cancer and other conditions that inform and at times inhibit employing the full spectrum of pain management therapies are common. We believe untreated and inappropriately treated pain may translate to increased costs to the Medicare program as more beneficiaries experience functional decline, incapacitation, and frailty. Additional risks in untreated pain include individuals using illicit drugs such as cannabis; inadequate treatment of mental disorders such as depression and anxiety, misuse of prescription drugs, alcohol and other drug use disorder, and increased suicide risk and suicide.

In 2019 HHS issued the Guide for Clinicians on the Appropriate Dosage Reduction or Discontinuation of Long-Term Opioid Analgesics (the Guide) to support the thoughtful, deliberative, and measured discontinuation of long-term opioid analgesics, and mitigate harm and risk to patients who are working with their clinicians to undergo appropriate tapering or discontinuation. The Guide notes that decisions to continue or reduce opioid medications for pain should be collaborative and based on the individual patient's goals and circumstances and clinicians should consider, for example, whether opioid medications continue to support patients meeting treatment goals; if opioids are exposing the person to an increased risk for serious adverse events or an opioid use disorder; and whether benefits continue to outweigh risks of opioids. Whether or not opioids are used in treatment, safe and effective non-opioid treatments can be integrated into patients' pain management plans based on an individualized assessment of benefits and risks, and considering the patient's diagnosis, goals and circumstances. Unique needs and coordination across the health care team is critical and clinicians and care teams have a responsibility to provide, or arrange for, coordinated management of patients' pain including any medication-related issues. The system of care should not ultimately result in patient abandonment. The FDA issued a safety announcement in 2019, advising—including through required updates to opioid analgesic prescribing information—that health care professionals should not abruptly discontinue opioids in patients who are physically dependent and that patient-specific plans should be created to gradually taper off opioids, in part due to the risk of adverse events including abrupt withdrawal symptoms, increased pain, mood changes, mental health impact, psychosocial impact, and importantly, suicide risk.

In 2020 the National Academy of Medicine, as part of its “Action Collaborative to Countering the U.S. Opioid Epidemic,” began an effort to understand more about the state of chronic pain management, and to bring greater awareness to any intended and unintended consequences of opioid prescribing metrics as they pertain to the delivery, access, and coordination of chronic pain management and care. CMS is one of the sponsors of this work. The aim of this project is to visually illustrate the chronic pain management journey and accelerate the uptake of a range of pain treatments by outlining approaches to effective communication that leads to strong clinical relationships and optimal quality of life for people with pain.

The SUPPORT Act (Pub. L. 115-271, October 24, 2018) outlines national strategies to help address America's opioid and substance use disorders (SUD) crisis, and advances policies to improve the treatment of pain and SUD. The SUPPORT Act recognizes the importance of opioid-related medication management, as well as the overall need to identify SUD in the Medicare beneficiary population. Sections 2002 and 6086 of the SUPPORT Act are of particular importance regarding pain management. For beneficiaries with chronic pain, section 2002 of the SUPPORT Act amended sections 1861(ww) and (hhh)(2) of the Act to include a review of any current opioid prescriptions in conjunction with the initial preventive physical examination (the “Welcome to Medicare” visit) and annual wellness visit (AWV). The opioid prescription review is to include a review of the potential risk factors to the individual for opioid use disorder, an evaluation of the individual's pain severity and current treatment plan, the provision of information on non-opioid treatment options, and referral to a specialist, if appropriate. Section 2002 also amended sections 1861(ww) and (hhh)(2) of the Act to add a screening for potential SUDs to the Welcome to Medicare visit and the AWV, and to add referral to a specialist, as appropriate, to the AWV.

Section 6086 of the SUPPORT Act, the Dr. Todd Graham Pain Management Study, will provide HHS and CMS with key information about services delivered to Medicare beneficiaries with acute or chronic pain, help in understanding the current landscape of pain relief options for Medicare beneficiaries, and inform decisions around payment and coverage for pain management interventions, including those that minimize the risk of SUD. CMS has worked with the Agency for Healthcare Research and Quality, which has undertaken three topic briefs and two systematic reviews to inform Medicare coverage for the treatment of acute and chronic pain. CMS has also worked with HHS' Office of the Secretary for Planning and Evaluation to write a Report on the Study, which will be submitted to Congress. CMS will post a completed copy of the Report on our website. The Report will address questions regarding coverage and payment for evidence-based interventions for acute and chronic pain in Medicare, barriers to access, costs and benefits of expanding or revising benefits not currently covered, and legislative and administrative options to improve pain interventions.

We believe it is important to highlight the role of a person-centered approach to pain care. The National Quality Forum, which as its core work defines measures and health care practices as the best, evidence-based approaches to improving care, has defined person-centered planning as “a facilitated, individual-directed, positive approach to the planning and coordination of a person's services and supports based on individual aspirations, needs, preferences, and values,” and stated that the “goal of person-centered planning is to create a plan that will optimize the person's self-defined quality of life, choice, and control, and self-determination through meaningful exploration and discovery of unique preferences and needs and wants in areas including, but not limited to, health and well-being, relationships, safety, communication, residence, technology, community, resources, and assistance.” These general principles should also apply in the treatment of individuals with pain, where clinicians confirm and affirm the individual's recovery and/or maintenance goals, and focus on those, where treatment is a means to an end. For example, one goal might be to not rely on aiming to reduce a simple pain score, such as a numeric or visual score, but to evaluate function for example, through a tool such as the Defense and Veterans Pain Rating scale, which integrates functional status, and then aim to optimize physical function and mental function in the beneficiary with chronic pain.

We recognize that there are no existing codes that specifically describe the work of the clinician involved in performing the tasks necessary to perform pain management care. We believe there are complexities in treating pain management patients that could include lifestyle discussion, ongoing medication management (such as opioid tapering or discontinuation, when appropriate), behavioral health care, preparation and updating of a care plan, consideration of Federal and other opioid prescribing limits and guidelines, Prescription Drug Monitoring Program checks, electronic prescribing requirements, special licensing requirements (controlled substance licenses; buprenorphine “X-waivers”), interdisciplinary interactions, prescription drug coverage, CMS high-prescriber oversight, consideration of out-of-pocket costs, and other issues. As one example, decreasing or discontinuing opioid treatment requires careful, person-centered consideration of all of these aspects of providing care. These unique challenges often adversely impact the delivery of care, and subsequent access to care, for beneficiaries with chronic pain. Current Medicare payment methodologies such as Chronic Care Management (CCM) support chronic disease management, though may not provide adequate payment to health care providers or systems to holistically care for beneficiaries with chronic pain; we believe the complexity and resources required for safe and effective pain management may not be adequately captured and paid through these codes.

We believe that creating separate or add-on payment for care and management for people with pain might provide opportunities to better leverage services furnished using telecommunications technology and non face-to-face care while expanding access to treatment for pain. Such an additional payment could potentially be effective in preventing or reducing the need for acute services such as fall avoidance, and reduce the need for treatment for mental disorders such as depression, anxiety, and sleep disorders which may occur in some individuals with pain. There is also reason to believe that addressing chronic pain (for example, pain that lasts more than 3 months) early in its course may result in averting the development of “high-impact” chronic pain in some individuals, where they experience at least one major activity restriction (for example, unable to work, go to school, perform household chores). These individuals report more severe pain, more difficulty with self-care, and higher health care use than others with chronic pain. From a social determinants of health perspective, Blacks, Native Americans, persons of Asian/Indian descent, older adults, and people with less education, and single individuals report more high impact chronic pain.

In 2019, 12.2 million individuals were enrolled in both Medicaid and Medicare, including people age 65 and older and younger beneficiaries with disabilities. Many have multiple chronic conditions, physical disabilities, behavioral health conditions, and cognitive impairments and on average, use more services and supports than those enrolled in only Medicaid or Medicare, with higher per capita costs. Dually eligible beneficiaries often have multiple social risk factors such as housing insecurity and homelessness, food insecurity, inadequate access to transportation, and low health literacy. A 2019 study on dually eligible beneficiaries using “high dose” opioids to treat pain between 2006 through 2015 indicated that the common conditions in beneficiaries studied were chronic pain, migraine, rheumatoid arthritis, osteoporosis, HIV/AIDS, viral hepatitis, and SUD.

We solicited comment on whether we should consider creating separate coding and payment for medically necessary activities involved with chronic pain management and achieving safe and effective dose reduction of opioid medications when appropriate, or whether the resources involved in furnishing these services are appropriately recognized in current coding and payment. These activities could include, but are not limited to the following:

• Diagnosis;
• Assessment and monitoring;
• Administration of a validated rating scale(s);
• Development and maintenance of a person-centered care plan;
• Overall treatment management;
• Facilitation and coordination of any needed behavioral health treatment;
• Medication management;
• Patient education and self-management;
• Crisis care;
• Specialty care coordination such as complementary and integrative pain care, and SUD care; and
• Other aspects of pain and/or behavioral health services, including care rendered through telehealth modalities.

We indicated in the proposed rule that we are interested in feedback regarding whether the resource costs involved in furnishing these activities will be best captured through an add-on code to be billed with an E/M visit or a standalone code. To price such a code, we could consider using a crosswalk to the valuation and inputs for reference codes such as CPT code 99483 ( Assessment of and care planning for a patient with cognitive impairment ), HCPCS code G2064 ( Comprehensive care management services for a single high-risk disease, e.g., principal care management, at least 30 minutes of physician or other qualified health care professional time per calendar month ), HCPCS code G0108 ( Diabetes outpatient self-management training services, individual, per 30 minutes ), or other services paid under the PFS with similar resource costs.

We also solicited information on the health care settings in which safe and effective pain management care is occurring, as well as what types of practitioners furnish these services. We solicited comments on whether the specific activities we identify above are appropriate, and whether there are other activities that should be included. We are interested in stakeholder feedback regarding how we could define and value separate coding or an E/M add-on code. We solicited comments on whether any components of the service could be provided “incident to” the services of the billing physician who is managing the beneficiary's overall care similar to the structure of the Behavioral Health Integration (BHI) codes, which can include BHI services that are not delivered personally by the billing practitioner and delivered by other members of the care team (except the beneficiary), under the direction of the billing practitioner on an incident to basis (as an integral part of services delivered by the billing practitioner), subject to applicable State law, licensure, and scope of practice. The other care team members are either employees or working under contract to the practitioner who bills for BHI services.

We welcome feedback from stakeholders and the public on potential separate coding or an E/M add-on code for chronic pain management for our consideration for CY 2022 or for future rulemaking

We received over 1,900 public comments on potential separate coding for chronic pain management. The following is a brief summary of the comments we received and our responses.

Comment: Generally, commenters agreed that efforts are needed to effectively support the complex needs of beneficiaries with chronic pain. Many commenters supported the creation of separate coding and payment for chronic pain management under the PFS. One commenter suggested that CMS either clarify or modify existing codes so they can support services for patients with chronic pain or significant acute pain, as well as beneficiaries with a chronic disease or behavioral health condition, stating that using the existing codes would avoid any concerns about overpayment for patients with both a chronic disease and pain, while also making it more feasible for small practices to employ care management staff and provide customized care management services for all the patients who need them. Some commenters recommended creating stand-alone codes rather than E/M add-on codes and several commenters included feedback about what specific activities should be included in such codes. One commenter recommended that “CMS establish a multi-stakeholder working group to determine operational details and resource allocation” and requested that CMS “establish a pilot program using innovative payment methodologies.”

Response: We thank the commenters for all of the information submitted in recognizing the needs of beneficiaries with pain. We will carefully consider this feedback for future rulemaking.

F. Evaluation and Management (E/M) Visits

Over the past several years, CMS has engaged with the AMA and other stakeholders in a process to update coding and payment for office/outpatient evaluation and management (E/M) visits, with recent changes taking effect January 1, 2021 (see 85 FR 84548 through 84574). In light of these changes, we are engaged in an ongoing review of other E/M visit code sets and proposed a number of refinements to our current policies. The following section discusses several policies we proposed regarding split (or shared) visits, critical care services, and teaching physician visits.

1. Split (or Shared) Visits

a. Background

A split (or shared) visit refers to an E/M visit that is performed (“split” or “shared”) by both a physician and an NPP who are in the same group. Because the Medicare statute provides a higher PFS payment rate for services furnished by physicians than services furnished by NPPs, we need to address whether and when the physician can bill for split (or shared) visits. For visits in the non-facility (for example, office) setting for which the physician and NPP each perform portions of the visit, the physician can bill for the visit rather than the NPP, as long as the visit meets the conditions of payment in our regulations at § 410.26(b)(1) for services furnished “incident to” a physician's professional services. However, for visits furnished under similar circumstances in facility settings (for example, in a hospital), our current regulations provide for payment only to the physician or NPP who personally performs all elements of the service, and no payment is made for services furnished “incident to” the billing professional's services.

As stated in our regulation at § 410.26(b)(1), Medicare Part B pays for services and supplies furnished “incident to” a physician's (or other practitioner's) professional services if those services and supplies are furnished in a noninstitutional setting to noninstitutional patients. In certain institutional (or “facility”) settings, our longstanding split (or shared) billing policy allows a physician to bill for an E/M visit when both the billing physician and an NPP in their group each perform portions of the visit, but only if the physician performs a substantive portion of the visit. When the physician bills for such a split (or shared) visit, in accordance with section 1833(a)(1)(N) of the Act, the Medicare Part B payment is equal to 80 percent of the payment basis under the PFS, which, under section 1848(a)(1) of the Act, is the lesser of the actual charge or the fee schedule amount for the service. In contrast, if the physician does not perform a substantive portion of such a split (or shared) visit and the NPP bills for it, in accordance with section 1833(a)(1)(O) of the Act, the Medicare Part B payment is equal to 80 percent of the lesser of the actual charge or 85 percent of the fee schedule rate.

Previously, our policy for billing these split (or shared) visits was reflected in several provisions of our Medicare Claims Policy Manual (sections 30.6.1(B), 30.6.12, and 30.6.13(H)) which were withdrawn effective May 9, 2021, in response to a petition under the Department's Good Guidance regulations at 45 CFR 1.5 (see Transmittal 10742 available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r10742cp ). In the absence of these manual provisions, the Medicare statute and various broadly applicable regulations continue to apply. In addition to withdrawing the manual provisions, we issued our response to the petition and an accompanying enforcement instruction on May 26, 2021, available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/Evaluation-and-Management-Visits ). In those documents, we indicated that we intend to address split (or shared) visits and critical care services (addressed below) through rulemaking; and that until we do, we will limit review to the applicable statutory and regulatory requirements for purposes of assessing payment compliance.

The list of applicable statutory and regulatory requirements includes the CY 2021 PFS final rule (85 FR 84549), where CMS generally adopted new CPT prefatory language and code descriptors for office/outpatient E/M visits. The new CPT guidelines for E/M services introduced a CPT definition of a split (or shared) visit for the first time, effective January 1, 2021. This new CPT definition was part of CPT's new guidelines indicating how to select the visit level based on time, which can be done for all office/outpatient E/M visits starting in 2021. The CPT guidelines that we are referring to are published in the CPT Codebook, in a section titled “Evaluation and Management Services (E/M) Guidelines.” In this section of our final rule, we use the term “CPT E/M Guidelines” to refer to this material.

In the CY 2021 PFS final rule (85 FR 84549), we stated that we are generally adopting the CPT E/M Guidelines for the new office/outpatient E/M visit codes. However, the CPT E/M Guidelines do not address many issues that arise in the context of PFS payment for split (or shared) visits, such as which practitioner should report the visit when elements of the visit are performed by different practitioners; whether a substantive portion of the visit must be performed by the billing practitioner; whether practitioners must be in the same group to bill for a split (or shared) visit; or the settings of care where split (or shared) visits may be furnished and billed. The CPT E/M Guidelines simply state, “A split or shared visit is defined as a visit in which a physician and other qualified health care professional(s) jointly provide the face-to-face and non-face-to-face work related to the visit. When time is being used to select the appropriate level of services for which time-based reporting of shared or split visits is allowed, the time personally spent by the physicians and other qualified health care professional(s) assessing and managing the patient on the date of the encounter is summed to define total time. Only distinct time should be summed for split or shared visits (that is, when two or more individuals jointly meet with or discuss the patient, only the time of one individual should be counted).”

In contrast, to ensure appropriate PFS payment, our policy for split (or shared) visits, as expressed in the recently withdrawn manual provisions, is that the physician may bill for a split (or shared) visit only if they perform a substantive portion of the visit, and the practitioners must be in the same group and furnishing the visit in specified settings in order to bill for a split (or shared) visit. Our manual also limited billing for split (or shared) visits to services furnished to established patients. In our proposed rule, we made a number of proposals to address the recently withdrawn manual sections and improve transparency and clarity regarding our policies on billing for split (or shared) visits, to update them to account for recent revisions to E/M visit coding and payment, and to revise our regulations to reflect these policies.

We received many public comments on our proposals for split (or shared) visits. In general, the commenters appreciated the need to clarify and refine our policies, although some were worried about increased administrative burden, disruption to current practice patterns, or perceived disadvantages to physicians or NPPs. There was no consensus on what the substantive portion of a split (or shared) visit should be, although many commenters recommended we find a way to recognize medical decision-making (MDM) as the substantive portion. The following is a summary of the comments we received and our responses.

b. Definition of Split (or Shared) Visits

We proposed to define a split (or shared) visit as an E/M visit in the facility setting that is performed in part by both a physician and an NPP who are in the same group, in accordance with applicable laws and regulations. We proposed to add this definition to a new section of our regulations at 42 CFR 415.140.

Additionally, we proposed to define split (or shared) visits as those that:

• Are furnished in a facility setting by a physician and an NPP in the same group, where the facility setting is defined as an institutional setting in which payment for services and supplies furnished incident to a physician or practitioner's professional services is prohibited under our regulation at § 410.26(b)(1).
• Are furnished in accordance with applicable law and regulations, including conditions of coverage and payment, such that the E/M visit could be billed by either the physician or the NPP if it were furnished independently by only one of them in the facility setting (rather than as a split (or shared) visit).

We proposed to revise our regulations at § 415.140 to codify this definition.

We believed that limiting the definition of split (or shared) visits to include only E/M visits in institutional settings, for which “incident to” payment is not available, would allow for improved clarity, and clearly distinguish, the policies applicable to split (or shared) visits, from the policies applicable to services furnished incident to the professional services of a physician. We did not see a need for split (or shared) visit billing in the office setting, because the “incident to” regulations govern situations where an NPP works with a physician who bills for the visit, rather than billing under the NPP's own provider number.

We also proposed to modify our policy to allow physicians and NPPs to bill for split (or shared) visits for both new and established patients, and for critical care and certain Skilled Nursing Facility/Nursing Facility (SNF/NF) E/M visits. We proposed these modifications to the current policy and conditions of payment for split (or shared) visits, discussed below, to account for changes that have occurred in medical practice patterns, including the evolving role of NPPs as part of the medical team.

Comment: While most commenters were generally supportive of our definition and appreciative of clarifications to current policy, a few commenters recommended that we allow billing of split (or shared) visits in all settings, both institutional and non-institutional. Commenters noted that split (or shared) visit billing might be appropriate or necessary for new patient visits in the office setting, since payment for services furnished incident to the services of physicians and other clinicians is only available for established patients.

Response: We have been reviewing this aspect of our “incident to” policy, independent of its relationship to split (or shared) visit billing. Since we are considering addressing requirements for new and established patients in future rulemaking in a broader context, and this is the only situation raised by commenters where “incident to” payment would not be available in a non-institutional setting, we do not believe we should address it through split (or shared) visit policies. We will continue to consider this issue in the context of potential future rulemaking. We are finalizing our definition of split (or shared) visits as proposed, and codifying it in a new section of our regulations at § 415.140, as proposed.

c. Definition of Substantive Portion

(1) More Than Half of the Total Time

As stated earlier, we proposed that only the physician or NPP who performs the substantive portion of the split (or shared) visit would bill for the visit. We proposed to define “substantive portion” as more than half of the total time spent by the physician and NPP performing the split (or shared) visit. We noted that our withdrawn manual instructions contained a few definitions of “substantive portion.” For example, one section defined substantive portion as any face-to-face portion of the visit, while another section defined it as one of the three key components of an E/M visit— either the history of present illness (HPI), physical exam, and/or MDM. Given recent changes in the CPT E/M Guidelines, HPI and physical exam are no longer necessarily included in all E/M visits, because as noted above, for office/outpatient E/M visits, the visit level can now be selected based on either MDM or time, and history and exam are performed only as medically appropriate. Accordingly, defining “substantive portion” as one of these three key components is no longer a viable approach. Similarly, MDM is not easily attributed to a single physician or NPP when the work is shared, because MDM is not necessarily quantifiable and can depend on patient characteristics (for example, risk). We believed that time is a more precise factor than MDM to use as a basis for deciding which practitioner performs the substantive portion of the visit.

We also did not believe it would be appropriate to consider the performance of any portion of the visit—with or without direct patient contact—as a substantive portion. For instance, we did not believe it would be appropriate to consider a brief or minor interaction, with or without direct patient contact, such as where the physician merely “pokes their head” into the room, to be a substantive portion of the visit. Therefore, we proposed to define “substantive portion” as more than half of the total time spent by the physician and NPP performing the split (or shared) visit. We proposed to revise our regulation at § 415.140 to codify this definition.

We recognized that the billing practitioner, who would be the practitioner providing the substantive portion of the visit, could select the level for the split (or shared) visit based on MDM, but we nonetheless proposed to base the definition of substantive portion on the amount of time spent by the physician and NPP providing the visit. We recognized that this policy would necessitate the practitioners' tracking and documenting the time they spent for these visits. However, we believed that practitioners are likely to increasingly time their visits for purposes of visit level selection independent of our split (or shared) visit policies, given recent changes to the CPT E/M Guidelines, and the fact that critical care visits are already timed. Accordingly, we did not believe this would comprise a substantial new burden.

Comment: The commenters agreed that the individual who performs the substantive portion should bill for the visit. Approximately half of the commenters supported our proposal, noting that it was appropriate and would provide a clear rule. However, approximately half of the public comments recommended alternative definitions of substantive portion, including:

• A lower percentage of time (25 to 30 percent of the total time) (several comments).
• MDM (several comments).
• Some portion of MDM, such as a majority or critical element of MDM, more than half of the time or the portion of the visit in which the MDM is performed, or physician involvement in the MDM (several comments).
• Choice of MDM or time, for example, based on whichever is used to select visit level (several comments).
• One of the three key components of history, exam, or MDM, at least until the AMA completes changes for E/M visit coding and the CPT E/M Guidelines that the commenters expect for 2023 (several comments).
• Some combination of the above, for example, more than half of the MDM or more than half of total time (several comments).
• Working with the CPT Editorial Panel to develop a policy (several comments).

The commenters who recommended using MDM (or part thereof) were concerned that using only time to determine the substantive portion implies that MDM and non-patient-facing work is less significant than time, and that time spent in front of the patient is most critical. The commenters were also concerned that tracking time would result in an administrative burden, or remove their ability to use MDM to select visit level. Some commenters were concerned about disrupting current practice patterns. Some commenters noted that using time would disadvantage physicians, because NPPs receive significantly less education, training, and certification than osteopathic and allopathic (DOs and MDs) physicians, making physicians more skilled, efficient, and proficient than NPPs. They stated that MDM is used more often to determine visit level. Commenters also noted, in many instances, the activities performed by the physician, which are the key portion of the visit, take less time than the activities that are required to provide the additional information needed for MDM and the plan of care. The commenters stated that an NPP may be involved in tasks that require significant time, such as preparing the medical record, taking a history, performing a physical exam, inputting orders, obtaining lab or test results, requesting consultations, and doing preliminary documentation. However, synthesizing the patient's symptoms and other information such as test results and then devising the plan of care are the substance of the visit and typically are done by a physician.

Response: Regarding recommendations to consider the substantive portion to be a lower percentage of time, having reviewed our current policy, we do not believe that the higher physician payment rate under the PFS should be made when a physician performs less than half of the visit, such as a quarter or a third of the total time or less than half of the MDM.

We do not believe MDM is necessarily the most critical or central component of E/M visits, and it is not the only service component included in the PFS payment for the service. We are also not clear how it could be known that MDM is used most often to determine visit level. PFS payment rates incorporate and assume a certain amount of physician time per visit, reflected in the assigned RVUs and reflected annually in our physician time files. PFS payment rates reflect the typical amount of time spent on visits, and the Act requires us to reflect both time and intensity of work (physician and practitioner) in our payment rates. We do not believe this in any way devalues the unique education, training, experience, or expertise of physicians, but rather that both time and expertise are important and included in payment under the PFS.

We continue to believe that MDM cannot be readily attributed to only the physician or the NPP, or definitively divided between them. MDM has three parts: the number and complexity of problem(s) that are addressed during the encounter; the amount and/or complexity of data to be reviewed and analyzed; and the risk of patient management decisions made at the visit. Both the physician and the NPP would be addressing the same problem(s) during the encounter, and both are likely to be reviewing and analyzing data. No key or critical portion of MDM is identified by CPT. Therefore, we do not see how MDM (or its critical portion, or other component part) can be attributed to only one of the practitioners, or how we could distinguish these for purposes of assigning appropriate payment when visits are shared.

We believe the commenters overestimate the administrative burden of tracking and attributing time, given the advent of EHRs and new E/M visit coding structures. However, we understand that an adjustment period may be needed to establish systems to track and attribute time for split (or shared) visits, especially since the coding for E/M visits in many facility settings will not use MDM or time to distinguish visit levels until 2023. Therefore, we are finalizing our definition of substantive portion for split (or shared) visits as proposed (more than half of the total time spent by the physician and NPP performing the split (or shared) visit) beginning January 1, 2023. However, we are modifying our proposed policy for one transitional year. For CY 2022, except for critical care visits, the substantive portion will be defined as one of the three key components (history, exam, or MDM), or more than half of the total time spent by the physician and NPP performing the split (or shared) visit). In other words, for CY 2022, the practitioner who spends more than half of the total time, or performs the history, exam, or MDM can be considered to have performed the substantive portion and can bill for the split (or shared) E/M visit. We wish to be clear that practitioners can still use MDM to select visit level for the E/M split (or shared) visit, as proposed. We also are clarifying that when one of the three key components is used as the substantive portion in 2022, the practitioner who bills the visit must perform that component in its entirety in order to bill. For example, if history is used as the substantive portion and both practitioners take part of the history, the billing practitioner must perform the level of history required to select the visit level billed. If physical exam is used as the substantive portion and both practitioners examine the patient, the billing practitioner must perform the level of exam required to select the visit level billed. If MDM is used as the substantive portion, each practitioner could perform certain aspects of MDM, but the billing practitioner must perform all portions or aspects of MDM that are required to select the visit level billed.

For visits that are already timed (that is, critical care services), the substantive portion will not be based on performance of the history, exam, or MDM. For critical care visits, starting for services furnished in CY 2022, the substantive portion will be more than half of the total time, as proposed. A unique listing of qualifying activities for purposes of determining the substantive portion of critical care visits will apply, as proposed (see section II.F.2. of this final rule where we discuss critical care).

We are codifying this definition of substantive portion for split (or shared) visits in our regulations at § 415.140. We will continue to review and consider any future changes by the AMA/CPT Editorial Panel to the CPT E/M Guidelines for split (or shared) visits. We also intend to monitor the claims data for split (or shared) visits, such as how frequently practitioners use or rely upon this billing construct, and what specialties they represent (see modifier requirement below). We summarize our final policies in Table 26.

(2) Distinct Time

We proposed that the distinct time of service spent by each physician or NPP furnishing a split (or shared) visit would be summed to determine total time and who provided the substantive portion (and therefore, bills for the visit). This would be consistent with the CPT E/M Guidelines stating that, for split (or shared) visits, when two or more individuals jointly meet with or discuss the patient, only the time of one individual should be counted. For example, if the NPP first spent 10 minutes with the patient and the physician then spent another 15 minutes, their individual time spent would be summed to equal a total of 25 minutes. The physician would bill for this visit since they spent more than half of the total time (15 of 25 total minutes). If, in the same situation, the physician and NPP met together for five additional minutes (beyond the 25 minutes) to discuss the patient's treatment plan, that overlapping time could only be counted once for purposes of establishing total time and who provided the substantive portion of the visit. The total time would be 30 minutes, and the physician would bill for the visit since they spent more than half of the total time (20 of 30 total minutes).

Comment: One commenter stated it would be burdensome for practitioners to track how much of their time was spent jointly meeting with or discussing the patient, as opposed to time spent individually. However, a number of commenters recommended generally that we should align our split (or shared) visit policies with the CPT E/M Guidelines to reduce administrative burden.

Response: We believe that we should align with the CPT E/M Guidelines on this point, to reduce administrative burden, and are finalizing as proposed that, for split (or shared) visits, when two or more individuals jointly meet with or discuss the patient, only the time of one individual can be counted.

(3) Qualifying Time

Drawing on the CPT E/M Guidelines, we proposed a listing of activities that could count toward total time for purposes of determining the substantive portion. For visits that are not critical care services, we proposed the CPT listing of activities that can count when time is used to select an E/M visit level, specifically the following activities, when performed and regardless of whether or not they involve direct patient contact:

• Preparing to see the patient (for example, review of tests).
• Obtaining and/or reviewing separately obtained history.
• Performing a medically appropriate examination and/or evaluation.
• Counseling and educating the patient/family/caregiver.
• Ordering medications, tests, or procedures.
• Referring and communicating with other health care professionals (when not separately reported).
• Documenting clinical information in the electronic or other health record.
• Independently interpreting results (not separately reported) and communicating results to the patient/family/caregiver.
• Care coordination (not separately reported).

Practitioners would not count time spent on the following:

• The performance of other services that are reported separately.
• Travel.

• Teaching that is general and not limited to discussion that is required for the management of a specific patient.

Since critical care services can include additional activities that are bundled into the critical care visit code(s), we proposed a different listing of qualifying activities, discussed in our section below on split (or shared) critical care services. Additionally, we solicited public comments on whether there should be a different listing of qualifying activities for purposes of determining the total time and substantive portion of split (or shared) emergency department (ED) visits, since those visits also have a unique construct.

Comment: The commenters were generally supportive of our proposal to use the CPT E/M Guidelines listing of qualifying activities for time. We received mixed comments about applying it to ED visits. Some commenters noted our proposed listing could apply equally to office/outpatient and ED visits. Other commenters noted that the CPT Editorial Panel should weigh in on this issue and develop a consensus on whether for ED visits, there should be a different listing of qualifying activities. One commenter recommended several revisions to our proposed listing, to remove time-based activities and to better represent MDM as the driving force determining the substantive portion of an ED visit, specifically:

• Obtaining and/or reviewing separately obtained history.
• Performing and/or reviewing a medically appropriate examination and/or evaluation.
• Formulation of a differential diagnosis.
• Reviewing and amending (as appropriate) clinical information in the electronic or other health record.
• Ordering medications, tests, or procedures.
• Independently interpreting results (not separately reported) and communicating results to the patient/family/caregiver.
• Consulting with other health care professionals as appropriate.
• Counseling and educating the patient/family/caregiver.
• Formulating and instituting a final treatment plan.
• Determining appropriate disposition.

Practitioners would not count the following activities:

• The performance of other services that are reported separately.
• Teaching that is general and not limited to discussion that is required for the management of a specific patient.

Response: Having reviewed the public comments and consulted with our medical officers, we do not believe that an alternative listing for ED visits is the best approach at this time. As we discussed above, only for 2022, we will allow history, or exam, or MDM, or more than half of the total time (inclusive of activities on the finalized listing), to comprise the substantive portion of any E/M visit (including ED visits) except critical care. Starting in 2023, the finalized listing of qualifying activities will apply to all split (or shared) E/M visits except critical care, for purposes of determining the substantive portion. (Critical care will have a different listing of qualifying activities, discussed in the critical care section below). We would expect all aspects of MDM to be included or reflected in the listing of qualifying activities. Many of the additions recommended by the ED physicians' association (for example, formulating and instituting a final treatment plan, determining appropriate disposition, formulation of a differential diagnosis) appear to be more detailed descriptions of MDM activities that could be interpreted as already included in the current CPT listing of qualifying activities. Perhaps additional levels of detail or specificity should be considered by the CPT Editorial Panel for inclusion in its listing of qualifying activities. However, we agree with the commenters who noted that a consensus should be reached at CPT before we adopt alternative language. Regarding suggested deletions from the listing, we do not believe it is necessary to exclude travel, even though ED visits do not involve travel, as long as there is one listing applicable for all E/M visit code families (other than critical care, as discussed below). Finally, we recognize the related, controversial issue of whether or not all ED visits should include time (not just split or shared ED visits). Therefore, starting in 2023, our final policy for ED visits will be to use the CPT listing of qualifying activities for time, as proposed. Meanwhile, we will continue to monitor any related changes that may be made by the CPT Editorial Panel.

Comment: Several commenters asked us to clarify whether our intent in our proposed rule was to require both practitioners to have face-to-face contact with the patient, or only one of them. These commenters were concerned that the CPT language could be interpreted to mean that both practitioners do not need to perform face-to-face work, which they believed would reduce transparency, harm quality assessment, and reduce program integrity.

Response: The current CPT E/M Guidelines state, “The E/M services for which these guidelines apply require a face-to-face encounter with the physician or other qualified health care professional. For office or other outpatient services, if the physician's or other qualified health care professional's time is spent in the supervision of clinical staff who perform the face-to-face services of the encounter, use 99211. A shared or split visit is a visit in which a physician and other qualified health care professional(s) jointly provide the face-to-face and non-face-to-face work related to the visit.” The list of qualifying activities for time do not specify whether each activity is face-to-face or not. To our knowledge, CPT has not defined the terms “face-to-face” and “non-face-to-face,” but in this context we interpret face-to-face to mean in-person. We note that certain prolonged service CPT codes use the terms “with direct patient contact” and “without direct patient contact” instead of “face-to-face.”

Our intent was that only one of the practitioners must perform the in-person part of an E/M visit when it is split (or shared), although either or both can do so. We acknowledge that Medicare policy on this was not clear in the past, since one manual section defined substantive portion as any face-to-face portion of the encounter, and another section defined it as a key component (which could have included, for example, MDM). We are finalizing as proposed that the substantive portion can be comprised of time that is with or without direct patient contact. Since by 2023 (except for critical care visits), the physician must perform more than half of the total time in order to bill a split (or shared) visit, we believe our final policy ensures enough physician involvement to support their billing for the service, even though the physician might not have direct patient contact. Our final policy is that for all split (or shared) visits, one of the practitioners must have face-to-face (in-person) contact with the patient, but it does not necessarily have to be the physician, nor the practitioner who performs the substantive portion and bills for the visit. The substantive portion could be entirely with or without direct patient contact, and will be determined by the proportion of total time, not whether the time involves direct or in-person patient contact. We will continue to consider this issue going forward and any changes or clarifications that may be made by the CPT Editorial Panel on this topic.

(4) Application to Prolonged Services

For office/outpatient E/M visits, as discussed in our CY 2021 PFS final rule (85 FR 84572), HCPCS code G2212 can be used to report prolonged services in 15-minute increments of time beyond the maximum time for a level 5 office/outpatient E/M visit. For all other E/M visits (except critical care and emergency department visits), CPT codes 99354-9 can be used to report prolonged time with or without direct patient contact, when required time increments above the typical time is spent (see CY 2017 PFS final rule, 81 FR 80228-80230 and the Medicare Claims Processing Manual (Pub. 100-02), chapter 12, section 30.6.15 available on our website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf ).

Our withdrawn manual provisions instructed that practitioners cannot bill prolonged services as a split (or shared) visit. Having reviewed this policy, we believed that codes that are billed as add-on codes for prolonged service time for an E/M visit, which could be furnished and billed as a split (or shared) visit under our proposed policy, should be considered to be part of that E/M visit. Therefore, we proposed to change our policy to allow a practitioner to bill for a prolonged E/M visit as a split (or shared) visit. Specifically, the physician or practitioner who spent more than half the total time (that is, performed the substantive portion described above) would bill for the primary E/M visit and the prolonged service code(s) when the service is furnished as a split (or shared) visit, if all other requirements to bill for the services were met. The physician and NPP would sum their time together, and whomever furnished more than half of the total time, including prolonged time, (that is, the substantive portion) would report both the primary service code and the prolonged services add-on code(s), assuming the time threshold for reporting prolonged services is met. We noted that for critical care visits, the practitioner would not bill prolonged E/M services because the practitioners would instead aggregate their time, as proposed below, to report additional units of critical care services.

Comment: We did not receive many comments specifically on this proposed policy, and the comments we received were supportive of our proposal.

Response: We thank the commenters for their support. Starting in 2023, our policy will be as proposed. Specifically, the physician or practitioner who spent more than half the total time (the substantive portion starting in 2023) will bill for the primary E/M visit and the prolonged service code(s) when the service is furnished as a split (or shared) visit, if all other requirements to bill for the services are met. The physician and NPP will add their time together, and whomever furnished more than half of the total time, including prolonged time, (that is, the substantive portion) will report both the primary service code and the prolonged services add-on code(s), assuming the time threshold for reporting prolonged services is met.

The same policy will apply for services furnished in the 2022 transition year when practitioners use a majority of total time as the substantive portion; but when practitioners use a key component as the substantive portion, there will need to be different approaches for office/outpatient E/M visits than other kinds of E/M visits. For shared office/outpatient visits where practitioners use a key component as the substantive portion, prolonged services can be reported by the practitioner who reports the primary service, when the combined time of both practitioners meets the threshold for reporting prolonged office/outpatient services (HCPCS code G2212). For all other types of E/M visits (except ED and critical care visits), prolonged services can be reported by the practitioner who reports the primary service, when the combined time of both practitioners meets the threshold for reporting prolonged E/M services other than office/outpatient E/M visits (60 or more minutes beyond the typical time in the CPT code descriptor of the primary service). (We remind readers that ED and critical care visits are not reported as prolonged services). While this is a complex approach for the CY 2022 transition year, we note that prolonged services historically are not frequently reported. We summarize these policies in Table 27.

d. New and Established Patients, and Initial and Subsequent Visits

Our withdrawn manual provisions stated that when an E/M service is furnished as a split or shared encounter, between a physician and an NPP (that is, an NP, PA, CNS or CNM), the service is considered to have been performed “incident to” if the requirements for “incident to” are met and the patient is an established patient. This provision was generally interpreted to mean that split (or shared) visits cannot be billed for new patients. The withdrawn manual provisions also did not specify whether the practitioner who bills for the split (or shared) visit could bill for initial, versus subsequent, split (or shared) visits in the facility setting. After conducting an internal review, including consulting our medical officers, in our proposed rule we stated our belief that the practice of medicine has evolved toward a more team-based approach to care, and greater integration in the practice of physicians and NPPs, particularly when care is furnished by practitioners in the same group in the facility setting. Given this evolution in medical practice, the concerns that may have been present when we issued the manual instructions may no longer be as relevant. We understand that there have been changes in the practice of medicine over the past several years, some facilitated by the advent of EHRs and other systems, toward a more team-based approach to care. There has also been an increase in alternative payment models that employ a more team-based approach to care. After considering and reevaluating our policy, we saw no reason to preclude the physician or NPP from billing for split (or shared) visits for a new patient, in addition to an established patient, or for initial and subsequent split (or shared) visits. Therefore, we proposed to permit the physician or NPP to bill for split (or shared) visits for both new and established patients, as well as for initial and subsequent visits. We believed this approach would also be consistent with the CPT E/M Guidelines for split (or shared) visits, which does not exclude these types of visits from being billed when furnished as split (or shared) services.

Comment: We received many comments on this proposal, all in support of it.

Response: We thank the commenters for their support. After consideration of public comments, we are finalizing as proposed.

e. Settings of Care

The concept of split (or shared) visits was developed as an analog in the facility setting to payment policies for services and supplies furnished incident to a physician's or an NPP's professional services in the non-institutional setting. Section 410.26(a)(6) of our regulations defines the non-institutional setting as all settings other than a hospital or SNF. We proposed to allow billing of split (or shared) visits, including critical care visits, when they are performed in any institutional setting and proposed to codify the definition of facility setting in the regulation at § 415.140. We discuss our proposals regarding billing for critical care split (or shared) E/M services below (see section II.F.2. of this final rule).

Our withdrawn manual provisions did not allow practitioners to bill for split (or shared) visits that are critical care services or SNF/NF visits. The manual stated that the split (or shared) E/M policy did not apply to critical care services or procedures, and that a split (or shared) E/M service performed by a physician and a qualified NPP of the same group (or employed by the same employer) cannot be reported as a critical care service. It also stated that a split (or shared) E/M visit cannot be reported in the SNF/NF setting. We proposed to define split (or shared) visits to be limited to services furnished in institutional settings, as discussed above. As discussed below, we did not see any reason to preclude billing for split (or shared) visits for critical care services, although we sought public comment on this issue in particular. We understand that there have been changes in the practice of medicine over the past several years, some facilitated by the advent of EHRs and other systems, toward a more team-based approach to care. There has also been an increase in alternative payment models that employ a more team-based approach to care. Where a physician and NPP in the same group take a team approach to furnishing care, as would be the case for split (or shared) visits, even for new patients, initial visits, critical care visits, or SNF/NF visits, we were less concerned about potential disruptions in continuity of care than we might once have been. Rather, we believed that when a visit is shared between a physician and an NPP in the same group, there would be close coordination and an element of collaboration in providing care to the beneficiary.

We did not see any reason to preclude billing for split (or shared) visits for the subset of SNF/NF visits that are not required by our regulations to be performed in their entirety by a physician. Under our current policy, no E/M services can be furnished and billed as split (or shared) visits in the SNF setting. We refer readers to our Conditions of Participation in 42 CFR 483.30 for information regarding the SNF/NF visits that are required to be performed in their entirety by a physician. That regulation requires that certain SNF/NF visits must be furnished directly and solely by a physician. Therefore, our proposal would not apply to the SNF/NF visits that are required to be performed in their entirety by a physician; any SNF/NF visit that is required to be performed in its entirety by a physician cannot and would not be able to be billed as a split (or shared) visit. However, for other visits to which the regulation at § 483.30 does not apply, there is no requirement for a physician to directly and solely perform the visit. We proposed that those visits could be furnished and billed as split (or shared) visits.

Comment: We received many comments on this proposal, all in support of it.

Response: We thank the commenters for their support. After consideration of the public comments, we are finalizing as proposed.

f. Same Group

In accordance with the current policy outlined in the withdrawn manual provisions, we proposed that a physician and NPP must be in the same group in order for the physician and NPP to bill for a split (or shared) visit. We believed that in circumstances when a split or (shared) visit is appropriately billed, a physician and NPP are working jointly to furnish all of the work related to the visit with the patient. However, if a physician and NPP are in different groups, we would expect the physician and NPP to bill independently, and only for the services they specifically and fully furnish. Further, consistent with our withdrawn manual guidance, we noted that Medicare does not pay for partial physician's visits, so CPT modifier -52 (reduced services) could not be used to report split (or shared) visits. Thus, if a physician and an NPP who are in different groups each furnished part of an E/M service, but not all of it, then we would not consider either service to be a billable service. Similarly, if two physicians, each in their own private practice, both saw the same patient in the hospital, but neither one fully furnished a billable service—there would be no basis on which to combine their efforts or minutes of service into one billable E/M visit.

We sought public comment on whether we should further define “group” for purposes of split (or shared) visit billing. While we did not propose a definition in the proposed rule, we considered several options, such as requiring that the physician and NPP must be in the same clinical specialty, in which case we would use the approach outlined in the CPT E/M Guidelines; that is the NPP is considered to be in the same specialty and subspecialty as the physician with whom they are working. We were also considering an approach under which we would align the definition of “group” with the definition of “physician organization” at § 411.351. The term “physician organization” is defined at § 411.351 for purposes of section 1877 of the Act and our regulations in 42 CFR part 411, subpart J (collectively, the physician self-referral law), and explained further in frequently asked questions available on the CMS website at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Downloads/FAQs-Physician-Self-Referral-Law.pdf. Another approach would be to consider practitioners with the same billing tax identification number (TIN) as being in the same group. We were concerned that this particular approach may be too broad in multi-specialty groups or health care systems that include many practitioners who do not typically work together to furnish care to patients in the facility setting. We noted that some of these approaches may not align with the definition of “group” used for purposes of Medicare enrollment.

Comment: We did not receive comments disagreeing with our proposal that the physician and NPP should be in the same group. Commenters agreed that the appropriate definition of group in the context of split (or shared) visits is a complex issue. Some commenters did not recommend that we further define “group” in this context, suggesting that the liability to a physician taking on the responsibility of billing for an NPP's work under their NPI, or assuming supervisory responsibility for an NPP, will only split (or share) visits with NPPs in whom they have confidence.

Some other commenters recommended various ways to define group. These included:

• Having the same TIN.
• Being an employee or independent contractor of the same entity.
• Being in the same clinical specialty or clinical specialty practice.
• Working as part of the team that provides the same clinical services. For example, if an NPP is working with a group of orthopedic surgeons to treat the patient, the NPP should be considered part of the orthopedic surgery group when determining whether split (or shared) visits can be provided.
• Being members of a care team working in the same practice.
• Presence of a supervisory or liability relationship between the physician and NPP.
• Professional service agreements that the physician has with the institution, or other care-coordination models under the Quality Payment Program.
• Aligning with the CPT E/M Guidelines in which the NPP is considered to be in the same specialty and subspecialty as the physician with whom they are working.

One commenter objected to classifying NPPs as being in the same specialty or subspecialty of the physician with whom they work. The commenter stated that split (or shared) visits across specialties are important for multidisciplinary care (for example, a PA specializing in cardiology should be able to split (or share) critical care services with a pulmonologist in the same group practice to provide the most appropriate, interdisciplinary care to manage life threatening illness or injury). However, another commenter noted that requiring different specialties may have the unintended consequence of NPPs always being in different specialties than the physicians with whom they work under the PFS specialty taxonomy.

A few commenters stated that using the definition of physician organization at § 411.352 would be too burdensome, prescriptive, and extensive. These commenters stated that under this definition, a solo physician with NPP(s) in their practice (as is common in rural areas) would be disadvantaged, because the group would be required to have at least two physicians who are members of the group (whether employees or direct or indirect owners).

Several commenters stated that the definition should include TIN but also professional service agreements that the physician has with the institution, or other care-coordination models under the Quality Payment Program that could include multiple TINs. Commenters acknowledged that a given TIN could encompass a health system or multiple specialties.

One commenter recommended that being in the same group should mean being employed by, or an independent contractor affiliated with, the same entity, or an independent contractor who is billing through the same entity, or where the physician is obligated to perform the supervisory service for that particular NPP on the patient's date of service for the particular split (or shared) visit regardless of the billing entity status. The commenters noted it would be important for the physician to be legally responsible for the care being provided by the NPP.

Some commenters recommended that we work with the AMA Workgroup on E/M to create a proposal to the CPT Editorial Panel to address this issue and to clarify the reporting in CPT E/M Guidelines. One commenter stated that the physician and NPP do not necessarily need to be the same specialty, but should be practicing as part of a team providing coordinated clinical care. The commenter stated that the definition of initial and subsequent E/M visits for 2023 will include guidance that aligns with the clinical team concept.

Response: After consideration of the public comments, we are finalizing as proposed that the physician and NPP must be in the same group, but we are not further defining “group” at this time. We intend to monitor our claims data, and we thank the commenters for their recommendations and insights into current practice, which we may consider for future rulemaking.

g. Medical Record Documentation

To ensure program integrity and quality of care, we proposed that documentation in the medical record must identify the two individual practitioners who performed the visit. The individual who performed the substantive portion (and therefore, bills the visit) would be required to sign and date the medical record. We proposed to revise our regulation at § 415.140 to reflect the conditions of payment for split (or shared) visits as discussed in this section.

We received public comments on the medical record documentation. The following is a summary of the comments we received and our responses.

Comment: We did not receive many comments to our documentation proposal. A few commenters supported our proposal. Several other commenters did not support it, because they believe each practitioner should document what they perform or, in the inpatient setting, sign, date, and time their documentation in the medical record. A few commenters recommended that we work with the AMA/CPT to develop consensus on a single set of clarifying guidelines. One commenter opposed the requirement that the billing provider sign and date the medical record, stating that this is a needless administrative requirement that will not support program integrity.

Response: Recently, we finalized a policy through notice and comment rulemaking that any individual who is authorized under Medicare law to furnish and bill for their professional services, whether or not they are acting in a teaching role, may review and verify (sign and date) the medical record for the services they bill, rather than re-document notes in the medical record made by physicians, residents, nurses, and students (including students in therapy or other clinical disciplines), or other members of the medical team (85 FR 84594 through 84596). We emphasized that, while any member of the medical team may enter information into the medical record, only the reporting clinician may review and verify notes made in the record by others for the services the reporting clinician furnishes and bills.

We continue to believe that we should only require the reporting clinician to review and verify medical records documenting the services provided by themselves and other individuals during an E/M visit for which they bill, because the reporting clinician assumes responsibility for those services by signing off on the medical record. It may be helpful for each practitioner providing the split (or shared) visit to directly document and time their activities in the medical record, to track and attribute time, in order to determine who performed the substantive portion and should therefore bill. However, we believe we should leave it to the discretion of individual practitioners and the groups they work in to decide how time will be tracked. For split (or shared) visits, we continue to believe that documentation in the medical record needs to identify the two individual practitioners who split (or shared) the visit. Therefore, after consideration of public comments, we are finalizing as proposed that documentation in the medical record must identify the two individual practitioners who performed the visit. The individual who performed the substantive portion (and therefore, bills the visit) must sign and date the medical record. We are revising our regulation at § 415.140 to include these requirements.

h. Claim Identification

We proposed to create a modifier to describe split (or shared) visits, and we proposed to require that the modifier must be appended to claims for split (or shared) visits, whether the physician or NPP bills for the visit. Currently, we cannot identify through claims that a visit was performed as a split (or shared) visit, which means that we could know that a visit was performed as a split (or shared) visit only through medical record review. We believed it is important for program integrity and quality considerations to have a way to identify who is providing which E/M services, and how often we are paying at the physician rate for services provided in part by NPPs. (Please see the documentation section above for additional information). The modifier would give CMS insight, directly through our claims data instead of only through medical record review, into the specific circumstances under which these split (or shared) visits are furnished. Such information would be helpful to CMS for program integrity purposes, and could be instructive in considering whether we may need to offer additional clarification to the public, or further revise the policy for these E/M visits in future rulemaking.

We proposed to revise our regulation at § 415.140 to reflect the conditions of payment for split (or shared) visits as discussed in this section.

Consistent with our current policy, Medicare does not pay for partial E/M visits for which all elements of the service are not furnished. Therefore, we proposed that the modifier identified by CPT for purposes of reporting partial services (modifier -52 (reduced services)) could not be used to report partial E/M visits, including any partial services furnished as split (or shared) visits. We noted that we were also considering whether it is necessary to amend our regulations to explicitly state that Medicare does not pay for partial E/M visits and were interested in public comments on this issue.

We received public comments on the claim identification and partial visit policy proposals. The following is a summary of the comments we received and our responses.

Comment: Many commenters were supportive of a modifier to identify split (or shared) visits on claims. Several commenters stated that this would allow for tracking the contributions of NPPs more easily, increasing transparency and allowing providers, employers, and CMS to better evaluate those contributions. These commenters stated that accurate attribution of services is needed for quality assessment, resource utilization determinations, and future policy considerations. However, many commenters opposed the adoption of a modifier to identify split (or shared) visits because they believe it will increase administrative burden. One association recommended a one-year delay, to allow for practitioner education. Another commenter noted that we did provide a sufficient rationale, and asked about the agency's program integrity experience with split (or shared) services.

Response: We agree with commenters that accurate attribution of services is needed for transparency and program integrity, quality assessment, resource utilization determinations, and future policy considerations. We agree with the commenters that, given the differential PFS payment rates for physicians and NPPs, we need to be able to identify when visits are furnished by these different types of practitioners to improve payment accuracy.

We disagree that reporting a modifier on a claim comprises a substantial administrative burden, and believe that any potential burden is outweighed by policy considerations of quality, payment accuracy and program integrity, as described above.

After consideration of the public comments, we are finalizing as proposed that, for services furnished beginning in CY 2022, we will require a modifier to be reported on the claim to identify split (or shared) visits as such.

Comment: We received few public comments on our proposal that the modifier identified by CPT for purposes of reporting partial services (modifier -52 (reduced services)) could not be used to report partial E/M visits, including any partial services furnished as split (or shared) visits. One commenter agreed with our view that PFS payment is not made for partial E/M visits, and did not believe that an explicit prohibition needs to be codified. Another commenter stated that split (or shared) visits should not be defined as partial or incomplete services, because they are neither.

Response: We thank the commenters for their support. In this final rule, we are clarifying that Medicare does not pay for partial E/M visits, and that the modifier identified by CPT for purposes of reporting partial services (modifier -52 (reduced services)) cannot be used to report partial E/M visits, including any partial services furnished as split (or shared) visits.

2. Critical Care Services (CPT Codes 99291-99292)

As stated previously, in light of updates that we previously finalized for coding and payment for office/outpatient E/M visits, we proposed a number of refinements to other E/M code sets including critical care. Historically, our policy for billing critical care services was reflected in several provisions in the Medicare Claims Processing Manual (sections 30.6.1(B), 30.6.12, and 30.6.13(H)) that were withdrawn effective May 9, 2021, in response to a petition under the Department's Good Guidance regulation at 45 CFR 1.5 (see Transmittal 10742 available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r10742cp ). In the absence of these manual provisions, Medicare statute and various broadly applicable regulations continue to apply. In addition to withdrawing the manual provisions, we issued our response to the petition and accompanying enforcement instruction issued on May 26, 2021, available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/Evaluation-and-Management-Visits.

In those documents, we indicated that we intend to address split (or shared) visits (see the previous section) and critical care services (addressed in this section) through rulemaking and that until we do, we will limit review to the applicable statutory and regulatory requirements for purposes of assessing payment compliance. The list of applicable statutory and regulatory requirements includes the CY 2021 PFS final rule (85 FR 84549), where CMS generally adopted new CPT prefatory language and code descriptors for office/outpatient E/M visits. Therefore, we proposed to update our critical care E/M visit policies to improve transparency and clarity, and to account for recent revisions to E/M visit coding and payment.

Specifically, we made a number of proposals related to critical care visits in the CY 2021 PFS proposed rule (86 FR 39207 through 39211). The CPT 2021® Professional Codebook (hereafter, CPT Codebook) provides guidelines for critical care services in the CPT E/M Guidelines on pp. 5-9 and in prefatory language, code descriptors, and parentheticals on pp. 31-33. We proposed to adopt the CPT prefatory language for critical care services as currently described in the CPT Codebook, except as otherwise specified. Should CPT make changes to the guidance for critical care services in a subsequent edition of the CPT Codebook, we could revisit these policies in future rulemaking.

We proposed to clarify our definition of critical care visits, as well as requirements governing how critical care visits are reported under various circumstances, including when:

• A single practitioner furnishes critical care.
• More than one practitioner or specialty furnishes critical care visits.
• A critical care visit is furnished as a split (or shared) visit.
• A critical care visit and another E/M visit occur on the same day.
• Critical care is furnished in the context of global surgery.
• Documenting critical care visits.

a. Definition of Critical Care

Critical care visits are described by CPT codes 99291 ( Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes ) and 99292 ( each additional 30 minutes (List separately in addition to code for primary service ). The CPT 2021® Professional Codebook (hereafter, CPT Codebook) defines critical care services in prefatory language on pp. 31-33.

Critical care services were defined in the withdrawn provisions of the Medicare Claims Processing Manual (IOM). The IOM definition tracked closely with the CPT Codebook prefatory language regarding critical care services. To improve transparency and clarity, we proposed to adopt the CPT prefatory language as the definition of critical care visits. The CPT prefatory language states that critical care is the direct delivery by a physician(s) or other qualified healthcare professional (QHP) of medical care for a critically ill/injured patient in which there is acute impairment of one or more vital organ systems, such that there is a probability of imminent or life-threatening deterioration of the patient's condition. It involves high complexity decision-making to treat single or multiple vital organ system failure and/ or to prevent further life-threatening deterioration of the patient's condition. In the proposed rule, we stated our belief that the CPT Codebook appropriately delineates coding and definitions for critical care services in order to distinguish them as more intense services that are valued relatively higher than other E/M services. Thus, we proposed to adopt the CPT prefatory language as the definition of critical care visits and referred readers to the CPT Codebook for additional details.

We stated that, under current Medicare policy, a QHP is an individual who is qualified by education, training, licensure/regulation (when applicable), facility privileging (when applicable), and the applicable Medicare benefit category to perform a professional service within their scope of practice and independently report that service (see, for example, 80 FR 70957; 85 FR 84543, 84593). Because the CPT Codebook provides that critical care services can be delivered by a physician or QHP, we proposed that critical care services may be reported by a physician or NPP who is a QHP (as explained above). In this section of our final rule, we refer to such an individual as an NPP.

In our proposed rule, we also noted that the CPT prefatory language specifies that critical care may be furnished on multiple days, and is typically furnished in a critical care area, which can include an intensive care unit or emergency care facility. CPT prefatory language also states that critical care requires the full attention of the physician or NPP, and therefore, for any given time period spent providing critical care services, the practitioner cannot provide services to any other patient during the same period of time. We proposed to adopt this CPT prefatory language to improve transparency and clarity of our policy for critical care for Medicare billing purposes.

CPT prefatory language also provides billing and coding guidance. The guidance bundles several services into critical care visits furnished by a given practitioner when performed during the critical period by the practitioners providing critical care. We proposed to adopt CPT's listing of bundled services that are part of critical care visits: Interpretation of cardiac output measurements (CPT codes 93561, 93562), chest X rays (CPT codes 71045, 71046), pulse oximetry (CPT codes 94760, 94761, 94762), blood gases, and collection and interpretation of physiologic data (for example, ECGs, blood pressures, hematologic data); gastric intubation (CPT codes 43752, 43753); temporary transcutaneous pacing (CPT code 92953); ventilator management (CPT codes 94002-94004, 94660, 94662); and vascular access procedures. As a result, these codes would not be separately billable by a practitioner during the time-period when the practitioner is providing critical care for a given patient. We also proposed to adopt the CPT prefatory language stating that time spent performing separately reportable procedures or services should be reported separately and should not be included in the time reported as critical care time.

Comment: The public comments were supportive of our proposed definition of critical care. Several commenters expressed concern about the services that are bundled into the critical care codes. In particular, they disagreed with the inclusion of vascular access procedures in the bundled services. The commenters stated that bundling all of the vascular access procedures (not merely peripheral access, but also central venous and arterial lines) into critical care billing is not advisable because of the significant additional risk potential of central venous and arterial access procedures. The commenters added that the central venous and arterial access procedures require significant additional procedural training and skill on the part of the practitioner and that not all those who practice critical care have this additional competency. The commenters suggested the peripheral vascular access procedures could be bundled into critical care services, but not the central venous/arterial access procedures.

Response: We appreciate the commenters' support of our proposed definition of critical care. For administrative simplicity, we believe we should adopt the CPT listing of bundled services. We note that we included vascular access procedures in the list of bundled services because page 31 of the CPT Codebook states that vascular access procedures are included in critical care bundle when performed during the critical period by the physician(s) providing clinical care. Therefore, we are finalizing as proposed the CPT listing of services bundled into critical care. We will review and consider any future changes made by CPT to the listing of bundled services, if future changes are made by the CPT Editorial Panel.

After consideration of public comments, we are finalizing our proposal to adopt the CPT definition of critical care services and the current CPT listing of bundled services.

b. Critical Care by a Single Physician or NPP

Our withdrawn manual provisions and the prefatory language in the CPT Codebook both describe the time duration for the correct reporting of critical care services by a single physician or NPP. To improve transparency and clarity of our policy, we proposed to adopt the CPT prefatory language. Under our proposal, the physician or NPP would report CPT code 99291 for the first 30-74 minutes of critical care services provided to a patient on a given date. The CPT Codebook indicates that CPT code 99291 should be used only once per date even if the time spent by the practitioner is not continuous on that date. Thereafter, the physician or NPP would report CPT code 99292 for additional 30-minute time increments provided to the same patient. The prefatory language states that CPT codes 99291 and 99292 are used to report the total duration of time spent by the physician or QHP (NPP) providing critical care services to a critically ill or critically injured patient, even if the time spent by the practitioner on that date is not continuous; and that non-continuous time for medically necessary critical care services may be aggregated. We proposed to adopt these rules for critical care services furnished by a single physician or NPP. We noted that the prefatory language does not indicate how practitioners should report critical care when a service lasts beyond midnight. We solicited public comments about how practitioners should report CPT codes 99291 and 99292 when critical care services extend beyond midnight to the following calendar day. We referred readers to the CPT Codebook (page 32) for examples of the total duration of critical care visits.

Comment: We received a few comments regarding this proposal. Commenters expressed support for allowing time to be aggregated when reporting the total duration of time spent by a physician or NPP providing critical care services, even if the time spent by the practitioner on that date is not continuous. Several commenters submitted suggestions for how practitioners might report CPT codes 99291 and 99292 when a service extends beyond midnight to the following calendar date. One commenter urged us to work with the AMA to develop guidance to be added to the CPT prefatory language, so that consistent guidance exists across payers. Other commenters recommended that when critical care extends over midnight, the entire period be attributed to the calendar day the critical care service was initiated. Another commenter suggested that the practitioner should conclude the distinct episode of critical care provision, tally the time, and attribute the service to the initial date. One other commenter recommended that, when critical care services extend beyond midnight, we should adopt the same rule that applies in the Outpatient Prospective Payment System (OPPS): Critical care services should be billed with the date of service they began.

Response: We thank the commenters for their support and suggestions. After consideration of public comments, we are finalizing as proposed that the physician or NPP will report CPT code 99291 for the first 30-74 minutes of critical care services provided to a patient on a given date. CPT code 99291 will be used only once per date even if the time spent by the practitioner is not continuous on that date. Thereafter, the physician or NPP will report CPT code 99292 for additional 30-minute time increments provided to the same patient. CPT codes 99291 and 99292 will be used to report the total duration of time spent by the physician or NPP providing critical care services to a critically ill or critically injured patient, even if the time spent by the practitioner on that date is not continuous; and non-continuous time for medically necessary critical care services may be aggregated.

Regarding critical care crossing midnight, since the publication of the CY 2022 PFS proposed rule, we identified CPT guidance that defines how a service is to be billed when the service extends across calendar dates. According to CPT introductory language, “Some services measured in units other than days extend across calendar dates. When this occurs, a continuous service does not reset and create a first hour. However, any disruption in the service does create a new initial service. For example, if intravenous hydration (96360, 96361) is given from 11 p.m. to 2 a.m., 96360 would be reported once and 96361 twice. For continuous services that last beyond midnight (that is, over a range of dates), report the total units of time provided continuously” (CPT Codebook, page xvii). We are adopting this rule for critical care being furnished by a single physician or NPP when the critical care crosses midnight.

c. Critical Care Visits Furnished Concurrently by Different Specialties

The CPT Codebook does not provide special instruction about how to report critical care visits furnished concurrently by more than one physician or practitioner, whether in a split (or shared) visit context or other contexts that might be relevant given the unique nature of critical care and the long timeframes over which patients may receive these services. The CPT E/M Guidelines state broadly that concurrent care is the provision of similar services (for example, hospital visits) to the same patient by more than one physician or other QHP on the same day. The CPT E/M Guidelines state that when concurrent care is provided, no special reporting is required. The CPT E/M Guidelines also state broadly that when time is being used to select the appropriate level of services for which time-based reporting of split (or shared) visits is allowed), the time personally spent by the physician and other QHP(s) assessing and managing the patient on the date of the encounter is summed to define total time; and that only distinct time should be summed for split (or shared) visits (that is, when two or more individuals jointly meet with or discuss the patient, only the time of one individual should be counted).

In the context of critical care services, our withdrawn manual provisions provided guidance on concurrent care, and stated that there are situations where physicians or NPPs within a group provide coverage or follow-on care for one another on a single day. The manual also stated that critically ill or injured patients may require the care of more than one practitioner from more than one specialty (regardless of group affiliation), and this work could transpire simultaneously or could overlap.

Consistent with our current policy, and to improve transparency and clarity of our policy for critical care services, we proposed that concurrent care occurs where more than one physician or qualified NPP furnishes services to the same patient on the same day. Medicare policy for physicians' services is that concurrent care exists where more than one physician renders services more extensive than consultative services during a period of time. The reasonable and necessary services of each physician rendering concurrent care could be covered where each is required to play an active role in the patient's treatment (for example, because of the existence of more than one medical condition requiring diverse specialized medical services). In our proposed rule, we noted that, in the context of critical care services, a critically ill patient may have more than one medical condition requiring diverse specialized medical services and thus requiring more than one practitioner having different specialties to play an active role in the patient's treatment. Thus, we proposed that critical care visits may be furnished as concurrent care (or concurrently) to the same patient on the same date by more than one practitioner in more than one specialty (for example, an internist and a surgeon, allergist and a cardiologist, neurosurgeon and NPP), regardless of group affiliation, if the service meets the definition of critical care and is not duplicative of other services. Additionally, as for most Medicare-covered services, these critical care visits would need to be medically reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. We solicited public comments on our proposal to better understand current clinical practice for critical care, and when it would be appropriate for more than one physician or NPP of the same or different specialties, and within the same or a different group, to provide critical care services.

Comment: We received a few comments, all in support of our proposal.

Response: We thank commenters for their support, and are finalizing as proposed.

d. Critical Care Furnished Concurrently by Practitioners in the Same Specialty and Same Group (Follow-Up Care)

Physician(s) or NPP(s) in the same specialty and in the same group may provide concurrent follow-up care, such as a critical care visit subsequent to another practitioner's critical care visit. This may be as part of continuous staff coverage or follow-up care to critical care services furnished earlier in the day on the same calendar date.

According to CPT coding and billing conventions, a practitioner who furnishes a timed service such as a critical care visit would typically need to report the primary service or procedure code before reporting an add-on code. However, we stated that because practitioners in the same specialty and same group cover for one another, we believed the total time for critical care services furnished to a patient on the same day by the practitioners in the same group with the same specialty should be reflected as if it were a single set of critical care services furnished to the patient. We proposed that, when critical care is furnished concurrently, by two or more practitioners in the same specialty and in the same group, to the same patient on the same date, the individual physician(s) or NPP(s) providing the follow-up or subsequent care would report their time using the code for subsequent time intervals (CPT code 99292), and would not report the primary service code (CPT code 99291). CPT code 99291 would not be reported more than once for the same patient on the same day by these practitioners. This proposal recognizes that multiple practitioners in the same specialty and the same group can maintain continuity of care by providing follow-up care for the same patient on the same day, and is consistent with our current policy as described in the withdrawn manual provisions.

We proposed that in the situation where a practitioner furnishes the initial critical care service in its entirety and reports CPT code 99291, that the practitioner(s) reporting subsequent critical care services would report CPT code 99292. This proposal recognizes that multiple practitioners in the same specialty and group can furnish critical care services concurrently to a patient on a single day.

We also proposed that when one practitioner begins furnishing the initial critical care service, but does not meet the time required to report CPT code 99291, another practitioner in the same specialty and group can continue to deliver critical care to the same patient on the same day. We stated that the total time spent by the practitioners could be aggregated to meet the time requirement to bill CPT code 99291. Under this proposal, once the cumulative required critical care service time is met to report CPT code 99291, CPT code 99292 could not be reported by a practitioner in the same specialty and group unless and until an additional 30 minutes of critical care services are furnished to the same patient on the same day (74 minutes + 30 minutes = 104 total minutes).

Finally, we stated that the aggregated time spent on critical care visits must be medically necessary and each visit must meet the definition of critical care in order to add the times for purposes of meeting the time requirement to bill CPT code 99291.

Comment: Several comments supported our proposal to aggregate time for critical care furnished concurrently by practitioners in the same specialty and same group (Follow-Up Care). A couple of commenters noted our math miscalculation (86 FR 39209). We incorrectly stated that 70 minutes + 34 minutes = 114 minutes when in fact it equals 104 minutes.

Response: We appreciate the support of commenters and thank them for letting us know about our addition error. We have revised the total number of minutes.

After consideration of public comments, we are finalizing our proposal for aggregating time when critical care is furnished concurrently, by two or more practitioners in the same specialty and in the same group, to the same patient on the same date (follow-up care).

e. Split (or Shared) Critical Care Visits

Under current CMS policy, critical care services cannot be billed as split (or shared) E/M services. As previously discussed in section II.F.1. of this final rule for split (or shared) visits, we believe the practice of medicine has evolved toward a more team-based approach to care, and greater integration in the practice of physicians and NPPs, particularly when care is furnished by clinicians in the same group in the facility setting. Given this evolution in medical practice, the concerns that may have been present when we issued current policy may no longer be as relevant. We understand that there have been changes in the practice of medicine over the past several years, some facilitated by the advent of EHRs and other systems, toward a more team-based approach to care. There has also been an increase in alternative payment models that employ a more team-based approach to care. In considering and reevaluating this policy, we believed it would be appropriate to revise our policy to allow critical care services to be reported when furnished as split (or shared) services. Therefore, we proposed that critical care visits may be furnished as split (or shared) visits. The proposals described for other types of split (or shared) visits would apply (except for the listing of qualifying activities for determining the substantive portion, discussed below), and service time would be counted for CPT code 99292 in the same way as for prolonged E/M services. In other words, we proposed that the total critical care service time provided by a physician and NPP in the same group on a given calendar date to a patient would be summed, and the practitioner who furnishes the substantive portion of the cumulative critical care time would report the critical care service(s).

Since unlike other types of E/M visits, critical care services can include additional activities that are bundled into the critical care visits code(s), we proposed a different listing of qualifying activities for split (or shared) critical care. These qualifying activities are described in prefatory language on pp. 31-32 of the 2021 CPT Codebook. When critical care services are furnished as a split (or shared) visit, we proposed to define the substantive portion as more than half the cumulative total time in qualifying activities that are included in CPT codes 99291 and 99292.

Similar to our proposal for split (or shared) prolonged visits, the billing practitioner would first report CPT code 99291 and, if 75 or more cumulative total minutes were spent providing critical care, the billing practitioner could report one or more units of CPT code 99292. We would require practitioners to include the proposed split (or shared) visit modifier on the claim, and the same documentation rules would apply as for other types of split (or shared) E/M visits. We noted that, in contrast to our proposals regarding concurrent critical care services, when a critical care service is furnished as a split (or shared) visit, when two or more practitioners spend time jointly meeting with or discussing the patient, the time could be counted only once for purposes of reporting the split (or shared) critical care visit. This is consistent with our proposed policy for all split (or shared) visits. It is also consistent with the CPT E/M Guidelines stating that, for split (or shared) visits, when two or more individuals jointly meet with or discuss the patient, only the time of one individual should be counted).

We sought public comment on these proposals to ensure they reflect a clinically appropriate approach, and to help us assess whether we should instead require that an individual physician or NPP directly perform the entirety of each critical care visit. We sought public comment to better understand current clinical practice for critical care, and when it would be appropriate for more than one physician or NPP of the same or different specialties, and within the same or a different group, to provide critical care to a patient.

Comment: We did not receive any public comments opposing any aspect of our proposals regarding split (or shared) critical care visits.

Response: We thank the commenters for their support. After consideration of the public comments, we are finalizing as proposed.

f. Critical Care Visits and Same-Day Emergency Department, Inpatient or Office/Outpatient Visits

The CPT Codebook states that critical care and other E/M services may be provided to the same patient on the same date by the same individual. However, our general policy as described in the Medicare Claims Processing Manual states that physicians in the same group who are in the same specialty must bill and be paid for services under the PFS as though they were a single physician. If more than one E/M visit is provided on the same day to the same patient by the same physician, or by more than one physician in the same specialty in the same group, only one E/M service may be reported unless the E/M services are for unrelated problems. Instead of billing separately, the physicians should select a level of service representative of the combined visits and submit the appropriate code for that level.

This policy is intended to ensure that multiple E/M visits for a patient on a single day are medically necessary and not duplicative. With respect to office/outpatient E/M visits specifically, our current manual instructs, “As for all other E/M services except where specifically noted, the Medicare Administrative Contractors (MACs) may not pay two E/M office visits billed by a physician (or physician of the same specialty from the same group) for the same beneficiary on the same day unless the physician documents that the visits were for unrelated problems in the office, off campus-outpatient hospital, or on campus-outpatient hospital setting which could not be provided during the same encounter.”

For hospital visits and hospital ED visits furnished on the same day as critical care services, the Medicare Claims Processing Manual states, “When a hospital inpatient or office/outpatient E/M service are furnished on a calendar date at which time the patient does not require critical care and the patient subsequently requires critical care both the critical care services (CPT codes 99291 and 99292) and the previous E/M service may be paid on the same date of service. Hospital ED services are not paid for [on] the same date as critical care services when provided by the same physician to the same patient.”

We expressed concern about adopting the CPT rule that states that critical care and other E/M visits may be furnished to the same patient on the same date by the same practitioner. We stated in the past that we believe multiple E/M visits by the same practitioner, or by practitioners in the same specialty within a group, on the same day as another E/M service ordinarily would not be medically necessary (83 FR 59639). We noted that the CPT rule allowing billing for critical care and other E/M visits on the same day, by practitioners in the same group and of the same specialty, could lead to duplicative payment, particularly given the frequently long duration of critical care services, the CPT prefatory language indicating that time spent furnishing critical care may be non-continuous, and the relatively higher valuation of critical care services compared to other E/M services. Thus, we proposed that no other E/M visit can be billed for the same patient on the same date as a critical care service when the services are furnished by the same practitioner, or by practitioners in the same specialty in the same group.

We suggested several alternative approaches to addressing our concerns about medical necessity and duplicative payment for E/M services furnished to a patient on the same day by the same practitioner or a practitioner in the same group. We previously considered an MPPR for standalone office/outpatient E/M visits that occur on the same day as a procedure. An MPPR would address efficiencies (for example, in preservice and postservice clinician work and PE) that are not accounted for in the current payment rates (83 FR 59639). These visits could be identified on the claim with modifier -25 (significant, separately identifiable E/M service by the same physician on the same day of the procedure or other service) and CMS could assign a reduced payment rate to one of the visits. CMS could also require documentation to support the medical necessity and non-duplicative nature of a claim for critical care services on the same calendar date as another E/M visit provided to a patient by the same practitioner or practitioner of the same specialty in a group.

We recognized that our proposal not to allow an E/M visit to be billed for the same patient on the same date as a critical care service when the services are furnished by the same practitioner, or by practitioners in the same specialty within a group, might be appropriate only in certain clinical situations. For example, it is possible that a patient might not require critical care services at the time of an ED visit, but then be admitted to the hospital on the same calendar date as the ED visit and require care that meets the definition of critical care services. It is also possible that the practitioner who furnished the ED visit might provide the critical care services to the same patient on the same calendar date. Thus, we solicited public comments on our proposal to better understand clinical practice for critical care when E/M services are furnished on the same date as critical care services and the services are furnished by the same practitioner or practitioners in the same specialty in the same group, while also reducing the potential for duplicative payment.

Comment: We received many public comments on our proposal regarding critical care visits and same-day emergency department, inpatient or office/outpatient E/M visits. Many commenters opposed the proposal. These commenters stated that the proposal was contrary to the CPT Codebook which states that critical care and other E/M services may be provided to the same patient on the same date by the same individual. Other commenters stated that same-day emergency department, inpatient or office/outpatient visits are separate services that can be independent of critical care services. Many commenters offered examples where an E/M visit might occur on the same day as critical care services and concluded by stating that there may be instances when a patient would need both types of services on the same day. Commenters stated that we should maintain enough flexibility around provision of these services to allow practitioners to bill an E/M visit on the same date as a critical care service in those instances where it is clinically appropriate and for which there is documentation of the specific services provided by each practitioner.

Response: We appreciate the many comments we received on this proposal. We remain concerned about adopting the CPT rule that states that critical care and other E/M visits may be furnished to the same patient on the same date by the same practitioner. As we have stated in the past, we believe that multiple E/M visits by the same practitioner or practitioners in the same specialty within a group, on the same date as another E/M service would not seem to be medically necessary (83 FR 59639). We appreciate the examples that commenters sent describing situations where a patient might require a same-day E/M visit, as well as critical care services, and understand that in certain circumstances the E/M visit could be independent of the critical care services. We also agree that flexibility is important; although, we do not presume the billing of critical care with other E/M visits on the same day as a typical situation. We note that the CPT rule allowing billing for critical care and other E/M visits on the same day, by practitioners in the same group and of the same specialty, could lead to duplicative payment, particularly given the frequently long duration of critical care services.

After consideration of the public comments, we are finalizing a policy similar to the policy in our withdrawn manual. Specifically, as long as the physician documents that the E/M service was provided prior to the critical care service at a time when the patient did not require critical care, that the service is medically necessary, and that the service is separate and distinct, with no duplicative elements from the critical care service provided later in the day, practitioners may bill for both services. Practitioners must use modifier -25 on the claim when reporting these critical care services. We may consider in future rulemaking a payment adjustment similar to our MPPR that would more broadly apply to same-day E/M visits and procedures.

g. Critical Care Visits and Global Surgery

Critical care visits are sometimes needed during the global period of a procedure, whether pre-operatively, on the same day or during the post-operative period. In many cases, preoperative and postoperative critical care visits are included in procedure codes that have a global surgical period. In the CY 2015 PFS final rule, we discussed our concerns related to accurately accounting for the number of visits included in the valuation of 10- and 90-day global packages (79 FR 67548, 67582). The 10- and 90-day global packages can include critical care visits. finalized a policy to change all global periods to 0-day global periods, as well as to allow separate payment for post-operative E/M visits.

Our concerns were based on a number of key points including: The lack of sufficient data on the number of visits typically furnished during the global periods, questions about whether we would be able to adjust values on a regular basis to reflect changes in the practice of medicine and health care delivery, and concerns about how our global payment policies could affect services that are actually furnished. Section 1848(c)(8)(B) of the Act, which was added by section 523(a) of the Medicare Access and CHIP Reauthorization Act (MACRA), required us to collect data to value surgical services. Because critical care visits are included in some 10- and 90-day global packages, we proposed to bundle critical care visits with procedure codes that have a global surgical period. We noted that this proposal differs from current policy as described in the Medicare Claims Processing Manual which states that critical care visits are unbundled from procedures with a global surgical period as long as the critical care service was unrelated to the procedure. As we have made clear in previous rulemaking, we are continuing to assess values for global surgery procedures (84 FR 2452), including the number and level of preoperative and postoperative visits, which can include critical care services. Because this work is still ongoing, we proposed to bundle critical care visits with procedure codes that have a global surgical period.

Comment: We received many public comments on our proposal to bundle critical care services with procedure codes with a global surgical period. Many commenters opposed our proposal. These commenters stated that this policy, if finalized, would have a significant negative impact on the quality and safety of patient care, health system resiliency, health equity, and the surgical workforce. Most commenters recommended that we continue to pay separately for critical care services that are billed with surgical procedures that do not contain critical care services as part of a global surgical package. A few commenters wrote in favor of maintaining modifiers -24 (Unrelated E/M service by the same physician during a postoperative period) and -25 (Significant, separately identifiable E/M service by the same physician on the same day of the procedure or other service) to indicate that the critical care service was unrelated to the surgical procedure and can be billed and paid at full value when unrelated to the procedure.

Response: We appreciate the many informative comments shared by stakeholders on this topic. We found the detailed comments about how our proposal would negatively impact the quality and safety of patient care, health system resiliency, health equity, and the surgical workforce especially compelling. Thus, after considering public comments, we are choosing not to finalize our proposal to always bundle critical care visits with procedure codes that have a global surgical period. Instead, we are maintaining our current policy that critical care visits may be separately paid in addition to a procedure with a global surgical period, as long as the critical care service is unrelated to the procedure. Preoperative and/or postoperative critical care may be paid in addition to the procedure if the patient is critically ill (meets the definition of critical care) and requires the full attention of the physician, and the critical care is above and beyond and unrelated to the specific anatomic injury or general surgical procedure performed (for example, trauma, burn cases). We are creating a new modifier that we will require on such claims to identify that the critical care is unrelated to the procedure. If care is fully transferred from the surgeon to an intensivist (and the critical care is unrelated), modifiers -54 (surgical care only) and -55 (postoperative management only) must also be reported to indicate the transfer of care. The surgeon will report modifier -54. The intensivist accepting the transfer of care will report both modifiers -55 and the new unrelated modifier. As usual, medical record documentation must support the claims. We may consider in future rulemaking an MPPR-like adjustment that would be used to identify critical care that is billed in conjunction with a global surgical procedure, and would discount one of the services rather than paying for both in their entirety.

h. Medical Record Documentation Requirements

Because critical care is a time-based service, we proposed to require practitioners to document in the medical record the total time that critical care services were provided by each reporting practitioner (not necessarily start and stop times). We stated that documentation would need to indicate that the services furnished to the patient, including any concurrent care by the practitioners, were medically reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. To support coverage and payment determinations regarding concurrent care, we indicated that services would need to be sufficiently documented to allow a medical reviewer to determine the role each practitioner played in the patient's care (that is, the condition or conditions for which the practitioner treated the patient). We stated that, in order to support coverage and payment determinations regarding split (or shared) critical care services, documentation requirements for all split (or shared) E/M visits would apply to critical care visits also (see section II.F.1. of this final rule).

Comment: We received a few public comments in support of our proposed documentation requirements. Commenters stated that critical care time should include total time, not a range or threshold met, that services must be medically reasonable and necessary to treat a critical condition, and that documentation should demonstrate the role played by the medical practitioner (especially if there is split or shared billing).

Response: We agree with the commenters that medical record documentation is especially important for split (or shared) critical care visit billing, as well as same-day multiple visits and billing of critical care in conjunction with a global surgical procedure, discussed above. After consideration of public comments, we are finalizing the documentation requirements for critical care time as proposed. We also refer readers to the sections above on critical care billed the same day as other E/M visits, and critical care billed in conjunction with a global surgical procedure, for additional discussion of documentation requirements in support of services billed.

3. Payment for the Services of Teaching Physicians

As part of the CPT office/outpatient E/M visit coding framework that we finalized beginning for CY 2021 (85 FR 84548 through 84574), practitioners can select the office/outpatient E/M visit level to bill, based either on the total time personally spent by the reporting practitioner or MDM. Stakeholders have asked us how teaching physicians who involve residents in furnishing care should consider time spent by the resident in selecting the office/outpatient E/M visit level.

For teaching physicians, section 1842(b) of the Act specifies that in the case of physicians' services furnished to a patient in a hospital with a teaching program, the Secretary shall not provide payment for such services unless the physician renders sufficient personal and identifiable physicians' services to the patient to exercise full, personal control over the management of the portion of the case for which payment is sought.

Regulations regarding PFS payment for teaching physician services are codified in 42 CFR part 415. In general, under § 415.170, payment is made under the PFS for services furnished in a teaching hospital setting if the services are personally furnished by a physician who is not a resident, or the services are furnished by a resident in the presence of a teaching physician, with exceptions as specified in subsequent regulatory provisions in part 415. Medicare separately pays for the time spent by the resident through direct graduate medical education (GME) under Medicare Part A.

a. General Policy for Evaluation and Management Visits

Under our regulation at § 415.172 and absent a public health emergency (PHE), if a resident participates in a service furnished in a teaching setting, a teaching physician can bill for the service only if they are present for the key or critical portion of the service. For residency training sites that are located outside a metropolitan statistical area, PFS payment may also be made if a teaching physician is present through audio/video real-time communications technology (that is, “virtual presence”). In the case of E/M services, the teaching physician must be present during the portion of the service that determines the level of service billed.

We proposed that when total time is used to determine the office/outpatient E/M visit level, only the time that the teaching physician was present can be included. We believe it is appropriate to include only the time of the teaching physician because the Medicare program makes separate payment for the program's share of the graduate medical training program, which includes time spent by a resident furnishing services with a teaching physician, under Medicare Part A. During the PHE, the time of the teaching physician when they are present through audio/video real-time communications technology may also be included in the total time considered for visit level selection. We noted that, outside the circumstances of the COVID-19 PHE, the teaching physician presence requirement can be met virtually, through audio/video, real-time communications technology, only in residency training sites that are located outside of a metropolitan statistical area.

This proposal is consistent with our previously finalized policy that practitioners can use total time personally spent by the reporting practitioner on the date of the encounter to select office/outpatient E/M visit level. It is also consistent with our regulation at § 415.172 that states that PFS payment is made when a teaching physician involves a resident in providing care only if the teaching physician is present for the key or critical portions of the service, including the portion that is used to select the visit level.

We received public comments on the general policy for E/M visits. The following is a summary of the comments we received and our responses.

Comment: Commenters overwhelmingly supported our proposed clarification concerning the specific portion of total time that can be used to determine separate payment for teaching physician services under the PFS for an office/outpatient (O/O) E/M visit involving residents. These commenters supported our clarification that since the Medicare program already pays for a resident's care as part of a graduate medical education (GME) training program, only the time personally spent by the teaching physician furnishing services should be used to select the level of O/O E/M visits services that are separately billed under the Medicare Part B PFS for teaching physician services. Medicare Part A payment for graduate medical training programs includes the time that a resident spends furnishing services with a teaching physician.

Response: We appreciate the overall support for our proposal and the consensus that it is a reasonable approach to prevent duplicative program payment for services furnished by teaching physicians involving residents. Our proposal is also consistent with our approach to the primary care exception discussed below.

Comment: One commenter disagreed with our proposal to make separate payment under the Medicare Part B PFS only to teaching physicians and not residents, opining it will cause a hardship for organizations that accept residents but are not recipients of the Medicare Part A GME payment. The commenter stated that such organizations rely on billing and separate payment under the Medicare PFS to a teaching physician for the total time spent for an O/O E/M visit to compensate for the time and effort of training a resident.

Response: We appreciate that organizations that are not hospitals with a teaching program or teaching hospital primary care centers may accept residents and provide education and training opportunities for such individuals. However, if an organization other than a teaching hospital with an accredited GME program “accepts residents” for training, it would either be a “non-hospital site” associated with a teaching hospital's GME program (in which case the hospital presumably would count and be paid for the FTE resident time spent there), or the “resident” would not be performing services as part of the GME program at all—they would be “moonlighting.” Program regulations at 42 CFR 410.200 state that services furnished in hospitals by residents in approved GME programs are specifically excluded from being paid as “physician services” defined in § 414.20. We also note that program regulations at § 415.208(b)(4) state that no payment is made for teaching physician services associated with services furnished by a moonlighting resident.

Comment: One commenter requested clarity on what specific teaching physician activities count toward the time the teaching physician was present, as well as whether face-to-face time is required or if non-face-to-face time as described in Current Procedural Terminology (CPT) guidelines counts. However, the commenter urged CMS to delay making changes or clarifications to this policy until 2023, when CPT could make substantial changes to E/M codes as it continues to review and revise the E/M code set.

Response: We appreciate the commenters' suggestion. At this time, the qualifying activities for selecting office/outpatient E/M visit level using the reporting practitioner's time are specified by CPT. Earlier this year, the CPT Editorial Panel published an erratum or technical correction to the 2021 CPT E/M Guidelines which addressed teaching physician time by excluding time spent in “teaching that is general and not limited to discussion that is required for the management of a specific patient.” Therefore, we are clarifying that only time spent by the teaching physician performing qualifying activities listed by CPT (with or without direct patient contact on the date of the encounter), including the time the teaching physician is present when the resident is performing such activities, may be counted for purposes of visit level selection. This excludes teaching time that is general and not limited to discussion that is required for the management of a specific patient. As CPT reviews and revises the E/M visit code set, we will consider in future rulemaking any pertinent changes that may be made by the CPT Editorial Panel on this topic, and whether further clarifications or changes may be needed to the current regulations at § 415.172 regarding the billing requirements for teaching physician services.

Comment: Several commenters urged CMS to make permanent beyond the COVID-19 pandemic, the ability of teaching physicians to include in the total time considered for visit level selection, their virtual presence through audio/video, real-time communications technology, when billing for office/outpatient E/M visits in residency training centers located inside, as well as outside of a metropolitan statistical area (MSA).

Response: We appreciate the commenters' recommendation. However, the issue of making the virtual presence flexibility permanent beyond the COVID-19 pandemic and extending this flexibility to include residency training centers located inside an MSA was not part of our proposal for general primary care office/outpatient E/M visit level selection.

Comment: A few commenters requested that CMS use “provider-neutral” language in all regulatory rulemaking, including in the definition of “teaching physician services” to reflect the full spectrum of healthcare professionals delivering care to their communities. A commenter encouraged CMS to clarify that physician assistants (PAs) and advanced practice registered nurses (APRNs) can count the total time they were present with residents, students, and other trainees toward selecting the E/M visit level.

Response: Payment is made under the Medicare PFS for teaching physicians' services as described in part 415 of our regulations. We define a teaching physician in § 415.152 as a physician other than a resident who involves residents in the care of their patients. Additionally, teaching physicians are involved in training residents as part of an approved GME residency program in a teaching hospital, which includes only programs in medicine, osteopathy, dentistry, or podiatry. For each of these program areas under a GME residency program, section 1861(r) of the Act uses the term “physician” in connection with the performance of any function or action by a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, and a doctor of podiatric medicine. NPPs are not included under the statutory definition of a physician.

After considering the public comments, we are finalizing our proposal that only the teaching physician's total time is counted when total time is used to determine the office/outpatient E/M visit level, not including the time spent by the resident furnishing care without the presence of the teaching physician. We are clarifying that only time spent by the teaching physician performing qualifying activities listed by CPT (with or without direct patient contact on the date of the encounter), including time the teaching physician is present when the resident is performing those activities, may be counted for purposes of visit level selection. This excludes teaching time that is general and not limited to discussion that is required for the management of a specific patient.

b. Primary Care Exception Policy

The regulation at § 415.174 sets forth an exception to the conditions for PFS payment for services furnished in teaching settings in the case of certain E/M services furnished in certain primary care centers. Under the so-called “primary care exception,” Medicare makes PFS payment in certain teaching hospital primary care centers for certain services of lower and mid-level complexity furnished by a resident without the physical presence of a teaching physician. We expanded the list of services that residents could furnish without the physical presence of the teaching physician for the duration of the PHE to include all levels of an office/outpatient E/M visit, among other services. Upon the conclusion of the PHE, levels 4-5 office/outpatient E/M visits will no longer be included in the primary care exception (85 FR 84585 through 84590).

Section 415.174(a)(3) requires that the teaching physician must not direct the care of more than four residents at a time, and must direct the care from such proximity as to constitute immediate availability (that is, provide direct supervision), and must review with each resident during or immediately after each visit, the beneficiary's medical history, physical examination, diagnosis, and record of tests and therapies. Section 415.174(a)(3) also requires that the teaching physician must have no other responsibilities at the time, assume management responsibility for the beneficiaries seen by the residents, and ensure that the services furnished are appropriate.

We proposed that under the primary care exception, only MDM can be used to select office/outpatient E/M visit level. The intent of the primary care exception as described in § 415.174 is that E/M visits of lower and mid-level complexity furnished by residents are simple enough to permit a teaching physician to be able to direct and manage the care of up to four residents at any given time and direct the care from such proximity as to constitute immediate availability. In the context of teaching hospital primary care centers that are staffed by residents and teaching physicians, we believe that MDM will be a more accurate indicator of the complexity of the visit as opposed to time. Because residents are in training, they may need more time than is reflected in the code descriptor to furnish a visit that has a low-level of medical decision making. For example, CPT code 99213 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and low level of medical decision making. When using time for code selection, 20-29 minutes of total time is spent on the date of the encounter ) involves a low level of MDM and between 20-29 minutes of total time. If time was used for level selection instead of MDM, it is possible that residents may need more than 20-29 minutes of time, including any conferring with the teaching physician, to furnish CPT code 99213. Thus, residents may be less efficient relative to a teaching physician in furnishing care.

Office/outpatient E/M visits requiring 30 or more minutes of total time are described by visit levels 4-5. After the expiration of the COVID-19 PHE, office/outpatient levels 4-5 will no longer be included in the primary care exception. In the CY 2021 PFS final rule, we expressed concern that the teaching physician may not be able to maintain sufficient personal involvement in all of the care to warrant PFS payment for the services being furnished by up to four residents when some or all of the residents might be furnishing services that are more than lower and mid-level complexity. We noted that when the teaching physician is directing the care of a patient that requires moderate or higher medical decision-making, the ability to be immediately available to other residents could be compromised, potentially putting patients at risk (85 FR 84586). Thus, to guard against the possibility of residents furnishing visits that are of more than lower and mid-level complexity, we proposed that only MDM may be used for office/outpatient E/M visit level selection for services furnished by residents under the primary care exception.

We acknowledge that under the new CPT office/outpatient E/M visit coding framework, it is possible that time is an accurate indicator of the complexity of the visit. Thus, we solicited public comments on this proposal, including our assumption that MDM is a more accurate indicator of the appropriate level of the visit relative to time in the context of the primary care exception for services furnished by residents and billed by teaching physicians in primary care centers. We also solicited comments on whether time is an accurate indicator of the complexity of the visit and how teaching physicians might select office/outpatient E/M visit level using time when directing the care of a patient that is being furnished by a resident in the context of the primary care exception.

We received public comments on the primary care exception policy. The following is a summary of the comments we received and our responses.

Comment: Most of the commenters support and concur with our proposal to use medical decision making (MDM) only to select the visit level for office/outpatient E/M visits under the primary care exception.

Response: We appreciate the commenters' support for our approach.

Comment: Several commenters opposed our proposal to use MDM exclusively to select the office/outpatient E/M visit level for services furnished under the primary care exception. These commenters were concerned that the exclusive use of MDM may create incentives for physicians to quickly move residents from patient to patient, rather than furnish the appropriate clinical care. They stated that without evidence that MDM is a more accurate indicator than time in selecting the E/M visit level under the primary care exception, both time and MDM should be allowed as options for visit level selection. The commenters noted that time spent by the teaching physician reviewing the chart, looking at images, discussing with consultants, etc., should all still count in determining the E/M level, just as it does in a non-teaching situation.

Response: We acknowledge the commenters' opposition to our proposal to allow MDM as the only option for E/M visit level selection under the primary care exception. However, under our primary care exception policy, we believe that using MDM to inform office/outpatient E/M visit level selection rather than time is appropriate given our concerns about the accuracy of counting time spent by residents in training to inform office/outpatient E/M visit level selection. We believe that the use of MDM is far more practical and less burdensome, because it allows for the likelihood that residents in training might take more time to perform services because they are potentially less efficient. As a result, time is not necessarily an accurate reflection of the visit level. Also, under the primary care exception, the teaching physician is allowed to participate simultaneously in the services furnished by up to four residents and bill separately for teaching physician services under the PFS for each of these residents. Under these circumstances, when a teaching physician must direct and manage the care of up to four residents at a given time and direct the care from such proximity as to constitute immediate availability, it is difficult to discern which time should be counted.

Comment: We received some comments that are outside the scope of the teaching physician proposals and comment solicitation we included in the proposed rule. One of these comments stated that the increased investment in primary care expected from the 2021 E/M visit code revaluation has not materialized in many cases, expressing the view that this is because the employers of many family physicians are not reflecting the increased RVUs or Medicare payment allowances in their employment contracts. The other commenter suggested that CMS should adjust the values of the E/M postoperative visits included in the 10- and 90-day global codes to reflect the 2021 updates to the office/outpatient E/M code payment increases.

Response: We will not be addressing the concerns raised in these comments in this final rule because they are not within the scope of topics addressed in this CY 2022 PFS rulemaking.

After considering public comments, we are finalizing our proposal that MDM is used to determine the visit level for office/outaptient E/M visits furnished under the primary care exception.

G. Billing for Physician Assistant (PA) Services

Under the respective Medicare statutory benefit categories for the services of PAs, nurse practitioners (NPs), and clinical nurse specialists (CNSs), these nonphysician practitioners (NPPs) are authorized to furnish services that would be physicians' services if they were furnished by a physician, and which they are legally authorized to perform by the State in which the services are furnished; and such services that are provided incident to these NPPs' professional services (but only if no facility or other provider charges or is paid any amount for the services). Additionally, the payment amount for the services of PAs, NPs, and CNSs, as specified under section 1833(a)(1)(O) of the Act, is equal to 80 percent of the lesser of the NPP's actual charge or 85 percent of the amount that would be paid to a physician under the PFS. However, while NPs and CNSs are authorized to bill the Medicare program and be paid directly for their professional services, section 1842(b)(6)(C)(i) of the Act has required since the inception of the PA benefit (with a narrow exception not relevant here), that payment for PA services must be made to the PA's employer. Accordingly, our regulation at § 410.74(a)(2)(v) specifies that PA services are covered under Medicare Part B only when billed by the PA's employer. Our regulation that addresses to whom Medicare Part B payment is made, at § 410.150(b)(15), further provides that payment is made to the qualified employer of a PA, and specifies that the PA could furnish services under a W-2 employment relationship, an employer-employee relationship, or as an independent contractor through a 1099 employment relationship. The regulation also specifies that a group of PAs that incorporate to bill for their services is not a qualified employer. Given the statutory requirement that we make payment to the PA's employer, PAs are precluded from directly billing the Medicare program and receiving payment for their services, and do not have the ability to reassign Medicare payment rights for their services to any employer, facility, or billing agent.

Section 403 of the Consolidated Appropriations Act, 2021 (CAA) (Pub. L. 116-260, December 27, 2020), amended section 1842(b)(6)(C)(i) of the Act to remove the requirement to make payment for PA services only to the employer of a PA effective January 1, 2022. With the removal of this requirement, PAs will be authorized to bill the Medicare program and be paid directly for their services in the same way that NPs and CNSs do. Effective with this amendment, PAs also may reassign their rights to payment for their services, and may choose to incorporate as a group comprised solely of practitioners in their specialty and bill the Medicare program, in the same way that NPs and CNSs may do. We note that the amendment made by section 403 of the CAA changed only the statutory billing construct for PA services. It changed neither the statutory benefit category for PA services, including the requirement that PA services are performed under physician supervision, at section 1861(s)(2)(K)(i) of the Act, nor the statutory payment percentage applicable to PA services specified in section 1833(a)(1)(O) of the Act. However, with the amendments to the PA physician supervision requirement under § 410.74(a)(2)(iv) made beginning in CY 2020, PAs have flexibility to meet the statutory physician supervision requirement through collaborating with physicians and forming partnerships as long as this is in accordance with their State scope of practice laws. Now that PAs are authorized to bill Medicare directly, we believe that PAs will furnish more services under collaborative relationships with physicians, likely in rural areas or underserved communities where Medicare beneficiaries may have less direct access to care by physicians because of a lack of physicians.

We proposed to amend pertinent sections of our regulations to reflect the amendment made by section 403 of the CAA. Specifically, we proposed to amend § 410.74(a)(2)(v) to specify that the current requirement that PA services must be billed by the PA's employer in order to be covered under Medicare Part B is effective only until December 31, 2021. We also proposed to amend § 410.150(b) to redesignate the current requirements in paragraph (b)(15) as § 410.150(b)(15)(i), and to provide that Medicare payment is made for PA services to the qualified employer of the PA for services furnished prior to January 1, 2022. In § 410.150, we further proposed to add a new paragraph (b)(15)(ii) to state that, effective for services furnished on or after January 1, 2022, payment is made to a PA for their professional services, including services and supplies provided incident to their services. We proposed to conform this new paragraph with the regulation at § 410.150(b)(16) regarding to whom payment is made for NP or CNS services. As such, the new paragraph at § 410.150(b)(15)(ii) would provide that payment is made to a PA for professional services furnished by a PA in all settings in both rural and non-rural areas; and that payment is made only if no facility or other provider charges or is paid any amount for services furnished by a PA. We would also update our program manual instructions to reflect the statutory change made by section 403 of the CAA and the changes to our regulations.

We received public comments on these proposals to amend the current requirements. The following is a summary of the comments we received and our responses.

Comment: Overall, the commenters supported this proposal that authorizes PAs to bill the Medicare program and be paid directly for their services. Commenters stated that this billing authorization simplifies the billing process for PAs in that it does not tie billing for PA services directly to employment which eliminates an administrative burden for employers; and, it provides billing parity between PAs and other NPPs such as NPs and CNSs, which may help to increase access to PA services, particularly in rural areas. Additionally, these commenters expressed their appreciation for this new billing authority that makes PAs eligible for the option to reassign payment for their services to their employer, independent contractor, or group practice and, to incorporate as a group of PAs and bill the Medicare program for PA services.

Response: We appreciate that commenters support the changes we proposed to implement section 403 of the CAA effective January 1, 2022.

Comment: A few commenters opposed our proposals to implement section 403 of the CAA. These commenters disapprove of the change to the statutory billing construct that authorizes PAs to bill the Medicare Part B program directly beginning January 1, 2022. Instead, these commenters support continued third-party payment to the PA's employer or independent contractor for PA services furnished collaboratively with physicians to deliver care led by physicians in integrated practice arrangements.

Response: While we appreciate the commenters' concerns, section 403 of the CAA amended the statute effective January 1, 2022. Our proposals simply implement the amended Medicare law.

Comment: Several commenters expressed concerns that this direct billing authority for PAs might undermine the proven physician-led-team based care model under which PAs, NPs and CNSs are integral team members, and instead encourage independent practice by these NPPs. These commenters requested that CMS establish oversight of PA billing practices to ensure that PAs are practicing in accordance with State law and scope of practice rules; that quality of care for Medicare beneficiaries is maintained; and, that the Medicare Trust Fund is protected.

Response: We do not anticipate that this change will impact the participation of NPPs as vital team members of physician-directed-team care models, or otherwise diminish the quality of health care furnished to Medicare beneficiaries. As provided in Medicare law at section 1861(s)(2)(K)(i) of the Act, PA services must be furnished under the supervision of a physician and, also in our regulation at § 410.74(a), PA services are covered only when furnished in accordance with State law and scope of practice rules.

Comment: One commenter suggested that allowing PAs to bill the Medicare program directly would require updates to Medicare enrollment and billing for PAs, and that the program should consider adopting a grace period to allow CMS to implement revisions to the CMS-855I, CMS-855R and related enrollment forms.

Response: We appreciate the concerns the commenter raised about the time required to update necessary reassignment and enrollment forms. However, we have prepared to update these forms to accommodate the change to allow direct billing by PAs effective January 1, 2022.

After considering public comments, we are finalizing our proposals to implement section 403 of the CAA as proposed.

H. Therapy Services

1. Payment for Outpatient PT and OT Services Furnished by Therapy Assistants

We are implementing the third and final part of the amendments made by section 53107 of the Bipartisan Budget Act (BBA of 2018) (Pub. L. 115-123, February 9, 2018). The BBA of 2018 added a new section 1834(v) of the Act. Section 1834(v)(1) of the Act requires CMS to make a reduced payment for physical therapy and occupational therapy services furnished in whole or in part by PTAs and OTAs at 85 percent of the otherwise applicable Part B payment for the service, effective January 1, 2022.

Section 1834(v)(2) of the Act requires that: (1) By January 1, 2019, CMS must establish a modifier to indicate that a therapy service was furnished in whole or in part by a PTA or OTA; and, (2) beginning January 1, 2020, each claim for a therapy service furnished in whole or in part by a PTA or an OTA must include the modifier. Section 1834(v)(3) of the Act requires CMS to implement these amendments through notice and comment rulemaking.

In the CY 2019 PFS final rule (83 FR 59654 through 59660), we established the CQ and CO modifiers that were required to be used by the billing practitioner or therapy provider to identify therapy services provided in whole or in part by PTAs and OTAs, respectively, beginning January 1, 2020. We require these payment modifiers to be appended on claims for therapy services, alongside the GP and GO therapy modifiers which are used to indicate the services are furnished under a physical therapy or occupational therapy plan of care, respectively. The payment modifiers are defined as follows:

• CQ modifier: Physical therapy services furnished in whole or in part by PTAs.
• CO modifier: Occupational therapy services furnished in whole or in part by OTAs.

In the CY 2019 PFS final rule (83 FR 59654 through 59660), we did not finalize our proposed definition of “furnished in whole or in part by a PTA or OTA” as a service for which any minute of a therapeutic service is furnished by a PTA or OTA. Instead, in response to public comments, we finalized a de minimis standard under which a service is considered to be furnished in whole or in part by a PTA or OTA when more than 10 percent of the service is furnished by the PTA or OTA.

In the CY 2019 PFS proposed and final rules (83 FR 35850 through 35852, and 83 FR 59654 through 59660, respectively), we explained that the CQ and CO modifiers would not apply to claims for outpatient therapy services that are furnished by, or incident to, the services of, physicians or NPPs including NPs, PAs, and CNSs. This is because our outpatient physical and occupational therapy services regulations require that the individual who performs outpatient therapy services incident to the services of a physician or NPP must meet the qualifications and standards for a therapist (other than State licensure). As such, only therapists, and not therapy assistants, can perform outpatient therapy services incident to the services of a physician or NPP (83 FR 59655 through 59656); and the modifiers to describe services furnished in whole or in part by a PTA or OTA are not applicable to the claim for a therapy service billed by a physician or NPP incident to their professional services. We indicated that we would add this distinction in the provision of the Medicare Benefit Policy Manual (MBPM) Chapter 15 that discusses therapy services furnished incident to the physician's or NPP's services at section 230.5, as well as the sections that discuss PTA and OTA services at sections 230.1 and 230.2, respectively.

In the CY 2020 PFS proposed and final rules (84 FR 40558 through 40564 and 62702 through 62708, respectively), we explained that the CQ/CO modifiers and the de minimis policy would apply to both untimed and timed codes. The untimed codes are evaluation and reevaluation codes, group therapy and supervised modalities, and when these are billed, only one unit is reflected in the “units” portion of the claim. When the PTA/OTA provides more than 10 percent of the service, the code is billed with a CQ/CO modifier. For timed codes, that is, those codes defined in 15-minute increments, the services are typically performed in multiple units of the same and/or different codes for a patient on one treatment day. We explained that under our policy, the therapist or therapy assistant needs to find the total time of all these 15-minute timed codes in order to determine the number of units that can be billed for that day. For example, if the PT/OT and/or the PTA/OTA, as appropriate, furnished between 8 minutes through 22 minutes, one unit can be billed; if 23 minutes through 37 minutes are provided, 2 units can be billed; if 38 minutes through 52 minutes are furnished, 3 units can be billed. Once the total number of units to bill is determined, the qualified professional (therapist or assistant) then needs to decide whether the CQ/CO modifier is applicable.

In the CY 2020 PFS proposed rule (84 FR 40558 through 40564), we proposed that the time the PTA/OTA spent together with the PT/OT in performing a service, as well as the time the PTA/OTA spent independent of the PT/OT treating the patient, is considered time for which the service is furnished in whole or in part by the PTA/OTA. As explained in the CY 2020 PFS final rule (84 FR 62702 through 62708), many commenters objected to our proposal to include as time that the therapy service is furnished “in whole or in part” by the PTA/OTA both the minutes spent by the PTA/OTA concurrently with and separately from the therapist. These commenters also expressed concerns that this policy would unfairly discount services that are fully furnished by therapists, and in which the therapy assistant supports them while they provide a service. We were persuaded by commenters to finalize a policy to not include as minutes furnished in whole or in part by a PTA/OTA the minutes in which the PTA/OTA worked concurrently with the PT/OT. We agreed with the commenters that when a therapy assistant and therapist furnish care to a patient at the same time, the patient requires both professionals, and this reflects a clinical scenario where the assistant is helping the therapist to provide a highly skilled procedure or one in which both professionals are needed for safety reasons. We modified our proposed regulation text at §§ 410.59 (outpatient occupational therapy), 410.60 (physical therapy), and 410.105 (for PT and OT Comprehensive Outpatient Rehabilitation Facility (CORF) services) accordingly.

For purposes of deciding whether the 10 percent de minimis standard is exceeded, we offered two different ways to compute this.

• The simple method: Divide the total of the PTA/OTA + PT/OT minutes by 10, round to the nearest integer then add 1 minute to get the number of minutes needed to exceed the de minimis standard at and above which the CQ/CO modifier applies.

• The percentage method: Divide the PTA/OTA minutes by the sum of the PTA/OTA and therapist minutes and then multiply this number by 100 to calculate the percentage of the service that involves the PTA/OTA, if this number is greater than 10 percent the CQ/CO modifier applies.

Hypothetical examples of each of these methods are included later in this section. In response to our proposal that all the units of one service needed to be considered when determining if the de minimis is applied, commenters requested that we consider each 15-minute unit instead—noting that they would be able to apply the CQ/CO modifier on one claim line for a service that was provided by the PTA/OTA and report another claim line without the CQ/CO for the service provided by the PT/OT. We were persuaded by stakeholders, and finalized a policy under which the de minimis standard is applied for each 15-minute unit of a service. This allows the separate reporting, on two different claim lines, of the number of 15-minute units of a code to which the therapy assistant modifiers do not apply, and the number of 15-minute units of a code to which the therapy assistant modifiers do apply. However, we neglected to modify the text of our regulations to reflect this final policy for applying the de minimis standard; therefore, we proposed to revise our regulation text to specify that the de minimis rule is applied to each 15-minute unit of a service, rather than to all the units of a service at §§ 410.59(a)(4)(iii)(B), 410.60(a)(4)(iii)(B), and 410.105(d)(3)(ii). The specific revisions are discussed below.

To recap, we finalized a de minimis standard to identify when the CQ/CO modifiers apply and when they do not apply as follows:

• Portions of a service furnished by the PTA/OTA independent of the physical therapist/occupational therapist, as applicable, that do not exceed 10 percent of the total service (or 15-minute unit of a service) are not considered to be furnished in whole or in part by a PTA/OTA, so are not subject to the payment reduction;
• Portions of a service that exceed 10 percent of the total service (or 15-minute unit of a service) when furnished by the PTA/OTA independent of the therapist must be reported with the CQ/CO modifier, alongside of the corresponding GP/GO therapy modifier; are considered to be furnished in whole or in part by a PTA/OTA, and are subject to the payment reduction; and
• Portions of a service provided by the PTA/OTA together with the physical therapist/occupational therapist are considered for this purpose to be services provided by the therapist.

In the CY 2020 PFS proposed rule (84 FR 40558 through 40564), we proposed to adopt a documentation requirement that a short phrase or statement must be added to the daily treatment note to explain whether the therapy assistant modifier was or was not appended for each therapy service furnished. We also sought comment on whether it would be appropriate to also require documentation of the minutes spent by the therapist or therapy assistant along with the CQ/CO modifier explanation as a means to avoid possible additional burden associated with a contractor's medical review process conducted for these services. Many commenters stated that: (1) The statute does not require documentation to explain why a modifier was or was not applied for each code; (2) the proposed documentation requirements are exceedingly burdensome and conflict with the agency's “Patients over Paperwork Initiative”; (3) the proposed documentation requirement that calls for a narrative phrase in the treatment note and requires documentation of the minutes is duplicative of current requirements that requires adding the total timed code minutes and total treatment time (includes timed and untimed codes) to the daily treatment note; and, (4) the Medicare Benefit Policy Manual (MBPM) already includes extensive documentation requirements. In response to the feedback, we did not finalize the proposed documentation requirement; nor did we finalize a requirement that the therapist and therapy assistant minutes be included in the documentation. Instead, we reminded therapists and therapy providers that correct billing requires sufficient documentation in the medical record to support the codes and units reported on the claim, including those reported with and without an assistant modifier. Further, in agreement with many commenters, we clarified that we would expect the documentation in the medical record to be sufficient to know whether a specific service was furnished independently by a therapist or a therapist assistant, or was furnished “in part” by a therapist assistant, in sufficient detail to permit the determination of whether the 10 percent standard was exceeded.

In the CY 2020 PFS proposed rule, we also provided multiple typical clinical billing scenarios to illustrate when the CQ/CO modifier would and would not be applicable. Because these clinical scenarios did not convey our finalized policies as modified in response to public comments, we indicated in the CY 2020 PFS final rule that we would provide further detail regarding the clinical scenario examples to illustrate how to use the therapy assistant modifiers through information we would post on the cms.gov website. We clarified that our revised finalized policy applied generally in the same way as illustrated in those examples, except for the difference in the minutes of time that are counted toward the 10 percent standard (not counting the minutes furnished together by a therapist and therapy assistant), the application of the 10 percent standard to each billed unit of a timed code rather than to all billed units of a timed code, and the billing on two separate claim lines of the units of a timed code to which the therapy assistant modifiers do and do not apply.

In early March 2021, we posted on our Therapy Services website at https://www.cms.gov/Medicare/Billing/TherapyServices general guidance on how to assign the CQ/CO modifiers for multiple billing scenarios. In the guidance, we provided general examples for 8 different billing scenarios in which multiple units of 15-minute codes are provided by PTs/OTs and PTAs/OTAs and one billing example that used the untimed code for group therapy performed for equal minutes by a PT and a PTA.

We noted that prior to applying our rules to determine appropriate application of the CQ/CO modifiers, the PTA/OTA or PT/OT first needs to determine how many 15-minute units can be billed in a single treatment day for a patient. For information on this topic, we referred readers to the chart in section 20.2.C of Chapter 5 of the Medicare Claims Processing Manual (MCPM) that describes how to count minutes for timed codes defined by 15-minute units, since the therapist or assistant should use the same counting rule, commonly known as the “8-minute rule,” that they have used previously.

Once the therapist or therapy assistant has identified the number of 15-minute units that can be billed for a patient on a single treatment day, we provided the following information to clarify how to apply our policy for application of the CQ and CO modifiers, as follows:

Step 1. Identify the Timed HCPCS Codes Furnished for 15 Minutes or More: List the code numbers of each of the services furnished along with the number of minutes in total done by the PT, PTA, OT, or OTA. When a PT, PTA, OT, or OTA provides at least 15 minutes and less than 30 minutes of a service on a single treatment day, assign 1 unit; when multiples of 15 minutes are furnished, for example, 30 minutes (assign 2 units) and 45 minutes (assign 3 units), etc. This needs to be the first step whenever it is applicable to the billing scenario. When any of these services, that is, full 15-minute increments, are provided by a PTA/OTA, the CQ/CO modifiers apply.

Step 2. Identify Services for Which the PT/OT and PTA/OTA Provide Minutes of the Same HCPCS Code: After applying Step 1, where applicable, identify any minutes (including remaining minutes from Step 1) performed by a PT/OT and PTA/OTA for the same service/code. Add the minutes furnished by the PT/OT and the PTA/OTA together, then divide the total by 10 and round to the nearest integer—this is the 10 percent de minimis time standard. Then add 1 minute to get the fewest number of minutes performed by the PTA/OTA that would exceed the 10 percent time standard for that service—if the PTA/OTA minutes meet or exceed this number, the CQ/CO modifier would be appended. This is the “simple” method for calculating the de minimis number of minutes.

Step 3. Identify Services Where the PT/OT and PTA/OTA Furnish Services of Two Different Timed HCPCS Codes: After applying Step 1 for each service, compare the remaining minutes furnished by the PT/OT for one service with the remaining minutes furnished by the PTA/OTA for a different service. Assign the CQ/CO modifier to the service provided by the PTA/OTA when the time they spent is greater than the time spent by the PT/OT performing the different service. The CQ/CO modifier does not apply when the minutes spent delivering a service by the PT/OT are greater than the minutes spent by the PTA/OTA delivering a different service.

Step 4. Identify the Different HCPCS Codes Where the PT/OT and the PTA/OTA Each Independently Furnish the Same Number of Minutes: Once Step 1 is completed for each service (when applicable), and when the remaining minutes for each service—one provided by the PT/OT and the other provided by the PTA/OTA—are the same, either service may be billed. If the service provided by the PT/OT is billed, the CQ/CO modifier does not apply. However, if the service provided by the PTA/OTA is billed, the CQ/CO modifier does apply.

The below two examples are taken from our guidance on the CMS website. These are examples of when the PT and PTA provide minutes of the same service:

Example #1

PTA—23 minutes 97110

PT—13 minutes 97110

PT—30 minutes 97140

Total = 66 minutes—qualifies for billing 4 units (53 minutes through 67 minutes)

Billing Explanation:

• First Step: Assign units to services based on those that have at least 15 minutes or codes that were provided in multiples of 15 minutes. For 97110, assign one unit of 97110 with the CQ modifier because the PTA furnished at least 15 minutes of 97110 (therapeutic exercise). Then, assign two units of 97140 without the modifier, because the PT furnished the full 30 minutes of manual therapy.

• Second Step: Determine if the PTA furnished more than 10 percent of the remaining minutes of the 97110 service. To do this via the simple method: Add the PTA's 8 remaining minutes to the PT's 13 minutes for a total time of 21 minutes. Divide the total by 10 to get 2.1 minutes and round to the nearest integer, which is 2 minutes (the 10 percent time standard for this service). Add 1 minute to find the threshold number of minutes that would exceed the de minimis standard, which in this example is 3 minutes. Using the percentage method, divide the PTA's remaining 8 minutes by the total 21 minutes of the service (8 PTA + 13 PT = 21 minutes) to get 0.38, then multiply the result × 100 = 38 percent.

Final Step: Because 8 minutes meets or exceeds the 3-minute threshold, and 38 percent is greater than 10 percent, a second unit of 97110 is billed with the CQ modifier.

Example #2

PTA—19 minutes of 97110

PT—10 minutes of 97110

Total = 29 minutes—two units of 97110 can be billed (23 minutes through 37 minutes).

Billing Explanation:

• First Step: Bill one unit of 97110 with the CQ modifier because a full 15 minutes was provided by the PTA, with 4 minutes remaining.

• Second Step: Determine if the PTA's 4 remaining minutes exceed the 10 percent de minimis standard. Simple method: Add together the PTA's 4 remaining minutes and the 10 PT minutes to get the total time of 14 minutes and divide by ten to get 1.4 minutes and round to the nearest integer = 1 minute to get the 10 percent de minimis standard. Then add 1 minute to get a threshold minimum of 2 minutes for PTA time. If the PTA minutes are at or above the threshold, the CQ modifier applies. Percentage method: Divide the PTA's 4 remaining minutes by the total time of 14 to get 0.29 then multiply by 100 = 29 percent. If the resulting percentage is greater than 10 percent, the PTA modifier applies.

• Final Step: Bill another unit of 97110 with the CQ modifier since 4 minutes is greater than the 2-minute threshold minimum and 29 percent is greater than 10 percent.

After reviewing the information posted on the CMS Therapy Services web page, therapy stakeholders reached out to CMS to express concern that certain aspects of the billing scenarios described in the guidance contradict their interpretation of our de minimis policy, especially as it applies to a final unit of a multiple-unit timed service. The therapy stakeholders suggested that the guidance we offered would lead to confusion for the same-service billing scenarios (including examples #1 and #2 above). We consider the unit of measure for a timed therapy service code to be 15 minutes. In billing scenarios with multiple units, we would consider the combined time for same or different services in 15-minute unit increments.

The stakeholders agree that the de minimis standard is applied to the last unit of a timed therapy service code in two separate cases. The first case happens when the PTA/OTA and the PT/OT each furnish less than 8 minutes for that final unit of a service. For example, if the PTA/OTA provided 7 minutes and the PT/OT furnished 5 minutes—using the simple method: 12 minutes divided by 10 equals 1.2, rounded to the nearest integer is 1, plus 1 equals 2—if the PTA/OTA provides 2 or more minutes, the CQ/CO modifier is applied. The second case occurs when the PTA/OTA provides 8 or more minutes and the PT/OT furnishes less than 8 minutes—in which event, the de minimis standard is exceeded and the CQ/CO modifier is applied.

We note that the therapy stakeholders' interpretation of when the de minimis policy applies for a final 15-minute unit of a multiple unit timed service is based on what is commonly termed the “8-minute rule” which recognizes a unit of a 15-minute timed therapy service code as 8 minutes (more than the midpoint of the service or 7.5 minutes), but only when it applies to the final unit billed. Applied to the above two examples, the stakeholders informed us that they believe the second unit of CPT code 97110 in both examples should not be billed with an assistant modifier because the therapist provided enough minutes of the service on their own, that is, 8 minutes or more, to bill for the last unit without the assistant's additional minutes. The stakeholders indicated that the therapist would have a financial incentive to not have the PTA/OTA provide the additional minutes at all if the CQ or CO modifier would apply. We note that, in addition to the two cases discussed above, there is another billing scenario to address in the context of our de minimis policy—specifically, where the PT/OT and PTA/OTA each furnish between 9 and 14 minutes of a 15-minute timed service when the total time of therapy services furnished in combination by the PTA/OTA and PT/OT is at least 23 but no more than 28 minutes, and there are two remaining units left to be billed. These “two remaining unit” cases with time ranges between 9 and 14 minutes include the following PTA/OTA:PT/OT (or vice versa) time splits: 9:14, 10:13, 11:12, 12:12, 12:13, 12:14, 13:13; 13:14; and 14:14.

We believe that the stakeholder's interpretation of the de minimis standard is not consistent with the de minimis policy we finalized in the CY 2020 PFS final rule (84 FR 62702 through 62708). However, in working through the billing scenarios with the stakeholders, we identified where we could make refinements to our policy to address some of the confusion and concerns expressed by stakeholders and to address the “two remaining unit” cases noted above. These refinements may also avoid implementing a payment policy that could be perceived to penalize the provision of additional care by a therapy assistant when those minutes of service would lead to a reduced payment for a unit of a service. The stakeholders criticized the finalized de minimis policy because they believed it provides an inherent financial incentive for the therapist to ensure that PTAs/OTAs provide services in exactly 15-minute intervals—to avoid any leftover PTA/OTA minutes that could necessitate application of the CQ/CO modifier, and reduced payment, for the service that the therapist is also providing—without regard to the clinical needs of the individual patient. The stakeholders suggested that if we were to recognize their “8-minute rule” and recommended policy, we would remove the incentive for the therapist to avoid providing appropriate minutes of therapy services performed by the PTA/OTA.

To address the concerns expressed by the stakeholders and the “two remaining unit” cases we identified in our review, we proposed to modify our existing policy, specifically for billing scenarios when only one unit of a timed therapy service remains to be billed (the majority of all billing scenarios) and the “two remaining unit” cases described above. As shown in Table 28, this policy requires the application of the CQ/CO modifier when the PTA/OTA provides at least 8 minutes or more and the PT/OT provides less than 8 minutes of the service; or, when both the PT/OT and the PTA/OTA provide less than 8 minutes of the same service.

Under this modification, the CQ/CO modifier would not apply when the PT/OT furnishes 8 minutes or more, or both the PT/OT and the PTA/OTA furnish 8 minutes or more, of a timed service. This “midpoint rule” policy was suggested to us by the therapy stakeholders. We agree that since, in this circumstance, the PT/OT provided enough minutes of the service on their own to bill the last unit of the service, the additional minutes of service performed by the PTA/OTA are not material, and thus, should be disregarded, as shown in the examples in Table 29.

With these policy adjustments, the CQ/CO modifiers apply when the PTA/OTA provides all the minutes of a timed service, and to some services (as illustrated in Table 28) when the PTA/OTA and PT/OT each, independent of the other, furnish portions of the same timed service. The CQ/CO modifiers also apply if the portion of an untimed code furnished by the PTA/OTA exceeds the de minimis standard. The CQ/CO modifiers do not apply when the PTA/OTA and the PT/OT furnish different services. Time spent by the PT/OT and PTA/OTA providing services together is considered time spent by the PT/OT for purposes of applying the de minimis standard. Finally, we proposed to modify our policy so that the CQ/CO modifiers would not apply when the PT/OT provides enough minutes of the service on their own to bill for the last unit of a timed service, (more minutes than the midpoint or 8 minutes of a 15-minute timed code) regardless of any additional minutes for the service provided by the PTA/OTA.

Examples of Billing Scenarios using the CQ/CO modifiers when the de minimis standard applies, and the proposed policy for the last billed unit of a service:

Example #A

PTA—10 minutes of 97110

PT—5 minutes of 97110

Total = 15 minutes—qualifies to bill one 15-minute unit (8 minute to 22 minutes).

Analysis: Bill one unit of 97110 with the CQ modifier because the PTA provided 8 minutes or more and the PT provided less than 8 minutes. The de minimis standard applies in these cases.

Example #B

PTA—5 minutes of 97110

PT—6 minutes of 97110

Total = 11 minutes—qualifies to bill one 15-minute unit (8 minute through 22 minutes).

Analysis: Bill one unit of 97110 with the CQ modifier because the PTA and the PT both provided less than 8 minutes. In this case, the PT provided 6 minutes and the PTA furnished 5 minutes independent of each other. The de minimis standard applies in these cases.

Example #C

PTA-22 minutes of 97110

PT—23 minutes of 97110

Total = 45 minutes—qualifies to bill three 15-minute units (38 minutes through 52 minutes).

Analysis:

• Apply Step One of the general policy rules and bill one unit of 97110 with the CQ modifier because the PTA provided 15 full minutes with 7 minutes remaining.
• Apply Step One to the PT's 23 minutes and bill one unit without the assistant modifier with 8 minutes remaining.
• The third unit of 97110 is billed without the assistant modifier because the therapist provided enough minutes (8 or more minutes) without the PTAs minutes to bill the final unit.

Example #D—Also See the Below Regulatory Proposal Using This `Two Remaining Unit' Example

PT—12 minutes of 97110

PTA—14 minutes of 97110

PT—20 minutes of 97140

Total = 46 minutes—qualifies to bill three units (38 minutes through 52 minutes)

Analysis:

• Apply Step One of the general policy rules and bill one unit of 97140 without the CQ modifier because the PT provided 15 full minutes of one unit with 5 minutes remaining.
• Two units remain to be billed and the PT and the PTA each provided between 9 and 14 minutes independent of one another with a total time between 23 and 28 minutes—in these “two remaining unit” scenarios, one unit is billed with the CQ modifier for the PTA and the other unit is billed without it for the PT.
• The PT's 5 remaining minutes of 97140 are counted towards the total timed minutes but are not billable in this scenario.

Example #E

OTA—11 minutes of 97535

OT—11 minutes of 97530

Total = 22 minutes—qualifies to bill one (1) unit (8 minutes through 22 minutes)

Billing Analysis: Since two different services were furnished for an equal number of minutes—the “tie-breaker” scenario applies. Either code 97530 by the OT or code 97535 by the OTA can be billed in accordance with a billing example in the MCPM, Chapter 5, section 20.2.C. Either one unit of 97530 is billed without the CO modifier or one unit of 97535 is billed with the CO modifier.

Example #F: Untimed Code—1 Unit Is Billed for All Untimed Codes Including Evaluations, Reevaluations, Supervised Modalities, and Group Therapy

OTA—20 minutes 97150 independent of the OT

OT—20 minutes 97150 independent of the OTA

Total = 40 minutes of Group Therapy = 1 unit of 97150 is billed for each group member

Billing Analysis: One unit of group therapy 97150 is billed with the CO modifier because the OTA provided more than the 10 percent time standard in this example. Either method can be used to determine if the OTA's time exceeded the 10 percent time standard for this clinical scenario, see below:

• The simple method: First add the OTA's 20 minutes to the OT's 20 minutes to get 40, then divide by 10 to get 4.0 and add 1 to equal 5 minutes. The OTA's 20 minutes is equal to or greater than 5 minutes so the CO modifier is required on the claim.

• The percentage method: Divide the number of minutes that an OTA independently furnished a service by the total number of minutes the service was furnished as a whole—20 divided by 40 equals 0.50. Then multiple by 100 to get 50 percent, which is greater than 10 percent. The CO modifier is applied to 97150.

• Tie breaker: The tie breaker does not apply in this scenario because the example does not contain two different timed codes described in 15-minute intervals. For “tie breaker” see Example #F above.

As noted above and illustrated in Example #D, there are a finite number of cases where there are two 15-minute units left to bill. In these “two remaining unit” cases, the PTA/OTA and the PT/OT each provide between 9 and 14 minutes with a total time of at least 23 minutes through 28 minutes. Under our proposed policy, one unit of the service would be billed with the CQ/CO modifier for the minutes furnished by the PTA/OTA (who furnished between 9 and 14 minutes of the service), and one unit would be billed without the CQ/CO modifier for the service provided by the PT/OT (who also furnished between 9 and 14 minutes of the same service). This is because the PTA/OTA and the PT/OT each independently furnished part of each unit of the same service, and these cases are not addressed by the proposed midpoint rule that would apply when there is only one single unit left to bill. We proposed to amend our regulation to address the scenario where there are two remaining 15-minute units of the same service for which the PTA/OTA and the PT/OT each provided between 9 and 14 minutes with a total time of at least 23 minutes and no more than 28 minutes. In this scenario, we proposed that one unit of the service will be billed with the CQ/CO modifier and the other unit of the service will be billed without the assistant modifier. We proposed to add this policy to our regulations at §§ 410.59(a)(4)(v) and 410.60(a)(4)(v) for outpatient occupational therapy and physical therapy services, respectively and at § 410.105(d)(3)(iv) for CORF services.

As noted previously, when we finalized the policy to consider each 15-minute unit of a service for purposes of determining whether the de minimis standard applies, we neglected to revise our regulations at §§ 410.59, 410.60 and 410.105 to reflect this change. As such, we proposed to amend the regulations at §§ 410.59(a)(4)(iii)(B) and 410.60(a)(4)(iii)(B) for outpatient occupational therapy and physical therapy services, respectively, and at § 410.105(d)(3)(ii) for CORF services to specify that we consider a service to be furnished in part by a PTA or an OTA when the PTA/OTA furnishes a portion of a service, or in the case of a 15-minute timed code, a portion of a unit of a service, separately from the portion of the service or unit of service furnished by the therapist such that the minutes for that portion of a service or a unit of a service furnished by the PTA/OTA exceed 10 percent of the total minutes for that service or unit of a service.

To accommodate the proposed refinement of the de minimis policy, we proposed to amend the same regulations at §§ 410.59(a)(4)(iv) and 410.60(a)(4)(iv) for outpatient occupational therapy and physical therapy services, respectively, and at § 410.105(d)(3)(iii) for CORF services to provide that, for the final 15-minute unit billed for a patient for a date of service, when the PT/OT provides more than the midpoint (at least 8 minutes) of a service such that they could bill for the service without any additional minutes being furnished by the PTA/OTA, the service may be billed without a CQ or CO modifier, and any remaining minutes of service furnished by the PTA/OTA are considered immaterial.

Beginning January 1, 2022, therapy services furnished in whole or in part by a PTA or OTA will be identified based on the inclusion by the billing therapy services provider (whether a therapist in private practice or therapy provider) of the CQ or CO modifier, respectively, on claim lines for therapy services, and the payment for those services will be adjusted as required by section 1834(v)(1) of the Act. Per our usual system update process, we plan to issue instructions in a change request to prepare our shared systems and Medicare Administrative Contractors (MACs) to pay the reduced amount for therapy services furnished in whole or in part by a PTA or OTA. We will issue a Medlearn Learning Network® (MLN) article once the CR is released, after the CY 2022 PFS final rule is issued.

When we identified a limited number of cases in which there are two 15-minute units left to bill and the PTA/OTA and the PT/OT each provide between 9 and 14 minutes with a total time of 23 through 28 minutes, where we proposed that one unit is billed with an assistant modifier and one unit is billed without it, we have identified four additional examples of PTA/OTA:PT/OT (or vice versa) time splits that we would like to acknowledge—these instances include 10:14, 11:13, 11;14, and 13:12. The full complement of these time splits are: 9:14, 10:13, 10:14, 11:12, 11:13, 11:14, 12:12, 12:13, 12:14, 13:12, 13:13, 13:14, and 14:14.

We are making a technical correction to the proposed regulation text at § 410.105(d)(3)(iii) that appeared in the CY 2022 PFS proposed rule, to remove an extra parenthesis “(” as it appeared in “((ii)” so that the CORF regulation at § 410.105(d)(3)(iii) correctly reads as “(iii) Paragraph (d)(3)(ii)”.

We solicited comment on all of our proposals.

We received over 12,000 public comments on our proposals. The following is a summary of the comments we received and our responses.

Comment: Many commenters, including the major therapy stakeholders, expressed appreciation that we updated the interpretation of the de minimis standard to take into account the “8-minute rule” for the final unit billed. One commenter conveyed their belief that this policy is sound and will ensure that therapists and therapy providers are not paid less for providing more care. A few commenters also supported our explanation and proposal to bill one unit of a service with the CQ/CO modifier and one unit without a CQ/CO modifier when the PTA/OTA and the PT/OT each provide between 9 and 14 minutes of a 15-minute timed service with a total time of 23 to 28 minutes where there are two units left to bill.

Response: We appreciate that commenters are supportive that we revised our de minimis policy in response to specific requests from the major therapy stakeholders regarding the “8-minute rule” for the final unit billed; and, thank the commenter for their remark about the soundness of this policy that permits therapists and therapy providers to furnish proper care without being paid less for the service. We also appreciate that others specifically supported our proposal to further refine our de minimis policy for those limited number of cases where there are 2 15-minute units remaining to be billed.

Comment: Many commenters supported and welcomed the refinement to the de minimis standard; however, many others requested that CMS delay implementation of the therapy assistant payment policy until CY 2023 so that: (a) Therapists and therapy assistants would have the time to implement the final policy changes; (b) we have additional time to provide education and technical assistance to providers on what some term as a complex policy; (c) electronic medical record (EMR) vendors have time to program, test, and finalize their systems; and (d) therapists in private practice and therapy providers have time to recover financially from the coronavirus pandemic. We also received several positive comments regarding the implementation of the therapy assistant payment policy, effective January 1, 2022.

In requesting the one-year delay of the 15 percent payment reduction for services furnished in whole or in part by PTAs, one commenter noted that the reduction alone would be a challenge in non-pandemic times, and stated that the total reduction in payment to physical therapists and therapy providers will total nearly 28 percent in the midst of the ongoing pandemic. The commenter described the nearly 28 percent reduction as the cumulative 27.75 percent reduction in payment that includes the 15 percent reduction for services furnished in whole or in part by PTAs, plus the 3.75 percent reduction in Medicare payment, and a 7 percent (on average) reduction in payment due to the MPPR, and the 2 percent Medicare sequester that is scheduled to return in CY 2022. The commenter cited these reductions in combination with the ongoing effects of the PHE for COVID-19 as support to delay the implementation of the 15 percent PTA payment differential until January 1, 2023.

Response: We are not able to change the implementation date as the statute at section 1834(v)(1) of the Act specifies that the payment adjustment for physical therapy and occupational therapy services furnished in whole or in part by PTAs and OTAs begins January 1, 2022. The revision we proposed to incorporate, the “8-minute rule” for the final 15-minute unit billed, according to discussions with the major therapy association stakeholders, reflects typical billing for some private insurers. We plan to add billing scenarios to our Therapy Services website located at https://www.cms.gov/Medicare/Billing/TherapyServices that are similar to or the same as the above Billing Scenarios #A through #F we discussed in the proposed rule. We will also include the general rules and steps involved with applying these rules to the various billing scenarios.

Comment: A majority of commenters asked that we provide an exemption of the 15 percent payment differential for rural and underserved areas, where they stated that a disproportionate amount of therapy services are provided by OTAs and PTAs. Some of these commenters noted that physical and occupational therapists, together with their therapy assistants, work as teams to play a critical role in assisting access to care in rural areas where they report a shortage of therapists exist.

One commenter told us that implementing the payment differential for services provided in whole or in part by PTAs and OTAs in January 2022 will further increase existing health disparities in rural areas. The commenter stated that they agree with the two mechanisms that were recommended by congressional members in a May 14, 2021 letter to help mitigate potential harm to rural beneficiaries from the 15 percent payment reduction for PTA/OTA services. Although the letter containing the recommendations from congressional members was not submitted as a comment to our CY 2022 PFS proposed rule, we note that the recommendations are the same as those that the commenter shared directly with us as a public comment to the CY 2020 PFS proposed rule. Those recommendations were for us to use our discretionary authority to help mitigate potential harm to rural beneficiaries from the 15 percent payment reduction for PTA/OTA services through one of two means based on provisions of section 1848 of the Act: (a) Create a class-specific geographic index for physical and occupational therapy services furnished by PTAs and OTAs; or (b) establish incentive payments for RVU data collected from physical and occupational therapists practicing in rural areas.

Response: While we empathize with commenters about a shortage of therapists and other healthcare workers in rural areas, section 1834(v)(1) of the Act does not provide us with statutory authority to exempt rural areas or other underserved areas from the 15 percent payment differential for therapy services provided in whole or in part by PTAs and OTAs. The suggested methods to mitigate the effects of the reduced payment amounts involving section 1848 of the Act cannot be used to supersede the requirements of section 1834(v)(1) of the Act that requires CMS to make the reduced payment for physical and occupational therapy services furnished in whole or in part by PTAs and OTAs in all areas at 85 percent of the otherwise applicable PFS amount. We are hopeful that the revised de minimis standard will improve the access issues in rural areas and underserved communities.

Comment: Many commenters requested that we change the requirement that PTs and OTs provide direct supervision of PTAs and OTAs in the private practice setting, claiming that the requirement is burdensome and inconsistent with CMS supervision requirements in all other settings where general supervision is allowed. Many commenters stated that the direct supervision requirement is more restrictive than the majority of State practice acts for physical and occupational therapists, does not allow therapists to practice within the full scope of their license, and that this impedes employment opportunities for PTAs and OTAs. Commenters also told us that changing the private practice direct supervision requirement to general supervision that allows audio-only contact between the PT/OT and the PTA/OTA, respectively, would also help to ensure continued patient access to needed therapy services, especially in rural and underserved areas where beneficiaries rely on assistant services to access therapy, assist in the ongoing recovery from the COVID-19 pandemic, and provide support for small outpatient therapy businesses that are facing the 15 percent cut to services provided by therapist assistants beginning in CY 2022. Many commenters informed us that they would support permanently allowing direct supervision via audio/video communications that they have appreciated using during the PHE, if we could not change the direct supervision requirement to general; however, they also reminded us to consider that some patients in rural and underserved areas may not have access to broadband, which may not allow patients to receive therapy services in their homes under this requirement.

Response: We did not address supervision requirements for PTAs and OTAs in the CY 2022 PFS proposed rule. As such, it would not be appropriate to modify those requirements in this final rule. We also received other comments raising issues that were well outside the scope of the issues we discussed in the CY 2022 PFS proposed rule, and for that reason, we decline to address those comments here.

While we are still reviewing the comments received in response to our comment solicitation about whether the flexibility we adopted to permit direct supervision through virtual presence should be continued, as discussed in section II.D. of this final rule, we want to acknowledge that the virtual presence definition for direct supervision is effective until the later of the end of the calendar year in which the PHE ends or December 31, 2021. The presence of the supervising practitioner includes virtual presence through audio/video, real-time communications technology (excluding audio-only). This allows the private practice therapist to provide direct supervision of therapy assistants through virtual presence via real-time audio/video communications technology (excluding audio-only).

Comment: Several commenters requested that we confirm the order of claims processing for therapy services billed with a CQ or CO modifier. Some questioned whether the 15 percent reduction is taken before or after the therapy MPPR. While some commenters thanked us for clarifying in the proposed rule that the 15 percent reduction for PTA/OTA services does not impact the beneficiary's 20 percent coinsurance, two commenters requested that we verify that the 20 percent beneficiary copay was not impacted, as they believed was suggested by the ratesetting formula we used to estimate the volume discount factor of 88 percent for services provided by PTAs and OTAs billed with a CQ or CO modifier that appeared in the PE section of the CY 2022 PFS proposed rule (86 FR 39112).

Response: In the CY 2022 PFS proposed rule (86 FR 39112), we clarified that the 15 percent payment reduction applicable to some PTA/OTA services applies to the 80 percent of the lesser of the actual charge or applicable fee schedule amount and that the remaining 20 percent is the beneficiary copayment. We explained that for therapy services to which the 15 percent reduction applies, payment will be made at 85 percent of the 80 percent of allowed charges, or 68 percent of allowed charges. We confirm that the beneficiary's copayment for a therapy service is deducted right after the application of the MPPR to the PE payment. CMS applies the MPPR to “always therapy” codes (as explained below), which occurs right before the 15 percent reduction is applied to 80 percent of the lesser of the actual charge or applicable fee schedule amount for claims with a CQ or CO modifier.

For the majority of therapy claims, the beneficiary copay is less than the 20 percent PFS allowed amount because it is always determined after the application of the therapy MPPR that applies to all “always therapy” codes. “Always therapy” codes include almost all therapy applicable codes in the Physical Medicine and Rehabilitation section of the 2021 CPT Professional Codebook with the exception of the codes for active wound care management (which are not “always therapy” codes). When therapy claims have more than one unit of a service or two or more “always therapy” codes, and they also have a CQ or CO modifier for each unit or code, the beneficiary's deductible (where it applies) is calculated first, then the MPPR is applied to the PE payment, and then the 20 percent coinsurance is deducted, as per the usual process. After that, the 15 percent reduction is taken for PTA/OTA services, followed by the 2 percent sequestration that is always last (when applicable).

Comment: We received many comments objecting to our determination (see section II.E.37. of this final rule) that physical therapists are not able to bill for the Remote Therapeutic Monitoring (RTM) codes because services cannot be billed incident to the services of a physical therapist (86 FR 39173 through 39174). The commenters maintain that, when billed by physical therapists, the RTM services would not be considered “incident to” as they are when billed by physicians. The commenters urged us to reconsider our interpretation of the RTM codes to permit physical therapists to bill and be paid for these services.

Response: The RTM codes addressed in section II.E.37. of this final rule were intended to be furnished by physical therapists and other practitioners who do not bill for E/M visits. (Please see section II.E.37. of this final rule for full discussion of the RTM codes and their use by therapists.) Payment for these RTM codes is being finalized for CY 2022, and we are now designating the five RTM CPT codes as “sometimes therapy” codes. (Please refer to section II.E.37. of this final rule for the discussion on code valuation for these RTM services.) As sometimes therapy codes, the RTM services can be billed outside a therapy plan of care when provided by a physician and certain NPPs, but only when appropriate. While therapists' services must always be provided under therapy plans of care, RTM services that relate to an RTM device that is specific to therapy services, such as the ARIA Physical Therapy device supply in CPT code 98977, must also be furnished under a therapy plan of care when furnished by physicians and NPPs. RTM services must be provided under direct supervision when not directly performed by physicians, NPPs, or therapists; and RTM services delegated by PTs and OTs to PTAs and OTAs, respectively, are subject to the de minimis standard.

The RTM codes we are finalizing as described in section II.E.37. of this final rule include two 20-minute codes, which is a different time interval from the existing 15-minute timed therapy codes. To accommodate the two 20-minute CPT codes 98980 and 98981 under our de minimis policy, we are making a technical amendment to the regulatory text to recognize this 20-minute time interval (or any other potential time intervals that may arise in the future) as an “other time interval.” Specifically, we will add “or other time interval” after the “15-minute” term in our de minimis regulations at §§ 410.59(a)(4)(iii)(B) (for outpatient occupational therapy), 410.60(a)(4)(iii)(B) (for outpatient physical therapy) and 410.105(d)(3)(ii) for CORF physical and occupational therapy services.

We are also providing a billing example to illustrate how the de minimis standard would be applied for the RTM treatment management services that describe the interactive communications between the therapist and/or therapy assistant and the patient/caregiver during the calendar month. CPT code 98980 represents the first 20 minutes provided in the month while CPT code 98981 reflects each additional full 20-minute unit, so the midpoint rule is not applicable to these codes.

Billing Scenario #AA: The PT and PTA independently provide a total of 80 minutes of RTM services during the month.

For purposes of billing 98980: The first full 20 minutes were provided by the PT—therefore, CPT code 98980 is billed without a CQ modifier.

For purposes of bulling CPT code 98981, the remaining 60 minutes qualifies for billing three 20-minute units, they were furnished as follows:

PTA—23 minutes of 98981

PT—37 minutes of 98981

Total = 60 minutes of 98981 (qualifies to bill three 20-minute units)

Billing Analysis: The 60 total minutes allows three full 20-minute units of CPT code 98981 to be billed:

• One unit is billed with the CQ modifier for 20 minutes of the 23 minutes provided by the PTA (with 3 minutes leftover).
• One unit is billed without the CQ modifier for the PT's 20 minutes of the 37 minutes—(with 17 minutes left over).
• The final 20-minute unit is billed with a CQ modifier because the PTA's 3 minutes is greater than 10 percent of the 20-minute total—that is, 3 minutes divided by 20 equals 15 percent which is greater than the 10 percent standard of 2 minutes.

The two device codes, CPT codes 98976 and 98977, are not subject to the de minimis standard, but, the devices' initial set up and patient education on its use represented by CPT code 98975 is subject to the de minimis policy as an untimed code.

Comment: We heard from many commenters on issues of interest to PTs, OTs, and SLPs, most relating to services included on the Medicare telehealth services list that are primarily provided by PTs, OTs, and SLPs (see section II.D. of this final rule). We also received several comments addressing issues other than those related to the reduced payment for services furnished in whole or in part by a PTA/OTA, such as requests to modify the plan of care certification requirement and recognize PTs as eligible to furnish and bill the CPT codes 20560 and 20561 for needle insertion without injection—a prohibition that falls under the Acupuncture NCD (NCD 30.3.3).

Response: These comments are outside of the scope of policies addressed in the CY 2022 PFS proposed rule, and therefore, we decline to address the comments here.

After consideration of public comments, we are implementing the final requirement of the amendments made by section 53107 of the BBA of 2018 to make payment for physical and occupational therapy services furnished in whole or in part by PTAs and OTAs at 85 percent of the otherwise applicable PFS payment amount for dates of service on and after January 1, 2022. We are finalizing our regulations as proposed at §§ 410.59(a)(4)(iii)(B) and 410.60(a)(4)(iii)(B) for outpatient occupational and physical therapy services, respectively, and at § 410.105(d)(3)(iii) for CORF occupational and physical therapy services to specify that the de minimis rule is applied to each 15-minute unit of a service, rather than to all the units of a service. We are also finalizing amendments to these sections of the regulations to account for the 20-minute codes for RTM services—specifically we are adding the phrase “or other timed” after “each 15-minute” and before “unit” such the phrase will correctly read as “to specify that the de minimis rule is applied to each 15-minute or other timed unit of a service.” We are also finalizing our regulations as proposed at §§ 410.59(a)(4)(iv) and 410.60(a)(4)(iv) for outpatient occupational and physical therapy services, respectively, and at § 410.105(d)(3)(ii) for CORF occupational and physical therapy services to note that the de minimis rule is not applied when the OT/PT provides more than the midpoint of a 15-minute timed code, that is, 8 or more minutes, regardless of any minutes for the same service furnished by the OTA or PTA. We are also finalizing our regulations as proposed at §§ 410.59(a)(4)(v) and 410.60(a)(4)(v) for outpatient occupational and physical therapy services, respectively, and § 410.105(d)(3)(iv) for CORF services to clarify the two remaining unit scenarios, to allow one unit to be billed with a CO/CQ modifier and the other unit to be billed without the CO/CQ modifier when the OTA/PTA and the OT/PT each provide between 9 and 14 minutes, independent of one another, with a total time between 23 and 28 minutes. We plan to add Billing Scenarios to our Therapy Services website located at https://www.cms.gov/Medicare/Billing/TherapyServices that are similar to or the same as the above Billing Scenarios #A through #F that we discussed in the proposed rule. We plan to add a de minimis example of the 20-minute RTM services defined by CPT codes 98980 and 98981. We will also include the general rules and steps involved with applying the rules to the various billing scenarios.

2. Therapy KX Modifier Threshold Amounts

The KX modifier thresholds were established through section 50202 of the Bipartisan Budget Act (BBA) of 2018. Formerly referred to as therapy caps, these KX modifier thresholds are a permanent provision of the statute, meaning that the statute does not specify an end date. These per-beneficiary amounts under section 1833(g) of the Act (as amended by section 4541 of the Balanced Budget Act of 1997) (Pub. L. 105-33, August 5, 1997) are updated each year based on the Medicare Economic Index (MEI). Specifically, these amounts are calculated by updating the previous year's amount by the MEI for the upcoming calendar year and rounding to the nearest $10.00. Increasing the CY 2021 KX modifier threshold amount of $2,110 by the CY 2022 MEI of 2.1 percent and rounding to the nearest $10.00 results in a CY 2022 KX threshold amount of $2,150 for PT and SLP services combined and $2,150 for OT services.

Section 1833(g)(7)(B) of the Act was also added by section 50202 of the BBA of 2018 and it retains the targeted medical review process, but at a lower threshold amount of $3,000 (until CY 2028 when it is updated by the MEI). Accordingly, for CY 2022, the MR threshold is $3,000 for PT and SLP services combined and $3,000 for OT services. Under the established targeted review process, some, but not all, claims exceeding the MR threshold amount are subject to review. Information on the targeted manual medical review process is available at https://www.cms.gov/ResearchStatistics-Data-and-Systems/MonitoringPrograms/Medicare-FFSCompliancePrograms/Medical-Review/TherapyCap.html.

We track each beneficiary's incurred expenses for therapy services annually and count them towards the KX modifier and MR thresholds by applying the PFS rate for each service less any applicable MPPR amount for services of CMS-designated “always therapy” services.

We apply the same PFS-rate accrual process noted above to outpatient therapy services furnished by critical access hospitals (CAHs), even though they are not paid for their therapy services under the PFS and may be paid on a cost basis (effective January 1, 2014).

When the expenses incurred for the beneficiary's outpatient therapy services for the year have exceeded one or both of the KX modifier thresholds, therapy suppliers and providers use the KX modifier on claims for subsequent medically necessary services. By using the KX modifier, the therapist and therapy provider attest that the services above the KX modifier thresholds are reasonable and necessary and that documentation of the medical necessity for the services is in the beneficiary's medical record. Claims for outpatient therapy services exceeding the KX modifier thresholds without the KX modifier included are denied.

I. Changes to Beneficiary Coinsurance for Additional Procedures Furnished During the Same Clinical Encounter as Certain Colorectal Cancer Screening Tests

Section 122 of Division CC of the Consolidated Appropriations Act (CAA) of 2021, Waiving Medicare Coinsurance for Certain Colorectal Cancer Screening Tests, amends section 1833(a) of the Act to offer a special coinsurance rule for screening flexible sigmoidoscopies and screening colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test. The reduced coinsurance will be phased-in beginning January 1, 2022. Currently, the addition of any procedure beyond a planned colorectal cancer screening test (for which there is no coinsurance), results in the beneficiary having to pay coinsurance.

Section 1861(pp) of the Act defines “colorectal cancer screening tests” and, under sections 1861(pp)(1)(B) and (C) of the Act, identifies “screening flexible sigmoidoscopy” and “screening colonoscopy” as two of the recognized procedures. During the course of either one of these two procedures, removal of tissue or other matter may become necessary for diagnostic purposes. Among other things, section 1861(pp)(1)(D) of the Act authorizes the Secretary to include in the definition other tests or procedures and modifications to the tests and procedures described under this subsection, with such frequency and payment limits as the Secretary determines appropriate, in consultation with appropriate organizations. Section 1861(s)(2)(R) of the Act includes colorectal cancer screening tests in the definition of the medical and other health services that fall within the scope of Medicare Part B benefits described in section 1832(a)(1) of the Act. Section 1861(ddd)(3) of the Act includes colorectal cancer screening tests within the definition of “preventive services.” In addition, section 1833(a)(1)(Y) of the Act provides for payment for a preventive service under the PFS at 100 percent of the lesser of the actual charge or the fee schedule amount for these colorectal cancer screening tests, and under the OPPS at 100 percent of the OPPS payment amount, when the preventive service is recommended by the United States Preventive Services Task Force (USPSTF) with a grade of A or B. As such, there is no beneficiary coinsurance for recommended colorectal cancer screening tests as defined in section 1861(pp)(1) of the Act.

Under these statutory provisions, we have issued regulations governing payment for colorectal cancer screening tests at § 410.152(l)(5). We pay 100 percent of the Medicare payment amount established under the applicable payment methodology for the setting for providers and suppliers, and beneficiaries are not required to pay Part B coinsurance for colorectal cancer screening tests (except for barium enemas, which are not recommended by the USPSTF with a grade of A or B).

In addition to colorectal cancer screening tests, which typically are furnished to patients in the absence of signs or symptoms of illness or injury, Medicare also covers various diagnostic tests (see § 410.32). In general, diagnostic tests must be ordered by the physician or practitioner who is treating the beneficiary and who uses the results of the diagnostic test in the management of the patient's specific medical condition. Under Part B, Medicare may cover flexible sigmoidoscopies and colonoscopies as diagnostic tests when those tests are reasonable and necessary as specified in section 1862(a)(1)(A) of the Act. When these services are furnished as diagnostic tests rather than as screening tests, patients are responsible for the Part B coinsurance (20 or 25 percent depending upon the setting) associated with these services.

We define colorectal cancer screening tests in our regulation at § 410.37(a)(1) to include “flexible screening sigmoidoscopies” and “screening colonoscopies, including anesthesia furnished in conjunction with the service.” Under our current regulations, we exclude from the definition of colorectal screening services, colonoscopies and sigmoidoscopies that begin as screening services, but where a polyp or other growth is found and removed as part of the procedure. The exclusion of these services from the definition of colorectal cancer screening tests is based upon longstanding provisions under sections 1834(d)(2)(D) and (d)(3)(D) of the Act dealing with the detection of lesions or growths during procedures (see CY 1998 PFS final rule at 62 FR 59048, 59082 for a more detailed explanation).

Prior to the enactment of section 122 of the CAA, section 1834(d)(2)(D) of the Act provided that if, during the course of a screening flexible sigmoidoscopy, a lesion or growth is detected which results in a biopsy or removal of the lesion or growth, payment under Medicare Part B shall not be made for the screening flexible sigmoidoscopy, but shall be made for the procedure classified as a flexible sigmoidoscopy with such biopsy or removal. Similarly, prior to the recent legislative change, section 1834(d)(3)(D) of the Act provided that if, during the course of a screening colonoscopy, a lesion or growth is detected that results in a biopsy or removal of the lesion or growth, payment under Medicare Part B shall not be made for the screening colonoscopy but shall be made for the procedure classified as a colonoscopy with such biopsy or removal. In these situations, Medicare pays for the flexible sigmoidoscopy and colonoscopy tests as diagnostic tests rather than as screening tests and the 100 percent payment rate for recommended preventive services under section 1833(a)(1)(Y) of the Act, as codified in our regulation at § 410.152(l)(5), has not applied. As such, beneficiaries currently are responsible for the usual coinsurance that applies to the services (20 or 25 percent of the cost of the services depending upon the setting).

Under section 1833(b) of the Act, before making payment under Medicare Part B for expenses incurred by a beneficiary for covered Part B services, beneficiaries must first meet the applicable deductible for the year. Section 4104 of the Affordable Care Act (that is, the Patient Protection and Affordable Care Act (Pub L. 111-148, March 23, 2010), and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, March 30, 2010), collectively referred to as the “Affordable Care Act”) amended section 1833(b)(1) of the Act to make the deductible inapplicable to expenses incurred for certain preventive services that are recommended with a grade of A or B by the USPSTF, including colorectal cancer screening tests as defined in section 1861(pp) of the Act. Section 4104 of the Affordable Care Act also added a sentence at the end of section 1833(b)(1) of the Act specifying that the exception to the deductible shall apply with respect to a colorectal cancer screening test regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure that is furnished in connection with, as a result of, and in the same clinical encounter as the screening test. Although amendments made by the Affordable Care Act addressed the applicability of the deductible in the case of a colorectal cancer screening test that involves biopsy or tissue removal, they did not alter the coinsurance provision in section 1833(a) of the Act for such procedures. Public commenters encouraged the agency to eliminate the coinsurance in these circumstances; however, the agency found that statute did not provide for elimination of the coinsurance (75 FR 73170 at 73431).

Beneficiaries have continued to contact us noting their concern that a coinsurance percentage applies (20 or 25 percent depending upon the setting) under circumstances where they expected to receive only a colorectal screening test to which coinsurance does not apply. Instead, these beneficiaries received what Medicare considers to be a diagnostic procedure because, for example, polyps were discovered and removed during the procedure. Similarly, physicians have expressed concern about the reactions of beneficiaries when they are informed that they will be responsible for coinsurance if polyps are discovered and removed during a procedure that they had expected to be a screening procedure to which coinsurance does not apply.

Section 122 of the CAA addresses this coinsurance issue by successively reducing, over a period of years, the percentage amount of coinsurance for which the beneficiary is responsible. Ultimately, for services furnished on or after January 1, 2030, the coinsurance will be zero.

To implement the amendments made by section 122 of the CAA, we proposed to modify our regulations to reflect the changes to Medicare statute. As amended, the statute effectively provides that, for services furnished on or after January 1, 2022, a flexible sigmoidoscopy or a colonoscopy can be considered a screening flexible sigmoidoscopy or a screening colonoscopy test even if an additional procedure is furnished to remove tissue or other matter during the screening test. Specifically, section 122(a)(3) of the CAA added a sentence to the end of section 1833(a) of the Act to include as colorectal screening tests described in section 1833(a)(1)(Y) of the Act, a colorectal cancer screening test, regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure that is furnished in connection with, as a result of, and in the same clinical encounter as the screening test. We noted that only flexible screening sigmoidoscopies and screening colonoscopies are recognized currently as colorectal cancer screening tests that might involve removal of tissue or other matter. This new sentence added under section 1833(a) of the Act uses the same language that was used to amend the statute at section 1833(b)(1) of the Act and to broaden the scope of colorectal cancer screening tests to which a deductible does not apply. Section 122(b)(1) of the CAA then limits application of the 100 percent Medicare payment rate (that is, no beneficiary coinsurance) under section 1833(a)(1)(Y) of the Act for the additional colorectal cancer screening tests (those that are not screening tests “but for” the new sentence at the end of section 1833(a) of the Act) by making payment for them subject to a new section 1833(dd) of the Act. Section 1833(dd) of the Act provides for a series of increases in the Medicare payment rate percentage for those services over successive periods of years through CY 2029. Thereafter, section 1833(dd) of the Act has no effect, so payment for all colorectal cancer screening tests would be made at 100 percent under section 1833(a)(1)(Y) of the Act.

To codify the amendments made by section 122 of the CAA in our regulations, we proposed to make two modifications to current regulations.

At § 410.37, we proposed to modify our regulation where we define conditions for and limitations on coverage for colorectal cancer screening tests by adding a new paragraph (j). That paragraph would provide that, effective January 1, 2022, when a planned colorectal cancer screening test, that is, screening flexible sigmoidoscopy or screening colonoscopy test, requires a related procedure, including removal of tissue or other matter, furnished in connection with, as a result of, and in the same clinical encounter as the screening test, it is considered to be a colorectal cancer screening test.

At § 410.152(l)(5), we also proposed to modify our regulation. Here we describe payment for colorectal cancer screening tests. Effective January 1, 2022, we proposed to provide for an increase in the Medicare payment percentage that is phased in over time. As the Medicare payment percentage increases, the beneficiary coinsurance percentage decreases. We proposed to revise § 410.152(l)(5) to provide that Medicare payment in a specified year is equal to a specified percent of the lesser of the actual charge for the service or the amount determined under the fee schedule that applies to the test. The phased in Medicare payment percentages for colorectal cancer screening services described in the proposed regulation at § 410.37(j) (and the corresponding reduction in coinsurance) are as follows:

• 80 percent payment for services furnished during CY 2022 (with coinsurance equal to 20 percent);
• 85 percent payment for services furnished during CY 2023 through CY 2026 (with coinsurance equal to 15 percent);
• 90 percent payment for services furnished during CY 2027 through CY 2029 (with coinsurance equal to 10 percent); and
• 100 percent payment for services furnished from CY 2030 onward (with coinsurance equal to zero percent).

Thus, between CYs 2022 and 2030, the coinsurance required of Medicare beneficiaries for planned colorectal cancer screening tests that result in additional procedures furnished in the same clinical encounter will be reduced over time from the current 20 or 25 percent to zero percent beginning CY 2030 and will remain at zero percent thereafter.

We received several public comments on our proposed modifications to the regulations. The following is a summary of the comments we received and our responses.

Comment: Overall, commenters expressed support for our proposals to implement, as required, section 122 of Division CC of the CAA of 2021.

Response: We thank commenters for supporting our proposals to implement the amendments made by section 122 of the CAA.

Comment: One commenter expressed concern about the length of the phase-in period for the reduction in the beneficiary's coinsurance percentage, and asked whether it could be changed to next year.

Response: We proposed to implement the amendments made by section 122 of the CAA. Those amendments clearly specify the applicable coinsurance percentages for each calendar year, and we do not have discretion to modify them.

Comment: A commenter requested that the beneficiary should not be responsible for coinsurance for anesthesia services when a screening flexible sigmoidoscopy or a screening colonoscopy becomes a diagnostic.

Response: In the CY 2015 PFS final rule (79 FR 67730 through 67732), we amended the definition of colorectal cancer screening tests that are colonoscopies at § 410.37(a)(1)(iii) to include anesthesia that was furnished in conjunction with screening colonoscopies. We did not make a corresponding modification to the definition of colorectal cancer screening tests that are flexible sigmoidoscopies at § 410.37(a)(1)(ii). Section 122 of the CAA did not change these regulatory definitions of colorectal cancer screening tests and we did not propose to modify them in the CY 2022 PFS proposed rule. Therefore, we are not making any changes in the regulation with respect to anesthesia with screening flexible sigmoidoscopy in this final rule. However, we will take these public comments into consideration for possible future rulemaking.

Comment: A commenter requested that we allow suppliers to waive the coinsurance even earlier than 2030 if they elect to do so without fear of violating any CMS rules.

Response: Through this rulemaking we are adopting Medicare regulations regarding beneficiary coinsurance that reflect the decreasing beneficiary financial obligations over time as established by statute. Prior to the complete phaseout of Medicare coinsurance amounts for colorectal cancer screening tests in CY 2030, suppliers may waive coinsurance amounts only if they comply with applicable law, including the Federal Anti‐Kickback Statute and the civil monetary penalty provision prohibiting inducements to beneficiaries.

Comment: A commenter urged CMS to conduct patient education and outreach about the changes to their coinsurance when a screening becomes a diagnostic.

Response: We agree it is important for Medicare beneficiaries to understand the changes that will affect their coinsurance percentage for certain colorectal cancer screening services and expect to develop articles and update other media to announce and explain the changes.

We received several comments that were outside the scope of the proposals made in the CY 2022 PFS proposed rule. Comments included questions about coverage of bowel preparation products, coverage of non-invasive screening tests that require a follow-up colonoscopy, and cost-sharing for new colorectal screening technologies. Although we are not summarizing and responding to these comments in this final rule, we will take them into consideration for possible future healthcare provider education or rulemaking.

After considering public comments, we are finalizing the proposals made in the CY 2022 PFS proposed rule to implement section 122 of the CAA without modification.

J. Vaccine Administration Services: Medicare Payments for Administering Preventive Vaccines

As we discussed in the CY 2022 PFS proposed rule (86 FR 39220), on January 31, 2020, under section 319 of the Public Health Service (PHS) Act (42 U.S.C. 247d), the Secretary of the Department of Health and Human Services (the Secretary) determined that a public health emergency (PHE) as a result of confirmed cases of 2019 Novel Coronavirus exists nationwide and has existed since January 27, 2020 (hereafter referred to as the PHE for COVID-19). The Secretary has since renewed this declaration for successive 90-day periods, the latest on October 18, 2021.

The PHE for COVID-19 has reinforced the important and positive impact that preventive vaccines can have on the health of Medicare beneficiaries and the broader public. At the time of publishing this final rule, the PHE for COVID-19 declaration is still in effect and the United States is in the middle of a national effort to vaccinate as many people against COVID-19 as quickly as possible. This national effort has at least temporarily altered the landscape for vaccines and vaccine administration by, for example, encouraging existing providers and suppliers to dramatically expand their vaccination capabilities and by encouraging new (and new types) of providers and suppliers to furnish vaccines.

Over the past several years, stakeholders have expressed concerns about the reduction in Medicare payment rates for the service to administer preventive vaccines covered by Medicare Part B under section 1861(s)(10) of the Act, including the influenza, pneumococcal, and hepatitis B virus (HBV) vaccines. In the last two PFS rulemaking cycles (that is, for CY 2020 and CY 2021), we have attempted to address some of these concerns and these efforts are discussed in more detail below. However, CY 2021 payment rates for administration of these vaccines by suppliers including physicians, NPPs, and mass immunizers remain the same as in CY 2019: A national average rate of $16.94, which is geographically adjusted. In the CY 2022 PFS proposed rule (86 FR 39221), we requested feedback on how we should update the payment rate for administration of these preventive vaccines under Medicare Part B.

1. Medicare Part B Payment for Vaccines

As we discussed in the CY 2022 PFS proposed rule (86 FR 39220 through 39224), under section 1861(s)(10) of the Act, Medicare Part B covers both the vaccine and its administration for the preventive vaccines specified—the influenza, pneumococcal, HBV, and COVID-19 vaccines. Under sections 1833(a)(1)(B) and (b)(1) of the Act, there is no applicable beneficiary coinsurance, and the annual Part B deductible does not apply for these vaccinations or the services to administer them. In CY 2021, payment for these vaccines is based on 95 percent of the Average Wholesale Price (AWP) for a particular vaccine product except where furnished in the settings for which payment is based on reasonable cost, such as a HOPD, RHC, or FQHC. For example, for the 2020-2021 influenza season, payment limits for adult influenza vaccine products range from about $19 to $61 per adult dose. We noted that most other preventive vaccines not specified for Medicare Part B coverage under section 1861(s)(10) of the Act, such as the shingles vaccine, are covered and paid for under Medicare Part D.

Section 3713 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) added the COVID-19 vaccine and its administration to section 1861(s)(10)(A) of the Act in the same subparagraph as the influenza and pneumococcal vaccines and their administration. We implemented this change through an interim final rule with comment period (November 4th COVID-19 IFC (85 FR 71145 through 71150)) which established that payments for COVID-19 vaccines and vaccine administration would be made in the same manner as payments for the influenza and pneumococcal vaccines. The IFC specifically amended §§ 414.707(a)(2)(iii) and 414.904(e)(1) to include the COVID-19 vaccine in the list of vaccines with payment limits calculated using 95 percent of the AWP (85 FR 71147). We noted that Medicare does not pay providers and suppliers for the vaccine product when the Federal Government purchases it and gives it to the provider or suppliers for free, as has been the case for all COVID-19 vaccines as of the publication of the proposed rule.

We noted that the vaccine administration services described under section 1861(s)(10) of the Act are not technically valued or paid under the PFS, as they are not included within the statutory definition of physicians' services in section 1848(j)(3) of the Act. Despite this, we have historically based payment rates for the administration of these preventive vaccines by suppliers such as physicians, NPPs, and mass immunizers on an evaluation of the resource costs involved in furnishing the service, which is similar to the methodology that we use to establish payment rates for the PFS. We noted further that we also assign a payment rate for administering these preventive vaccines under the Outpatient Prospective Payment System (OPPS), and those payment rates are for hospitals and home health agencies for preventive vaccine administration. Certain other types of providers and suppliers, such as RHCs, FQHCs and critical access hospitals (CAHs), are paid based on reasonable cost for vaccine administration. We also noted that payments for the administration of the preventive vaccines by suppliers such as physicians, NPPs, and mass immunizers are geographically adjusted based on the provider's wage index.

As discussed in the CY 2021 PFS proposed rule (85 CFR 50162), many stakeholders raised concerns about the reductions in payment rates for the preventive vaccine administration services that had occurred over the past several years. We generally have established payment rates for the three Healthcare Common Procedural Coding System (HCPCS) codes G0008, G0009, and G0010—which describe the services to administer an influenza, pneumococcal and HBV vaccines, respectively, based on a direct crosswalk to the PFS payment rate for CPT code 96372 ( Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular ). Because we proposed and finalized reductions in valuation for that code for CY 2018, the payment rate for the vaccine administration codes was concurrently reduced. Further, because the reduction in RVUs for CPT code 96372 was significant enough to be required to be phased in over several years under section 1848(c)(7) of the Act, the reductions in overall valuation for the vaccine administration codes were likewise subject to reductions over several years. As we noted in the CY 2022 PFS proposed rule (86 FR 39222) in Table 21, Table 30 shows the national payment rate for administering these preventive vaccines has declined more than 30 percent since 2015.

We explained that we have attempted to address the reduction in payment rates for these vaccine administration HCPCS codes in the last two PFS rulemaking cycles. In the CY 2020 PFS final rule, we acknowledged that it is in the public interest to ensure appropriate resource costs are reflected in the valuation of the immunization administration services that are used to deliver these vaccines, and noted that we planned to review the valuations for these services in future rulemaking. For CY 2020, we maintained the CY 2019 national payment amount for immunization administration services described by HCPCS codes G0008, G0009 and G0010.

In the CY 2021 PFS proposed rule, we proposed to crosswalk G0008, G0009 and G0010 to CPT code 36000 ( Introduction of needle or intracatheter, vein ) (85 FR 50163). In the proposed rule, we noted that CPT code 36000 is a service with a similar clinical vignette, and that the additional clinical labor, supply, and equipment resources associated with furnishing CPT code 36000 were similar to costs associated with these vaccine administration codes. We also noted that this crosswalk would have resulted in a payment rate for vaccine administration services that is approximately the same as the CY 2017 rate (as noted in Table 30) that was in place prior to the revaluation of CPT code 96372 (the original crosswalk code). In the CY 2021 PFS final rule, we did not finalize the proposed policy, and instead finalized a policy to maintain the CY 2019 payment amount for G0008, G0009 and G0010 (85 FR 84628). In the final rule, we also noted that we continued to seek additional information that specifically identifies the resource costs and inputs that should be considered to establish payment for vaccine administration services on a long-term basis.

As noted above, section 3713 of the CARES Act added the COVID-19 vaccine and its administration to the preventive vaccines covered under Medicare Part B under section 1861(s)(10)(A) of the Act in the same subparagraph as the influenza and pneumococcal vaccines and their administration. We noted in the CY 2022 PFS proposed rule (86 FR 39222) that section 3713 of the CARES Act allows us to implement the amendments made by that section through “program instruction or otherwise.” In implementing section 3713 of the CARES Act in the November 4th COVID-19 IFC (85 FR 71147), we indicated that we would establish specific coding and payment rates for the COVID-19 vaccine and its administration through technical direction to Medicare Administrative Contractors (MACs) and information posted publicly on the CMS website.

In December 2020, we publicly posted the applicable CPT codes for the Pfizer-BioNTech and Moderna COVID-19 vaccines and initial Medicare payment rates for administration of these vaccines upon the FDA's authorization of these vaccines. We announced an initial Medicare payment rate for COVID-19 vaccine administration of $28.39 to administer single-dose vaccines. For a COVID-19 vaccine requiring a series of two or more doses—for example, for both the Pfizer-BioNTech and Moderna products—we announced a payment rate for administration of the initial dose(s) of $16.94, which was based on the Medicare payment rate for administering the other preventive vaccines under section 1861(s)(10) of the Act. We also announced a payment rate for administering the second dose of $28.39, which was based on the payment rate that was proposed, but not finalized, for administration of the other preventive vaccines under section 1861(s)(10) of the Act in the CY 2021 PFS proposed rule, discussed in more detail above.

On March 15, 2021, we announced an increase in the payment rate for administering a COVID-19 vaccine to $40 per dose, effective for doses administered on or after March 15, 2021, which means the payment rate is $40 to administer a single dose product, and $40 each to administer the first and second dose in a two-dose regime ($80 total).

As discussed above, payment rates for suppliers such as physicians, NPPs, and mass immunizers for administering the Part B covered preventive vaccines (other than for COVID-19) have generally been based on a direct crosswalk to CPT code 96372 ( Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular ). The service described by this crosswalk code is paid under the PFS, and Medicare's process to value codes under the PFS relies in part on recommended resource inputs provided by the AMA RUC and steps to translate those recommended inputs into national RVUs.

In 2020, the RUC resubmitted its 2009 valuation recommendation for vaccine administration services described by CPT codes, including CPT codes 90460 ( Administration of first vaccine or toxoid component through 18 years of age with counseling ), 90471 ( Administration of 1 vaccine ), and 90473 ( Administration of 1 nasal or oral vaccine ). The AMA RUC also recently provided valuation recommendations for the CPT codes that describe the service to administer the COVID-19 vaccines.

As noted earlier, we also assign a payment rate for administering preventive vaccines under the OPPS by assigning each service to an ambulatory payment classification (APC) based on clinical and resource cost similarity to other services assigned to the APC. Geometric mean costs, which are generally used in establishing the prospective OPPS payments for each APC, are calculated using historical claims and cost report information. In CY 2021, CMS assigned HCPCS codes G0008, G0009 and G0010 to APC 5691 ( level 1 drug administration ), which has a national payment rate of $40 for CY 2021.

In the CY 2022 PFS proposed rule (86 FR 39223), we explained that our practice of setting payment rates for preventive vaccine administration services described by HCPCS codes G0008, G0009 and G0010 for physicians, NPPs, and mass immunizers by using the PFS approach (for example, a crosswalk to an existing CPT code) means that costs incorporated into the rate primarily reflect costs of furnishing the service in a physician office setting. It also means that the payment rate can be affected by other aspects of the PFS rate-setting methodology, such as the allocation of indirect PE, and broader changes to PFS codes and rates, including the multi-year phase-in of significant reductions in RVUs discussed earlier. We noted that we have not historically collected or used information from other providers and suppliers, including pharmacies which are commonly enrolled as mass immunizers to furnish vaccines and vaccine administration services, for purposes of establishing a rate for these codes.

We requested feedback from stakeholders that would support the development of an accurate and stable payment rate for administration of the preventive vaccines described in section 1861(s)(10) of the Act for physicians, NPPs, mass immunizers and certain other providers and suppliers. We invited commenters to submit their detailed feedback to the following questions and requests that we believe may assist us in establishing payment rates for these services that could be appropriate for use on a long-term basis.

• What are the different types of providers and suppliers that furnish preventive vaccines, and have these types of providers/suppliers changed as a result of the PHE for COVID-19? (We noted that our claims data reflect the type of Medicare enrollment for those billing for the vaccine administration, but we are particularly interested in understanding additional, specific characteristics of the providers and suppliers that may not be distinguishable under the more general Medicare enrollment data.) Do different providers and suppliers furnish different aspects of the vaccine administration for the same beneficiary?
• What are the differences in incurred costs of furnishing influenza, pneumococcal and HBV vaccines compared to furnishing COVID-19 vaccines? Are there differences in the costs (per dose or otherwise) of furnishing a one-dose vaccine product vs. a two-dose vaccine product? Also, are there differences in cost of administering preventive vaccines furnished under the Part D benefit, such as the shingles vaccines, compared to those furnished under Part B?
• What are the resource costs that physicians, NPPs, mass immunizers and certain other suppliers incur when furnishing vaccines safely and effectively? Specifically, what are the costs related to staffing/labor, infrastructure, patient onboarding/enrollment, vaccine storage and handling, vaccine procurement and coordination, supplies, CDC and State reporting requirements, patient counseling about safety and efficacy, and other costs we may not have considered? We also sought information on specific resource costs per vaccine dose within each cost category, if that is available.

• What are the impacts of the PHE for COVID-19 on resource costs incurred by vaccination providers, and do stakeholders envision that these impacts will continue after the PHE has ended? Following the end of the PHE, do you expect that the same types of vaccination providers and suppliers will continue to administer vaccines, or do you envision that this will change (if so, how, and what would be the primary factors driving the change)?

• How should Medicare assess costs associated with furnishing these preventive vaccines outside of the physician office setting, such as in pharmacies, mass immunization sites, mobile vaccine clinics or other locations? In addition, as we noted in the CY 2022 PFS proposed rule (86 FR 39224), we understand that there could be administrative burden associated with the routine collection of cost data to support more accurate rate-setting for suppliers that are vaccinating patients. Are there other ways to update and validate costs for a broader range of entities using existing data?
• Payment rates for vaccine administration currently vary by setting. For HCPCS codes G0008, G0009 and G0010, the CY 2021 national average payment rate for physicians, practitioners and other suppliers is $16.94, which is geographically adjusted, while for HOPDs it is $40. However, for COVID-19 vaccine administration, Medicare now pays $40 per administration in all settings, unless the vaccine in administered under certain circumstances in the home or residence (as discussed in more detail below). Should Medicare continue to pay differently for non-COVID-19 preventive vaccines furnished in certain settings or under certain conditions? If not, what factors contribute to higher costs for administration of non-COVID-19 vaccines that are not currently reflected in the Medicare payment rates?
• Should CMS use a different process to update the payment rates for administration of the preventive vaccines described in section 1861(s)(10) of the Act on an annual basis?

• In the last few years we have also crosswalked vaccine administration CPT codes 90460 ( Administration of first vaccine or toxoid component through 18 years of age with counseling ), 90461 ( Administration of vaccine or toxoid component through 18 years of age with counseling ), 90471 ( Administration of 1 vaccine ), 90472 ( Administration of vaccine ), 90473 ( Administration of 1 nasal or oral vaccine ), and 90474 ( Administration of nasal or oral vaccine ) to the same rate used by G0008, G0009 and G0010. How should Medicare address payment rates for these CPT codes under the PFS?

• Are there major differences between what Medicare pays physicians, NPPs and mass immunizers for non-COVID-19 preventive vaccine administration and what commercial insurers pay? To the extent possible, we also sought comments on the specific rates used by other insurers.

We received feedback from a wide variety of stakeholders in response to our comment solicitation on payment rates for the administration of COVID-19 vaccines and other preventive vaccines covered under the Medicare Part B vaccine benefit. Commenters overwhelmingly emphasized the importance of vaccination in achieving positive health outcomes for Medicare beneficiaries and the broader American public. At the same time, they observed that immunization rates overall continue to fall short of national objectives, and that troubling disparities exist with respect to vaccination among racial and ethnic minorities. Commenters also confirmed that many different types of healthcare providers have contributed to the vaccination effort in the United States, and provided detailed feedback on the challenges and resource costs experienced by these vaccine providers, especially in the context of the COVID-19 public health emergency. In what follows, we summarize the comments that we received on these topics, and explain how they have informed the policies we are adopting in this final rule.

Comment: The comments we received are a testament to the complex landscape of vaccination that has emerged in the wake of the COVID-19 pandemic. We received feedback from representatives of many different types of healthcare providers who stated that they significantly increased their vaccination capabilities in an effort to immunize as many Americans as possible against COVID-19. These include primary care physicians, NPs, pharmacies, urgent care centers, podiatrists, community health centers, Urban Indian Organizations, and schools of nursing. Commenters cited Federal financial assistance and flexibilities, in particular the March 2020 Declaration under the Public Readiness and Emergency Preparedness (PREP) Act (Division C of Pub. L. 109-148), as factors that have enabled a broader scope of healthcare providers to participate in the COVID-19 vaccination effort. In addition, commenters noted that healthcare providers such as hospitals, pharmacies and FQHCs have sought to expand the reach of their vaccination campaigns by establishing mobile and outreach clinics, as well as operating mass immunization sites in their communities.

We also received numerous responses to our request for feedback on the specific types of expenses incurred by healthcare providers of COVID-19 and other preventive vaccines, including the ways in which these expenses have evolved as a result of the COVID-19 PHE. Many commenters indicated that the costs of administering the COVID-19 vaccines are higher than those associated with other preventive vaccines, citing factors such as the needs for ultra-cold storage, manual filling of syringes, scheduling for subsequent doses, post-injection monitoring, stocking of EPI pens, distribution of CDC fact sheets, disposal and logging of wasted doses, and State and Federal reporting obligations, which in turn have required hiring of additional staff and various software and IT enhancements. With respect to the specific impacts of the pandemic on resource costs, commenters cited the need for personal protective equipment, increased sanitization measures, community outreach efforts, and high patient volumes combined with staffing shortages. One commenter added that costs and administrative burdens have increased because patients do not want to go to provider locations to risk other illnesses. In addition, several commenters pointed specifically to misinformation and vaccine hesitancy as factors that have impeded the national immunization effort, and recommended that payment rates should take into consideration the time required to counsel and educate patients, including in the event that a patient ends up declining the vaccine. A few commenters indicated that they expect the effects of the pandemic to persist into CY 2022 and beyond, and that we should therefore maintain the $40 payment rate for COVID-19 vaccines for the foreseeable future.

Finally, commenters also provided feedback on the expenses associated with setting up outreach clinics and mass immunization sites, which require significant upfront infrastructure investments, as well as back-end costs to break down these operations when they are concluded. Specific expenses associated with such ventures include tents, generators, portable restrooms, relocation of computers and other equipment, security services, and staffing. Some commenters recommended that the payment rate for mass community vaccination events organized by FQHCs be increased from $40 to at least $120 per dose to reflect these additional costs incurred by FQHCs.

One commenter representing pharmacists stated that cost reporting would be the best approach to valuing vaccine administration at pharmacies, and that the current crosswalk to the PFS does not accurately reflect the costs incurred by pharmacies in furnishing these services. The commenter cited costs including vaccine packaging and storage, ancillary supplies such as syringes and gloves, patient outreach and counseling, staffing and training, reporting requirements, seasonal fluctuations in patient volume, and reporting requirements. In response to our inquiry about the differences in costs of administering preventive vaccines furnished under the Part B and Part D benefits, a couple of commenters noted that the Part B claims submission process is more complex and labor-intensive than the process under Part D and results in greater costs for pharmacies.

Given the various expenses outlined above, commenters generally applauded CMS for establishing a payment rate for COVID-19 vaccines of $40 per dose as of March 15, 2021, with several commenters noting that this amount accurately reflects the resource costs involved in COVID-19 vaccine administration. On the other hand, a majority of commenters also expressed concern regarding the payment rate for other Part B preventive vaccines, that is, influenza, pneumococcal, and HBV vaccines—which, as noted above, currently stands at $16.94. Commenters stated that this amount does not take full account of the expenses associated with administering these vaccines, and that, as a result, many healthcare providers, especially smaller, independent practices and those in underserved areas, might be discouraged from offering vaccines to their patients. Indeed, many commenters cited adequate reimbursement as one of the principal factors that contribute to higher immunization rates, and several cited a recent survey in which 80 percent of respondents indicated that increasing vaccine administration payment rates would help overcome vaccination barriers and costs created by the pandemic. A couple of commenters added that Medicare payment rates impact the rates paid by Medicaid and private payers, with one commenter asserting that some regional and private payers pay as little as half of the Medicare rate. One commenter therefore commended CMS for taking efforts to ensure appropriate, predictable and stable payment for vaccines and their administration as a key lever to improving immunization rates among Medicare beneficiaries. Another commenter added that contracting influenza concurrently with COVID-19 may increase the risk of adverse health outcomes, and recommended increasing payment rates for influenza vaccines for this reason.

Commenters generally recommended that payment rates for the influenza, pneumococcal and HBV vaccines should be updated and that payment for the administration of these vaccines and of the COVID-19 vaccines should be determined using consistent methodologies, as discussed below. One group of commenters recommended that CMS pay for these services on the basis of resource-based relative value scale (RBRVS) principles using recommendations submitted by the AMA RUC. In May 2021, the RUC submitted its recommendations for Immunization Administration codes 90460, 90461, 90471, 90472, 90473, 90474, G0008, G0009 and G0010. In particular, the RUC recommended that CMS crosswalk HCPCS codes G0008-10 to CPT code 90471, using inputs that would result in a payment of approximately $21 per dose.

Furthermore, in December 2020, the RUC submitted recommendations for CPT codes 0001A, 0002A, 0011A, 0012A, and 0031A (the first and second doses of the Pfizer-BioNTech and Moderna COVID-19 vaccines and the first dose of the Janssen vaccine, respectively). Specifically, the RUC recommended crosswalking these codes to CPT code 90460, which would result in a payment of approximately $30 for the vaccine administration codes, and additionally recommended that for the duration of the PHE CMS approve payment of approximately $10 for new CPT code 99072 ( Additional supplies, materials, and clinical staff time over and above those usually included in an office visit or other non-facility service(s), when performed during a Public Health Emergency, as defined by law, due to respiratory-transmitted infectious disease ) to reflect the additional PEs associated with administration of the COVID-19 vaccines during the PHE. The RUC submitted similar recommendations for the third doses of the Pfizer and Moderna vaccines in August 2021. Thus, using the RUC recommendations would result in a payment for COVID-19 vaccine administration of approximately $35-$40 per dose during the PHE, and approximately $25-$30 after the PHE is terminated.

Another group of commenters recommended decoupling payment for preventive vaccine administration from the crosswalk to a code valued under the PFS. These commenters generally supported a site-neutral payment of $40 per dose for administration of all Part B preventive vaccines, in line with the current payment rate for COVID-19 vaccine administration and with the payment rate for administration of all preventive vaccines under the OPPS. Several commenters who supported this recommendation stated that equal payment for COVID-19 and other preventive vaccines would be appropriate, since the work involved in administering the different types of vaccines is essentially the same. A few commenters also stated that costs associated with vaccine administration do not vary significantly across different sites of service, with some adding that a site-neutral payment would help address inequities across healthcare provider settings and maximize access to the vaccines. Additionally, a few commenters stated that, if CMS does not decouple payment for vaccine administration from the PFS and adopt a payment rate of $40 per dose as discussed above, then an acceptable alternative would be to value these services by means of a crosswalk to CPT code 36000 ( Introduction of needle or intracatheter, vein ), as originally proposed in the CY 2021 PFS proposed rule. As explained in the CY 2021 PFS proposed rule (85 FR 50163), CPT code 36000 is a service with a similar clinical vignette, and the additional clinical labor, supply, and equipment resources associated with furnishing CPT code 36000 are similar to costs associated with these vaccine administration codes. This proposal, which was not finalized, would have resulted in a payment for Part B vaccine administration services of approximately $28.39 per dose.

One commenter suggested that CMS base payment for vaccine administration services on average rates paid by commercial payers or on the 2015 Medicare rate adjusted for inflation to 2022. Another commenter provided data indicating that rates set by commercial payers for CPT code 90471 ( Immunization, initial ) and CPT code 90472 ( Immunization administration, each additional vaccine ) are about 41 percent and 23 percent higher than rates set by Medicare, respectively.

Response: We appreciate the feedback received from the wide range of providers and suppliers that furnish preventive vaccinations. We agree with commenters on the need to establish stable payment rates that take into account the costs associated with administering the preventive vaccines included in the Part B vaccine benefit. In particular, we agree that the payment rates for administration of the influenza, pneumococcal and hepatitis B vaccines are too low and need to be adjusted to reflect the costs incurred by healthcare providers. Furthermore, we agree with commenters who stated that we should decouple payment for these vaccine administration services from the crosswalk to the PFS and treat them independently. We took a number of factors into consideration in developing our final policy.

First, we considered the impact of the pandemic on the costs associated with vaccine administration, as well as the specific costs associated with administration of the COVID-19 vaccines. We generally agree with the commenters who stated that the service to administer these vaccines is essentially the same and does not vary significantly across different types of healthcare providers. At the same time, we recognize that the PHE has posed and continues to pose unique challenges for vaccination providers, particularly with respect to the administration of vaccines for COVID-19. For example, we anticipate that healthcare providers will continue to experience unusual costs associated with staffing, scheduling, and reporting requirements as increasing numbers of patients receive additional doses and boosters of the COVID-19 vaccines in the near future, and as health care providers adapt their vaccine delivery infrastructure accordingly. After the PHE, however, we anticipate that these costs will go down as patient volumes stabilize and as healthcare providers incorporate tasks such as scheduling and reporting into their routine clinical practice. In addition, we note that healthcare providers will have already made certain capital investments associated with the COVID-19 vaccines, such as ultra-cold storage freezers and software upgrades, during the course of the PHE, and thus after the PHE such investments will no longer represent a significant additional cost over and above the costs of administering other preventive vaccines. At the same time, we recognize that the formal termination of the PHE will not necessarily coincide with an immediate return to pre-pandemic circumstances, and that some of the additional costs mentioned above may persist while conditions normalize. For these reasons, we believe that it is appropriate to establish a single, consistent payment rate for the administration of all Part B preventive vaccines following the end of the calendar year in which the PHE expires. That is, effective January 1 of the year following the year in which the PHE ends, the $40 payment rate for administration of the COVID-19 vaccines will be adjusted to equal the payment rate for the administration of other Part B preventive vaccines.

We also considered the empirical data sources available to us for establishing an appropriate vaccine-neutral payment. On the one hand, we considered the recommendations submitted by the AMA RUC, which, as noted above, would result in payment rates of approximately $21 for administration of the influenza, pneumococcal and hepatitis B vaccines, and approximately $25-$30 for administration of the COVID-19 vaccine following the end of the PHE. On the other hand, we considered the payment rate for vaccine administration services established using the APC methodology under the hospital OPPS, which currently stands at approximately $40. Finally, we considered the recommendation made by commenters who stated that we should base the payment rate on a crosswalk to CPT code 36000, which would result in a payment rate of approximately $30 after adjusting the CY 2021 rate of $28.39 for inflation. Based on these data and on the feedback we received from commenters, we believe that $30 is the most appropriate payment rate for administration of Part B preventive vaccines. Specifically, this amount is approximately equivalent to the CY 2021 valuation of CPT code 36000 adjusted for inflation to CY 2022, and also near the upper range of the approximate payment rates that would result if we adopted the RUC recommendations for administration of the COVID-19 vaccines.

Based on the history and status of payment for preventive vaccine administration discussed above and given the concerns gathered through the comment solicitation we believe that we need to act expeditiously to update payment rates for the administration of preventive vaccines paid under Medicare Part B, effective January 1, 2022. In addition, we believe that the timing is appropriate for establishing a predictable payment rate for preventive vaccine administration since the PHE has ignited a hypervigilance for infectious diseases.

In setting the payment rate for administration of preventive vaccines, we carefully considered how to move forward with what we believe is the appropriate payment mechanism that would align with the goal of vaccinating as many Medicare beneficiaries as possible each year in an effort to prevent illnesses that are known to lead to negative outcomes. For example, we considered the value of establishing a site-neutral payment rate versus recognition that cost structures are different between an office, hospital, or temporary remote COVID-19 vaccination administration site. We concluded that establishing payment rates that are intended to address the unique costs experienced across the wide variety of providers and suppliers that administer vaccinations would require the development of an unnecessarily complex payment methodology and potentially delay implementation.

We also recognize the value of a site-neutral payment rate, especially with regard to vaccine administration, since the procedure itself is practically the same across settings. However, we are unable to establish a single Medicare program payment rate that is site-neutral since there are several settings in which different Medicare payment methodologies dictate different payment rates for vaccine administration under Part B. Payment rates for administration of preventive vaccines by suppliers such as physicians, NPPs, and mass immunizers historically have been based on an evaluation of the resource costs involved in furnishing the service, which is analogous to the methodology that we use to establish payment rates under the PFS. We also assign a payment rate under the OPPS for administration of preventive vaccines by hospitals. Certain other types of providers and suppliers, such as RHCs, FQHCs and CAHs, are paid on a reasonable cost basis for vaccine administration.

We believe we have gathered sufficient resource cost data that can be used to set an appropriate payment rate for suppliers such as physicians, NPPs, and mass immunizers, who administer the majority of preventive vaccines to Medicare beneficiaries. In addition, we believe a stable vaccine-neutral payment rate is appropriate in this space so providers and suppliers that furnish preventive vaccinations can rely on predictable payments for this service, which we anticipate would allow them to forecast their business plans and engage in activities that could continue to build and sustain robust vaccination programs. As we discuss above, we recognize there are cost differentials that exist with regard to the COVID-19 vaccine versus the other preventive vaccines at the time of this final rule and that those may continue to exist into and potentially throughout CY 2022. Therefore, beginning for services furnished in CY 2022, we are finalizing a uniform payment rate of $30 for the administration of an influenza, pneumococcal or HBV vaccine covered under the Medicare Part B preventive vaccine benefit at section 1861(s)(10) of the Act.

The AMA RUC develops recommended valuations for services by contemplating the typical case and then deciding how many minutes the typical case takes and what supplies are typically used. The RUC developed specific estimates for COVID-19 vaccine administration and for pediatric and other immunizations, but not for the Part B preventive vaccines. The RUC recommendations would produce a payment for COVID-19 vaccine administration of approximately $35-$40 per dose during the PHE, and approximately $25-$30 after the PHE is terminated. The best cost data we have available comes from the hospital outpatient setting, which, as mentioned above, suggests a cost of approximately $40 for administration of a preventive vaccine. However, most immunizers will not have a cost structure similar to an acute care hospital. As such, we believe it is appropriate to finalize a payment rate that approximates the RUC's estimates of the costs involved in the typical case of COVID-19 vaccine administration after the PHE, (that is, $30).

In addition, as explained above, we will maintain the current payment rate of $40 per dose for the administration of the COVID-19 vaccines through the end of the calendar year in which the PHE ends; effective January 1 of the year following the year in which the PHE ends, the payment rate for COVID-19 vaccine administration will be set at a rate that aligns with the per dose payment rate for administration of other Part B preventive vaccines. We recognize that it is difficult to predict when resource costs relating to COVID-19 vaccination will align with those for other vaccinations after the PHE ends, as we believe the scale of this PHE is unique in recent Medicare payment history. We will continue to actively monitor vaccination utilization and may consider refinements in the future.

We note that the administration of the preventive vaccines described under section 1861(s)(10) of the Act is not included within the statutory definition of physicians' services, that the payment rates finalized above are independent of the PFS, and that these payment rates will be updated as necessary independently of the valuation of any specific codes under the PFS. We believe that the payment rates finalized above accurately reflect the resource costs involved in the administration of Part B preventive vaccines, and that a payment differential limited to the duration of the PHE recognizes the additional costs involved in the administration of the COVID-19 vaccines in the context of the pandemic.

Comment: Some commenters, while supporting payment rates based on AMA RUC recommendations for CY 2022, encouraged CMS to consider whether it would be more effective and sustainable to develop a payment methodology for vaccine administration that considers the value of preventive vaccinations instead of only considering the cost of furnishing these services, and whether such an approach might boost vaccination rates among Medicare beneficiaries. Commenters who advocated for this approach stated that cost-based reimbursement has been ineffective, whereas moving away from a cost-based methodology would give vaccine providers more flexibility to furnish additional counseling services or implement innovative clinical workflows to optimize vaccination among their patients.

Response: We thank the commenters for their suggestion. We plan to monitor immunization rates among Medicare beneficiaries after the payment rates for vaccine administration services finalized in this final rule go into effect, and will continue to engage with members of the public on potential refinements to our policies.

As we stated above, we believe we have gathered sufficient resource cost data to set a payment rate for vaccine providers such as physicians, NPPs, and mass immunizers, who administer the majority of preventive vaccines to Medicare beneficiaries. Therefore, beginning January 1, 2022, these providers and suppliers will be paid $30 for the administration of an influenza, pneumococcal or HBV vaccine under the Medicare Part B vaccine benefit. In addition, through the end of the year in which the COVID-19 PHE ends, we will maintain the current payment rate of $40 per dose for the administration of the COVID-19 vaccines; following the end of the year in which the PHE ends, the payment rate for COVID-19 vaccine administration will be set at a rate that aligns with the rate for other preventive vaccines.

Comment: A couple of commenters provided feedback in response to our inquiry about the process to update the payment rates for administration of preventive vaccines on an annual basis. One commenter suggested that incremental updates should be made to the payment rate each year. Another commenter stated that annual updates to the vaccine administration payment rates based on OPPS claims data would be a reliable and data-based method for updating the payment rate and would prevent the issues that have occurred in the past with the crosswalk to CPT code 96372.

Response: We thank the commenters for their suggestions. We continue to seek feedback on an appropriate mechanism for updating these payments on a yearly basis by, for example, applying an annual inflation factor, for example the MEI, to the payment rate in order to reflect increases in costs faced by providers and suppliers that furnish the service, and plan to address updating the payment rate for Part B preventive vaccine administration in future rulemaking.

Comment: We received feedback from several commenters who emphasized the role of primary care physicians in vaccinating Medicare beneficiaries and the general public. The commenters cited a study indicating that primary care practices provide over half of all vaccine administration services for Medicare beneficiaries, and noted that these healthcare professionals are an important resource for addressing vaccine hesitancy and encouraging patients to receive vaccinations. On the other hand, commenters expressed concern that inadequate payment rates may discourage small family practices with limited resources from offering vaccines, and that patients may be less likely to follow through on their physician's advice to receive a vaccine if it is not immediately available onsite.

Several commenters emphasized the role of pharmacists in providing both routine seasonal vaccines and vaccines against COVID-19, and anticipated that pharmacies will continue to play a leading role in immunization efforts after the PHE is over and COVID-19 becomes endemic. Commenters pointed to the widespread presence of pharmacies in local communities across the country, with one commenter asserting that pharmacists are the most accessible healthcare professionals, interacting regularly with patients and providing education and recommendations that may have a positive impact on a person's decision to receive a vaccine.

Response: We appreciate the contributions that primary care physicians and pharmacists make in the national immunization effort, including their role in educating patients on the issue of vaccines. We believe that the payment rates for vaccine administration services finalized in this final rule more accurately reflect the costs incurred by primary care physicians, pharmacists and other healthcare providers in furnishing vaccines.

Comment: We also received comments related to payment to FQHCs for COVID-19 vaccine administration services, vaccination efforts among American Indian/Alaska Native (AI/AN) populations and payment for vaccine administration to Indian health care providers, suggestions on ways to promote effective and equitable distribution of preventive vaccines, and potential barriers to access that may prevent beneficiaries from receiving vaccines covered under the Medicare Part D benefit.

Response: We appreciate the commenters' feedback. However, we did not discuss or include proposals on these issues in the CY 2022 PFS proposed rule. As such, these comments are outside the scope of this rulemaking, but we will take these comments into consideration for the future.

2. Payment for COVID-19 Vaccine Administration in the Home

As we discussed in the CY 2022 PFS proposed rule (86 FR 39224), effective June 8, 2021, we announced a new add-on payment with a national rate of $35.50 when a COVID-19 vaccine is administered in the home. Under this policy, providers and suppliers that administer a COVID-19 vaccine in the home under certain circumstances can bill Medicare for one of the existing COVID-19 vaccine administration CPT codes (0001A, 0002A, 0011A, 0012A, 0031A) along with HCPCS code M0201 ( COVID-19 vaccine administration inside a patient's home; reported only once per individual home per date of service when only COVID-19 vaccine administration is performed at the patient's home ). Providers and suppliers administering a COVID-19 vaccine in the home will be paid a national average payment $75.50 dollars per dose ($40 for COVID-19 vaccine administration and $35.50 for the additional payment for administration in the home, and both payments are geographically adjusted).

In establishing the additional payment for COVID-19 vaccine administration in the home, we also established certain conditions for the add-on payment described by HCPCS code M0201. More specifically, for purposes of this additional payment for administration of the COVID-19 vaccine in the home, we established that Medicare will make this payment when either of these situations applies:

• The patient has difficulty leaving the home to get the vaccine, which could mean any of these:

(1) They have a condition, due to an illness or injury, that restricts their ability to leave home without a supportive device or help from a paid or unpaid caregiver;

(2) They have a condition that makes them more susceptible to contracting a pandemic disease like COVID-19; or

(3) They are generally unable to leave the home, and if they do leave home, it requires a considerable and taxing effort;

• The patient is hard-to-reach because they have a disability or face clinical, socioeconomic, or geographical barriers to getting a COVID-19 vaccine in settings other than their home. These patients face challenges that significantly reduce their ability to get vaccinated outside the home, such as challenges with transportation, communication, or caregiving. We also specified that payment is made for HCPCS code M0201 if the sole purpose of the visit is to administer the COVID-19 vaccine. However, Medicare will not pay the additional amount if the provider or supplier furnished another Medicare covered service in the same home on the same date.

For purposes of this add-on payment for in-home COVID-19 vaccine administration, we announced that a home can be a private residence, temporary lodging (for example, a hotel or motel, campground, hostel, or homeless shelter), an apartment in an apartment complex or a unit in an assisted living facility or group home, or a patient's home that is made provider-based to a hospital during the PHE for COVID-19. As such, a home may be a domiciliary or rest home, meaning a facility, which provides room, board, and other personal assistance services (for example, an assisted living facility).

We also announced that the following locations are not considered to be the patient's home for purposes of the add-on payment for COVID-19 vaccine administration: Communal spaces of a multi-unit living arrangement; hospitals; Medicare SNFs, and Medicaid NFs, regardless of whether they are the patient's permanent residence; assisted living facilities participating in the CDC's Pharmacy Partnership for Long-Term Care Program when their residents are vaccinated through this program. In the CY 2022 PFS proposed rule (86 FR 39224), we clarified that an institution is not considered to be a patient's home if the institution meets the requirements of sections 1861(e)(1), 1819(a)(1), or 1919(a)(1) of the Act, which includes hospitals and skilled nursing facilities (SNFs), as well as most nursing facilities under Medicaid.

Additionally, we established that assisted living facilities participating in the CDC Pharmacy Partnership for Long-Term Care Program partnership would not be eligible for this higher payment for COVID-19 vaccine administration in the home when their residents were vaccinated through this program.

In addition, we established that the COVID-19 vaccine administration service must be furnished inside an individual's home. For this purpose, an individual unit in a multi-dwelling building is considered a home. For example, an individual apartment in an apartment complex or an individual bedroom inside an assisted living facility or group home is considered a home. We established that communal spaces of, or related to, congregate living arrangements (such as a communal area of an apartment or condominium complex, assisted living facility, group home) were not considered a home for purposes of this add-on payment because multiple people could be vaccinated and monitored either simultaneously or in tandem in such communal spaces.

As noted in the code descriptor for HCPCS code M0201, this code could be billed only once per individual home per date of service. In situations where more than one Medicare beneficiary lives in the same individual home, the additional payment for COVID-19 vaccine administration in the home was limited to one time in that home on that day, while any additional COVID-19 vaccine administration services for other individuals in that same home would be paid at the generally applicable rate of approximately $40 without the additional in-home add-on payment amount.

We established the payment amount for HCPCS code M0201 for in-home vaccination to reflect the additional costs associated with administering the vaccine in the home, such as upfront administration costs like scheduling, the additional clinical time needed for post administration monitoring of a single patient, and public health reporting requirements. To identify an appropriate payment rate for HCPCS code M0201, we used the home health low utilization payment adjustment add-on factor for skilled nursing as a proxy for the increased resource costs, above those reflected in the base payment rate for COVID-19 vaccine administration, involved in arranging and furnishing COVID-19 vaccine administration services in the home. For home health services, we make a low utilization payment adjustment (LUPA) when, during a 30-day period of home health care (or prior to January 1, 2020, a 60-day episode of home health care) a patient receives minimal services (less visits than a predetermined threshold) and the home health agency is paid per visit rather than the full 30-day (previously 60-day) bundled payment amount (see 42 CFR 484.230). As stated in the CY 2008 HH PPS proposed rule, after the HH PPS went into effect we received comments and correspondence stating that the LUPA per-visit payment rates do not adequately account for the front-loading of costs in an episode. Commenters suggested that because of the small number of visits in a LUPA episode, HHAs have little opportunity to spread the costs of lengthy initial visits over a full episode (72 FR 25424). As such, under the Medicare home health payment system, LUPA add-on payments are made to account for the upfront fixed costs and prolonged visit lengths in a LUPA period/episode compared to those for non-LUPA periods/episodes. We believe the LUPA add-on factor for skilled nursing is an appropriate proxy for the upfront fixed costs and prolonged visit lengths that exemplify and constitute the increased resource costs involved in arranging and furnishing COVID-19 vaccine administration services in the home.

The CY 2021 LUPA add-on factor for skilled nursing is 1.8451, and we applied this to the base rate for COVID-19 vaccine administration of $40 per dose (effective March 15, 2021). This calculation results in a total proxy payment rate for in-home COVID-19 vaccine administration of approximately $74. Subtracting the $40 base rate for COVID-19 vaccine administration, which applies across most other settings, results in an additional proxy payment rate of roughly $34. To expedite access to this service and ensure consistency in payment rates for HCPCS code M0201 between health care professionals, other suppliers, and institutional providers, we established a payment rate that corresponds to the proxy we calculated based on the LUPA add-on factor using a reference to another proxy payment rate under the hospital OPPS. Specifically, we looked to APC payment amounts under the hospital OPPS that were similar to the $34 proxy amount and could be implemented with speed under the COVID-19 vaccine benefit (which relies on both institutional and professional claims processing systems). We identified New Technology APC 1494 under the hospital OPPS with a national payment rate of $35.50 as an appropriate reference payment amount for this service for most providers and suppliers, and established that amount as the national payment rate for HCPCS code M0201. That is, the national payment rate for HCPCS code M0201 is $35.50 for all providers and suppliers not paid reasonable cost. Although we announced a payment rate of approximately $35 on June 8, 2021, in order to accelerate implementation of the new payment for claims processing purposes, it was expedient to choose a proxy payment rate that was already in place under the OPPS.

In announcing the add-on payment for in-home COVID-19 vaccine administration, we noted that we established these policies on a “preliminary basis to ensure access to COVID-19 vaccines during the public health emergency” and that “we continue to evaluate the needs of Medicare patients and these policies, and will address them in the future, as needed.”

On August 24, 2021, after the publication of the CY 2022 PFS proposed rule, we announced a number of changes to our policies. Effective August 24, 2021, communal spaces of a multi-unit or communal living arrangement, as well as assisted living facilities participating in the CDC's Pharmacy Partnership for Long-Term Care Program when their residents are vaccinated through this program, can qualify as a Medicare patient's home for purposes of the additional in-home payment amount. Furthermore, effective August 24, 2021, Medicare pays the additional payment amount for up to a maximum of 5 vaccine administration services per home unit or communal space within a single group living location; but only when fewer than 10 Medicare patients receive a COVID-19 vaccine dose on the same day at the same group living location.

We used the proposed rule as a way to collect feedback on our policies and potential future changes.

• We sought feedback on our requirements, including the definition of the “home” and the types of clinical and non-clinical circumstances that make it difficult for a beneficiary to receive a COVID-19 vaccine outside the home. Do these requirements strike the appropriate balance of ensuring access to vaccines for vulnerable beneficiaries while also protecting against potential fraud? Should we maintain these requirements during the PHE as-is, and if not, what changes should we consider? Outside of the circumstances of the PHE that create a need for beneficiaries to be vaccinated as quickly and broadly as possible, under what circumstances do health care providers, suppliers, or others find particular need to vaccinate people at home rather than periodically in association with routine in-person visits?
• As noted, we established an add-on payment of $35.50, which is based on applying the LUPA add-on factor for skilled nursing to the national $40 payment rate for the base service as a proxy to reflect the additional resources involved in furnishing services in the home setting. What are the costs associated with furnishing COVID-19 vaccines in the home, and how do these costs differ from costs of furnishing vaccines in traditional locations, such as a physician's office or mass immunization site?
• What other steps should we take related to program integrity and beneficiary protection with this new add-on payment for administering the COVID-19 vaccine in the home? What documentation should providers and suppliers that furnish vaccines in the home be required to maintain and/or provide?

As we noted in the CY 2022 PFS proposed rule (86 FR 39225), this add-on payment of $35.50 only applies when providers or suppliers furnish the COVID-19 vaccine in the home, and is not billable when providers and suppliers furnish a different preventive vaccine (influenza, pneumococcal, HBV) in the home. Furthermore, we explained that we believe the additional payment is only appropriate for COVID-19 vaccines due to the unique circumstances of the PHE, as well as the upfront fixed costs and prolonged visit lengths that exemplify and constitute the increased resource costs involved in arranging and furnishing COVID-19 vaccine administration services in the home. However, we sought feedback on whether the same barriers that could prevent a beneficiary from obtaining a COVID-19 vaccine would also prevent them from obtaining other preventive vaccines, whether Medicare should make a similar add-on vaccine administration payment in those circumstances, and whether the costs to furnish other preventive vaccines in the home would be consistent with the costs to furnish the COVID-19 vaccine.

Comment: We received numerous comments in support of our policy to provide an additional payment in the amount of $35.50 when a COVID-19 vaccine is administered in the home under certain circumstances. Commenters overwhelmingly recommended that we continue making the additional payment beyond the end of the PHE, and many commenters also supported extending the payment to other preventive vaccines, either permanently or until the end of the pandemic. In support of this policy, commenters emphasized the importance of increasing vaccination rates and making the vaccines available to vulnerable homebound beneficiaries, who face barriers including chronic illness, financial and social precarity, and lack of access to digital resources. Several commenters stated that the same circumstances that currently prevent a beneficiary from leaving their home to receive a COVID-19 vaccine apply to other preventive vaccines as well and will continue beyond the end of the PHE. With respect to the specific resource costs involved in providing vaccine services in the home, commenters cited travel, vaccine storage and handling requirements, scheduling challenges, security, and sanitization; some commenters observed that similar costs apply to the administration of both the COVID-19 and other preventive vaccines in a beneficiary's home. A few commenters agreed that the Home Health LUPA is a reasonable proxy for the additional resource costs involved with administering COVID-19 vaccines in the home, while others asserted that the current payment amount of $35.50 is too low.

Response: We agree with the feedback that we received regarding the need to incentivize providers to administer COVID-19 vaccines in the home during the PHE, and especially with commenters who cited the need to protect beneficiaries who would be at increased risk of contracting COVID-19 and developing a serious illness if exposed. We also thank suppliers such as family physicians who have gone to great lengths to vaccine hard-to-reach populations under the difficult circumstances of the pandemic.

Given the commenters' concurrence with the added costs and compelling needs that led CMS to adopt the in-home add-on payment, we believe this policy is an appropriate one. In addition, since we do not expect those needs or costs to diminish immediately with the end of the PHE, we believe it would be appropriate to leave the in-home add-on payment rate in place through the end of the CY in which the PHE ends. For example, we anticipate that additional booster doses will be needed. In addition, we believe that that this policy would set clear expectations for vaccine providers and suppliers and allow for a more gradual transition to a permanent payment policy.

Therefore, we are finalizing our policy to continue making the additional payment of $35.50 when a COVID-19 vaccine is administered in a beneficiary's home under certain circumstances until the end of the year in which the PHE expires. We believe that this extension will maximize access to COVID-19 vaccines for vulnerable homebound beneficiaries during the gradual return to normal conditions following the formal termination of the PHE. At the same time, it will afford CMS the opportunity to monitor vaccine uptake data. We also note that a policy to continue this payment in place through the end of the year in which the PHE ends is in keeping with our policies outlined elsewhere regarding the payment rate of $40 for COVID-19 vaccine administration, as well as the coverage and payment of COVID-19 monoclonal antibody therapies for COVID-19 under the Part B vaccine benefit.

We note that for purposes of this add-on payment for in-home COVID-19 vaccine administration, we are maintaining the policy that a home can be a private residence, temporary lodging (for example, a hotel or motel, campground, hostel, or homeless shelter), an apartment in an apartment complex or a unit in an assisted living facility or group home, or a patient's home that is made provider-based to a hospital during the PHE for COVID-19; however, an institution is not considered to be a patient's home if the institution meets the requirements of sections 1861(e)(1), 1819(a)(1), or 1919(a)(1) of the Act, which includes hospitals and SNFs, as well as most nursing facilities under Medicaid.

We are grateful for the additional feedback we received from commenters who advocated maintaining the additional payment for in-home COVID-19 vaccination beyond the PHE and extending it to other preventive vaccines, and we will continue to engage with stakeholders on this topic.

Comment: Several commenters expressed concern that our policies regarding eligibility for the additional in-home payment are too restrictive, and encouraged CMS to consider incorporating flexibilities that would make this payment available under a greater variety of circumstances. Among the restrictions cited most frequently by commenters was our policy that Medicare does not pay the additional payment if another Medicare service is provided in the same home on the same date. For example, one commenter observed that home providers are not eligible to receive the additional payment if they offer the vaccine during an E/M visit or in conjunction with an influenza vaccine.

Another commenter stated that it is important for CMS to consider the unique cultural dynamics in households in Indian Country and provide flexibility to consider the family size composition and intergenerational living arrangements that are common in AI/AN communities; specifically, the commenter urged CMS to provide the additional payment when services are furnished to other family members in the same household. Commenters also cited restrictions on the number of vaccine administration services that may be furnished during a single visit and in a single home unit or communal space, as well as on the types of providers that are eligible to receive the additional payment. In addition, one commenter requested that CMS classify mobile vaccination as a patient's “home” to reflect the increased costs of safely vaccinating patients in this setting.

Response: We thank the commenters and will take their feedback into consideration if we contemplate any future changes to our policy concerning COVID-19 vaccine administration in the home.

Comment: One commenter urged CMS to offer explicit guidance on how the concept of “home” should be documented in individual patient medical records to reflect the various circumstances supported by COVID-19 vaccination payment policies as outlined on the CMS website. The commenter also requested that CMS clarify whether the 10-patient limit applies to the capacity of the living facility or whether it is based on the number of patients given vaccination on a date of service.

Response: We have not established any specific medical record documentation requirements for the additional in-home COVID-19 vaccination payment. We have issued guidance explaining the circumstances under which the payment is available; and vaccine providers should ensure that the medical record documentation is sufficient support payment. We note that the documentation should additionally support the beneficiary's appropriateness for home vaccination as indicated in the CMS Coronavirus vaccination toolkit.

In response to the second part of the commenter's question, we are clarifying that, effective August 24, 2021, Medicare pays for up to a maximum of 5 vaccine administration services per home unit or communal space within a single group living location, but only when fewer than 10 Medicare patients receive a COVID-19 vaccine dose on the same day at the same group living location. When 10 or more Medicare patients receive a COVID-19 vaccine dose at a group living location on the same day, the additional payment can only be billed once per home (whether the home is an individual living unit or a communal space). We are further clarifying that the limit applies to the number of patients who receive a COVID-19 vaccine dose on the same day, regardless of the total number of patients residing at the location or the total capacity of the facility. For example, if 8 Medicare patients all reside in a location that houses 100 patients total, and those 8 Medicare patients receive a COVID-19 vaccine dose on the same day at that location, then, effective August 24, 2021, Medicare pays approximately $497.50 (5 × $35.50 for the in-home vaccine administration, plus 8 × $40 for each dose of the COVID-19 vaccine). On the other hand, if 12 Medicare patients all reside in a location that houses 100 patients total, and those 12 Medicare patients receive a COVID-19 vaccine dose on the same day at that location, then, effective August 24, 2021, Medicare pays approximately $515.50 (12 × $40 for each dose of COVID-19 vaccine, and 1 × $35.50 for one in-home vaccine administration—only one home add-on payment is billable in this circumstance because 10 or more Medicare patients were vaccinated at the same group living location on the same date).

Comment: One commenter stated that most COVID-19 vaccinations in the home have been administered by community pharmacists, and requested retroactive payment for pharmacists and other providers who administered the vaccine in communal spaces and other previously ineligible locations prior to the new flexibilities effective as of August 24, 2021.

Response: The additional flexibilities effective on August 24, 2021, were introduced, among other reasons, in order to enable a greater number of healthcare providers to furnish vaccine services to Medicare beneficiaries in their homes. We are grateful to community pharmacists and other healthcare providers who furnished these services in communal spaces and other ineligible locations prior to August 24, 2021, but we are not adopting the commenter's suggestion to make additional payments to providers retroactively.

3. Monoclonal Antibodies Used To Treat COVID-19

As we discussed in the CY 2022 PFS proposed rule (86 FR 39226), on November 9, 2020, the FDA issued an Emergency Use Authorization (EUA) for bamlanivimab monotherapy. On November 21, 2020 the FDA issued an EUA for casirivimab and imdevimab, which are administered together. On February 9, 2021, the FDA issued an EUA for bamlanivimab and etesevimab, which are administered together and which are also authorized for post-exposure prophylaxis for certain high risk patients. On April 16, 2021, the FDA revoked the EUA for bamlanivimab monotherapy. On May 26, 2021, the FDA issued an EUA for sotrovimab monotherapy. On June 3, 2021, the FDA revised the EUA for casirivimab and imdevimab, which revised the dosing regimen from 2,400 mg (1200 mg of casirivimab and 1 200 mg of imdevimab) to 1 200 mg (600 mg of casirivimab and 600 mg of imdevimab), authorized the addition of a new presentation consisting of a single vial of casirivimab and imdevimab co-formulated in a 1:1 ratio, and also authorized casirivimab and imdevimab to be administered together via subcutaneous injection in certain limited circumstances. On June 24, 2021, the FDA issued an EUA for tocilizumab monotherapy. We explained that under the EUAs, all of these products, except for tocilizumab could be used for certain high-risk patients with mild-to-moderate COVID-19 with the goal of preventing further deterioration and hospitalization. Tocilizumab is authorized for hospitalized patients who are receiving systemic corticosteroids and require supplemental oxygen, non-invasive or invasive mechanical ventilation, or extracorporeal membrane oxygenation (ECMO).

When these products were granted EUAs during the PHE for COVID-19, we made the determination to cover and pay for them under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act. When we announced this approach, we also indicated that we would address “potential refinements to payment for administering monoclonal antibody products to treat COVID-19 through future notice-and-comment rulemaking”.

We make a separate payment for the products (when not given to the provider or supplier for free by the government) and for the service to administer them. We noted that as of June 30, 2021, the monoclonal antibody products authorized by the FDA under an EUA include two products involving drugs administered together, casirivimab and imdevimab and bamlanivimab and etesevimab, sotrovimab monotherapy, and tocilizumab monotherapy. All four products may be administered through intravenous (IV) infusion, and casirivimab and imdevimab may be administered via subcutaneous injection in certain limited circumstances under the updated June 3rd EUA.

Initially, we established a national payment rate of $309.10 for the service to administer (through IV infusion only at the time) these products, which was based on one hour of infusion and post-infusion monitoring in the hospital outpatient setting. We noted that while these products are typically infused over a period of roughly one hour, the EUA for casirivimab and imdevimab allows the product to be infused over a shorter time-period, such as 20 minutes, when appropriate. We noted that, as of June 15, 2021, the EUAs require at least one hour of post-infusion monitoring for all of the products available. On May 6, 2021, we increased the payment rate for administration of these products to $450.00 and established a separate payment rate of $750.00 when a monoclonal antibody product used to treat COVID-19 is administered in a home or residence.

As we further explained in the CY 2022 PFS proposed rule (86 FR 39226), the decision to cover and pay for monoclonal antibody products used to treat COVID-19 under the COVID-19 vaccine benefit prioritized access to these products during the COVID-19 pandemic by allowing almost all Medicare enrolled providers and suppliers, as permitted by State law and consistent with the terms of the EUA, to furnish and bill for administering these products across settings of care. Covering and paying for these services under the COVID-19 vaccine benefit also means that beneficiaries are not responsible for any cost sharing for the product or the service to administer it. We noted that Medicare considers other monoclonal antibody products—that is, monoclonal antibody products used in the treatment of other health conditions—“biologicals” and pays for them based on the methodology in section 1847A of the Act when they are furnished in physician offices, ambulatory infusion clinics and under a similar methodology under the hospital OPPS. We also noted that, for these care settings, we typically rely on the applicable AMA CPT codes to describe and pay for drug administration services performed by providers and suppliers.

As noted above, bamlanivimab monotherapy and casirivimab and imdevimab, administered together, were authorized in late 2020. At that time, we made the determination to cover and pay for them under the vaccine benefit in section 1861(s)(10) of the Act, and this decision prioritized beneficiary access for purposes of addressing the PHE for COVID-19. Since that time, the EUA for bamlanivimab monotherapy has been revoked, the EUA for casirivimab and imdevimab administered together has been revised to include a new presentation, a new dosing regimen, and a new route of administration (in certain limited circumstances) and post-exposure prophylaxis for certain high-risk patients, sotrovimab monotherapy has been authorized and tocilizumab monotherapy has been authorized. In the CY 2022 PFS proposed rule (86 FR 39226) we stated that it was also becoming clear that, as more products enter the market, the Federal Government might not purchase them for distribution to providers and suppliers for free, as is the case with sotrovimab monotherapy and tocilizumab monotherapy. We note that subsequent to the issuance of the CY 2022 PFS proposed rule, the Federal Government has purchased sotrovimab and will be directing the distribution of the product beginning mid-October, 2021.

Given these fast-moving changes, we solicited feedback on our approach to coverage and payment for COVID-19 monoclonal antibody products under the COVID-19 vaccine benefit. We explained that we are considering whether we should align payment and coverage for these products with our approach for other monoclonal antibody products following the end of the PHE. We further explained that we believe the context in which these products are furnished to beneficiaries after the end of the PHE may more closely resemble the circumstances under which similar drugs and biologics are ordinarily furnished, specifically to a more targeted patient population outside of a pandemic. Outside the context of the PHE, we believe treating these products like other drugs and biologics paid under section 1847A of the Act may better align Medicare coverage and payment policies for COVID-19 monoclonal antibody products with other monoclonal antibody products, which are purchased by providers and suppliers through similar channels and administered using similar modalities. As noted above, coverage and payment for COVID-19 monoclonal antibodies under the COVID-19 vaccine benefit has meant that Medicare beneficiaries are not responsible for any cost-sharing, which is typically 20 percent of the allowed amount in most settings. We noted that if Medicare were to pay for COVID-19 monoclonal antibody products under the methodologies in 1847A of the Act, it would mean that beneficiary co-insurance would apply, similar to the way it applies to other drugs and biologics that are not paid for under a preventive vaccine benefit.

We also noted that tocilizumab—typically sold under the brand name Actemra®—was previously approved by the FDA for several indications. As a result, during the PHE for COVID-19, Medicare has separate coding and payment rules for tocilizumab when it is furnished to patients with COVID-19 and in a manner consistent with the terms of the EUA, and for when tocilizumab is used for other clinical purposes. This may be confusing for hospital providers and we believe that treating these monoclonal antibody products like other drugs and biologics paid under section 1847A of the Act may help clarify these inconsistencies. We invited feedback on these issues.

We also invited additional feedback on the resource costs to administer COVID-19 monoclonal antibody products, such as costs associated with infrastructure, clinical labor, and equipment, including personal protective equipment. We recognize that administering monoclonal antibodies used to treat COVID-19 may be complex due the need to interact with beneficiaries that have active infections and manage the potential for spreading disease. We requested information on how the costs to furnish monoclonal antibodies used to treat COVID-19 compare with infusions of other complex biologics, and how the costs to furnish these products may be different when these products are administered in the home.

Comment: Commenters offered diverging opinions in response to our request for information on the coverage of monoclonal antibodies for the treatment of COVID-19 under the Medicare Part B vaccine benefit. Several commenters urged CMS to extend payment for COVID-19 monoclonal antibodies as vaccines beyond the end of the PHE. A few commenters cited continuing uncertainty regarding the pandemic and the emergence of new variants as reasons why CMS should defer any changes to its current policy to future rulemaking cycles, while others emphasized the importance of maintaining beneficiary access to these treatments, especially among minority communities. In addition, several commenters pointed to the development of monoclonal antibodies used for pre-exposure prophylaxis against COVID-19, stating that such products are functionally equivalent to vaccines and should therefore be covered under the COVID-19 statutory vaccine benefit in section 1861(s)(10) of the Act. On the other hand, we also received comments supporting a transition to regular Part B payment for COVID-19 monoclonal antibody treatments following the end of the PHE, including payment for the products themselves as biologics under section 1847A of the Act. In particular, several commenters recommended a transition to payment for COVID-19 monoclonal antibody therapies as biologics following the end of the year in which the PHE expires, as long as CMS provides clear guidance about the process and takes steps to mitigate out-of-pocket expenses for Medicare beneficiaries. One commenter recommended an extension beyond the PHE of at least two calendar quarters and urged CMS provide clear guidance to manufacturers on ASP reporting obligations.

With respect to the specific expenses incurred by providers of monoclonal antibodies, commenters observed that the current infusion infrastructure is tailored to non-infectious patients, and indicated that increased costs for administration of COVID-19 monoclonal antibody therapies result primarily from measures necessary to mitigate risk and isolate infectious patients. Specific resource costs cited by respondents include: Isolation of infectious patients in separate rooms or infusion suites; personal protective equipment for staff; staff training and implementation of new clinical workflows; reporting requirements; and, sometimes, increased pharmacy labor to deal with inconsistent product packaging and labeling.

While several commenters encouraged CMS to extend the additional payment and associated flexibilities for administration of COVID-19 monoclonal antibody therapies in the home beyond the end of the PHE, other commenters recommended against in-home administration of these products, citing concerns over patient safety and the potential for adverse reactions.

Response: We agree with commenters who recommended CMS transition to treating COVID-19 monoclonal antibody therapies as biologicals that are paid using methodologies under section 1847A of the Act following the end of the calendar year in which the PHE expires. In particular, we believe that the public health needs that prompted coverage of these products as vaccines will gradually restabilize following the end of the PHE, and that extending the current payment approach to the end of the year will give healthcare providers adequate time to prepare for the change in payment methodology while continuing to maximize access to beneficiaries, including those who receive these treatments in the home. Similar to the continuation policies we are adopting for the $40 payment rate and the in-home add-on payment for COVID-19 vaccine administration, given the commenters' concurrence with the added costs and compelling needs that led CMS to provide payment and coverage for COVID-19 monoclonal antibody therapies under the Medicare Part B vaccine benefit, we believe this policy is an appropriate one. In addition, since we do not expect those needs or costs to diminish immediately with the end of the PHE, we believe it would be appropriate to continue to provide payment and coverage for COVID-19 monoclonal antibody therapies under the Medicare Part B vaccine benefit in place through the end of the CY in which the PHE ends. We recognize that once the COVID-19 PHE declaration is terminated, EUAs issued under that declaration will no longer remain in effect, which may affect the availability of some products either for the diagnosis, treatment, or prevention of COVID-19, because they will need to have the requisite marketing authorization to remain on the market. To the extent there are products that would no longer have the requisite marketing authorization to remain on the market after a revocation of an EUA, we believe a transition period would be appropriate to allow for adjustments, as needed, to care plans that included such products.

Therefore, we are finalizing a policy to continue to pay for COVID-19 monoclonal antibody therapeutic products as vaccines under section 1861(s)(10) of the Act until the end of the calendar year in which the PHE expires. During this interim time, we will continue to pay providers and suppliers for the products themselves at 95 percent of Average Wholesale Price (AWP) except when they are provided for free by the government; we will also maintain the $450 payment rate for administering a COVID-19 monoclonal antibody in a healthcare setting, as well as the payment rate of $750 for administering a COVID-19 monoclonal antibody therapy in the home. Starting at the beginning of the calendar year following the year in which the PHE ends, we will treat COVID-19 monoclonal antibody therapies as biologics paid under section 1847A of the Act, and discontinue the unique payment rates of $450 and $750 for administering a COVID-19 monoclonal antibody product, which were established to ensure access during the PHE. We note that under section 1847A of the Act, physicians and suppliers furnishing COVID-19 monoclonal antibody therapies typically will be paid based on Average Sales Price (ASP) + 6 percent. In addition, providers and suppliers will be paid under the applicable payment system, and using the appropriate coding and payment rates, for administering COVID-19 monoclonal antibodies similar to the way they are paid for administering other complex biological products.

Comment: A few commenters stated that CMS should continue to make enhanced payments for COVID-19 monoclonal antibodies even after transitioning to regular coverage of these services under Medicare Part B as discussed above. One commenter stated that if payment for COVID-19 monoclonal antibodies is aligned with that for other monoclonal antibody products, then additional work and PE costs must be factored in, and CMS must address steep reductions in drug administration services due to clinical labor pricing update proposal, for example by providing an enhanced payment when a COVID-19 diagnosis is present on a claim. Another commenter recommended a $300 COVID-19 therapy modifier to offset what they described as grossly undervalued professional service payments for infusion centers.

Response: We believe that the public health needs that prompted enhanced payments for COVID-19 monoclonal antibodies and administration services will gradually restabilize following the end of the PHE. As described in the previous section, extending the current payment approach to the end of the year in which the PHE ends will give healthcare providers adequate time to prepare for the change in payment methodology while continuing to maximize access to beneficiaries.

Comment: One commenter stated that CMS should adjust the eligibility standards for home-based administration of COVID-19 monoclonal antibodies to align with the more flexible standards that apply when determining eligibility for the additional payment when a COVID-19 vaccine is administered in a beneficiary's home. That is, in order to qualify as homebound for purposes of receiving monoclonal antibody services in the home, a beneficiary would need to meet the requirements set forth in the CMS COVID-19 vaccination toolkit.

Response: We thank the commenter for their feedback and will take it into consideration if we contemplate any future changes to our policy concerning in-home administration of COVID-19 monoclonal antibodies.

Comment: We received several comments pertaining to the role of specific provider types in administering and billing for COVID-19 monoclonal antibodies.

One commenter stated that pharmacists are well-positioned to increase awareness of and expand access to monoclonal antibody therapies, and urged CMS to consider supplemental funding for community pharmacies to develop the infrastructure to administer monoclonal antibodies onsite. Additionally, the commenter stated that a significant barrier to maximizing the use of pharmacists to develop these treatments is inadequate reimbursement for administrative costs and delays in the processing of claims by Medicare; the commenter therefore urged CMS to issue pharmacist/pharmacy specific guidance on pharmacy billing for these therapies outlining specific, rapid turn-around of Medicare reimbursements for MACs that covers the entirety of administration costs in a pharmacy setting.

One commenter emphasized the role of urgent care centers in furnishing monoclonal antibody treatment, and stated that simplification of administrative and reporting requirements would improve urgent care centers' ability to offer these services.

Another commenter urged CMS to establish a protocol allowing long-term care pharmacies (LTCPs) to bill independently for the procurement, preparation and reporting of monoclonal antibody treatment administered by a long-term care facility (LTCF). The commenter stated that splitting this fee is currently allowed by CMS, but the division is conducted as a private, two-party contract between LTCFs and LTCPs, and that providing a mechanism to reimburse each party for their efforts would provide CMS with better data related to the use of monoclonal antibodies to combat COVID-19 and other public health threats.

In addition, one commenter emphasized the role of home infusion pharmacies in providing monoclonal antibody treatment, both in beneficiaries' homes and in pharmacy-owned infusion suites. The commenter observed that, after the PHE, administration of monoclonal antibodies for COVID-19 in the home would not be covered under the standard Part B benefit without additional flexibilities, and therefore, urged CMS to maintain coverage of these products as vaccines until the establishment of a similar benefit that allows a licensed home infusion pharmacy to provide COVID-19 treatments in the home or in a pharmacy-owned and operated infusion suite at the current payment rates for each site of care.

Response: We believe that, following the end of the PHE, the public health needs that prompted coverage and payment of COVID-19 monoclonal antibody therapies (and their administration) under the Part B vaccine benefit will gradually restabilize. As discussed in the previous section, extending the current payment approach to the end of the year in which the PHE ends will give healthcare providers adequate time to prepare for the change in payment methodology while continuing to maximize access to beneficiaries, including those who receive these therapies in the home.

Comment: Several commenters urged CMS to update the FQHC cost report to ensure adequate reimbursement for monoclonal antibody infusions at 100 percent of reasonable cost.

Response: We appreciate the commenters' feedback. However, we did not discuss or include proposals on FQHC cost reports in the CY 2022 PFS proposed rule. As such, these comments are outside the scope of this rulemaking, but we will take these comments into consideration for the future.

4. Summary

We have taken several steps to promote broad and timely access to COVID-19 vaccines, including monoclonal antibody products used to treat COVID-19 paid for as vaccines, during the PHE for COVID-19. We appreciate the feedback we have received from the public on these important issues regarding preventive vaccine administration, vaccine administration in the home, and administration of monoclonal antibody products used to treat COVID-19.

In summary, for CY 2022, we are finalizing the following policies:

Administration of Preventive Vaccines

Effective January 1, 2022, CMS will pay $30 per dose for the administration of the influenza, pneumococcal and hepatitis B virus vaccines. In addition, CMS will maintain the current payment rate of $40 per dose for the administration of the COVID-19 vaccines through the end of the calendar year in which the ongoing PHE ends. Effective January 1 of the year following the year in which the PHE ends, the payment rate for COVID-19 vaccine administration will be set at a rate to align with the payment rate for the administration of other Part B preventive vaccines.

In-Home Administration of COVID-19 Vaccines

CMS will continue the additional payment of $35.50 for COVID-19 vaccine administration in the home under certain circumstances through the end of the calendar year in which the PHE ends.

COVID-19 Monoclonal Antibody Products

CMS will continue to pay for COVID-19 monoclonal antibodies under the Medicare Part B vaccine benefit through the end of the calendar year in which the PHE ends. During this interim time, we will maintain the $450 payment rate for administering a COVID-19 monoclonal antibody in a healthcare setting, as well as the payment rate of $750 for administering a COVID-19 monoclonal antibody therapy in the home. Effective January 1 of the year following the year in which the PHE ends, CMS will pay physicians and other suppliers for COVID-19 monoclonal antibody products as biological products paid under section 1847A of the Act; healthcare providers and practitioners will be paid under the applicable payment system, and using the appropriate coding and payment rates, for administering COVID-19 monoclonal antibodies similar to the way they are paid for administering other complex biological products.

Table 32 summarizes the policy changes finalized in this final rule.

K. Payment for Medical Nutrition Therapy Services and Related Services

Section 105 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554, December 21, 2000) added section 1861(vv)(1) to the Act which provided Medicare coverage under Part B for Medical Nutrition Therapy (MNT) services when performed by registered dietitians and nutrition professionals pursuant to a referral from a physician.

Under section 1842(b)(18)(C) of the Act, registered dietitians and nutrition professionals are included in the list of NPPs that may bill Medicare and be paid directly for their services, effective January 1, 2002. To submit claims for MNT services, the registered dietitian or nutrition professional must enroll as such in accordance with our regulations at 42 CFR 414.64 and 424.510. Like other NPPs listed in section 1842(b)(18)(C) of the Act, registered dietitians and nutrition professionals who are employees or independent contractors of hospitals or physician groups may reassign their rights to receive payment to that hospital or physician group, as appropriate. The Medicare specialty code for “dietitian/nutritionist” is 71.

Under section 1833(a)(1)(T) of the Act, we were originally required to pay for MNT services at 80 percent of the lesser of the actual charge for the services or 85 percent of the amount determined under the PFS for the same services if the services had been furnished by a physician. We established payment regulations for MNT in our regulation at § 414.64 in the CY 2002 PFS final rule (66 FR 55278 through 55281 and 55332).

MNT services are defined as nutritional diagnostic, therapeutic, and counseling services that are furnished by a registered dietitian or nutrition professional for the purpose of managing diabetes or a renal disease. These practitioners use three CPT® codes to bill for MNT assessment and intervention services with the referral of a physician. In cases where there is a second physician referral for MNT for the same patient within a calendar year (for example, based on a change in the patient's condition, diagnosis, or treatment regimen), the furnishing practitioner uses two other HCPCS codes to report these episodes. We have worked with stakeholders over the years to establish values for the services described by the five MNT codes.

The importance of MNT services for managing diabetes or renal disease, as well as the underutilization of the benefit by Medicare beneficiaries were discussed in the proposed rule at section III.I. (86 FR 39259 through 39261). More recently, stakeholders who were concerned about the low utilization rate for the services have requested that CMS make changes geared toward making MNT services more accessible to Medicare beneficiaries. These stakeholders believe the underutilization of MNT services is due to multiple factors. Some of these factors and our proposals to address them are discussed elsewhere in this final rule (see section III.I.), including proposals to remove the requirement that the MNT referral be made by the “treating physician” and update the glomerular filtration rate (GFR) eligibility criteria to reflect current medical practice. First, stakeholders recommended that we modify the Medicare Claims Processing Manual (MCPM) to increase the visibility of MNT services by moving the provisions that address these services to appear near the provisions addressing other preventive services. (We note that MNT services are included in the definition of preventive services under section 1861(ddd)(3)(A) of the Act). Second, the stakeholders recommended that we revise our Medicare Benefit Policy Manual to address registered dietitians and nutrition professionals, and the MNT services they furnish, in a way that aligns with the provisions addressing other types of practitioners and the services they furnish.

We established the MNT regulations in the CY 2002 PFS final rule at § 410.130 through § 410.134 and § 414.64. There have since been two significant changes to payment for MNT services, which are discussed in more detail below: (1) We added MNT services to the Medicare telehealth services list and recognized that registered dietitians and nutrition professionals can furnish and bill for these services as distant site practitioners; and (2) section 4104 of the Affordable Care Act (ACA) amended the statute to remove application of the Medicare Part B deductible and coinsurance for MNT services effective January 1, 2011. In the CY 2006 PFS final rule (70 FR 70155 through 70157), we amended our regulation to add registered dietitians and nutrition professionals to the list of distant site practitioners for telehealth services at § 410.78(b)(2)(viii), and to add the three individual MNT services to the Medicare telehealth services list by adding “individual medical nutrition therapy” to § 414.65(a)(1). In the CY 2011 PFS final rule, we also added one of the group MNT codes (97804) to the Medicare telehealth services list (75 FR 73314 through 73315). Although the codes for individual MNT services were recognized as telehealth services beginning in CY 2006, a recent claims query (prior to the PHE for COVID-19) showed low utilization of MNT services via telehealth by registered dietitians and nutrition professionals.

In the CY 2011 PFS final rule, (75 FR 73412 through 73430), we implemented the amendments made by section 4104 of the ACA, which were designed to remove financial barriers that may have prevented beneficiaries from obtaining certain preventive services. Section 4104 of the ACA amended section 1833(a)(1) of the Act by adding a new subparagraph (Y), which provides for Medicare Part B payment at 100 percent for preventive services described in section 1861(ddd)(3)(A) of the Act that are recommended with a grade of A or B by the United States Preventive Services Task Force (USPSTF); and, amended section 1833(b)(1) of the Act to specify that the annual Medicare Part B deductible does not apply to preventive services with a recommended grade of A or B by the USPSTF. Section 1861(ddd)(3) of the Act defines “preventive services” and includes MNT services as a preventive service through a cross reference to section 1861(ww)(2) of the Act. Additionally, section 4104 of the ACA amended section 1833(a)(1)(T) of the Act to specify that Medicare Part B payment is made at 100 percent (instead of 80 percent) of the lesser of the actual charge or 85 percent of the PFS payment amount for these services if they are recommended with an A or B rating by the USPSTF, thereby removing beneficiary coinsurance for these services. In the CY 2011 PFS final rule, we listed all preventive services and their recommended ratings from the USPSTF in Table 66 (66 FR 73420 through 73430), noting that all 5 MNT services received a grade of B from the USPSTF; and the last column in the table noted that the coinsurance and deductible are not applicable to these services beginning January 1, 2011. We codified the coinsurance exception for MNT services at § 410.152(l)(7) to indicate that Medicare Part B pays 100 percent of the Medicare payment amount; and codified the exception for the Medicare Part B deductible at § 410.160(b)(11).

At that time, the preventive services coinsurance and deductible changes were implemented through Change Request 7012 (Transmittal 864); however, we neglected to update the payment regulation for MNT services at § 414.64(a). As a result, we proposed in the CY 2022 PFS proposed rule to modify the regulation at § 414.64(a) to clarify that MNT services, with their USPSTF recommended B rating, are paid at 100 percent of the lesser of the actual charges or 85 percent of the PFS amount. In the proposed regulation text at § 414.64(a), we made an inadvertent typographical error, using “or” instead of “of.” We are correcting the error here in this final rule so that § 414.64(a) provides that payment is made at 80 percent, or 100 percent if the service is recommended by the United States Preventive Services Task Force with a grade of A or B, “of” the lessor of the actual charge or 85 percent of the physician fee schedule amount.

Because the registered dietitian and nutrition professional are the only practitioner types listed at section 1842(b)(18)(C) of the Act without a specific regulatory provision addressing them as a type of practitioner and specifying payment policies for their services, we proposed to create a new section at § 410.72 to reflect these practitioners and related payment policies. We proposed to include in the regulation at § 410.72 a cross reference to the regulation at § 410.134 that addresses the qualifications for registered dietitians and nutrition professionals. For covered services described at § 410.72(b), we proposed as a condition of coverage to refer to medical nutrition therapy services as defined at § 410.130, and also to refer to the conditions for coverage of MNT services at § 410.132(a). Section 410.132(a) requires a referral for MNT services from a physician (an M.D. or D.O.), and that MNT services are performed by the registered dietitian or nutrition professional in a face-to-face encounter except when those services are furnished as a telehealth service as provided in § 410.78 of our regulations.

Because registered dietitians and nutrition professionals are also the primary specialty that furnishes diabetes self-management training (DSMT) services, we proposed to include DSMT at § 410.72(b)(2) as an “other service” that registered dietitians and nutrition professionals can provide in cases where the registered dietitian or nutrition professional is a certified provider of DSMT services as specified at section 1861(qq)(2)(A) of the Act; and they have submitted necessary documentation to, and are accredited by, a CMS-approved accreditation organization, as specified in § 410.141(e) for DSMT services. We also proposed to address in the regulation at § 410.72(b)(2) the current requirement that, as specified in the regulation at § 410.141(b)(1), DSMT services require a referral from the physician or qualified NPP (as defined in § 410.32(a)(2)) who is treating the beneficiary's diabetes condition. We also proposed to specify in the regulation at § 410.72(b)(3) that MNT and DSMT services cannot be furnished together on the same date of service as detailed in the national coverage determination for MNT services (see https://www.cms.gov/medicare-coverage-database/details/ncd-details.aspx?ncdid=252 ); and, that neither MNT nor DSMT services can be furnished incident to the professional services of a physician or other practitioner. For MNT services, we proposed to clarify that MNT services cannot be provided incident to the services of a billing physician. As a distinct, stand-alone benefit under Medicare Part B at section 1861(s)(2)(V) of the Act, MNT services cannot be furnished incident to a physician's professional service that is separately specified at section 1861(s)(2)(A) of the Act. Further, if a physician also meets the qualifications to bill Medicare as a registered dietitian or nutrition professional (although not necessarily enrolled as one), they would have to personally provide any MNT services as explained above, meaning that those services could not be furnished by auxiliary personnel incident to their own professional services. For DSMT services, we also proposed to clarify that DSMT services cannot be provided incident to the services of a billing physician or practitioner. DSMT is a distinct benefit under Medicare Part B, as specified in a stand-alone statutory provision at section 1861(s)(2)(S) of the Act. Approved DSMT entities are separately recognized programs, rather than individuals or practitioners, that provide DSMT services in accordance with their accreditation from a CMS-approved organization under § 410.142, indicating that the entity meets a set of quality standards described in § 410.144. Even when the DSMT services are billed by a physician or other practitioner, such as the DSMT certified provider, the physician or other practitioner could not provide DSMT services directly, unless they themselves are also an approved DSMT entity. If a physician or practitioner is an approved entity, the DSMT services must be provided in accordance with the requirements to furnish such services. For these reasons, we proposed to add at § 410.72(b)(3)(ii) that neither MNT nor DSMT may be furnished and billed incident to the professional services of a physician or practitioner, where applicable.

Given the foregoing, we proposed to add at § 410.72(d) that the registered dietitian or nutrition professional can be paid for their professional services only if those services have been personally performed by them. Section 1861(vv) of the Act clearly indicates that MNT services are only provided by registered dietitians and nutrition professionals; and this was reiterated at § 410.134 as established in the CY 2002 PFS final rule (66 FR 55331). In addition, the regulation at § 410.132(a) specifies that MNT services consist of face-to-face nutritional assessments and interventions in accordance with nationally accepted dietary or nutritional protocols. After we issued the CY 2022 PFS proposed rule, we reviewed the proposed regulation text at § 410.72(d) regarding the requirement that professional services of registered dietitians and nutrition professionals must be “personally performed” by them. We noted that the term, “personally performed” is used in 42 CFR part 410 of the regulations to describe services furnished both directly and incident to the services of other types of practitioners that are authorized by the statute to furnish and bill Medicare for covered services incident to their own professional services. Registered dietitians and nutrition professionals are not authorized by the statute to furnish and bill Medicare for services incident to their professional services. Upon further reflection, we are concerned that the reference to “personally performed” in the proposed regulation text at § 410.72(d) could potentially be confusing when applied to services of registered dietitians and nutrition professionals. To avoid any potential confusion, we are clarifying that registered dietitians and nutrition professionals may bill Medicare only for professional services that they furnish directly to the beneficiary. For the same reasons, we are also modifying and finalizing our proposed regulation text to substitute “directly” for “personally” in § 410.72(d).

In the CY 2022 PFS proposed rule, we included proposed regulation text at § 410.72(g) to specify that MNT and DSMT services may be provided as telehealth services (meeting the requirements in § 410.78) when registered dietitians or nutrition professionals act as distant site practitioners. While we did explain as noted above that registered dietitians and nutrition professionals were added to the list of distant site practitioners for telehealth services in § 410.78 of our regulation in the CY 2006 PFS final rule, we neglected to discuss the proposed regulation text at § 410.72(g) in the preamble to the CY 2022 PFS proposed rule. The proposed regulation text at § 410.72(g) essentially provides a cross-reference to longstanding policy codified in § 410.78 beginning in CY 2006. We received no comments on this proposed regulation text. We also discovered typographical errors in the proposed regulation text at § 410.72(g) after the CY 2022 PFS proposed rule was issued. The DSMT acronym was misspelled as “DMST” and we left out the “s” at the end of “telehealth services.” In this final rule, we are correcting these two errors and otherwise finalizing the regulation text at § 410.72(g) as proposed.

In the CY 2002 PFS final rule (which we cited correctly but inadvertently misidentified in the CY 2022 PFS proposed rule as the CY 2001 PFS final rule), we discussed that registered dietitians and nutrition professionals who are enrolled in Medicare could furnish services in various settings including private practices and outpatient hospitals, but that separate payment for MNT services would not be made when beneficiaries are inpatients in Part A stays in hospitals and SNFs (66 FR 55279). We explained that our payment to hospitals and SNFs includes payment for MNT services. We established these conditions of payment in the regulation at § 414.64(e) (which we inadvertently cited incorrectly in the CY 2022 PFS proposed rule as § 414.64(c)). We proposed to add these conditions of payment to our regulation at § 410.72(c)(1) and (2), to address payment for services of registered dietitians and nutrition professionals when beneficiaries are inpatients of hospitals and SNFs. Also, in the CY 2002 PFS final rule, we finalized, in accordance with section 1861(s)(2)(V)(ii) of the Act, that there is no coverage for MNT services available for beneficiaries who are receiving maintenance dialysis for which payment is made under section 1881 of the Act, that is, services from an end-stage renal disease (ESRD) facility. We codified this policy at § 410.132(b) of our regulations. We proposed to add this rule to our regulation at § 410.72(c)(3) through a cross-reference to § 410.132(b).

In accordance with section 1842(b)(18)(B) of the Act, the registered dietitian or nutrition professional must accept assignment, meaning that they must accept the payment amount Medicare approves as payment in full and collect nothing from the beneficiaries for those services for which Medicare pays 100 percent of the Medicare approved amount or only collect the difference between the Medicare approved amount and the Medicare Part B payment in accordance with § 424.55. We proposed to add at § 410.72(f) that the services of a registered dietitian or nutrition professional are provided on an assignment-related basis. Because Medicare pays 100 percent of the Medicare approved amount for MNT covered services, this means that beneficiaries cannot be billed any amount for MNT covered services. For other services, including DSMT, for which the Medicare Part B coinsurance percentage is 20 percent, a registered dietitian or nutrition professional must not collect amounts in excess of the limits specified in § 424.55 of our regulation, and if they do, they must refund the full amount of the impermissible charge to the beneficiary. Finally, we noted that the proposed regulatory text for § 410.72(f) is consistent with the text in existing regulations for other types of NPPs at §§ 410.74(d)(2), 410.75(e)(2), 410.76(e)(2) and 410.77(d)(2). We also considered whether alternate regulatory text that cross-references the assignment requirements in § 424.55 would provide additional clarity. Specifically, we considered whether to specify within § 410.72(f) that the services of a registered dietitian or nutrition professional are provided on an assignment-related basis; the registered dietitian or nutrition professional may not charge a beneficiary in excess of the amounts permitted under 42 CFR 424.55; and if a beneficiary has made payment for a service in excess of these limits, the registered dietitian or nutrition professional must refund the full amount of the impermissible charge to the beneficiary.

To ensure maximum consistency in our regulations, we stated that if we finalize the alternate regulatory text for § 410.72(f), we would also make corresponding revisions to §§ 410.74(d)(2), 410.75(e)(2), 410.76(e)(2) and 410.77(d)(2). We solicited public comments on the clearest language to describe the assignment requirements, as well as the rest of our proposals.

We received public comments on our proposals. The following is a summary of the comments we received and our responses.

Comment: Several commenters appreciated and commended our proposal to clarify and codify payment for MNT services at § 414.64(a) to reflect that MNT services, with their USPSTF recommended B rating, are paid at 100 percent of the PFS amount, rather than 80 percent.

Response: We thank the commenters for their support.

Comment: Some commenters offered support for all the proposed changes to regulations related to the Part B MNT benefit and expressed their agreement with our reasons for proposing the changes. Other commenters expressed support for the proposed regulatory text that includes specific payment policies for registered dietitians and nutrition professionals who are recognized to bill Medicare directly for the MNT services they provide.

Response: CMS appreciates the many commenters' support.

Comment: One commenter asked whether a physician (MD or DO) can “co-sign” an MNT referral made by an NPP they are supervising, for example, when the physician and NP or PA are practicing under a collaborative practice agreement as required by State law. The commenter added that NPPs manage and coordinate care for many individuals with diabetes and earlier stages of chronic kidney disease (CKD) in both urban and rural areas—suggesting that it would be appropriate to permit these NPPs to refer patients for MNT. We also received several comments about the possibility of expanding the referral requirement for MNT services to include other physicians such as optometrists and certain NPPs, including PAs and NPs.

Response: As discussed in the proposed rule, section 1861(vv)(1) of the Act expressly requires that the referral for MNT services must be from a physician—an M.D. or D.O. as defined in section 1861(r)(1) of the Act. We interpret this requirement to mean that the MNT referral must come directly from an M.D. or D.O., and not through a “cosignature” on a referral from another type of physician or practitioner. Therefore, we are not expanding the referral requirement to include other physicians or practitioners as these commenters requested.

Comment: One commenter requested that we provide clarification for our statement in the proposed rule regarding limitations on payment to registered dietitians and nutrition professionals at § 410.72(c). The commenter specifically asked us to explain our statement that the payment CMS makes to hospitals and SNFs for their Medicare beneficiaries who are inpatients includes payment for MNT services.

Response: We appreciate the commenter's interest in payment for MNT services under the PFS and the opportunity to clarify our statement. In developing the proposed regulation at § 410.72, we included the restrictions on separate payment for MNT as discussed in the CY 2002 PFS final rule and codified at § 414.64(e), which specifies that separate payment for MNT services is made only if the beneficiary is not an inpatient of a hospital, SNF, nursing home or hospice; and is not receiving services in an RHC, FQHC or ESRD facility. We did not propose to revise our policy in this regard; only to reiterate it under the proposed new regulation at § 410.72 that pertains to registered to dietitians and nutrition professionals and the services they furnish.

Comment: We received comments from several organizations that were supportive of our proposals to reduce barriers and improve access to MNT services, but expressed the view that the proposals did not go far enough to achieve those goals. They noted that Medicare Advantage plans often cover MNT for other conditions in addition to the Medicare coverage of MNT for patients with diabetes and CKD, and urged us to expand access to MNT for other conditions as appropriate, including mental health conditions (such as eating disorders).

Response: Currently, section 1861(s)(2)(V) of the Act provides a benefit for MNT services only for beneficiaries with diabetes or a renal disease. The scope of the statutory Medicare Part B benefit for MNT does not allow for expansion to additional diagnoses/conditions.

Comment: We received other comments that were not specific to the discussion and proposals made in the CY 2022 PFS proposed rule. For example, a few commenters requested that we provide additional clarity in the Medicare Claims Processing and Benefit Policy Manuals on coverage and billing procedures for MNT and DSMT services under the PFS in all settings, including hospital clinics, FQHCs, RHCs, and CAHs; and one commenter wanted CMS and Congress to address multiple access barriers to the DSMT benefit.

Response: We thank the commenters for their feedback and will take this information into consideration for the future. We look forward to working with stakeholders to consider and work toward increasing appropriate access to MNT and DSMT services. However, these comments are outside the scope of this rulemaking, and we decline to respond to them here.

We did not receive comments in response to our request for comments on the clearest language to describe the assignment requirements for registered dietitians and nutrition professionals. As noted in the proposed rule and specified at section 1842(b)(18)(B) of the Act, registered dietitians and nutrition professionals are required to provide services on an assignment-related basis. We proposed to add regulation text at the new § 410.72(f) that mirrors the current regulation text to reflect the requirements for payment on an assignment-related basis for other types of NPPs in §§ 410.74(d)(2), 410.75(e)(2), 410.76(e)(2) and 410.77(d)(2). We also indicated that we were considering whether to adopt alternate regulation text at § 410.72(f) that would reflect the requirements for payment on an assignment-related basis through a cross-reference to the regulation at § 424.55, and whether that approach would provide greater clarity. Specifically, we said we were considering whether to specify in § 410.72(f) that the services of a registered dietitian or nutrition professional are provided on an assignment-related basis, and the registered dietitian or nutrition professional may not charge a beneficiary in excess of the amounts permitted under § 424.55; and that if a beneficiary has made payment for a service in excess of these limits, the registered dietitian or nutrition professional must refund the full amount of the impermissible charge to the beneficiary. We stated that if we finalized the alternate approach to regulation text for § 410.72(f), to ensure maximum consistency across our regulations, we would make corresponding revisions to the regulations at §§ 410.74(d)(2), 410.75(e)(2), 410.76(e)(2), and 410.77(d)(2). After further reflection, we believe that alternate text that cross-refers to the assignment requirements at § 424.55 provides greater clarity, and helpfully cross-refers to the current regulation that specifies the requirement for billing on an assignment-related basis. Therefore, we are adopting the alternate approach we described in the proposed rule and finalizing alternate regulatory text to specify that the registered dietitian's or nutrition professional's services are provided on an assignment-related basis, and the registered dietitian or nutrition professional may not charge a beneficiary in excess of the amounts permitted under 42 CFR 424.55. Additionally, the registered dietitian or nutrition professional must refund the full amount of the impermissible charge to the beneficiary, if a beneficiary has made payment for a service in excess of these limits.

Given that we are finalizing the alternate regulatory text for § 410.72(f), as we noted in describing the alternate approach to the regulation text at § 410.72(f) in our proposed rule, to ensure consistency in our regulations, we are also finalizing conforming revisions to §§ 410.74(d)(2), 410.75(e)(2), 410.76(e)(2) and 410.77(d)(2), of our regulations for PAs, NPs, CNSs, and certified nurse mid-wives, respectively.

After consideration of public comments, we are finalizing our proposals, with modifications explained above, to amend the regulation at § 414.64(a) to reflect that MNT services are paid at 100 percent (instead of 80 percent) of 85 percent of the Medicare PFS approved amount without cost sharing; and to add the regulation at § 410.72 to address registered dietitians and nutrition professionals and payment for their services. We are also finalizing revisions to the regulations at §§ 410.74(d)(2), 410.75(e)(2), 410.76(e)(2) and 410.77(d)(2) to remove current language addressing the requirements of payment on an assignment-related basis and to instead cross-refer to those requirements as specified in the current regulation at § 424.55.

III. Other Provisions of the Proposed Rule

A. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

1. Background

a. RHC and FQHC Payment Methodologies

As discussed in 42 CFR part 405, subpart X, RHC and FQHC visits generally are face-to-face encounters between a patient and one or more RHC or FQHC practitioners during which one or more RHC or FQHC qualifying services are furnished. RHC and FQHC practitioners are physicians, NPs, PAs, CNMs, clinical psychologists (CPs), and clinical social workers, and under certain conditions, a registered nurse or licensed practical nurse furnishing care to a homebound RHC or FQHC patient in an area with a shortage of home health agencies. A Transitional Care Management (TCM) service can also be paid by Medicare as an RHC or FQHC visit. In addition, a Diabetes Self-Management Training (DSMT) service or a Medical Nutrition Therapy (MNT) service furnished by a certified DSMT or MNT program may also be considered an FQHC visit for Medicare payment purposes. Only medically necessary medical, mental health, or qualified preventive health services that require the skill level of an RHC or FQHC practitioner are RHC or FQHC billable visits. Services furnished by auxiliary personnel (for example, nurses, medical assistants, or other clinical personnel acting under the supervision of the RHC or FQHC practitioner) are considered incident to the visit and are included in the per-visit payment.

RHCs generally are paid an all-inclusive rate (AIR) for all medically necessary medical and mental health services and qualified preventive health services furnished on the same day (with some exceptions). The AIR is subject to a payment limit, meaning that an RHC will not receive any payment beyond the specified limit amount. As of April 1, 2021, all RHCs are subject to a payment limit for the AIR, and this limit will be determined for each RHC in accordance with section 130 of the Consolidated Appropriations Act, 2021 as described below.

FQHCs were paid under the same AIR methodology until October 1, 2014. Beginning that date, in accordance with section 1834(o) of the Act (as added by section 10501(i)(3) of the Affordable Care Act), they began to transition to an FQHC PPS system in which they are paid based on the lesser of the FQHC PPS rate or their actual charges. The FQHC PPS rate is adjusted for geographic differences in the cost of services by the FQHC PPS geographic adjustment factor (GAF). The rate is increased by 34 percent when an FQHC furnishes care to a patient that is new to the FQHC, or to a beneficiary receiving an initial preventive physical examination (IPPE) or has an annual wellness visit (AWV).

Both the RHC AIR and FQHC PPS payment rates were designed to reflect the cost of all services and supplies that an RHC or FQHC furnishes to a patient in a single day. The rates are not adjusted for the complexity of the patient health care needs, the length of the visit, or the number or type of practitioners involved in the patient's care.

2. Payment Methodology for RHCs

a. Background

As we discussed previously, under Medicare Part B, payment to RHCs for services (defined in § 405.2411) furnished to beneficiaries is made on the basis of an all-inclusive payment methodology subject to a maximum payment per-visit (discussed in section III.A.3. of this final rule) and annual reconciliation. Our regulations at § 405.2470 provides that RHCs are required to submit cost reports to allow the Medicare Administrative Contractor (MAC) to determine payment in accordance with 42 CFR part 405, subpart X, and instructions issued by CMS. The statutory payment requirements for RHC services are set forth at section 1833(a)(3) of the Act, (as amended by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ), which states that RHCs are paid reasonable costs * * * less the amount a provider may charge as described in clause of section 1866(a)(2)(A) of the Act, but in no case may the payment exceed 80 percent of such costs. The beneficiary is responsible for the Medicare Part B deductible and coinsurance amounts. Section 1866(a)(2)(A)(ii) of the Act and implementing regulations at § 405.2410(b) establish beneficiary coinsurance at an amount not to exceed 20 percent of the clinic's reasonable charges for covered services.

We explain in § 405.2464(a) the AIR is determined by the MAC at the beginning of the cost reporting period. The MAC calculates the AIR that will apply for the upcoming cost reporting period for each RHC by dividing the estimated total allowable costs by estimated total visits for RHC services. The MAC also periodically reviews the AIR throughout the cost reporting period to assure that payments approximate actual allowable costs and visits and may adjust the rate. Productivity, payment limits, and other factors are also considered in the calculation. Allowable costs must be reasonable and necessary and may include practitioner compensation, overhead, equipment, space, supplies, personnel, and other costs incident to the delivery of RHC services (§ 405.2468).

Medicare payment for RHC services are ultimately determined at cost report settlement. That is, during the annual reconciliation as explained in § 405.2466, MACs determine the total reimbursement amount due the RHC for covered services furnished to Medicare beneficiaries based on the reporting period. The total reimbursement amount due is compared with total payments made to the RHC for the reporting period, and the difference constitutes the amount of the reconciliation. If the total reimbursement due to the RHC exceeds the payments made for the reporting period, the MAC makes a lump-sum payment to the RHC to bring total payments into agreement with total reimbursement due the RHC. If the total payments made to an RHC for the reporting period exceed the total reimbursement due the RHC for the period, the MAC arranges with the RHC for repayment.

In the event a new RHC is in its initial reporting period, and the MAC does not have a cost report to set its AIR, the RHC provides the MAC an estimate of what it expects its costs to be for its initial reporting period. In the Provider Reimbursement Manual (Pub. 15-2), chapter 46, section 4600, we explain that for an RHC's initial reporting period, the clinic completes the cost report's worksheets with estimates of costs and visits and other information required by the reports. The MAC uses these estimates to determine an interim rate of payment for the RHC. This interim rate may be adjusted throughout the reporting period. Following the end of the RHC's reporting period, the RHC is required to submit its worksheets, using data based on its actual experience for the reporting period. The AIR for the following year will then be based on the RHC's actual experience.

As discussed in Pub. 100-02, Chapter 13, section 80.2, when RHCs are part of the same organization with more than one RHC, they may elect to file consolidated cost reports rather than individual cost reports. Under this type of reporting, each RHC in the organization need not file individual cost reports. Rather, the group of RHCs may file a single report that accumulates the costs and visits for all RHCs in the organization. In order to qualify for consolidation reporting, all RHCs in the group must be owned, leased, or through any other agreement, controlled by one organization.

3. RHC Payment Limit Per-Visit

a. Background

Prior to the Balanced Budget Act of 1997 (BBA), the payment methodology for an RHC depended on whether it was “provider-based” or “independent.” Specifically, payment to provider-based RHCs for services furnished to Medicare beneficiaries was made on a reasonable cost basis by the provider's MAC in accordance with the regulations at 42 CFR part 413; whereas payment to independent RHCs for services furnished to Medicare beneficiaries was made on the basis of a uniform all-inclusive rate payment methodology in accordance with 42 CFR part 405, subpart X. In addition, payment to independent RHCs also was subject to a maximum payment per visit (also referred to as a “payment limit per-visit”, “upper payment limit per-visit”, or “cap”) as set forth in section 1833(f) of the Act. This national statutory payment limit was set at $46 and was adjusted annually based on the Medicare Economic Index (MEI) described in section 1842(b)(3) of the Act.

Section 1833(f) of the Act was further amended by section 4205(a) of the BBA) (Pub. L. 105-33) to permit an exception to the national statutory payment limit for RHCs based in rural hospitals with less than 50 beds. Our guidance directed Medicare intermediaries to use the bed definition at § 412.105(b) and the rural definition at § 412.62(f)(1) to determine which RHCs are eligible for the exception. The hospital bed definition was based on available bed days and the rural definition was based on the Office of Management and Budget's metropolitan statistical area (MSA) method.

Section 224 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (Appendix F of Consolidated Appropriations Act of 2001) (BIPA) (Pub. L. 106-554, December 21, 2000) further amended section 1833(f) of the Act by expanding the eligibility criteria for receiving an exception to the national statutory payment limit for RHCs. Specifically, this section of BIPA extended the exemption to RHCs based in small, urban hospitals. Effective July 1, 2001, all hospitals of less than 50 beds were eligible to receive an exception from the per visit payment limit for their RHCs.

As discussed in Change Request 1958, Transmittal A-01-138 issued on December 6, 2001, following the implementation of the BBA provision, CMS announced an alternative bed size definition for very rural, sole community hospitals with seasonal fluctuations in patient census. The MAC reviews the number of beds twice a year to determine whether the provider-based RHC meets the exception, during the Desk Review process and during the interim rate process (that is, determining the RHC's AIR). The provider-based RHC continues to receive the exception until the hospital which they are affiliated with submits a cost report with more than 50 beds. However, in the May 8, 2020 Federal Register , in response to the PHE for COVID-19, we published the “Medicare and Medicaid Programs, Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program” interim final rule with comment period (85 FR 27550) (May 8, 2020 IFC). In the May 8, 2020 IFC, we implemented, on an interim basis, a change to the period of time used to determine the number of beds in a hospital at § 412.105(b) for purposes of determining which provider-based RHCs are subject to the payment limit (85 FR 27569). That is, for the duration of the PHE, we adopted an interim final policy to use the number of beds from the cost reporting period prior to the start of the PHE as the official hospital bed count for application of this policy. As such, RHCs with provider-based status that were exempt from the national statutory payment limit in the period prior to the effective date of the PHE (January 27, 2020) would continue to be exempt from the bed count requirement for the duration of the PHE for the COVID-19 pandemic, as defined at § 400.200, even if the hospital raised its bed count above 50. Once the PHE for COVID-19 ends, hospitals need to lower their bed count to less than 50 beds to utilize an RHC policy that has such a requirement.

b. Section 130 of the Consolidated Appropriations Act, 2021

In the CY 2022 PFS proposed rule (86 FR 39231 through 39232), we discussed section 130 of the Consolidated Appropriations Act, 2021 (CAA 2021) (Pub. L. 116-260, December 27, 2020), which updated section 1833(f) of the Act by restructuring the payment limits for RHCs beginning April 1, 2021. We noted that section 2 of H.R. 1868 (Pub. L. 117-7), enacted April 14, 2021, provided a technical correction to section 1833(f) of the Act. The amendments made by this technical correction take effect as if included in the enactment of the Consolidated Appropriations Act of 2021 (Pub. L. 116-260).

We explained that section 1833(f)(2) of the Act, as added by section 130 of the CAA 2021, states that beginning April 1, 2021, RHCs will begin to receive an increase in their payment limit per visit over an 8-year period, with a prescribed amount for each year from 2021 through 2028. Then, in a subsequent year, at the limit established for the previous year increased by the percentage increase in the MEI applicable to primary care services furnished as of the first of such subsequent year. This provision also subjects all new RHCs (including provider-based RHCs in a hospital with less than 50 beds and enrolled in Medicare after December 31, 2020) to the national statutory payment limit.

The national statutory payment limit for RHCs over an 8-year period is as follows:

• In 2021, after March 31, at $100 per visit;
• In 2022, at $113 per visit;
• In 2023, at $126 per visit;
• In 2024, at $139 per visit;
• In 2025, at $152 per visit;
• In 2026, at $165 per visit;
• In 2027, at $178 per visit; and
• In 2028, at $190 per visit.

In addition, in the CY 2022 PFS proposed rule (86 FR 39231), we stated that beginning April 1, 2021, provider-based RHCs that met the qualifications in section 1833(f)(3)(B) of the Act, as added by section 130 of the CAA 2021 and amended by Public Law 117-7, were entitled to special payment rules, as described in section 1833(f)(3)(B) of the Act. That is, a provider-based RHC must meet the following criteria to have its payment limit established based on its per visit payment amount (or AIR):

• As of December 31, 2020, was in a hospital with less than 50 beds and after December 31, 2020 in a hospital that continues to have less than 50 beds (not taking into account any increase in the number of beds pursuant to a waiver during the PHE for COVID-19); and one of the following circumstances:

++ As of December 31, 2020, was enrolled in Medicare (including temporary enrollment during the PHE for COVID-19); or

++ Submitted an application for enrollment in Medicare (or a request for temporary enrollment during the PHE for COVID-19) that was received not later than December 31, 2020.

Specifically, beginning April 1, 2021, for provider-based RHCs that had a per visit payment amount (or AIR) established for services furnished in 2020, the payment limit per visit shall be set at an amount equal to the greater of : (1) The per visit payment amount applicable to such RHC for services furnished in 2020, increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of 2021; or (2) the national statutory payment limit for RHCs per visit. We stated that the details of the most recent MEI rebasing and revising are discussed in the CY 2011 PFS final rule with comment period (75 FR 73262). The MEI increase for an update year is based on historical data through the second quarter of the prior calendar year. For example, the 2021 update reflects data through the second quarter 2020. IGI is a nationally recognized economic and financial forecasting firm with which we contract to forecast the components of the MEI and other CMS market baskets, https://ihsmarkit.com/index.html.

We explained that in a subsequent year (that is, after 2021), the provider-based RHC's payment limit per visit shall be set at an amount equal to the greater of : (1) The payment limit per visit established for the previous year, increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of such subsequent year; or (2) the national statutory payment limit for RHCs. We stated that the proposed CY 2022 MEI update was 1.8 percent based on the IGI 1st quarter 2021 forecast of the MEI and productivity adjustment, which reflects historical MEI data through 4th quarter 2020 and historical MFP data through 2019. As is our general practice, we proposed that if more recent data became available after the publication of the proposed rule and before the publication of this final rule (for example, a more recent estimate of the MEI percentage increase or productivity adjustment), we would use such data, if appropriate, to determine the final CY 2022 MEI update.

Based on the more recent data available for this CY 2022 PFS final rule (that is, IGI's third quarter 2021 forecast of the 2006-based MEI with historical data through the second quarter of 2021 and historical MFP data through 2020), we estimate that the CY 2022 MEI update is 2.1 percent.

In the CY 2022 PFS proposed rule (86 FR 39231), we explained for provider-based RHCs that meet certain requirements, but did not have a per visit payment amount (or AIR) established for services furnished in 2020, the payment limit per visit shall be at an amount equal to the greater of: (1) The per visit payment amount applicable to the provider-based RHC for services furnished in 2021; or (2) the national statutory payment limit for RHCs.

In a subsequent year (that is, after 2022), the provider-based RHCs payment limit per visit will be the greater of : (1) The payment limit per visit established for the previous year, increased by the percentage increase in MEI applicable to primary care services furnished as of the first day of such subsequent year; or (2) the national statutory payment limit for RHCs.

We stated that a provider-based RHC that meets the qualifications of section 1833(f)(3)(B) of the Act, as corrected by Public Law 117-7 will lose this designation if the hospital does not continue to have less than 50 beds, beyond the exemptions provided for the PHE for COVID-19. If this occurs, the provider-based RHC will be subject to the statutory payment limit per visit applicable for such year and not able to regain the specified provider-based payment limit.

Lastly, we stated that provider-based RHCs that are newly enrolled beginning January 1, 2021, and after are subject to the national statutory payment limit applicable for such year for RHCs.

c. Implementation of Section 130 of the Consolidated Appropriations Act, 2021

In the CY 2022 PFS proposed rule (86 FR 39232 through 39233), we stated that prior to this legislation, the CY 2020 national statutory payment limit for RHCs was $86.31. We noted that due to this timing, for calendar year 2021, there are two sets of payment rules for RHCs. That is, for the period before March 31, 2021, independent RHCs and provider-based RHCs that did not meet specified requirements were subject to the payment limit of $87.52 that CMS announced in Change Request 12035, Transmittal 10413 issued on October 29, 2020. Provider-based RHCs that met specified requirements were not subject to a payment limit for the first quarter of calendar year 2021. However, beginning April 1, 2021, in accordance with section 130 of the CAA 2021, all RHCs are now subject to a payment limit. For example, beginning April 1, 2021 through December 31, 2021 the national statutory payment limit for RHCs is $100.00. We explained in the proposed rule that in order to prepare for this change in payment limits during the calendar year, Change Request 12185, Transmittal 10679 was issued on March 16, 2021, to implement an increase in the RHC statutory payment limit per visit and establish the provider-based RHC payment limits per visit, which went in effect on April 1, 2021. We noted Change Request 12185, Transmittal 10679, was rescinded and replaced by Transmittal 10780 issued on May 4, 2021 to reflect the technical corrections in section 2 of H.R. 1868 (Pub. L. 117-7). We also noted that this provision does not impact the way beneficiary coinsurance is calculated as described in § 405.2410(b)(1).

i. Specified Provider-Based RHCs

In section III.A.3.b. of the CY 2022 PFS proposed rule (86 FR 39232) and section III.A.3.b. of this final rule, we discuss the qualifications specified in section 1833(f)(3)(B) of the Act, as amended by Public Law 117-7, that determine if a provider-based RHC is entitled to the special payment rules described in section 1833(f)(3)(A) of the Act. To determine if an RHC was in a hospital with less than 50 beds as of December 31, 2020, we stated that we would review each provider-based RHC using the existing bed count review process, as described previously, to determine if this criterion is met. In addition, we explained that this process generally includes ongoing review by the MACs two times a year. The beds to be counted for purposes of this criterion are described in § 412.105(b), in accordance with existing policy.

In the CY 2022 PFS proposed rule (86 FR 39232), we discussed our intent to continue with our existing policy and in accordance with section 1833(f)(3)(B)(i) of the Act which states that “as of December 31, 2020, was in a hospital with less than 50 beds and after such date such hospital continues to have less than 50 beds” an RHC will retain its specified provider-based status until the hospital which they are affiliated submits a cost report with more than 50 beds. An RHC will no longer retain its specified provider-based status nor be eligible for specified status in the future once the hospital which they are affiliated submits a cost report with more than 50 beds. However, in response to the PHE for COVID-19 and in accordance with section 1833(f)(3)(B)(I) of the Act, we stated that we would apply the policy that allows for increased hospital bed counts, as described in the May 8, 2020 IFC, for purposes of determining this bed count criterion for specified provider-based RHC status. That policy specified that for the duration of the PHE, we would use the number of beds from the cost reporting period prior to the start of the PHE as the official hospital bed count. We noted that the criteria specified in section 1833(f)(3)(B)(i) of the Act specified in a hospital with less than 50 beds, therefore, beginning April 1, 2021, we would apply the bed definition at § 412.105(b) exclusively.

In the CY 2022 PFS proposed rule (86 FR 39232), we discussed section 1833(f)(3)(B)(ii) of the Act, as added by section 2 of Public Law 117-7, which requires that these specified provider-based RHCs as of December 31, 2020 are “enrolled under section 1866(j) of the Act (including temporary enrollment during such emergency period for such emergency period),” or “submitted an application for enrollment under section 1866(j) of the Act (or a request for such a temporary enrollment for such emergency period) that was received not later than December 31, 2020.” We proposed that the RHC's effective date of enrollment (as established under existing regulations) would be used in our determination as to whether an RHC is enrolled under section 1866(j) of the Act as of December 31, 2020. In addition, with regard to an application for enrollment under section 1866(j) of the Act or a request for temporary enrollment, we proposed to use the date an application or request was received to determine if the RHC met the qualification. We explained that RHCs that established temporary locations for the purpose of responding to the PHE for COVID-19, in accordance with their State pandemic response plan, are permitted to enroll and receive temporary Medicare billing privileges. When the PHE for COVID-19 ends, an RHC that had been temporarily enrolled under the flexibilities described previously must submit a complete CMS-855 enrollment application in order to establish full Medicare billing privileges. Failure to do so will result in the deactivation of the RHC's temporary billing privileges. No payments can be made for services provided while the temporary billing privileges are deactivated. For RHCs enrolled through the temporary enrollment process that will need to submit a complete CMS-855 enrollment application, we proposed, regardless of when the temporarily enrolled RHC is fully enrolled, that the RHC would be entitled to the special payment rules as long as it was temporarily enrolled as of December 31, 2020 or a temporary enrollment request was received by December 31, 2020, and it meets the bed count requirement.

As we stated in the CY 2022 PFS proposed rule (86 FR 39233), section 1833(f)(3)(A) of the Act instructs Medicare to set payment limits per visit for these specified provider-based RHCs under certain payment rules. Specifically, beginning April 1, 2021, a payment limit per visit shall be set at an amount equal to the greater of : (1) The per visit payment amount applicable to such RHC for services furnished in 2020, increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of 2021 or ; (2) the statutory payment limit per visit as described in section 1833(f)(2) of the Act. For subsequent years, in accordance with section 1833(f)(3)(A)(ii) of the Act, that payment amount is increased by the percentage increase in the MEI or the statutory payment limit described in section 1833(f)(2) of the Act, whichever is greater.

As we explained in the CY 2022 PFS proposed rule (86 FR 39233), we interpreted the “per visit payment amount” to align with the interim rate process the MACs use in determining an RHC's AIR. That is, as explained in § 405.2464(a) the AIR is determined by the MAC using the most recently available cost report. Therefore, with regard to “services furnished in 2020” we interpreted this to mean the period at which the services were furnished in 2020 and that costs for those services were reported. We understand that there may be more than one cost report that reports costs for services furnished in calendar year 2020. However, since section 130 of the CAA 2021 states that the “per visit payment amount” is to be increased by the CY 2021 MEI, if a provider has a cost reporting period that differs from a calendar year time-period then the MACs should use data based on the relevant cost report period ending in 2020.

Finally, in the CY 2022 PFS proposed rule (86 FR 39233), we acknowledged that certain RHCs file consolidated cost reports. We stated that for specified provider-based RHCs, existing RHCs that are independent, and existing RHCs that are in a hospital with greater than 50 beds, we will continue to use the parent RHCs' cost reports to determine the payment limit per visit (for multi-facility RHC systems), as consolidated cost reporting reduces the reporting burden and cost report preparation time for RHCs. We noted that combining multiple individual RHC cost reports into a consolidated cost report allows RHCs to take advantage of administrative efficiencies and economies of scale that do not exist otherwise.

However, we explained that in accordance with section 1833(f)(2) of the Act, all new provider-based RHCs and independent RHCs enrolled, as of January 1, 2021, shall have a payment limit established at the national statutory payment limit for RHCs. Therefore, beginning with RHCs enrolled in Medicare as of January 1, 2021, we would no longer allow new RHCs to file consolidated cost reports.

ii. All Other RHCs

In the CY 2022 PFS proposed rule (86 FR 39233), we explained that while there are criteria that allow for specified provider-based RHCs to be eligible for certain payment rules, all other RHCs are subject to payment limits as described in section 1833(f)(2) of the Act. We stated that while there may be new RHCs that are “in a hospital with less than 50 beds” and “enrolled under section 1866(j) [of the Act]”, they will not have met these criteria by December 31, 2020. Thus, any new RHCs will also be subject to the national statutory payment limits as described in section 1833(f)(2) of the Act.

We noted that though the payment limit is described, these RHCs will still have an AIR per visit determined based on their allowable costs for each year going forward. The payment limit that is established will be the maximum amount that an RHC will be paid by Medicare per visit. At the time of reconciliation, if an RHC's costs per visit are above the AIR, they will be paid an amount that reflects these additional costs, not to exceed the payment limit. If an RHC's costs per visit are below the AIR, then CMS would collect any overpayment for that visit. In addition, we noted that to implement this provision beginning April 1, 2021, CMS instructed the MACs to increase the payment limits to $100 per visit.

In the CY 2022 PFS proposed rule (86 FR 39233), we stated that while the payment limit per-visit as set forth in section 1833(f) of the Act was implemented in administrative instructions issued to the MACs in Change Request 12185, we proposed revisions to § 405.2462 to reflect the provisions set forth in section 1833(f)(2) and (3) of the Act. We solicited comment on these revisions and on our proposals regarding the implementation of section 130 of the CAA 2021.

The following is a summary of the comments we received and our responses.

Comment: While commenters supported the increased upper payment limit for independent RHCs, some commenters expressed concern about how the payment limit per visit is established for specified provider-based RHCs. To be appropriately reflective of an individual clinic's true costs, one commenter stated that grandfathered, clinic specific, upper payment limits should be based on the final cost settled amount for cost reporting periods that end in 2020, or 2021 (for grandfathered RHCs that do not have cost reporting period that end in 2020), not an interim rate. If an interim final rate is necessary for the time period before final cost settled rates are adjudicated, the commenter suggested that CMS set interim clinic-specific upper limits only until such time that a final rate is established.

Response: We agree with the commenter and believe that what the commenter describes is aligned with the statute and how we implemented the payment limit per visit for specified provider-based RHCs through Change Request 12185, Transmittal 10780, issued on May 4, 2021. That is, in accordance with section 1833(f)(3)(A) of the Act, specified provider-based RHCs that had a per visit payment amount (or AIR) established for services furnished in 2020, had their payment limit per visit based on their AIR determined from their final settled cost report ending in 2020 increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of 2021 (CY 2021 MEI of 1.4 percent). However, if the product of these two numbers (AIR established for services furnished in 2020 * 1.014) were less than the national statutory payment limit of $100, their payment limit per visit was established at $100.

With regard to a specified provider-based RHC that does not have an AIR established for services furnished in 2020 and is receiving an interim rate until the MAC accepts and finalizes the RHC's initial cost report, we again agree with the commenter. We believe that what the commenter describes also aligns with the statute and how we implemented the payment limit per visit for these specified provider-based RHCs through Change Request 12185, Transmittal 10780, issued on May 4, 2021. That is, in accordance with section 1833(f)(3)(A) of the Act, specified provider-based RHCs that did not have an AIR established for services furnished in 2020, will have their payment limit per visit established based on their AIR determined by MACs using the RHC's final settled cost report ending in 2021. The interim rate estimate will be reconciled at cost report settlement for the cost reporting period ending in 2021 which is used to establish the RHC's payment limit per visit for services furnished in 2021.

Comment: One commenter noted that while the law and the CY 2022 PFS proposed rule is a significant improvement for independent RHCs, they are concerned that implementing the rule for provider-based RHCs will have devastating consequences for the future of the provider-based RHC program and rural health more broadly. The commenter suggested that CMS monitor impacts of the provider-based RHC upper-payment limit changes on access for rural beneficiaries and encouraged CMS to implement the statute in a manner that limits the impact on current and future provider-based RHCs. The commenter further expressed concern that there are differing interpretations on the updated statute regarding the provision that allows those entities who had submitted their CMS-855A applications by December 31, 2020 to be eligible for grandfather status by the regional MAC. Therefore, the commenter urged CMS to implement the statute in a manner allowing all provider-based RHCs who had submitted an CMS-855A application by December 31, 2020, to be eligible for grandfathered rates.

Another commenter requested that CMS confirm that provider-based RHCs whose enrollment application was received by CMS as of December 31, 2020, will not be required to complete their certification process by the end of 2021 since completing this process can take as long as 6 months under normal circumstances and even longer during the PHE. One commenter requested that CMS expand the definition of “existing RHCs” to include hospital-based clinics that can provide proof of material efforts to establish a new RHC before December 31, 2020.

Response: We appreciate the commenter notifying us that they believe that the regional MACs may have differing interpretations of the statute and the accompanying Change Request 12185, Transmittal 10780, issued on May 4, 2021 that CMS issued to implement the provisions required under section 130 of the CAA, 2021. In conjunction with the issuance of this final rule, we expect to issue guidance that clarifies what date is used to determine if a provider-based RHC is entitled to the special payment rules described in section 1833(f)(3)(B)(ii) of the Act. The date CMS receives the application or request is the date used to determine whether the RHC met the qualifications.

Regarding the comment requesting that CMS confirm that provider-based RHCs whose enrollment application was received by CMS as of December 31, 2020 will not be required to complete their certification process by the end of 2021, we confirm there is no requirement on the timing of when the certification process needs to be complete after the enrollment application is received by CMS.

With regard to the comment requesting that CMS expand the definition of “existing RHCs” to include hospital-based clinics that can provide proof of material efforts to establish a new RHC before December 31, 2020, we believe that the statute was clear that to be eligible for special payment consideration, the provider-based RHC needed to be, as of December 31, 2020, enrolled in Medicare (including temporary enrollment during the PHE for COVID-19) or have submitted an application for enrollment in Medicare (or a request for temporary enrollment during the PHE for COVID-19) that was received not later than December 31, 2020. We do not believe that hospital-based clinics that can provide proof of material efforts to establish a new RHC before December 31, 2020 meets that criteria.

With regard to the comment suggesting that CMS monitor the impacts of the provider-based RHC upper-payment limit changes on access for rural beneficiaries, we agree with the commenter and CMS plans to monitor the policy changes for potential health equity impacts, including utilization and access to care for rural beneficiaries.

Comment: One commenter requested that CMS clarify whether a hospital with an existing provider-based RHC may temporarily increase capacity to 50 or more beds in response to any future localized or national PHE without being penalized by losing its existing RHC status. The commenter also requested that CMS reduce the administrative burden on both MACs and hospitals by determining a hospital's bed count once a year, based on that year's Medicare cost report.

Response: We appreciate the commenter's suggestion regarding future PHE flexibilities as it relates to the exception for RHCs based in rural hospitals with less than 50 beds. However, it is out of scope for this proposal. For the duration of the COVID-19 PHE, we adopted an interim final policy to use the number of beds from the cost reporting period prior to the start of the COVID-19 PHE as the official hospital bed count for application of this policy. As such, RHCs with provider-based status that were exempt from the national statutory payment limit in the period prior to the effective date of the COVID-19 PHE (January 27, 2020) would continue to be exempt from the bed count requirement for the duration of the PHE for the COVID-19 pandemic, as defined at § 400.200, even if the hospital raised its bed count above 50. Once the COVID-19 PHE ends, hospitals need to lower their bed count to less than 50 beds to utilize the RHC exception. In addition, protocols are already in place to determine how the MACs establish the bed count. The MAC reviews the number of beds twice a year to determine whether the provider-based RHC meets the exception, during the Desk Review process and during the interim rate process (that is, determining the RHC's AIR).

As described in Chapter 13 of the Medicare Benefit Policy Manual, the MACs review is not an additional burden for the purpose of this rule. We note that it is impossible to predict in advance the extent, severity and impact of a future public health emergency, and not every public health emergency, even a localized one, might require us to provide the bed count flexibility the commenter seeks in order to assure patients' access to services. We recognize that many interim policies and waivers established during the COVID-19 PHE provided needed flexibilities for Medicare providers and suppliers, and we continue to study the effectiveness of these waivers in providing patient access in the event of a future PHE.

Comment: One commenter requested that CMS not retroactively recoup any potential overpayments that may accrue as a result of an audit adjustment of a hospital's initial cost report, but instead incorporate the audit adjustments into the RHCs AIR prospectively for future years.

Response: We do not believe that it would be necessary or appropriate for CMS to incorporate the audit adjustments into the RHCs AIR prospectively for future years. Applying audit adjustments prospectively seems to imply that there should be forgiveness of any errors in the cost report that determines the base rate. RHCs are required to submit a cost report that is correct and in compliance with provisions of the health care services laws and regulations, as are the MACs. If an adjustment is proposed and the provider appeals the adjustment, the appeal would be handled like any other appeal that impacts subsequent years. While appeals have taken some years to resolve, the Provider Reimbursement Review Board (PRRB) has implemented new rules to make it easier to settle some appeals and, thereby, reduce the time to resolve appeal and reduce the backlog of cases.

Comment: One commenter requested that CMS not punish any provider-based RHC who may make updates to their facilities by removing their grandfathered status. A provider-based RHC should be able to update their facility or move facilities without losing their specified provider-based status. Another commenter requested that CMS clarify that if an existing RHC needs to change its address or alter its enrollment application, it will not negate the RHC's existing status, subjecting it to the national statutory payment limit. Another commenter requested that the policies regarding grandfathering status following an RHC change of address or change of ownership be explicitly addressed in CMS guidance, as the statute is clear that these RHCs should maintain their grandfathered status and clinic specific upper payment limit in these scenarios.

Response: If an RHC undergoes a change of ownership (CHOW) and the acquiring owner accepts assignment of the Medicare agreement, all things associated with the agreement carries over to the new owner. This would include the CMS certification number (CCN), any financial obligations/repayments, the “grandfather” provision located at 42 CFR 491.5(b), which applies to location requirements, and the qualifications specified in section 1833(f)(3)(B) of the Act, as amended by Public Law 117-7, that determine if a provider-based RHC is entitled to the special payment rules described in section 1833(f)(3)(A) of the Act.

Regarding a change of address, updates to a facility (for example, cosmetic improvements), or altering of a specified provider-based enrollment record, we do not believe that this would impact their eligibility, as long as the RHC continues to meet the location requirements of section 1861(aa)(2) of the Act and part 491 of this chapter concerning RHC services and conditions for approval, and has filed an agreement with CMS that meets the requirements in § 405.2402 to provide RHC services under Medicare. We note that RHCs are intended to provide services in rural areas.

Comment: A few commenters suggested that CMS revise the proposal to no longer allow new RHCs to file consolidated reports. One commenter suggested that CMS revise this proposal to only prohibit consolidated cost reports when grandfathered and non-grandfathered RHCs are combined and allow new RHCs to file consolidated cost reports with other RHCs who are also subject to the national statutory payment limit. Another commenter requested that CMS clarify whether a hospital who acquires a new RHC that is subject to the lower national statutory payment limit may still include the RHC on the consolidated cost report as long as the RHC is reported using a separate cost reporting line number. They stated that this solution will reduce the administrative burden on both hospitals and MACs while achieving CMS' goal of segregating the cost to provide care in existing RHCs from new RHCs.

Response: We appreciate the commenters' feedback on the flexibilities for RHCs to file consolidated cost reports. We were persuaded by the commenters' suggestion to reconsider the benefits that consolidated cost reporting provides for RHCs, such as administrative efficiencies. At the time of the proposed rule, we had not contemplated allowing only new RHCs that are subject to the national statutory payment limit to file consolidated cost reports. However, we agree that there are situations where new RHCs could file consolidated cost reports with other RHCs to reduce their administrative burden. We analyzed potential outcomes based on the different statuses of RHCs. We compared provider-based RHCs that have or will have their payment limit per-visit established based on their applicable AIR to RHCs that have their payment limit per visit based on the national statutory payment limit (that is, existing provider-based RHCs that are in a hospital with greater than 50 beds, independent RHCs, and new RHCs).

We note that flexibility in requiring consolidated cost reports has been a longstanding CMS policy. We have historically allowed multi-facility RHC systems to file consolidated cost reports because often sites under common ownership have integrated functions such as bookkeeping and purchases (for example, medical supplies) in an effort to operate more efficiently. We do not want to inadvertently cause a disruption in the data reporting that is in place for RHCs or cause undue burden for new RHCs that may be a part of a multi-facility RHC system with other new RHCs.

Therefore, new RHCs (that is, enrolled under section 1866(j) of the Act on or after January 1, 2021) are permitted to file consolidated cost reports with:

• New RHCs that are provider-based,
• New RHCs that are independent,
• Existing independent RHCs, and/or
• Existing provider-based RHCs that are in a hospital that has greater than 50 beds.

For reasons stated above, we believe that RHCs that have the same national statutory payment limit should have the flexibility to file a consolidated cost report and each of the types of RHCs listed above will have a payment limit per-visit as described in section 1833(f) of the Act.

We agree with commenters with regard to the types of RHCs that should not be permitted to file consolidated cost reports. Specifically, we will not permit specified provider-based RHCs to file a consolidated cost report with a new RHC. We believe that it would not be appropriate to allow a new RHC that the statute specifies should have a payment limit per-visit set to the national statutory payment limit provided at section 1833(f)(2) of the Act to file a consolidated cost report with an RHC that otherwise has a payment limit per-visit established on their applicable AIR.

Regarding the comment requesting CMS to clarify whether a hospital that acquires a new RHC that is subject to the national statutory payment limit may still include the new RHC on the consolidated cost report, we agree that the hospital cost report provides this ability. That is, hospitals have the ability to identify a group of RHCs as consolidated and identify an individual RHC. More information on identifying provider-based RHCs on the hospital cost report (FORM CMS-2552-10) is available in PRM 15-2, Chapter 40, section 4010.

After consideration of the public comments, we are finalizing our proposal to codify § 405.2462 as proposed to reflect the provisions set forth in section 1833(f)(2) and (3) of the Act.

3. Payment for Attending Physician Services Furnished by RHCs or FQHCs to Hospice Patients

a. Background

In the Fiscal Year (FY) 2021 Hospice Payment Rate Update final rule (85 FR 47070) we explain that hospice care is a comprehensive, holistic approach to treatment that recognizes the impending death of a terminally ill individual and warrants a change in the focus from curative care to palliative care for relief of pain and for symptom management. Palliative care is at the core of hospice philosophy and care practices, and is a critical component of the Medicare hospice benefit. The goal of hospice care is to help terminally ill individuals continue life with minimal disruption to normal activities while remaining primarily in the home environment.

A hospice uses an interdisciplinary approach to deliver medical, nursing, social, psychological, emotional, and spiritual services through a collaboration of professionals and other caregivers, with the goal of making the beneficiary as physically and emotionally comfortable as possible. As referenced in our regulations at § 418.22(b)(1), to be eligible for Medicare hospice services, the patient's attending physician (if any) and the hospice medical director must certify that the individual is “terminally ill,” as defined in section 1861(dd)(3)(A) of the Act and our regulations at § 418.3; that is, the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course.

Section 1861(dd)(3)(B) of the Act defines the term “attending physician” to mean, with respect to an individual, the physician, the NP or PA who may be employed by a hospice program, whom the individual identifies as having the most significant role in the determination and delivery of medical care to the individual at the time the individual makes an election to receive hospice care.

As explained in Pub. 100-02, chapter 9, section 20.1, the attending physician is a doctor of medicine or osteopathy who is legally authorized to practice medicine or surgery by the State in which he or she performs that function, an NP, or PA, and is identified by the individual, at the time he or she elects to receive hospice care, as having the most significant role in the determination and delivery of the individual's medical care. An NP is defined as a registered nurse who performs such services as legally authorized to perform (in the State in which the services are performed) in accordance with State law (or State regulatory mechanism provided by State law) and who meets training, education, and experience requirements described in § 410.75. A PA is defined as a professional who has graduated from an accredited PA educational program who performs such services as he or she is legally authorized to perform (in the State in which the services are performed) in accordance with State law (or State regulatory mechanism provided by State law) and who meets the training, education, and experience requirements as the Secretary may prescribe. The PA qualifications for eligibility for furnishing services under the Medicare program can be found in the regulations at § 410.74(c).

RHCs and FQHCs are not authorized under the statute to serve in the role of an attending physician. However, a physician, NP, or PA who works for an RHC or FQHC may provide hospice attending physician services during a time when they are not working for the RHC or FQHC (unless prohibited by their RHC or FQHC contract or employment agreement). These services would not be considered RHC or FQHC services since they are not being provided by an RHC or FQHC practitioner during RHC or FQHC hours. The physician, NP, or PA would bill for services under Part B using their own provider number/NPI. In addition, any service provided to a hospice beneficiary by an RHC or FQHC practitioner must comply with Medicare prohibitions on commingling. Further information regarding commingling is available in Pub. 100-02, Chapter 13, section 100.

b. Section 132 of the Consolidated Appropriations Act 2021

In the CY 2022 PFS proposed rule (86 FR 39234), we discussed that section 132 of the CAA 2021 amended section 1834(o) of the Act and added a new section 1834(y) to the Act, to provide the authority for both FQHCs and RHCs, respectively, to receive payment for hospice attending physician services. Specifically, when a designated attending physician employed by or working under contract with an FQHC or RHC furnishes hospice attending physician services (as described in section 1812(d)(2)(A)(ii) of the Act) on or after January 1, 2022, the FQHC or RHC is eligible to receive payment under the FQHC PPS or RHC AIR, respectively.

Therefore, beginning January 1, 2022, a physician, NP, or PA who is employed by or working under contract with an RHC or FQHC may provide hospice attending physician services during a time when they are working for the RHC or FQHC. The RHC or FQHC would bill for these services as they would for any other qualified service to be paid the RHC AIR or the FQHC PPS rate, respectively. When the RHC/FQHC furnishes a hospice attending physician service that has a TC, the provider furnishing the TC would go to the hospice for payment as discussed in the Medicare Claims Processing Manual at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c11.pdf.

We proposed to codify the new statutory provisions as described in section 132 of the CAA 2021 in 42 CFR 405, subpart X, specifically:

• At § 405.2411, Scope of benefits, we are amending § 405.2411(b) to reflect that hospice attending physician services are covered when furnished during a patient's hospice election only when provided by an RHC/FQHC physician, NP, or PA designated by the patient at the time of hospice election as his or her attending physician and employed or under contract with the RHC or FQHC at the time the services are furnished.
• At § 405.2446, Scope of services, we are amending § 405.2446(c) to include that FQHC services are covered when they are hospice attending physician services furnished during a hospice election.

We received public comments on the proposal to codify the new statutory provisions as described in section 132 of the CAA 2021. The following is a summary of the comments we received and our responses.

Comment: Many commenters were supportive of our proposal to codify the new statutory provision as described in section 132 of the CAA 2021 in 42 CFR part 405, subpart X. One commenter noted that the new statutory provision would remove an unnecessary barrier to the efficient provision of hospice care for Medicare beneficiaries. Another commenter stated that allowing RHC/FQHC providers to continue to care for their patients who elect the hospice benefit should enhance the quality of care and coordination of care.

A few commenters requested that CMS clarify that hospice patients could change their attending physician to an RHC/FQHC provider after their initial hospice election and expressed concern that the proposed language in § 405.2411(b)(3) limits this payment to RHC/FQHC providers whom patients choose as their attending provider at the time they elect to receive hospice care. Commenters stated that under current Medicare rules, hospice patients are permitted to change their attending provider after they have made their initial election to receive hospice benefits, and that nothing in section 132 of the CAA 2021 would prohibit RHC/FQHC providers from serving as attending providers for patients who select them after making their initial hospice election. Commenters requested that the phrase “at the time of election” be removed from the regulatory text. Several commenters requested that CMS align FQHC policies with other Medicare providers and permit patients to change their attending provider after they have made their initial election to receive hospice benefits. Commenters stated that CMS has the authority to provide more flexibility for health center patients to ensure they have the provider of their choice during every step of hospice care.

Response: Regarding the concerns that CMS align policies with other Medicare providers and permit patients to change their attending physician after they have made their initial election to receive hospice benefits, we agree. The regulations at § 418.24(g) provide authority for changing the attending physician, and states “to change the designated attending physician, the individual (or representative) must file a signed statement with the hospice that states that he or she is changing his or her attending physician.” Since hospice beneficiaries can change their attending physician at any time during their hospice election and we believe that this would also permit a beneficiary to change from their attending physician designated at their election to an RHC or FQHC practitioner, if they preferred. Therefore, we will remove the phrase “at the time of election” stated in our proposed regulation text at § 405.2446(c).

After consideration of the comments received, we are finalizing our proposal to codify the new statutory provision as described in section 132 of the CAA in 42 CFR 405, subpart X with a revision to the proposed regulation text at § 405.2446(c) to provide flexibility since hospice patients are permitted to change their attending provider after they have made their initial election.

Comment: One commenter stated that “CMS did not specify in the proposed rule which revenue code(s) RHCs can use when billing for these encounters” and requested that CMS provide clarity.

Response: We would point the commenter to subregulatory guidance published in Transmittal 10907, Change Request 12357 on August 10, 2021. In exploring how to implement this policy, we found that there is a HCPCS modifier, -GV, defined as “attending physician not employed or paid under arrangement by the patient's hospice provider” currently in existence and this modifier provides the necessary information for RHCs and FQHCs to bill. Therefore, we believed that a new revenue code was not needed.

Comment: We received one comment that was out of scope for this rule. While supportive of our proposal to codify the new statutory provision as described in section 132 of the CAA 2021 in 42 CFR 405, subpart X, the commenter recommended that CMS authorize PAs employed by a hospice to prescribe medications to Medicare hospice patients, similar to hospice-employed physicians and NPs. The commenter noted that CMS should allow a beneficiary to have the option to select a PA employed by a hospice when the patient does not have a previously established attending physician.

Response: We appreciate the feedback; however, this comment is considered to be out of scope of the proposed rule, and therefore, we are not addressing in this final rule.

4. Concurrent Billing for Chronic Care Management Services (CCM) and Transitional Care Management (TCM) Services for RHCs and FQHCs

a. Background

In the CY 2013 PFS final rule (77 FR 68978 through 68994), we authorized Medicare payment for TCM services furnished by an RHC or FQHC practitioner, effective January 1, 2013, consistent with the effective date of payment for TCM services under the PFS. We adopted two CPT codes (99495 and 99496) to report physician or qualifying NPP care management services for a patient following a discharge from an inpatient hospital or SNF, an outpatient hospital stay for observation or partial hospitalization services, or partial hospitalization in a community mental health center. As a condition for receiving TCM payment, a face-to-face visit was required.

In the CY 2016 PFS final rule with comment period (80 FR 71080 through 71088), we finalized policies for payment of CCM services in RHCs and FQHCs. Payment for CCM services in RHCs and FQHCs was effective beginning on January 1, 2016, for RHCs and FQHCs that furnish a minimum of 20 minutes of qualifying CCM services during a calendar month to patients with multiple (two or more) chronic conditions that were expected to last at least 12 months or until the death of the patient, and that would place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline. Payment was made for CCM services when CPT code 99490 was billed alone or with other payable services on an RHC or FQHC claim, and the rate was based on the PFS national average non-facility payment rate. The requirement that RHC or FQHC services be furnished face-to-face was waived for CCM services furnished to an RHC or FQHC patient because CCM describes non-face-to-face services.

In the CY 2018 PFS final rule, (82 FR 53172 through 53180), we finalized a policy permitting payment for CCM, general Behavioral Health Integration (BHI), and the psychiatric collaborative care model (CoCM) services furnished by RHCs or FQHCs on or after January 1, 2018, described by HCPCS codes G0511 and G0512. HCPCS code G0511 is a General Care Management code for use by RHCs or FQHCs when at least 20 minutes of qualified CCM or general BHI services are furnished to a patient in a calendar month. HCPCS code G0512 is a psychiatric CoCM code for use by RHCs or FQHCs when at least 70 minutes of initial psychiatric CoCM services or 60 minutes of subsequent psychiatric CoCM services are furnished to a patient in a calendar month. The payment amount for HCPCS code G0511 is set at the average of the three national non-facility PFS payment rates for the CCM and general BHI codes and updated annually based on the PFS rates. The three codes are CPT code 99490 (20 minutes or more of CCM services), CPT code 99487 (60 minutes or more of complex CCM services), and CPT code 99484 (20 minutes or more of BHI services). The payment amount for HCPCS code G0512 is set at the average of the two national non-facility PFS payment rates for the CoCM codes and is updated annually based on the PFS rates. The two codes are CPT code 99492 (70 minutes or more of initial psychiatric CoCM services) and CPT code 99493 (60 minutes or more of subsequent psychiatric CoCM services).

In the CY 2019 PFS final rule (83 FR 59687), we finalized a policy that effective January 1, 2019, the payment rate for HCPCS code G0511 (General Care Management Services) is set at the average of the national non-facility PFS payment rates for CPT codes 99490, 99487, 99484, and 99491.

In the CY 2020 PFS final rule with comment period (84 FR 62692), we added HCPCS code G2064 ( 30 minutes of PCM services furnished by physicians or NPPs ) and G2065 ( 30 minutes or more of PCM services furnished by clinical staff under the direct supervision of a physician or NPP ) as a general care management service and included it in the calculation of HCPCS code G0511. Beginning January 1, 2021, the payment for HCPCS code G0511 is set at the average of the national non-facility PFS payment rates for CPT codes 99490, 99487, 99484, and 99491, and HCPCS codes G2064 and G2065, and is updated annually based on the PFS rates. Additional information on CCM requirements is available on the CMS Care Management web page and on the CMS RHC and FQHC web pages.

Currently, RHCs and FQHCs may not bill for TCM services for a beneficiary if another practitioner or facility has already billed for CCM services for the same beneficiary during the same time-period.

b. Concurrent Billing for Chronic Care Management Services and TCM Services for RHCs and FQHCs

As discussed in the CY 2022 PFS proposed rule (86 FR 39235), we finalized a policy in the CY 2020 PFS final rule (84 FR 62687) allowing suppliers paid under the PFS to concurrently bill care management codes that were previously restricted from being billed with TCM for services billed under the PFS. This included allowing concurrent billing of TCM with 14 HCPCS codes, as well as CPT codes 99490 and 99491, which describe CCM services furnished under the PFS. However, we did not extend this policy to care management services furnished in RHCs or FQHCs at that time.

Consistent with changes made in the CY 2020 PFS final rule for care management services billed under the PFS, in the CY 2022 PFS proposed rule (86 FR 39235) we proposed to allow RHCs and FQHCs to bill for TCM and other care management services furnished for the same beneficiary during the same service period, provided that all requirements for billing each code are met. This would include the services described by HCPCS codes G0511 (General Care Management for RHCs and FQHCs only) and G0512 (Psychiatric CoCM code for RHCs and FQHCs only), which both describe a service period of one calendar month. We stated that when medically necessary, these services may complement each other rather than substantially overlapping or duplicating services since TCM services are furnished once within 30 days of a patient's discharge, whereas CCM services require a more comprehensive care management plan, care coordination and ongoing clinical care, and CoCM services describe care management services specifically for behavioral health conditions. We noted that under this proposal, time and effort could not be counted more than once.

The following is a summary of the comments we received and our responses.

Comment: Commenters supported the proposal to allow RHCs and FQHCs to bill for TCM and other care management services furnished for the same beneficiary during the same service period, provided that all requirements for billing each code are met. Commenters agreed that patients receiving TCM services after discharge would benefit from the more comprehensive care management plan developed under CCM, as well as the behavioral health-specific care management included in the Psychiatric Collaborative Care Management (CoCM) when furnished simultaneously.

Response: We appreciate the commenters' support and feedback on our proposal to allow RHCs and FQHCs to concurrently bill TCM with other care management services.

After consideration of the public comments, we are finalizing our proposal to allow RHCs and FQHCs to bill for TCM and other care management services furnished for the same beneficiary during the same service period, provided all requirements for billing each code are met.

5. Conforming Technical Changes to 42 CFR 405.2466

In the November 6, 2020 Federal Register , we published the “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” interim final rule with request for comment (85 FR 71145 through 71147) (hereinafter referred to as the November 6, 2020 IFC). In the November 6, 2020 IFC, we implemented section 3713 of the CARES Act (Pub. L 116-136, March 27, 2020), which established Medicare Part B coverage and payment for a COVID-19 vaccine and its administration.

As we discussed in that rule (85 FR 71147), section 3713 of the CARES Act added the COVID-19 vaccine and administration to section 1861(s)(10)(A) of the Act in the same subparagraph as the influenza and pneumococcal vaccines and their administration. Therefore, the Medicare allowed amount and billing processes for COVID-19 vaccinations are similar to those in place for influenza and pneumococcal vaccinations across provider/supplier settings. The amendments made to section 1861(s)(10)(A) of the Act were effective on the date of enactment, that is, March 27, 2020, and apply to a COVID-19 vaccine beginning on the date that such vaccine is licensed under section 351 of the PHS Act (42 U.S.C. 262). A list of vaccines and their effective dates are updated as they are available and located on the CMS website at https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies. Although there were regulations updated to reflect the changes set forth by the CARES Act, we inadvertently did not revise the specific regulation text that applies to RHCs and FQHCs.

Therefore, in the CY 2022 PFS proposed rule (86 FR 39235) consistent with the changes described previously, we proposed to make conforming technical changes to the applicable RHC and FQHC regulations in 42 CFR part 405, subpart X, specifically:

• At § 405.2466, Annual reconciliation, we proposed to amend paragraph (b)(1)(iv) to include the COVID-19 vaccine in the list of vaccines and their administration that would be paid at 100 percent of Medicare reasonable cost.

We did not receive public comments on this provision, and therefore, we are finalizing as proposed.

B. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)—Telecommunications Technology

1. Revising the Definition of an RHC and FQHC Mental Health Visit

a. Payment Rules for RHC and FQHC Visits and for Medicare Telehealth Services

Section 1861(aa)(1) of the Act defines RHC services as physicians' services and such services and supplies that are furnished as an incident to a physician's professional service, and items and services, as well as certain vaccines and their administration. It also includes services furnished by a PA, NP, clinical psychologist, or clinical social worker and services and supplies furnished as incident to these services as would otherwise be covered if furnished by a physician or incident to a physician's service. In the case of an RHC in an area with a home health agency shortage, part-time or intermittent nursing care and related medical supplies may be furnished by a registered professional nurse or licensed practical nurse to a homebound individual under certain conditions. Section 1861(aa)(3) of the Act defines FQHC services to include the specified RHC services and preventive services, as well as required primary preventive health services.

As previously stated, RHC and FQHC visits are defined as medically-necessary, face-to-face encounters between a patient and an RHC or FQHC practitioner, during which time one or more RHC or FQHC qualifying services are furnished. Services furnished must be within the practitioner's State scope of practice, and only services that require the skill level of the RHC or FQHC practitioner are considered RHC or FQHC visits. The RHC and FQHC payment is based on the costs of all services, except in certain circumstances, such as vaccines and their administration.

RHCs are paid an all-inclusive rate (AIR) for medically-necessary primary health care services, and qualified preventive health services, furnished by an RHC practitioner. Medicare pays 80 percent of the RHC AIR, subject to a payment limit. Services furnished incident to an RHC professional service are included in the AIR and are not billed as a separate visit. The PC of a procedure is usually a covered service, but is not a stand-alone billable visit. The costs of covered services provided incident to a billable visit may be included on the RHC cost report.

FQHCs are paid 80 percent of the lesser of the FQHC's charge or the FQHC PPS payment rate. Except for grandfathered tribal FQHCs, the FQHC PPS payment rate reflects a base rate that is the same for all FQHCs, a geographic adjustment based on the location where services are furnished, and other applicable adjustments. The FQHC PPS rate was established based on the aggregate of FQHC total costs, and is updated yearly by the productivity-adjusted FQHC market basket increase.

Under the PFS, Medicare makes payment to professionals and other suppliers for physician's services, certain diagnostic tests, and some preventive services. Section 1834(m) of the Act specifies for Medicare telehealth services paid under the PFS, the payment amounts and circumstances under which Medicare makes payment for a discrete set of services, all of which must ordinarily be furnished in-person, when they are instead furnished using interactive, real-time telecommunication technology. When furnished under the telehealth rules, many of these specified Medicare telehealth services are still reported using codes that describe “face-to-face” services but are furnished using audio/video, real-time communication technology instead of in-person (82 FR 53006). Section 1834(m) of the Act also specifies conditions related to which professionals can be paid by Medicare for their professional services furnished via telehealth (referred to as distant site practitioners) and the originating site (both setting of care and geography) where a beneficiary is located while receiving telehealth services furnished remotely by the physician or practitioner through a telecommunications system. The regulation text at 42 CFR 410.78(f) describes a process for adding or deleting services to the list of Medicare telehealth services through the annual PFS rulemaking process and defines what technology may be used to furnish the service.

Under the statutory authority set out under section 1834(m)(4)(C)(ii) of the Act, RHCs and FQHCs, like hospitals, physician offices, and other sites, are authorized to serve as originating sites for eligible telehealth services. As defined in section 1834(m)(4)(C)(i) of the Act, the originating site is where the eligible telehealth individual is located at the time the service is furnished via a telecommunications system. As defined in section 1834(m)(4)(A) of the Act, the distant site is where the physician or practitioner is located at the time the service is provided via a telecommunications system. Originating sites are paid an originating site facility fee that is billed using HCPCS code Q3014 and is assigned a rate of $27.02 for CY 2021.

Section 3704 of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (Pub. L. 116-136, March 27, 2020) directs the Secretary to establish Medicare payment for telehealth services provided by RHCs and FQHCs serving as a distant site (that is, where the practitioner is located) during the public health emergency (PHE) for COVID-19. Separately, section 3703 of the CARES Act expanded CMS' emergency waiver authority to allow for a waiver of any of the statutory telehealth payment requirements under section 1834(m) of the Act for telehealth services furnished during the PHE. Specifically, section 1834(m)(8)(B) of the Act, as added by the CARES Act, requires that the Secretary develop and implement payment methods for FQHCs and RHCs that serve as a distant site during the PHE for the COVID-19 pandemic. The payment methodology outlined in the CARES Act requires that rates shall be based on rates that are similar to the national average payment rates for comparable telehealth services under the Medicare PFS. CMS established rates based on the average amount for all PFS telehealth services on the telehealth list, weighted by volume. RHCs and FQHCs bill for these Medicare telehealth services using HCPCS code G2025 and the rate for CY 2021 is $99.45. The temporary authority under section 1834(m)(8) of the Act to pay RHCs and FQHCs for furnishing distant site Medicare telehealth services expires when the PHE for the COVID-19 pandemic is terminated. While they will continue to be able to serve as an originating site for Medicare telehealth services, the payment mechanism for the professional services of RHC and FQHC practitioners will be FQHC and RHC payments under the established methodology, that is the RHC AIR or the FQHC PPS.

b. Adoption of Telehealth Technologies for Mental Health Care

While not specific to RHC and FQHC telehealth services provided during the PHE, according to MedPAC's report, Telehealth in Medicare after the Coronavirus Public Health Emergency, there were 8.4 million telehealth services paid under the PFS in April 2020, compared with 102,000 in February 2020. MedPAC also reported that during focus groups held in the summer of 2020, clinicians and beneficiaries supported continued access to telehealth visits with some combination of in-person visits. They cited benefits of telehealth, including improved access to care for those with physical impairments, increased convenience from not traveling to an office, and increased access to specialists outside of a local area. In their annual beneficiary survey, over 90 percent of respondents who had a telehealth visit reported being “somewhat” or “very satisfied” with their video or audio visit, and nearly two-thirds reported being “very satisfied.”

Widespread use of telecommunications technology to furnish services during the PHE has illustrated interest within the medical community and among Medicare beneficiaries in furnishing and receiving care through the use of technology beyond the PHE. During the PHE for COVID-19 pandemic, RHCs and FQHCs, much like other provider types, have had to change how they furnish care in order to meet the needs of their patients, and use of the temporary authority to bill Medicare for PFS telehealth services has been widely utilized by RHCs and FQHCs during the PHE. This shift in how care is furnished has prompted us to reevaluate the regulations regarding visit requirements for encounters between an RHC or FQHC patient and an RHC or FQHC practitioner to ensure that they reflect contemporary medical practice.

Recently enacted legislation modified the circumstances under which Medicare makes payment for mental health services furnished via telehealth technology under the PFS following the PHE. Division CC, section 123 of the Consolidated Appropriations Act of 2021 (CAA) (Pub. L. 116-260, December 27, 2020) removed the domestic geographic originating site restrictions and added the home of the individual as a permissible originating site for telehealth services billed under the PFS when furnished for the purposes of diagnosis, evaluation, or treatment of a mental health disorder. This change correlates with a growing acceptance of the use of technology in the provision of mental health care. Clinicians furnishing telepsychiatry services at Massachusetts General Hospital Department of Psychiatry during the PHE observed several advantages of the virtual format for furnishing psychiatric services, noting that patients with psychiatric pathologies that interfere with their ability to leave home (for example, immobilizing depression, anxiety, agoraphobia, and/or time-consuming obsessive-compulsive rituals) were able to access care more consistently since eliminating the need to travel to a psychiatry clinic can increase privacy, and therefore, decrease stigma-related barriers to treatment, potentially bringing care to many more patients in need, as well as enhanced ease of scheduling, decreased rate of no-shows, increased understanding of family and home dynamics, and protection for patients and practitioners with underlying health conditions.

These findings are consistent with our analysis of Medicare claims data that indicate that use of interactive communication technology for mental health care is likely to continue to be in broad use beyond the circumstances of the pandemic. According to our analysis of Medicare Part B claims data for services furnished via Medicare telehealth under the PFS during the PHE, use of telehealth for many professional services spiked in utilization around April 2020 and diminished over time; however, utilization was still higher than it was prior to the PHE. In contrast, Medicare claims data suggests that for mental health services both permanently and temporarily added to the Medicare Telehealth list, subsequent to April 2020, the trend is toward maintaining a steady state of usage over time. Given this information, broad acceptance in the public and medical community, and the relatively stable Medicare utilization of services during the entire COVID-19 pandemic, we believe use of interactive communication technology in furnishing mental health care is becoming an established part of medical practice, very likely to persist well after the COVID-19 pandemic, and available across the country under Medicare statute for the range of professionals furnishing mental health care and paid under the PFS.

c. Revising the Definition of an RHC and FQHC Mental Health Visit

In the 2022 PFS proposed rule (86 FR 39237), we stated that beneficiaries receiving mental health services from RHC and FQHC practitioners should have the same access to mental health care delivered via telecommunications technology as beneficiaries receiving services from practitioners paid under the PFS. We believed that disruptions in access to mental health care from trusted practitioners can be particularly problematic for Medicare beneficiaries, especially when it results in fragmented care. However, absent changes in the definition of mental health visits, RHCs and FQHCs would no longer be paid by Medicare for mental health care services delivered via telecommunications technology and would likely resume furnishing solely in-person, face-to-face mental health visits after the PHE, thereby removing the ability for beneficiaries to be able to receive these services from RHC/FQHC practitioners if furnished via interactive communication technology.

Because the definitions of RHC and FQHC services, as specified in sections 1861(aa)(1) and (3) of the Act, respectively, refer specifically to physicians' services, and services that would be physicians' services, but are instead furnished by certain other types of practitioners, we felt it would be consistent to align policies to provide access to services furnished by RHCs and FQHCs similar to PFS services, where appropriate and within statutory requirements. To ensure that beneficiaries could access services furnished by RHCs and FQHCs in a manner similar to mental health services under the PFS after the PHE, we stated that it would be appropriate to consider modifying our regulatory definition of a mental health visit to provide for remote access to RHC and FQHC services. Therefore, to avoid both the inequities in access to modes of care, and to avoid potentially problematic interruptions to care or the negative consequences of fragmented care, for CY 2022, we proposed to revise the regulatory requirement that an RHC or FQHC mental health visit must be a face-to-face (that is, in person) encounter between an RHC or FQHC patient and an RHC or FQHC practitioner to also include encounters furnished through interactive, real-time telecommunications technology, but only when furnishing services for the purposes of diagnosis, evaluation, or treatment of a mental health disorder.

Additionally, similar to the discussion of mental health services furnished under the PFS, as described in section II.D. of this final rule, we believe that mental health telehealth services furnished via audio-only communications technology would increase access to care, especially in areas with poor broadband infrastructure and among patient populations that either are not capable of, or do not consent to, the use of devices that permit a two-way, audio/video interaction. Therefore, in order to align with proposals related to use of audio-only telecommunications technology to furnish similar mental health services under the PFS, we proposed to allow RHCs and FQHCs to furnish mental health visits using audio-only interactions in cases where beneficiaries were not capable of, or did not consent to, the use of devices that would permit a two-way, audio/video interaction. We noted that the decision related to a service being furnished via telecommunications technology should be a patient-centered choice and that providers/practitioners should not force or impose services being furnished via telecommunications technology on beneficiaries who prefer to receive the services in-person. Additionally, some patients may have preferred a hybrid whereby some mental health services are in person, but other times they are done using telecommunications technology. We stated that this decision should be based on the clinical judgment of the practitioner, in consideration of patient needs and preferences.

This change would allow RHCs and FQHCs to report and be paid for mental health visits furnished via real-time, telecommunication technology in the same way they currently do when these services are furnished in-person. This expansion of payable modes of mental health services furnished by RHCs and FQHCs corresponds with the expanded availability for professionals paid for Medicare telehealth services under the PFS authorized by section 123 of the CAA and using the technology available for use for corollary services when paid under the PFS. This revision would not allow RHCs or FQHCs to report visits furnished using asynchronous communications like email exchanges. Rather, RHCs and FQHCs would continue to report and be paid for furnishing medically necessary virtual communications services in accordance with the requirements for HCPCS code G0071 (83 FR 59686). Also, this change would not allow RHCs and FQHCs to report Medicare telehealth services under section 1834(m) of the Act or be paid under the PFS since RHCs and FQHCs are not authorized to serve as distant site practitioners for Medicare telehealth services once the PHE for the COVID-19 pandemic has been terminated. In order to track utilization of mental health visits furnished using communication technology, we proposed that RHCs and FQHCs would append the 95 modifier (Synchronous Telemedicine Service Rendered via Real-Time Interactive Audio and Video Telecommunications System) in instances where the service was furnished using audio-video communication technology or a new service level modifier in cases where the service was furnished audio-only.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: We received many public comments that were supportive of the proposal to revise the current regulatory language for RHC or FQHC mental health visits to include visits furnished using interactive, real-time telecommunications technology. Some commenters pointed out that rural residents often face significant barriers to accessing mental health services, which result in significant disparities in care and that patients in rural areas often must travel long distances to receive specialized care such as mental health services. Commenters stated that being able to access these services through local RHCs and FQHCs via telecommunications technology would help to increase the frequency in which rural residents can access mental health services. Some commenters noted that patients without reliable transportation, internet, or the necessary technology will still face difficulties accessing services after the PHE ends.

One commenter stated that allowing RHCs to be reimbursed at the AIR reduces administrative burden and ensures that providing equitable mental health care remains a component of RHC provided care. A few commenters requested that this flexibility be extended to medical visits furnished at RHCs and FQHCs, not just mental health visits. Additionally, MedPAC commented that FQHC and RHC-provided telehealth services should be paid at rates comparable to those under the PFS.

Response: After consideration of the public comments, we are finalizing our proposal to revise the current regulatory language for RHC or FQHC mental health visits to include visits furnished using interactive, real-time telecommunications technology and for RHCs and FQHCs to report and be paid for mental health visits furnished via real-time, telecommunication technology in the same way they currently do when these services are furnished in-person. Since the flexibilities authorized by the CARES Act will expire at the end of the PHE, we do not believe we currently have the authority to pay RHCs and FQHCs for services that would be paid under the AIR or PPS at the PFS rates outside of the PHE. We note that payment for virtual communications and care management services furnished at RHCs and FQHCs are paid based on PFS rates; however, these services describe non-face-to-face encounters between a patient and an RHC or FQHC practitioner and are paid outside of the AIR or PPS. Therefore, we are finalizing for CY 2022 that RHCs and FQHCs will be paid for mental health visits furnished via telecommunications technology at the same rate they are paid for in-person mental health visits (that is, the AIR or FQHC PPS).

In response to comments that this flexibility be extended to medical visits furnished at RHCs and FQHCs, not just mental health visits, we note that the use of telecommunications technology to furnish medical visits at RHCs and FQHCs was not within the scope of this proposal.

We received public comments on allowing RHCs and FQHCs to furnish mental health visits using audio-only interactions in cases where beneficiaries are not capable of, or do not consent to, the use of devices that permit a two-way, audio/video interaction. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the inclusion of audio-only communications technology in this proposal and stated that this flexibility especially benefits rural patients with poor broadband structure. Several commenters stated that Medicare beneficiaries receiving services through these facilities should have the same access to mental and behavioral health services as those being treated by providers practicing independently.

Response: After consideration of public comments, we are finalizing our proposal to allow RHCs and FQHCs to furnish mental health visits using audio-only interactions in cases where beneficiaries are not capable of, or do not consent to, the use of devices that permit a two-way, audio/video interaction. We are also finalizing our proposal for RHCs and FQHCs to append the 95 modifier (Synchronous Telemedicine Service Rendered via Real-Time Interactive Audio and Video Telecommunications System) in instances where the service was furnished using audio-video communication technology and to append a new service level modifier in cases where the service was furnished audio-only. This will allow us to track utilization of mental health visits furnished using telecommunication technology at RHCs and FQHCs in order inform future rulemaking.

Additionally, we noted in the proposed rule that section 123 of the CAA also requires that there be an in-person service within 6 months prior to the furnishing of the telehealth service and at intervals thereafter as specified by the Secretary for mental health services furnished via Medicare telehealth under the PFS. We solicited comment on whether we should consider a similar requirement for mental health services furnished by RHCs and FQHCs via telecommunications technology, or whether this requirement may be especially burdensome for beneficiaries receiving treatment at RHCs and FQHCs, particularly in rural areas. In establishing a similar requirement for RHC and FQHC mental health services, we would consider the changes described for Medicare telehealth services described in section II.D. of this final rule that there be an in-person service within 6 months prior to the furnishing of the telecommunications service and that an in-person service (without the use of telecommunications technology) be provided at least every 6 months while the beneficiary is receiving services furnished via telecommunications technology for diagnosis, evaluation, or treatment of mental health disorders, which would be documented in the patient's medical record, or whether we should defer to the clinical judgment of the practitioner on how often an in-person visit would be appropriate.

We received public comments on whether we should consider a similar requirement for mental health services furnished by RHCs and FQHCs via telecommunications technology, or whether this requirement may be especially burdensome for beneficiaries receiving treatment at RHCs and FQHCs, particularly in rural areas. The following is a summary of the comments we received and our responses.

Comment: Several commenters were opposed to imposing an in-person service requirement for telehealth mental health visits. A few commenters described that existing evidence does not support the need for such a requirement, which could negatively impact access to care for beneficiaries and recommended CMS defer to the clinical judgment of the practitioner on how often an in-person visit would be appropriate and additionally noting that existing studies suggest low-income patients and those living in rural communities face more transportation barriers compared to other patients, and therefore, it is likely that in-person requirements would more profoundly impede access to care for the populations that RHCs and FQHCs serve. Other commenters encouraged CMS to provide maximum flexibility for FQHCs implementing in-person service requirements for patients receiving mental health services furnished via telecommunications technology. One commenter recommended that CMS provide a robust set of exceptions for patients unable or unwilling to fulfill the once every six months in-person visit requirement.

However, a few commenters supported requiring an in-person visit every 6 months, asserting that these requirements ensure some level of physical proximity between the patient and provider which is valuable in the event of in-person mental health care needs. Some commenters stated that this requirement would protect the integrity of the benefit and aligns with FFS provider in-person requirements and that ensuring that patients in rural areas receive mental health care via telecommunications technology in a location reasonably situated to where they receive in-person care would provide the most comprehensive option in meeting patient needs. Several commenters stated that if CMS had to establish an interval for subsequent in-person visits, it should be at least 12 months, noting that even that would present a hardship for rural patients and patients with disabilities.

Response: We appreciate all the comments received on this topic. We are persuaded by the comments related to ensuring access in the event of in-person needs and alignment with requirements under Medicare FFS. Therefore, we are finalizing that there must be an in-person mental health service furnished within 6 months prior to the furnishing of the telecommunications service and that in general, there must be an in-person mental health service (without the use of telecommunications technology) must be provided at least every 12 months while the beneficiary is receiving services furnished via telecommunications technology for diagnosis, evaluation, or treatment of mental health disorders. Consistent with policies finalized for mental health services furnished via telehealth under the PFS, the in-person service requirements apply only to telehealth services furnished to a patient receiving the service at home. However, in response to commenters' concerns regarding the requirement that an in-person, non-telehealth visit be furnished every 12 months, we agree with commenters that there may be specific circumstances when an in-person visit within 12 months of each mental health visit furnished via telecommunications technology may be inadvisable or impracticable for an individual beneficiary. Therefore, we are finalizing a policy that will allow for limited exceptions to the requirement that there be an in-person, non-telehealth service every 12 months based on beneficiary circumstances, in which case the basis for that decision should be documented in the patient's medical record. Specifically, if the patient and practitioner consider the risks and burdens of an in-person service and agree that, on balance, these outweigh the benefits, and the practitioner documents the basis for that decision in the patient's medical record, then the in-person visit requirement is not applicable for that 12-month period. Situations in which the risks and burdens associated with an in-person service may outweigh the benefit could include, but are not limited to, instances when an in-person service is likely to cause disruption in service delivery or has the potential to worsen the patient's condition(s). The risks and burdens associated with an in-person service could also outweigh the benefit if a patient receiving services is in partial or full remission and only requires a maintenance level of care. Other justifications include the clinician's professional judgment that the patient is clinically stable and/or that an in-person visit has the risk of worsening the beneficiary's condition, creating undue hardship on self or family, or if it is determined that the patient is at risk for disengagement with care that has been effective in managing the illness. We note that the 12-month in-person visit requirement is not intended to dictate how often a provider and patient should meet in person; rather, patients and providers should determine the frequency of in-person meetings as driven by clinical needs. This is consistent with the policies for Medicare telehealth services furnished under PFS, as required by section 123 of the CAA and as finalized in Section II.D of this final rule. Given that this requirement may pose more of a challenge for beneficiaries in rural areas, we will monitor the impact of this requirement to determine whether it presents a disruption in access to mental health care in the RHC/FQHC setting.

d. Regulatory Changes

We proposed to revise the regulation at § 405.2463, to revise paragraph (a)(1)(i) to state that a mental health visit is a face-to-face (that is, in person) encounter (or, for mental health visits only, an encounter that meets the requirements under paragraph (b)(3)) between an RHC patient and an RHC practitioner. We proposed to revise paragraph (b)(3) to define a mental health visit as a face-to-face encounter or an encounter where services are furnished using interactive, real-time, audio and video telecommunications technology or audio-only interactions in cases where beneficiaries are not capable of, or do not consent to, the use of devices that permit a two-way, audio/video interaction for the purposes of diagnosis, evaluation or treatment of a mental health disorder. We also proposed to revise § 405.2469, FQHC supplemental payments, to revise paragraph (d) by adding that a supplemental payment required under this section is made to the FQHC when a covered face-to-face (that is, in-person) encounter or an encounter where services are furnished using interactive, real-time, telecommunications technology or audio-only interactions in cases where beneficiaries do not wish to use or do not have access to devices that permit a two-way, audio/video interaction for the purposes of diagnosis, evaluation or treatment of a mental health disorder occurs between a MA enrollee and a practitioner as set forth in § 405.2463.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: We received many public comments that were supportive of the proposal to revise the current regulatory language for RHC or FQHC mental health visits to include visits furnished using interactive, real-time telecommunications technology.

Response: After consideration of public comments, we are finalizing our proposal to revise the regulation at §§ 405.2463 and 405.2469, as described above. Additionally, at § 405.2463, we are revising paragraph (b)(3) to state that there must be an in-person mental health service furnished within 6 months prior to the furnishing of the telecommunications service and that an in-person mental health service (without the use of telecommunications technology) must be provided at least every 12 months while the beneficiary is receiving services furnished via telecommunications technology for diagnosis, evaluation, or treatment of mental health disorders. We are also revising §§ 405.2463(b)(3) and 405.2469(d) to allow an exception for a particular 12-month period when the physician or practitioner and patient agree that the risks and burdens outweigh the benefits associated with furnishing the in-person item or service, and the practitioner documents the reasons for this decision in the patient's medical record. At § 405.2469, FQHC supplemental payments, we are revising paragraph (d) to describe the same in-person visit requirement referenced above.

C. Federally Qualified Health Centers (FQHCs) Payment for Tribal FQHCs—Comment Solicitation

1. Health Services to American Indians and Alaska Natives (AI/AN)

There is a special government-to-government relationship between the Federal Government and Federally-recognized tribes based on U.S. treaties, laws, Supreme Court decisions, Executive Orders and the U.S. Constitution. This government-to-government relationship forms the basis for Federal health services to American Indians/Alaska Natives (AI/AN) in the U.S. In 1976, the Indian Health Care Improvement Act (IHCIA) (Pub. L. 94-437, September 30, 1976) amended the statute to permit payment by Medicare and Medicaid for services provided to AI/ANs in Indian Health Service (IHS) and tribal health care facilities that meet the applicable requirements. Under this authority, Medicare services to AI/ANs may be furnished by IHS operated facilities and programs and tribally-operated facilities and programs under Title I or Title V of the Indian Self Determination Education Assistance Act, as amended (ISDEAA) (Pub. L 93-638, January 4, 1975). According to the IHS Profile, the IHS healthcare delivery system currently consists of 46 hospitals, with 24 of those hospitals operated by the IHS and 22 of them operated by tribes under the ISDEAA, as well as 492 health centers, 75 operated by IHS and 417 operated by tribes under the ISDEAA.

Payment rates for outpatient medical care (also referred to as outpatient hospital services) furnished by the IHS and tribal facilities is set annually by the IHS under the authority of sections 321(a) and 322(b) of the Public Health Service Act (the PHS Act) (42 U.S.C. 248 and 249(b)) (Pub. L. 83-568 (42 U.S.C. 2001(a)), and the IHCIA, based on the previous year cost reports from Federal and tribal hospitals. The IHCIA provided the authority for CMS (then HCFA) to pay IHS and tribal facilities for its outpatient hospital services to Medicare eligible patients, using an outpatient per visit rate (also referred to as the Medicare all-inclusive payment rate (AIR).

2. Federally Qualified Health Centers (FQHCs) Prospective Payment System (PPS)

FQHCs were established in 1990 by section 4161 of the Omnibus Budget Reconciliation Act of 1990 (OBRA 90) (Pub. L. 101-508, November 5, 1990), and were effective beginning on October 1, 1991. They are facilities that furnish services that are typically furnished in an outpatient clinic setting. The statutory requirements that FQHCs must meet to furnish services to Medicare beneficiaries are in section 1861(aa)(4) of the Act. All FQHCs are subject to Medicare regulations at 42 CFR part 405, subpart X, and 42 CFR part 491. Based on these provisions, the following three types of organizations that are eligible to enroll in Medicare as FQHCs:

• Health Center Program grantees: Organizations receiving grants under section 330 of the PHS Act (42 U.S.C. 254b).
• Health Center Program “lookalikes”: Organizations that have been identified by the Health Resources and Services Administration as meeting the requirements to receive a grant under section 330 of the PHS Act, but which do not receive section 330 grant funding.
• Outpatient health programs or facilities operated by a Tribe or tribal organization under the ISDEAA, or by an urban Indian organization receiving funds under Title V of the IHCIA.

FQHCs are also entities that were treated by the Secretary, for purposes of Medicare Part B, as a comprehensive Federally funded health center as of January 1, 1990 (see section 1861(aa)(4)(C) of the Act). Section 1834 of the Act was amended in 2010 by section 10501(i)(3)(A) of the Affordable Care Act by adding a new subsection (o), “Development and Implementation of Prospective Payment System” for FQHCs. Section 1834(o)(1)(A) of the Act requires that the system include a process for appropriately describing the services furnished by FQHCs, and establish payment rates based on such descriptions of services, taking into account the type, intensity, and duration of services furnished by FQHCs. It also stated that the new system may include adjustments (such as geographic adjustments) as determined appropriate by the Secretary. Section 1833(a)(1)(Z) of the Act, as added by the Affordable Care Act, requires that Medicare payment for FQHC services under section 1834(o) of the Act be 80 percent of the lesser of the actual charge or the PPS amount determined under section 1834(o) of the Act.

In accordance with the requirements in the statute, as amended by the Affordable Care Act, beginning on October 1, 2014, payment to FQHCs is based on the lesser of the national encounter-based FQHC PPS rate, or the FQHC's total charges, for primary health services and qualified preventive health services furnished to Medicare beneficiaries. The FQHC PPS rate is adjusted by the FQHC geographic adjustment factor (GAF), which is based on the Geographic Practice Cost Index used under the PFS. The FQHC PPS rate is also adjusted when the FQHC furnishes services to a patient that is new to the FQHC, and when the FQHC furnishes an IPPE or an AWV. Payment to the FQHC for a Medicare visit is the lesser of the FQHC's charges (as established by the G-code), or the PPS rate. The CY 2021 FQHC PPS rate is $176.45.

3. Grandfathered Tribal FQHCs

In the November 16, 2015 Federal Register , we published a final rule, entitled “Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016 (referred to as CY 2016 PFS final rule). In that rule, we discuss the payment methodology and requirements finalized for grandfathered tribal FQHCs (80 FR 71089 through 71096). We stated that tribal facilities that met the conditions of § 413.65(m) on or before April 7, 2000, and had a change in their status on or after April 7, 2000, from IHS to tribal operation, or vice versa, or the realignment of a facility from one IHS or tribal hospital to another IHS or tribal hospital, such that the organization no longer met the Medicare Conditions of Participation (CoPs) for Medicare-participating hospitals at § 482.12, the “governing body” of the facility could nevertheless seek to become certified as a grandfathered tribal FQHC.

In CY 2016 PFS final rule, we explained that a different structure was needed to maintain access to care for AI/AN populations served by the hospitals and clinics impacted by the provider-based rules at § 413.65, while also ensuring that the tribal clinics are in compliance with our health and safety rules. We recognized that a tribal clinic billing under an IHS hospital's CMS Certification Number (CCN), without any additional administrative or clinical relationship with the IHS hospital, could put that hospital at risk for noncompliance with their CoPs because the clinic had a separate governing body although still provider-based. We explained that the FQHC program provided an alternative structure that met the needs of these tribal clinics and the populations they served, while also ensuring the IHS hospitals were not at risk of being cited for non-compliance with the requirements with their CoPs (80 FR 71090).

As stated in § 405.2462(d)(1) a “grandfathered tribal FQHC” is a FQHC that is operated by a tribe or tribal organization under the ISDEAA; was billing as if it were provider-based to an IHS hospital on or before April 7, 2000 and is not currently operating as a provider-based department of an IHS hospital. We refer to these tribal FQHCs as “grandfathered tribal FQHCs” to distinguish them from freestanding tribal FQHCs that are currently being paid the lesser of their charges or the adjusted national FQHC PPS rate, and from provider-based tribal clinics that may have begun operations subsequent to April 7, 2000. Currently, there are 7 “grandfathered tribal FQHCs”.

Under the authority in section 1834(o) of the Act to include adjustments determined appropriate by the Secretary, we revised §§ 405.2462 and 405.2464 to pay these grandfathered tribal FQHCs on the Medicare outpatient per visit rate as set annually by the IHS, that is, the AIR and not the FQHC PPS payment rates (80 FR 71089). Payment rates for outpatient medical care (also referred to as outpatient hospital services) furnished by the IHS and tribal facilities is set annually by the IHS under the authority of sections 321(a) and 322(b) of the Public Health Service Act (the PHS Act) (42 U.S.C. 248 and 249(b)) (Pub. L. 83-568 (42 U.S.C. 2001(a)), and the IHCIA, based on the previous year cost reports from Federal and tribal hospitals. The outpatient per visit rate is only applicable for those IHS or tribal facilities that meet the definition of a provider-based department as described at § 413.65(m), or a “grandfathered” tribal FQHC as described at § 405.2462(d)(1). There is an outpatient per visit AIR for Medicare visits in Alaska and a separate outpatient per visit AIR for Medicare visits in the lower 48 States. For CY 2021, the outpatient per visit rate for Medicare visits in Alaska is $662 and $414 in the lower 48 States (85 FR 86940). There are no grandfathered tribal FQHCs in Alaska because the tribes operate the hospitals, not IHS. We note that IHS does not operate any hospitals or facilities in Hawaii or the territories, and thus, no rates are set in those localities.

As we discussed in CY 2016 PFS final rule, the payment rate is not adjusted by the FQHC GAF; for new patients, annual wellness visits, or initial preventive physical examinations; or annually by the productivity-adjusted FQHC PPS market basket increase, as further adjustments would be unnecessary and/or duplicative of adjustments already made by IHS in deriving the rate. Comparatively, the FQHC PPS rate established by CMS is $176.45. The reimbursement is the lesser of the charges or the IHS AIR rate. We stated as part of the CY 2016 PFS final rule that we would monitor future costs and claims data of these tribal clinics and reconsider options as appropriate.

4. Paying all IHS- and Tribally-Operated Outpatient Clinics the AIR

As we discussed in the CY 2022 PFS proposed rule (86 FR 39239), CMS established a Tribal Technical Advisory Group (TTAG) in 2004 to provide advice and input to CMS on policy and program issues impacting AI/AN populations served by CMS programs. Although not a substitute for formal consultation with Tribal leaders, the TTAG enhances the government-to-government relationship and improves increased understanding between CMS and Tribes. The TTAG has subject specific subcommittees that meet on a regular basis in order to be more effective and perform in-depth analysis of Medicare, Medicaid, CHIP, and the Health Insurance Marketplace policies that have Tribal implications. The TTAG is comprised of 17 representatives: An elected Tribal leader, or an appointed representative from each of the 12 geographic areas of the IHS delivery system and a representative from each of the national Indian organizations headquartered in Washington, DC—the National Indian Health Board, the National Congress of American Indians, and the Tribal Self-Governance Advisory Group. Section 5006(e)(1) of the American Recovery and Reinvestment Act of 2009, which became effective July 1, 2009, mandates that TTAG shall be maintained within CMS and added two new representative's positions: A representative and alternate from a national urban Indian health organization (National Council of Urban Indian Health); and a representative and alternate from the IHS.

In the CY 2022 PFS proposed rule (86 FR 39239), we stated that the TTAG has requested that CMS amend its Medicare regulations to make all IHS and tribally-operated outpatient facilities eligible for payment at the IHS Medicare outpatient per visit rate/AIR. The TTAG explained that outpatient clinics, which are otherwise similar to grandfathered tribal FQHCs, are paid at different rates depending upon whether they meet the requirements as a “provider based facility,” a “grandfathered tribal FQHC,” a non-grandfathered tribal FQHC, or none of the above. They believe that the rates vary based on the Medicare regulatory definition, rather than the actual costs of the outpatient clinic. There are varying payment differentials among Medicare enrolled providers and suppliers under the authorities of the SSA. For example, ASCs are paid differently than HOPDs; which are paid differently whether they are under the under the outpatient prospective payments system or a located in a critical access hospital.

The TTAG also questioned the need for grandfathered tribal FQHCs to file cost reports. Specifically, the TTAG stated that the FQHC cost reports have no relationship to the IHS Medicare outpatient per visit rate/AIR paid to grandfathered tribal FQHCs, as they use hospital cost reports in setting the rate. Therefore, they stated, the FQHCs should only need to file a cost report to the extent necessary to support payment for non-FQHC services that are reimbursed outside the Medicare outpatient per visit rate/AIR. We noted that under section 1815(a) of the Act, providers participating in the Medicare program are required to submit financial and statistical information to achieve settlement of costs relating to health care services rendered to Medicare beneficiaries. Under the FQHC PPS, Medicare payment for FQHC services is the lesser of the FQHC PPS rate or the charges on the claim. In the establishment of the FQHC PPS, the statute does not exempt FQHCs from submitting cost reports. In addition, Medicare payments for the reasonable costs of the influenza and pneumococcal vaccines and their administration, allowable graduate medical education costs, and bad debts are determined and paid through the cost report. The FQHC market basket also uses information from the FQHC cost report to determine the cost share weights, which reflect the relative costs of input expenses that FQHCs face in order to provide FQHC services. Having a full picture of the costs of providing care by grandfathered FQHCs is important so that CMS can be sure that payments are adequate.

5. Solicitation for Input and Comment

In the CY 2022 PFS proposed rule (86 FR 39240), we expressed appreciation for the TTAG's concerns with ensuring that CMS make appropriate payments among the clinics for similar services and the impact this has on tribal Medicare beneficiaries and ensuring that access to healthcare is available and equitable and we take these concerns seriously, but noted that we had insufficient information necessary to evaluate the costs and benefits of potential changes to these policies. Therefore, we solicited comments on the TTAG's request for CMS to amend its Medicare regulations to make all IHS- and tribally-operated outpatient facilities/clinics eligible for payment at the Medicare outpatient per visit rate/AIR, regardless of whether they were owned, operated, or leased by IHS.

We solicited information on the kinds of and number of facilities or clinics that could potentially enroll in Medicare as an FQHC, or are already an FQHC paid under the FQHC PPS, and if these clinics are freestanding or provider-based to expand on information provided by the IHS Profile.

We solicited information regarding the relative operating costs of IHS- and tribally-operated outpatient clinics compared to non-tribal FQHCs, stakeholder feedback and supporting evidence to address whether or why payment set at the IHS AIR would be more appropriate than payment rate under the FQHC PPS.

Further, we solicited comment on how the IHS AIR, which is based upon a limited number of hospital cost reports, relates to costs in such clinics and the kinds of services that the clinics furnish.

Finally, we solicited comment on the concerns that the AI/AN community may have on issues regarding access or inequity care in situations where a payment differential exists.

We noted that although we have information on grandfathered tribal FQHCs and the outpatient hospital cost reports, we did not have any information specific to the composition of IHS and tribal facilities. For example, if the facility is not enrolled in Medicare as an FQHC or is not provider based to a hospital, is it a physician practice? It would be helpful to know how the facilities are organized and related. Are there other options for enrolling as different types of providers or suppliers?

As increasing the rate would increase payments from the Medicare Trust Fund, we also requested comment on the magnitude of that payment change and whether any program integrity concerns would be present with the increased payment.

We also requested comments on FQHC services that are paid through the cost report, like influenza, pneumococcal, and COVID-19 vaccinations and GME and how that impacts the request to not file cost reports.

As stated previously, we believed that having a full picture of the costs of providing care was important to ensure adequate payments.

We also solicited input on other potential uses of the adjustment authority under section 1834(o)(1)(A) of the Act which provides that the FQHC PPS may include adjustments determined appropriate by the Secretary. For example, should we consider TTAG's request on the expansion of the payment policy finalized in the CY 2016 PFS final rule for grandfathered tribal FQHCs to all Tribally-operated outpatient clinics. Alternatively, should we develop a payment adjustment applicable to IHS- and tribally-operated outpatient clinics based on the cost differential reported in their cost reports when compared to non-IHS outpatient clinics, or non-provider-based clinics, if such differentials exist and would be interested in specific comments about appropriate adjustments to the FQHC PPS rate for clinics that are enrolled as FQHCs.

Finally, we requested information on other potential ways to determine whether the costs associated with furnishing services to AI/AN are uniquely greater than other clinics within the confines of the FQHC PPS outlined in section 1834(o)(1) of the Act.

We received several comments on these questions. Below, we provide a summary of the comments we received and our response.

Comment: Commenters stated CMS should exercise its authority to authorize all IHS clinics to bill at the same IHS AIR as a matter of health equity. One commenter noted it is of particular importance in fulfilling the Indian Self-Determination education Assistance Act (ISDEAA) and preventing Tribes from being penalized for having assumed control over their own clinics. Several commenters stated that there is an equity issue when a facility's Medicare designation determines the rate they will be reimbursed as IHS clinics are heavily reliant on third-party reimbursements to fund operations. Commenters also noted that the request for information regarding the make-up, structure, and costs of IHS/Tribal clinics needed to evaluate the costs and benefits of potential changes to Medicare policies was irrelevant to the issue. Commenters did not agree that billing as an FQHC is the only or best solution, especially since so few clinics elect to enroll as an FQHC due to the burden of submitting cost reports, and suggested changes to the tribal provider-based rules at § 413.65(m) and an umbrella rule providing that all outpatient Indian health programs qualify for reimbursement at the AIR regardless of how they are enrolled in Medicare. Commenters also proposed changes that would amend 42 CFR part 405. In addition, one commenter stated that allowing all Indian health clinics to bill at the IHS AIR would have zero impact on program integrity, especially since the IHS AIR is already available to some Tribal clinics.

Response: Although we did not receive specific information on costs or specific types of clinics, we will consider the commenters' requests for CMS to amend its Medicare regulations to make all IHS- and tribally-operated outpatient facilities/clinics eligible for payment at the Medicare outpatient per visit rate/AIR, regardless of whether they were owned, operated, or leased by IHS. We understand the commenters' concerns and note that commenters do not agree that wholesale enrollment as Medicare FQHCs is the preferred outcome. We would like to continue these discussions to evaluate the impact of the commenters' proposed changes to the current Medicare payment policies and will consider these recommendations for future rulemaking.

D. Requiring Certain Manufacturers To Report Drug Pricing Information for Part B and Determination of ASP for Certain Self-Administered Drug Products

1. Requiring Certain Manufacturers To Report Drug Pricing Information for Part B (§§ 414.802 and 414.806)

a. Overview and Summary

Section 1927(b)(3)(A)(iii)(I) of the Act requires manufacturers with a Medicaid drug rebate agreement to report Average Sales Price (ASP) data as specified in section 1847A of the Act. Some manufacturers without Medicaid drug rebate agreements voluntarily submit ASP data for their single source drugs or biologicals that are payable under Part B; however, other manufacturers without Medicaid drug rebate agreements do not voluntarily submit such data. Without manufacturer reported ASP data, CMS cannot calculate the ASP payment limit, and consequently, payment is typically based on Wholesale Acquisition Cost (WAC).

Consistent with section 1847A(c)(3) of the Act and our regulations at § 414.804(a)(2), the ASP is net of price concessions. However, consistent with the definition of WAC at section 1847A(c)(6)(B) of the Act, the WAC is not net of price concessions, and thus is nearly always, and sometimes significantly, higher than ASP. Drugs with payment allowances based on WAC may have greater “spreads” between acquisition costs and payment than drugs for which there is an ASP-based payment allowance, which, in turn, may: (1) Incent the use of the drug based on its spread rather than on purely clinical considerations; (2) result in increased payments under Medicare Part B; and (3) increase beneficiary cost sharing.

Section 401 of Division CC, Title IV of the CAA, 2021 (for the purposes of this section of this proposed rule, hereinafter is referred to as “section 401”) amended section 1847A of the Act to add new section 1847A(f)(2) of the Act, which requires manufacturers without a Medicaid drug rebate agreement to report ASP information to CMS for calendar quarters beginning on January 1, 2022, for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act, including items, services, supplies, and products that are payable under Part B as a drug or biological. Section 401(b)(2) also amended section 1847A(c)(6)(A) of the Act to permit the Secretary to exclude repackagers from the definition of “manufacturer” for purposes of the ASP reporting requirement in section 1847A(f)(2) of the Act, if the Secretary determines appropriate.

Section 401(b)(1) also adds provisions to section 1847A of the Act addressing confidentiality, audit and verification provisions; civil money penalties for misrepresentation, late reporting, and reporting of false information; and increasing oversight and enforcement provisions. These provisions largely track the statutory provisions in section 1927(b) of the Act that apply to the reporting of ASP by manufacturers with Medicaid drug rebate agreements. Additionally, section 401(d) requires HHS Office of the Inspector General (OIG) to submit a report on the accuracy of ASP submissions to Congress by January 1, 2023.

Finally, section 401 amended section 1927(b) of the Act to clarify that for Part B ASP reporting, drugs would include items, services, supplies, and products that are payable under Medicare Part B as a drug or biological.

In the CY 2022 PFS proposed rule, we proposed regulatory changes to implement the new reporting requirements at 42 CFR, part 414, subpart J.

b. Reporting Requirements for Manufacturers Without a Medicaid Drug Rebate Agreement

Starting with calendar quarters beginning on January 1, 2022, manufacturers will be required to report ASP for drugs and biologicals payable under Medicare Part B consistent with the statutory requirements of section 1847A(f) of the Act, regardless of whether they have Medicaid drug rebate agreements. Our existing regulations at 42 CFR part 414, subpart J implement the ASP reporting requirements referenced in section 1847A(f)(1) of the Act, that is, the requirements of section 1927(b)(3) of the Act. Thus, the existing regulations at subpart J already set forth requirements for manufacturers with Medicaid drug rebate agreements to report their ASP information (and if required to make payment, WAC) each quarter.

Many manufacturers without Medicaid drug rebate agreements voluntarily submit ASP data consistent with these requirements. Whether obligated to report or voluntarily reporting, manufacturers are accustomed to the existing regulatory requirements at subpart J, and indeed, the methodology for reporting ASP reflected in these regulations does not currently distinguish between manufacturers with Medicaid drug rebate agreements and those without these agreements.

Because new section 1847A(f)(2) of the Act, as noted previously, largely parallels section 1927(b)(3) of the Act, and thus both manufacturers with Medicaid drug rebate agreements, as well as those without such agreements, will be subject to requirements already reflected in the existing regulations at subpart J, we did not believe it was necessary to propose substantial changes to the regulation text. For these reasons, our proposal to amend the regulations to reflect the new requirements of section 1847A(f)(2) of the Act sought to preserve the status quo to the extent possible.

c. Definitions

As noted previously, the new section 1847A(f)(2) of the Act, as added by section 401(a), requires manufacturers without a Medicaid drug rebate agreement to report ASP information to CMS for calendar quarters beginning on January 1, 2022 for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act, including items, services, supplies, and products that are payable under Part B as a drug or biological. Section 401 also made a conforming amendment to the ASP reporting requirements applicable to manufacturers with Medicaid drug rebate agreements at section 1927(b)(3)(A)(iii) of the Act to specify that those reporting requirements also apply to items, services, supplies, and products that are payable under Part B as a drug or biological.

To implement this change, we proposed to amend the definition of the term “drug” at § 414.802 to mean a drug or biological, and includes an item, service, supply, or product that is payable under Medicare Part B as a drug or biological.

We received public comments on amending the definition of the term “drug” at § 414.802 to mean a drug or biological, and includes an item, service, supply, or product that is payable under Medicare Part B as a drug or biological. The following is a summary of the comments we received and our responses.

Comment: Some commenters suggested that CMS provide more clarity or be more specific in the definition of the term “drug” to further describe which products, or groups of products, are subject to requirement in section 401.

Response: We disagree that further clarification is needed for this definition. The requirements in section 401 apply to drugs or biologicals described in section 1842(o)(1)(C), (E), or (G) of the Act or section 1881(b)(14)(B) of the Act, including items, services, supplies, or products that are payable under [Medicare Part B] as a drug or biological. That is, if a particular item, service, supply, or product of any kind, is payable as a drug or biological under Part B, then it is subject to the ASP reporting requirements.

Comment: One commenter requested that CMS confirm that radiopharmaceuticals that do not currently report ASPs will be excluded from this proposal. The commenter stated that ASPs are not currently reported for all radiopharmaceuticals, and requiring ASP reporting for all radiopharmaceuticals will require CMS to clarify how ASPs should be calculated under circumstances that are unique to radiopharmaceuticals. For these reasons, the commenter suggested that any proposal that requires ASP reporting for all radiopharmaceuticals should be delayed to allow CMS to provide sufficient information to radiopharmaceutical manufacturers to allow for accurate ASP reporting, and to allow radiopharmaceutical manufacturers to prepare.

Response: Consistent with section 303(h) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173, December 8, 2003), radiopharmaceuticals are not paid under section 1847A of the Act. Section 401 requires manufacturers without Medicaid drug rebate agreements to report ASP to the same extent that manufacturers with Medicaid drug rebate agreements must do. It does not change the scope of drugs and biologicals for which ASP must be reported other than to clarify that the ASP reporting requirements apply to items, services, supplies, and products that are payable under Part B as a drug or biological and are described in section 1842(o)(1)(C), (E) of the Act, or (G) or 1881(b)(14)(B) of the Act.

Comment: One commenter generally expressed support of the proposal to modify the definition of “drug” at § 414.802 to include any item, service, supply or product that is payable under Part B as a drug or biological.

Response: We thank the commenter for their feedback.

After consideration of public comments, we are finalizing the definition of the term “drug” at § 414.802 as proposed.

Section 1847A(c)(6)(A) of the Act incorporates the definition of manufacturer at section 1927(k)(5) of the Act, except that section 401(b)(2) permits the Secretary to exempt repackagers from the definition of manufacturer, as determined appropriate, for purposes of section 1847A(f)(2) of the Act. However, no such exemption is provided for manufacturers with Medicaid drug rebate agreements (see the definition of manufacturer at § 447.502). Consequently, the current ASP data reporting includes submissions by repackagers.

In the CY 2022 PFS proposed rule (86 FR 39241 through 39242), we discussed Medicare Payment Advisory Commission's (MedPAC's) assertion in their June 2017 report (available at http://medpac.gov/docs/default-source/reports/jun17_ch2.pdf ) that many repackagers currently do not report ASP data. We explained that we conducted an analysis to estimate the proportion of repackaged products in our existing ASP data because we believed it could inform our consideration of whether we should propose to exclude repackagers from the definition of manufacturers for purposes of section 1847A(f)(2) of the Act. If our existing ASP data do not contain an appreciable proportion of repackaged products, it may be appropriate to exclude repackagers from the definition of manufacturer for this limited purpose. However, if repackaged products comprise an appreciable proportion of our existing ASP data, we would reasonably anticipate this trend to follow under the new requirements, and in such a scenario, it would not be appropriate to exclude repackagers from the definition of manufacturer for purposes of section 1847A(f)(2) of the Act because excluding their sales could distort the ASP.

To effectuate this analysis, we obtained a list of National Drug Codes (NDCs) of repackaged drugs from the United States Food and Drug Administration (FDA). We also obtained a list of labeler codes for which the manufacturers have Medicaid drug rebate agreements. We then performed a crosswalk both of these to our composite file of ASP data submissions to segregate our composite file of ASP data submissions into four categories:

(1) Repackaged products for which ASP data submissions were required (that is, manufacturers with Medicaid drug rebate agreements);

(2) Repackaged products for which ASP data submissions were voluntary (that is, for manufacturers without Medicaid drug rebate agreements);

(3) Non-repackaged products for which ASP data submissions were required; and

(4) Non-repackaged products for which ASP data submissions were voluntary.

We estimated that, of all 6319 products for which we currently receive ASP data submissions (the sum of categories (1) through (4) above), repackaged products accounted for 271 (4.29 percent) of these products. Additionally, repackaged products accounted for 137 (2.51 percent of) products for which ASP data submissions were required, and 134 (15.23 percent of) products for which ASP data were voluntarily submitted.

Additionally, we conducted another analysis to estimate: (1) The number of new ASP submissions we can expect as a result of the new requirements under section 401; and (2) the proportion of those submissions that involve repackaged products. To effectuate this analysis, we obtained a crosswalk of NDCs and Healthcare Common Procedure Coding System (HCPCS) codes that includes the NDCs and HCPCS codes of items for which ASP reporting is not currently required. We supplemented this crosswalk by adding HCPCS codes with NDCs that are payable under Part B, but not already reflected in the crosswalk. We then identified and removed from the crosswalk all of the products contained in our composite file of ASP data submissions and those HCPCS codes that are non-covered under Medicare Part B. Adding the results of this analysis to the results of categories two and four from the prior analysis (that is, repackaged and non-repackaged products for which ASP submissions were voluntary), we estimated there will be 6,994 total products for which manufacturers will now be required to submit ASP data. We then compared this number to FDA's list of repackaged products in the previous analysis, and found that of the 6,994 products for which manufacturers will be required to submit ASP data, 223 (3.19 percent) are repackaged products. Further, we estimated 6,114 products for which their manufacturers did not previously (voluntarily) submit ASP data and will now be required to do so under the new reporting requirements of section 401. Of these, 89 (1.46 percent) are repackaged products.

These data did not persuade us that it was necessary to exempt repackagers from the new reporting requirements under section 401 at this time. Our current operational process to verify the accuracy of manufacturers' reported ASP data does not distinguish: (1) Products on the basis of repackaging; and (2) manufacturers who are required to report ASP data from those who do so voluntarily.

Each month, we review ASP data submissions at the NDC level (and for products without NDCs, the manufacturer's product code). Previously, we have not required manufacturers to identify which products are repackaged as part of these submissions. Exempting repackagers from the new requirements of section 1847A(f)(2) of the Act would significantly increase our administrative burden because we would have to undergo an additional quality check for each NDC from a different database for which data are submitted as part of our operational process to verify the accuracy of manufacturers' reported ASP data. Moreover, for products without NDCs, our ability to determine if these products are repackaged (without manufacturer attestation) to that effect is significantly limited. Finally, any such attestation would require a data source for us to verify the accuracy of the attestation, and no such data source currently exists.

These additional checks could, in turn, significantly increase the time it takes for us to calculate and display on our website the volume-weighted ASP payment limits. Additionally, we were concerned that exempting repackagers from the new reporting requirements could lead to a gap in ASP reporting, meaning that ASPs could be distorted to the extent that certain sales are carved out of the reporting requirement through the use of repackagers. Consequently, in order to maintain consistency and integrity of the ASP data for those manufacturers with and without Medicaid drug rebate agreements, we did not believe it was appropriate to exclude repackagers from the requirements of section 401 at this time. However, we stated that we may propose to exempt repackagers in the future, if warranted.

We solicited comment on this approach.

The following is a summary of the comments we received and our responses.

Comment: One commenter suggested that CMS exclude repackagers from the proposed ASP reporting requirements. They stated that requiring all repackagers to report would likely be duplicative and increase the burden on all parties without providing tangible benefit. In addition, they stated that, generally, most reporting requirements are simply not applicable to repackagers, whose business is generally outside of the scope of the proposed requirements. They recommend repackagers who already report ASP data continue to do so, but that CMS not require repackagers, as a group, to be subject to the reporting requirements at this time.

Response: We are not persuaded that repackagers should be excluded at this time. As previously stated in this section, in order to maintain consistency and integrity of the ASP data for those manufacturers with and without Medicaid drug rebate agreements, and for operational reasons, we do not believe it is appropriate to exclude repackagers from the ASP reporting requirements. If warranted, we could revisit this in future rulemaking.

Comment: One commenter concluded that CMS' analysis and proposal not to exclude repackagers without a rebate agreement from reporting ASP data is reasonable. The commenter stated that given that repackagers with a rebate agreement are required to report ASP data, it is reasonable not to exclude repackagers without a rebate agreement from the requirements of section 401. They added that having ASP data from repackagers with and without rebate agreements could also permit future analysis of the effect of repackagers' ASP submissions on Medicare Part B payment rates.

Response: We agree it is reasonable not to exclude repackagers without a Medicaid drug rebate agreement and thank the commenter for their feedback.

After consideration of public comments, we are not excluding repackagers from the definition of manufacturers for purposes of section 1847A(f)(2) of the Act.

In summary, we proposed to modify the definition of drug at § 414.802 to include any item, service, supply or product that is payable under Part B as a drug or biological. We did not propose to exclude repackagers from the definition of manufacturer for purposes of the reporting requirements at section 1847A(f)(2) of the Act and are finalizing the definition of drug at § 414.802 as proposed.

d. Civil Money Penalties

As amended by section 401(b), section 1847A(d)(4)(A) of the Act specifies the penalties associated with misrepresentations in the reporting of the manufacturer's ASP for a drug or biological. Consistent with our existing regulation at § 414.806, if the Secretary determines that a manufacturer has made a misrepresentation in the reporting of ASP data, a civil money penalty in an amount of up to $10,000 may be applied for each price misrepresentation and for each day in which the price misrepresentation was applied.

New sections 1847A(d)(4)(B) and (C) of the Act, as added by section 401(b), apply civil money penalties for failure to report timely and accurate ASP data for manufacturers without Medicaid drug rebate agreements, consistent with the civil money penalties found at sections 1927(b)(3)(C)(i) and (ii) of the Act for manufacturers with Medicaid drug rebate agreements. Our current regulations at § 414.806 refer to section 1927(b)(3)(C) of the Act, as amended by section 303(i)(4) of the MMA, as specifying the penalties associated with a manufacturer's failure to submit timely information or the submission of false information.

We proposed to amend § 414.806 to reflect the new provisions specifying penalties for manufacturers without Medicaid drug rebate agreements and to provide some technical changes to streamline the regulations text. Specifically, we proposed to do the following:

• Add paragraph (a), labeled as “Misrepresentation”, moving the existing regulatory language at § 414.806 specific to misrepresentation to this paragraph;
• Remove the sentence which reads, “If the Secretary determines that a manufacturer has made a misrepresentation in the reporting of ASP data, a civil money penalty in an amount of up to $10,000 may be applied for each price misrepresentation and for each day in which the price misrepresentation was applied,” since the previous sentence in the regulations text already references the statutory provision for this language;
• Add paragraph (b), labeled as “Failure to provide timely information or the submission of false information”;
• Add paragraph (b)(1) to clarify that the existing language at § 414.806 regarding civil money penalties for failure to submit timely information or for the submission of false information applies to manufacturers with a Medicaid drug rebate agreement;
• Remove the phrase “as amended by section 303(i)(4) of the MMA”; and
• Add paragraph (b)(2) to reflect new sections 1847A(d)(4)(B) and (C) of the Act regarding civil money penalties for failure to submit timely information or for the submission of false information for manufacturers without a Medicaid drug rebate agreement.

We welcomed comments on these proposals.

We received one public comment on these proposals. The following is a summary of the comment we received and our response.

Comment: One commenter stated that it fully supported CMS' proposed revisions to the regulations at § 414.806 to mirror the enforcement provisions of the statute. In addition, the commenter expressed concern that the current civil monetary penalties may not sufficiently ensure that all manufacturers fully comply with the express requirements of the new ASP reporting provisions and suggested that CMS address other enforcement options it may use if manufacturers fail to comply with the ASP reporting requirements. Specifically, the commenter suggested that CMS could pursue action under the False Claims Act (31 U.S.C. 3729-3733), elect to not reimburse certain products of a manufacturer that does not report ASP, or adopt alternative reimbursement schemes for certain products.

Response: We appreciate the commenter's support in finalizing these proposals. We also appreciate the feedback regarding other methods of enforcement; however, these are outside the purview of codifying and implementing section 401.

After consideration of public comments, we are finalizing amendments to § 414.806 as proposed.

e. Summary of All Proposals

In summary, to implement the new reporting requirements for manufacturers without Medicaid drug rebate agreements, we proposed to modify:

• The definition of drug at § 414.802; and
• The regulations describing civil money penalties at § 414.806.

We welcomed comments on these proposals.

We received public comments on these proposals as described in sections (c) and (d) above. We received several comments of general support of section 401 implementation. The following is a summary of these comments and our responses.

Comment: Several commenters expressed general support of section 401 and its implementation. They commended Congress and CMS for taking the necessary steps to resolve the inconsistent treatment of similarly situated products under the Medicare Part B program and support efforts to require manufacturers to provide CMS with regular and accurate ASP data for drugs and biological products payable under Medicare Part B as a means to ensure accurate payment.

Response: We thank these commenters and appreciate their feedback. We also received several comments that were not specifically related to the proposals. The following is a summary of these comments and our responses.

Comment: We received several comments requesting that CMS publish an ASP payment limit in the ASP Drug Pricing File for all billing and payment codes for which there are products reporting ASP data. These commenters stated that this would create a level field for all manufacturers, prevent overbilling to Medicare due to reimbursement based on WAC prices, decrease beneficiary financial responsibility, and ensure that clinicians select products based on clinical efficacy. Commenters also stated that CMS has lacked transparency by not publishing ASP payment limits for all billing and payment codes for which there are products reporting ASP data. They suggested that billing and payment codes with a published ASP payment limit have an advantage over those that do not and that providers are hesitant to prescribe products that do not appear on the ASP Drug Pricing File. In addition, one commenter suggested that if an ASP payment limit is not published in the ASP Drug Pricing File, then the Medicare payment should be based on invoice pricing only, rather than basing payment on the WAC. Two commenters suggested that CMS should expand the list of published ASP payment limits to include all items separately payable under Part B as done in Addendum B for the hospital outpatient setting.

Response: Section 401 does not address the ASP Drug Pricing File, nor does it specify which products should be published on the file, and the proposed rule did not include any proposals pertaining to the ASP Drug Pricing File. CMS does not publish an ASP payment limit or crosswalk for every product for which ASP data is reported.

Similarly, section 401 does not address MACs' discretion to use WAC-based pricing or invoice pricing to determine payment amounts in the absence of a published ASP payment limit, and the proposed rule did not include any proposals pertaining to this discretion.

Comment: Some commenters recommended that CMS address the proper treatment of lagged price concessions in the ASP for products that are newly reporting ASP and that CMS confirm that manufacturers submitting ASP data for the first time are estimating the price concessions based on the most recent 12-month period for which data is available.

Response: Manufacturers that are newly reporting ASP data to CMS must do so in the same manner as those who are already reporting ASP data.

Specific information about calculating and reporting lagged price concessions is available in the December 1, 2006 Federal Register (71 FR 69666), the September 16, 2004 Federal Register (69 FR 55763), and the regulation text at § 414.804(a)(3).

Comment: A few commenters requested that CMS consider deferring the implementation of this requirement to provide more specific guidance for manufacturers newly reporting ASP data.

Response: Section 401 requires manufacturers without a Medicaid drug rebate agreement to report ASP information to CMS for calendar quarters beginning on January 1, 2022, for drugs or biologicals payable under Medicare Part B and described in sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act, including items, services, supplies, and products that are payable under Part B as a drug or biological. CMS does not have the authority to defer the statutory implementation date.

Comment: One commenter suggested that manufacturers should disclose actual material and production costs to regulators, as well as research and development costs contributing to a drug's pricing.

Response: We thank the commenter for their feedback; however, manufacturers' reporting of actual material, production, research, and development costs are outside the scope of this rule.

After consideration of public comments, we are finalizing these proposals as proposed.

2. Determination of ASP for Certain Self-administered Drug Products (§ 414.904)

a. Background

Drugs and biologicals payable under Medicare Part B fall into three general categories: those furnished incident to a physician's services (hereinafter referred to as “incident to”) (section 1861(s)(2) of the Act), those administered via a covered item of durable medical equipment (DME) (section 1861(s)(6) of the Act), and others as specified by statute (for example, certain vaccines described in sections 1861(10)(A) and (B) of the Act). Payment limits for most drugs and biologicals separately payable under Medicare Part B are determined using the methodology in section 1847A of the Act, and in many cases, payment is based on the ASP plus a statutorily mandated 6 percent add-on. Most drugs payable under Part B are paid under the “incident to” benefit under section 1861(s)(2) of the Act, which includes drugs and biologicals not usually self-administered by the patient.

Paragraphs (4)(A) and (6) of sections 1847A(b) of the Act require that the Medicare Part B payment amount for a single-source drug or biological be determined using all of the NDCs assigned to it. Section 1847A(b)(5) of the Act further states that the payment limit shall be determined without regard to any special packaging, labeling, or identifiers on the dosage form or product or package. In 2007, CMS issued a program instruction (available at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf ), as permitted under section 1847A(c)(5)(C) of the Act, stating that the payment limit for a single source drug or biological will be based on the pricing information for products produced or distributed under the applicable FDA approval (such as a New Drug Application (NDA) or Biologics License Application (BLA)). Therefore, all versions of a single source drug or biological product (or NDCs) marketed under the same FDA approval number (for example, NDA or BLA, including supplements) are considered the same drug or biological for purposes of payments made under section 1847A of the Act and are crosswalked to the same billing and payment code. This means that a self-administered version marketed under the same FDA approval is subject to the ASP reporting requirements and is not excluded from the payment limit calculation, even though Medicare does not make separate Part B payment for it. This is consistent with our longstanding policy on the scope of the ASP reporting requirements. (Please see our final rule titled, “Medicare Program; Revisions to Payment Policies, Five-Year Review of Work Relative Value Units, Changes to the Practice Expense Methodology Under the Physician Fee Schedule, and Other Changes to Payment Under Part B; Revisions to the Payment Policies of Ambulance Services Under the Fee Schedule for Ambulance Services; and Ambulance Inflation Factor Update for CY 2007,” published in the December 1, 2006 Federal Register (71 FR 69675)). The price of a drug or biological product that may be administered by the patient (that is, self-administered) may differ from versions that are administered incident to a physician's service, which may affect the ASP-based payment limit for drug or biological product's billing and payment code.

The HHS OIG conducted studies of payment-limit calculations for certain drugs paid under section 1847A of the Act. The OIG identified two highly utilized biological products for which there are both Part-B-covered (versions administered incident to a physician's service) and non-covered versions (those identified to be self-administered) for which the NDCs were marketed under the same FDA approval number. OIG's studies found that when the ASPs of the self-administered versions are included in the payment limit calculation, the resulting payment limit is substantially higher than if the ASPs of only the incident-to versions had been included.

The OIG studies concluded that as a result, Medicare payment amounts were inflated, causing the program and its beneficiaries to pay an additional $366 million from 2014 through 2016 and $497 million from 2017 through 2018. They recommended that legislative changes be made to provide CMS the flexibility to determine when certain versions of a drug identified to be self-administered should be included in ASP payment limit calculations.

Section 405 of Division CC, Title IV of the CAA, 2021 (for the purposes of this section, referred to as “section 405”), amended section 1847A of the Act by redesignating existing subsection (g) as subsection (h) and adding new subsection (g), which describes the Medicare Part B ASP payment-limit adjustment for certain drugs and biological products for which NDCs have been identified by the OIG to be self-administered and not covered under Medicare Part B. The new section 1847A(g)(1) of the Act directs OIG to conduct periodic studies to identify NDCs for drug or biological products that are identified to be self-administered for which payment may not be made under Part B pursuant to section 1861(s)(2) of the Act and that OIG determines should be excluded from the determination of the payment amount under section 1847A of the Act.

New section 1847A(g)(2) of the Act specifies that if the OIG identifies an NDC under section 1847A(g)(1) of the Act, it must inform the Secretary at such times as the Secretary may specify. Then the Secretary shall, to the extent appropriate, apply as the payment limit for the applicable billing and payment code the lesser of: (1) The payment allowance that would be determined under section 1847A of the Act if the NDC for the identified drug or biological product were excluded from the calculation; or (2) the payment limit otherwise determined under section 1847A of the Act without application of section 1847A(g) of the Act. In other words, the Medicare payment limit for a drug or biological product's billing and payment code in these circumstances would be the lesser of the payment limit determined including the NDCs identified to be self-administered and the payment limit determined after excluding the NDCs identified to be self-administered (hereinafter referred to as the “lesser-of payment methodology”).

Although section 1847A(g)(1) of the Act provides us with discretion in whether to apply the lesser-of methodology to billing and payment codes that include self-administered versions identified by the OIG (because we are directed to apply the methodology to the extent deemed appropriate), new section 1847A(g)(3) of the Act, requires the application of the lesser-of methodology to the two billing and payment codes identified in the OIG's July 2020 report titled, “Loophole in Drug Payment Rule Continues To Cost Medicare and Beneficiaries Hundreds of Millions of Dollars,” (available at https://oig.hhs.gov/oei/reports/OEI-BL-20-00100.asp ) (hereinafter referred to as “OIG's July 2020 report”)) beginning July 1, 2021. To meet the implementation date required by this provision, we applied the lesser-of methodology to the payment limit calculations for the billing and payment codes representing Cimzia® (certolizumab pegol) and Orencia® (abatacept), details on these calculations are described in this section. In a memorandum providing supplemental information on the OIG July 2020 report, the OIG provided specific NDCs that the report identified: 00003-2188-11, 00003-2188-51, 00003-2814-11, 00003-2818-11, 50474-0710-79, 50474-0710-81. The lesser-of methodology was applied to these billing and payment codes for the July 2021 ASP Drug Pricing Files and crosswalks along with program instructions in a change request (CR) at https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/2021-asp-drug-pricing-files.

In the CY 2022 PFS proposed rule (86 FR 39244), we proposed to codify the new requirements of section 1847A(g) of the Act at § 414.904. Our proposals sought to specify when the application of the lesser-of methodology would be appropriate, describe how we would apply the lesser-of payment methodology to billing and payment codes that OIG has identified pursuant to studies described in section 1847A(g)(1) of the Act, and how to codify the approach we used for the certolizumab pegol and abatacept billing and payment codes.

b. Identification of Billing and Payment Codes to Which the Lesser-of Policy Will Be Applied

As noted previously, section 1847A(g)(1) of the Act directs OIG to conduct periodic studies to identify NDCs for drug or biological products that are self-administered and for which payment is not made under Part B. Section 1847A(g)(2) of the Act specifies that if OIG makes an identification under section 1847A(g)(1) of the Act, OIG informs CMS at such times as we may specify, and in such an event, we apply the lesser-of methodology to the extent deemed appropriate. In the CY 2022 PFS proposed rule (86 FR 39244), we proposed that when the OIG conducts a periodic study, they would inform us at the time the study becomes publicly available. CMS would then obtain the NDCs identified by the OIG study described in section 1847A(g)(1) of the Act. However, if the specific NDCs were not available in the OIG study report, we would request OIG provide documentation of the identified NDCs to CMS.

To allow operational time for assessment and application of the lesser-of methodology, we stated it was reasonable that the application of the lesser-of methodology be reflected beginning in the ASP pricing file two quarters following the OIG study publication. For example, if the OIG study became available to the public in the first quarter of the calendar year, the lesser-of methodology would be applied to the payment limit calculation of the applicable billing and payment code in the third quarter ASP pricing file (in other words, the July ASP pricing file) and each quarter thereafter.

We received public comments on the identification of billing and payment codes to which the lesser-of methodology will be applied. The following is a summary of the comments we received and our responses.

Comment: Several commenters expressed concern regarding the OIG studies described in new section 1847A(g)(1) of the Act. Specifically, there is concern that neither CMS nor the OIG has specified details about future OIG studies, what criteria the OIG will use to initiate a study, how often such studies will be conducted, or if external stakeholders will be able to request a study. Commenters suggested that CMS offer a timeframe under which the OIG would be expected to produce such reports and work with the OIG to ensure transparency of factors used to determine which NDCs are considered “self-administered” and address study methodology. Another commenter urged the OIG to be thoughtful and transparent in the factors that it will use when determining which NDCs are “self-administered.”

Response: The proposed rule did not include any proposals pertaining to how, when, or under what conditions the OIG would produce study reports as described in section 1847A(g)(1) of the Act. The statute assigns to the OIG, and not to CMS, the determination of self-administration for purposes of these studies, as well as study methodology.

Comment: One commenter expressed concern that CMS does not specifically define the term “self-administered” for purposes of the lesser-of methodology. The commenter inquired whether CMS and/or the OIG will refer to contractor self-administered drug (SAD) lists to determine if a drug should be studied and the “lesser-of” methodology be applied and, if so, if the drug will have to be on all contractor SAD lists for the drug eligible for an OIG study.

Response : Section 1847A(g)(1) of the Act states the Inspector General shall conduct periodic studies to identify which NDCs for drug or biological products are self-administered and should be excluded from the determination of the payment amount under this section. Such studies shall be based on the same or similar methodologies to the methodologies used in OIG's July 2020 report or in the November 2017 final report of the Inspector General entitled “Excluding Noncovered Versions When Setting Payment for Two Part B Drugs Would Have Resulted in Lower Drug Costs for Medicare and its Beneficiaries.” Methodologies for these studies are described in detail in each report. As noted previously, the statute puts these determinations in the OIG's purview.

c. Calculation of Payment Allowance Using the Lesser-of Payment Methodology

Sections 1847A(g)(2) and (g)(3) of the Act set forth the lesser-of payment methodology for applicable billing and payment codes with NDCs for certain drug or biological products identified by the OIG as self-administered products for which payment may not be made under this part because such products are not covered under section 1861(s)(2) of the Act. In the CY 2022 PFS proposed rule (86 FR 39244), we proposed to codify this methodology, which we currently use for the billing and payment codes that describe certolizumab pegol and abatacept , and which we also proposed to use for billing and payment codes for which OIG identifies a drug or biological product with NDCs identified to be self-administered as described in section 1847A(g)(1) of the Act.

The ASP payment limit calculation is described in section 1847A(b)(6) of the Act and codified at § 414.904(b)(2)(ii) and (c)(2)(ii), which specifies that for a billing and payment code, the volume-weighted average of the ASPs reported by the manufacturer is determined by:

• Computing the sum of the products (for each NDC assigned to such drug products) of:

++ The manufacturer's ASP determined by the Secretary without dividing such price by the total number of billing units for the NDC for the billing and payment code; and

++ The total number of units sold; and

• Dividing the sum determined under (A) by the sum of by the sum of the products (for each NDC assigned to such drug products) of

++ The total number of units specified sold; and

++ The total number of billing units for the NDC for the billing and payment code.

When applying the lesser-of methodology described in 1847A(g)(2) and (g)(3) of the Act, we proposed to make two calculations as described in section 1847A(b)(6) of the Act: (1) The ASP payment limit for the billing and payment code, excluding the NDCs that have been identified by the OIG study (that is, excluding the ASPs for those NDCs, as well as the units of such NDCs sold in the quarter); and (2) the ASP payment limit for the billing and payment code, including such NDCs' ASPs and units sold. The calculation resulting in the lower payment limit would be used as the payment limit for the applicable billing and payment code for that quarter's ASP pricing files. We proposed to apply the lesser-of methodology to the billing and payment codes containing OIG-identified products each quarter when determining ASP payment limits.

New section 1847A(g) of the Act did not change ASP reporting requirements, and consistent with section 1847A(f)(1) of the Act and, beginning January 1, 2022, section 1847A(f)(2) of the Act, manufacturers must continue to report ASP data for all NDCs of the drug or biological product. Under new section 1847A(g) of the Act, ASP data for all NDCs under the same FDA approval application (for example, NDA or BLA, including any supplements) are required to carry out the lesser-of calculations for the purposes of determining the payment limit for the billing and payment code. Even if the resulting payment limit does not reflect the ASPs or units sold of self-administered versions of a product identified by the OIG, the manufacturer must continue to report those versions' ASPs and units sold to the Secretary.

The implementation of the lesser-of methodology is not expected to be associated with substantial administrative costs and we incorporated the methodology in the current operational process used to determine ASP payment limits each quarter. The OIG found that Medicare and its beneficiaries would have saved a combined $497 million on certolizumab pegol and abatacept over 2 years (2017 through 2018) if such a methodology had been in place.

We did not receive public comments on this provision, and therefore, we are finalizing as proposed.

d. Exceptions

In the CY 2022 PFS proposed rule (86 FR 39245), we further proposed that the application of the lesser-of methodology was deemed appropriate in all cases in which OIG identifies a drug or biological product in a periodic study described in section 1847A(g)(1) of the Act and made publicly available, unless the drug or biological product is in short supply. As stated in the OIG's July 2020 report, CMS expressed concern about the potential impact on beneficiary access if certain versions identified to be self-administered were excluded from the ASP payment limit calculation. Because of the potential for drug shortages that may affect patient care, beneficiary and provider access, and drug prices for providers, we will consider it not appropriate to apply the lesser-of methodology when a drug is in short supply. Similar to the average manufacturer price (AMP) price substitution provision in section 1847A(d)(3)(C) of the Act (codified in § 414.904(d)(3)), we proposed to add § 414.904(d)(4)(ii) to specify that we would not apply the lesser-of methodology (that is, we would determine the payment allowance including all NDCs of the drug or biological product) if the drug and dosage form(s) represented by the billing and payment code are reported by the Drug Shortage list established under section 506E of the Federal Food, Drug, and Cosmetic Act (FFDCA) (Pub. L. 75-717) at the time that ASP payment limits are being finalized for the next quarter. However, we proposed that this exception to the application of the lesser-of methodology would not apply in the case of the billing and payment codes for certolizumab pegol and abatacept because section 1847A(g)(3) of the Act does not provide us with the same discretion as section 1847A(g)(2) of the Act. Thus, for these applicable billing and payment codes we will always apply the lesser-of methodology. We recognized that NDCs identified by an OIG study described in section 1847A(g)(1) or (g)(3) of the Act may change. In the event that the manufacturer of an OIG-identified product simply redesignates the NDC for its product, we stated the new NDC also would meet the same criteria defined in the OIG study. In this circumstance, we expected that the product labeling would not contain substantial changes regarding the redesignated NDC. Therefore, we proposed to add § 414.904(d)(4)(iv) to codify the application of the lesser-of methodology such that the manufacturer-reported pricing data associated with redesignated NDCs would be used in the lesser-of methodology in the same way as the original OIG-identified NDC.

Once an OIG study identifies self-administered versions of a drug or biological product, there may be subsequent FDA approvals of other products with the same active ingredient, such as new syringe sizes, new types of injector syringes, generic formulations, biosimilar biological products, or interchangeable biological products. For example, this would include the situation in which the current manufacturer of certolizumab pegol or abatacept obtains a supplemental FDA approval for a new version of the product. Similarly, this would also include the situation in which another manufacturer gains FDA approval of a product with the same active ingredient as an OIG-identified self-administered version. We stated that we believe that provisions at new section 1847A(g) of the Act would require a new OIG study as described in section 1847A(g)(1) of the Act in order for us to apply the lesser-of methodology to the drug or biological product.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: One commenter expressed support of the proposal to not apply the lesser-of payment methodology to drugs or biological products for which there is a shortage. The commenter stated that ensuring patient access to needed medicines is critical both for individuals and for our health care system more broadly, and not applying the lesser-of payment methodology to products in short supply should help to improve access.

Response: We appreciate the commenters feedback and agree that not applying the lesser-of methodology to products in short supply will help improve access.

After consideration of public comments, we are finalizing § 414.904(d)(4)(ii) as proposed.

e. Summary

In summary, to implement new section 1847A(g) of the Act, we proposed to:

• Add § 414.904(d)(4) to codify the lesser-of payment methodology and define when the application of the lesser-of methodology would first be reflected in the ASP pricing file following the OIG study publication; and
• Describe the lesser of methodology at § 414.904(d)(4)(iv).
• Describe exceptions to application of the lesser-of methodology at § 414.904(d)(4)(ii).
• Clarify application of the lesser-of methodology for billing and payment code described under section 1847A(g)(3) of the Act at § 414.904(d)(4)(iii).
• Describe the application of the lesser-of methodology to redesignated NDCs of those identified in the OIG studies at § 414.904(d)(4)(v).

We solicited comments on these proposals.

We received other general comments on section 405. The following is a summary of the comments we received and our responses.

Comment: One commenter stated that they oppose the application of the lesser-of methodology to certolizumab pegol and abatacept billing and payment codes as they may negatively impact patient access to the most appropriate treatment for their disease. They expressed that certain products with separate formulations, such as those administered by subcutaneous versus intravenous routes, are distinct with sufficiently unique indications, risks, and target patient populations. To make an appropriate medical decision, providers follow the standards of medical practice and incorporate the patient's unique medical history.

The commenter disputed the OIG report's assertion that providers are monetarily incentivized to administer certolizumab pegol and abatacept over other therapies and stated that providers select the most appropriate treatment for their patients without any consideration of financial incentives. The commenter suggested that CMS not implement OIG's recommendation of excluding self-administered formulations of certolizumab pegol and abatacept from ASP payment limit calculations.

Response: Section 1847A(g)(3) of the Act requires the application of the lesser-of methodology to certolizumab pegol and abatacept billing and payment codes. This section states that, for NDCs identified by OIG's July 2020 report, the lesser-of methodology shall be applied beginning July 1, 2021. As required by this statutory provision, we have implemented section 1847A(g)(3) of the Act as reflected in the July 2021 ASP Drug Pricing File and quarterly files thereafter ( https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/2021-asp-drug-pricing-files ).

Comment: One commenter encouraged CMS to abandon the lesser-of methodology in favor of a model that works to provide appropriate reimbursement for all drugs. They suggested that CMS consider the alternative approaches that maintain balanced market incentives for competition among physician-administered drugs with the goal of protecting patient access.

They stated that there is a need to broaden the current thinking beyond the studied “loophole” where the OIG finding is based on two specific drugs where the self-administered versions reported appear to increase the volume-weighted ASP creating a financial incentive for the use of these products while leading to increased cost and limiting access for patients. Likewise, there needs to be consideration that including non-covered NDCs may reduce the volume-weighted ASP leading to disincentives in the marketplace for those drugs and again impacting patient access. Furthermore, they stated that approval of same drug within one NDA or BLA versus multiple NDAs or BLAs should not lead to a different reimbursement paradigm for covered and non-covered drugs.

Response: As stated in the previous response, section 1847A(g)(3) of the Act requires the application of the lesser-of methodology with respect to these drugs and does not give CMS the discretion to decline to apply it.

As explained in the background section, paragraphs (4)(A) and (6) of sections 1847A(b) of the Act require that the Medicare Part B payment amount for a single-source drug or biological be determined using all of the NDCs assigned to it and section 1847A(b)(5) of the Act further states that the payment limit shall be determined without regard to any special packaging, labeling, or identifiers on the dosage form or product or package. In 2007, CMS issued a program instruction (available at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf ), as permitted under section 1847A(c)(5)(C) of the Act, stating that the payment limit for a single source drug or biological will be based on the pricing information for products produced or distributed under the applicable FDA approval (such as an NDA or BLA). Therefore, all versions of a single source drug or biological product (or NDCs) marketed under the same FDA approval number (for example, NDA or BLA, including supplements) are considered the same drug or biological, for payments made under section 1847A of the Act and are crosswalked to the same billing and payment code.

Comment: One commenter expressed general support of the proposal to utilize the lesser-of payment methodology for all self-administered NDCs identified by the future OIG studies. They stated that the lesser-of methodology eliminates the potential for non-covered self-administered forms of a product to inflate Medicare Part B payment rates and results in savings for beneficiaries and taxpayers.

Response: We thank the commenter and appreciate their feedback.

After consideration of public comments, we are finalizing these proposals as proposed.

E. Medicare Part B Payment for Drugs Approved Through the Pathway Established Under Section 505(b)(2) of the Federal Food, Drug, & Cosmetic Act

1. Background

As we discussed in the CY 2022 PFS proposed rule (86 FR 39245 through 39246), for most drugs that are payable under Medicare Part B, payment-limit amounts are determined using the methodology in section 1847A of the Act. In many cases, the payment-limit amount is based on the ASP plus a statutorily mandated 6 percent add-on. Additionally, small molecule drugs payable under Medicare Part B using the methodology in section 1847A of the Act fall into two broad, mutually exclusive categories: (1) Multiple source drugs, and (2) single source drugs. These terms are defined in sections 1847A(c)(6)(C) and (D) of the Act, respectively.

In most cases, the distinction between multiple source drugs and single source drugs is straightforward. We published program instructions in 2007 (available at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf ) that address how these distinctions are made. However, a subset of drugs that are approved by the FDA under New Drug Applications (NDAs) are approved through the pathway established under section 505(b)(2) of the FFDCA (Pub. L. 75-717, June 25, 1938) (hereinafter referred to as “section 505(b)(2) drug products”). For section 505(b)(2) drug products, the distinction between multiple source drugs and single source drugs can be less straightforward.

The drug approval pathway established under section 505(b)(2) of the FFDCA (hereinafter referred to as “the section 505(b)(2) pathway”) provides an avenue for applications that contain full reports of investigations of safety and effectiveness, where at least some of the information needed for an approval comes from studies not conducted by or for the applicant, and for which the applicant has not obtained a “right of reference or use” . An application submitted under the section 505(b)(2) pathway (hereinafter referred to as a “section 505(b)(2) application”) may rely either on the FDA's findings of safety, effectiveness, or both, for an already-FDA-approved drug product or on published literature, provided that: (1) Such reliance is scientifically justified, and (2) the section 505(b)(2) application complies with applicable statutory and regulatory requirements, including, but not limited to, patent certification, if appropriate. Unlike a generic drug product approved under an Abbreviated New Drug Application (ANDA), a section 505(b)(2) drug product is not required to have the same FDA-approved labeling as the labeling for the already-FDA-approved drug product(s) upon which the section 505(b)(2) application relied. (For more information, see the FDA's May 2019 guidance titled, “Determining Whether to Submit an ANDA or a 505(b)(2) Application,” available at https://www.fda.gov/media/124848/download. )

We noted that the number of section 505(b)(2) drug products approved each year has been growing, from about 40 per year from 2011 to 2016, to about 60 to 70 per year from 2017 to 2020. Approximately 10 to 20 percent of these section 505(b)(2) drug products are payable under Medicare Part B. Of these, some section 505(b)(2) drug products share substantial portions of the FDA-approved labeling with the approved drug product(s) upon which the section 505(b)(2) application relied, for example prescribing information on safety, efficacy, and pharmacokinetics. In some cases, the section 505(b)(2) drug product even shares substantial portions of labeling with generic drug products that are payable under Part B as multiple source drugs. Medicare Part B claims data from 2020 indicate that spending for some of these section 505(b)(2) drug products (that is, those that could be assigned to a multiple source drug code under the framework described below, but are instead currently assigned to a single source drug code) is substantially greater than that for the corresponding generic drug products assigned to a multiple source drug code. One example is a sterile injectable drug that was first approved as a lyophilized powder for reconstitution in a vial and later was approved through the section 505(b)(2) pathway as a concentrated liquid in a vial. Another example is a drug available as a lyophilized powder for reconstitution in a vial that was then approved through the section 505(b)(2) pathway as a ready-to-use intravenous (IV) solution in a bag. Analysis of 2020 claims data for the separately coded section 505(b)(2) drug product (that is, the ready-to-use IV solution) shows that Medicare spending per service unit was approximately eight times that of the corresponding products in the multiple source drug code. Moreover, in the July 2021 ASP Pricing File (available at https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/2021-asp-drug-pricing-files ), the payment limit for the section 505(b)(2) drug product is 17.2 times the payment limit for the multiple source code, when adjusted for the different dose descriptors of each code. In another example, there were approximately 7.54 million allowed service units, representing approximately $1.38 million of allowed charges, for a multiple source drug code, but for the separately coded section 505(b)(2) drug product, over the same time-period there were approximately 1.08 million allowed service units, representing approximately $2.13 million in allowed charges. Calculating the allowed charges per allowed service unit, each service unit of the section 505(b)(2) drug product cost Medicare 10.78 times that of the corresponding products assigned to the multiple source drug code, costing Medicare an additional $1.93 million. In the July 2021 ASP Pricing File, the payment limit for the section 505(b)(2) drug product is 21.3 times the payment limit for the multiple source code.

In the CY 2022 PFS proposed rule (86 FR 39246) we indicated that based on these observed data points, we plan to perform additional analysis of spending on section 505(b)(2) drug products and potential savings to Medicare and Medicare beneficiaries that may be realized if certain section 505(b)(2) drug products were to be assigned to multiple source drug codes based on the framework described in section III.E.3 of the proposed rule. The framework is also provided below in section III.E.3 of this final rule.

2. CY 2021 Proposal

In the CY 2022 PFS proposed rule (86 FR 39246), we discussed that in the CY 2021 PFS proposed rule, we proposed to codify our long-standing approach to determine whether a section 505(b)(2) drug product is described by an existing multiple source drug code, or if the section 505(b)(2) drug product would be assigned to a single source drug code. In that proposal, we explained generally how information about the section 505(b)(2) drug product's active ingredient(s), drug product name (this refers to nomenclature of the drug product as found in the United States Pharmacopeia—National Formulary (USP-NF) and nomenclature as found in title of the FDA-approved labeling), and description; labeling information; and ordering (prescribing) and clinical use would factor into a determination. Commenters on our proposal in the CY 2021 PFS proposed rule (primarily manufacturers) stated that the proposal conflicted with both the Medicare statute and the FDA's therapeutic equivalence (TE) ratings, and would impair access for patients, underpay providers, and stifle innovation. Several commenters from beneficiary advocate and provider organizations generally repeated the same points, although some commenters expressed support for curbing drug prices, particularly if the proposal did not affect patient access. Several commenters appeared to take a middle ground that conditionally supported the proposals, particularly if more detail could be provided and if effects on patient access were considered. Several commenters supported the proposals without conditions. Several commenters expressed that we should provide more detail about the decision framework and the determination process.

Some commenters on the CY 2021 PFS proposed rule requested that we provide more details about the process by which certain section 505(b)(2) drug products would be assigned to multiple source drug codes. Commenters requested that we include more detail on how factors described in the CY 2021 PFS proposal, (for example, differences in the active ingredient and labeling) may be interpreted and which drug products might be affected. Commenters also requested that we provide the public more time to assess a more detailed proposal, as well as an opportunity, such as through future rulemaking, for public input both on the proposal and on decisions about specific drug products.

Several commenters stated that if we move forward with the CY 2021 proposal, we should exclude products with “meaningful differences” from the policy and encouraged us to continue an approach “that allows for innovation, competition, and ultimately more therapeutic choices for Medicare beneficiaries.” We noted that we recognize some section 505(b)(2) drug products have clear differences in factors such as safety, efficacy, or pharmacokinetics, which would not result in the assignment of the product to the existing multiple source drug code. We stated that the framework discussed in section III.E.3 of the CY 2022 PFS proposed rule (86 FR 39247) would address situations in which a section 505(b)(2) drug product is not described by an existing multiple source drug code, and therefore, would not be assigned to the existing multiple source drug code.

We explained in the CY 2022 PFS proposed rule (86 FR 39247) that in response to commenters' requesting more detail about our proposed approach and to delay finalizing a decision, we did not finalize our proposals in the CY 2021 PFS proposed rule regarding section 505(b)(2) drug products. We stated that the delay would allow time for CMS to further consider this issue. Therefore, as part of our further consideration, we solicited comment on a more detailed framework (hereinafter referred to as “the framework”) for determining when a section 505(b)(2) drug product is a multiple source drug under section 1847A(c)(6)(C) of the Act.

The framework is consistent with program instruction published in 2007, which addressed how we would assign “single source drugs” and “biological products” using a multi-step process. However, this program instruction did not expressly address how we would assign multiple source drugs. The program instruction uses the term “drug” at the billing and payment code level when discussing single source drugs in the same way that the discussion in this preamble uses the term “drug” in reference to multiple source drugs. Development of standards for identifying multiple source drugs (that is, the framework) would add to the 2007 program instruction and provide detail about an approach to Medicare Part B payment for section 505(b)(2) drug products.

We stated that the framework described in section III.E.3 in the CY 2022 PFS proposed rule (86 FR 39247) aims to build off the current CMS policy for assigning drug products to billing and payment codes by describing detailed standards for determining whether a section 505(b)(2) drug product corresponds to an existing multiple source drug code. While we did not propose to adopt the framework, we instead sought comment on the framework to inform future policy making.

3. The Framework

As we described in the CY 2022 PFS proposed rule (86 FR 39247), the framework is a determination process to identify when section 505(b)(2) drug products without an FDA TE rating to an existing drug product payable under Part B correspond to an existing multiple source drug code for the purpose of payment under Medicare Part B. The framework would provide additional detail about the decision-making process and increase transparency about potential determinations resulting from the framework.

The first portion of the framework would compare certain qualities of the section 505(b)(2) drug product with drug products already assigned to an existing multiple source drug code. This includes comparison of the: (1) Active ingredient(s); (2) dosage form (if part of the drug product name); (3) salt form; and (4) other ingredients in the drug product formulation. The drug product assessment could result in a match or non-match designation. Section 505(b)(2) drug products receiving a match designation in the first portion of the framework would continue to a verification step. This step would compare the pharmacokinetic and clinical studies of the section 505(b)(2) drug product's FDA-approved labeling with those of the drug products already assigned to an existing multiple source code. Finally, a determination would be made as to whether the section 505(b)(2) drug product could be assigned to the existing multiple source code.

For full details on the framework, please see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysisianFeeSched/PFS-Federal-Regulation-Notices.

We solicited comment on the following:

• The framework and how it aligns with the statutory definitions of single source and multiple source drugs in section 1847A(c)(6)(C) and (D) of the Act, respectively;
• How the framework distinguishes situations in which a section 505(b)(2) drug product is not described by an existing multiple source drug code; and
• The potential impacts of the framework on Medicare beneficiaries, the government, and other stakeholders.

We received public comments on the framework, a determination process to identify when section 505(b)(2) drug products without an FDA TE rating to an existing drug product payable under Part B correspond to an existing multiple source drug code for the purpose of payment under Medicare Part B. The following is a summary of the comments we received and our response.

Comment: Overall, we received 27 comments on the framework approach to assigning certain section 505(b)(2) drug products to existing multiple source codes. A majority of commenters were pharmaceutical manufacturers; other commenters included MedPAC, and professional associations representing stakeholder interests.

We received 14 comments on the framework and how it aligns with the statutory definitions of single source and multiple source drugs. Several commenters noted that CMS lacks the statutory basis for the framework. The commenters stated that the framework does not align with the statutory definition for multiple source drug.

We received six comments on how the framework distinguishes situations in which a section 505(b)(2) drug product is not described by an existing multiple source drug code. Some commenters stated that framework does detect meaningful differences between drug products. However, some commenters stated that the framework is not robust enough and does not consider all of the important elements that would make two drug products meaningfully different. Other commenters suggested modifications to the framework.

We received comments on the potential impacts of the framework on Medicare beneficiaries, the government, and other stakeholders. Several commenters expressed concern about potential impacts of the framework on manufacturers' use of the section 505(b)(2) pathway. Commenters stated that implementation of the framework approach would slow innovation by discouraging or disincentivizing manufacturers from using the section 505(b)(2) pathway for drug approval. The commenters also stated that payment for section 505(b)(2) drug products as multiple source drugs could result in inadequate reimbursement, and subsequently, may limit access to patients in the physician office setting.

Lastly, we received comments in support of the framework and the assignment of certain section 505(b)(2) drug products to existing multiple source codes. One commenter agreed that drugs approved under the section 505(b)(2) pathway should be considered for definition as a multiple source drug. The commenter stated that defining some section 505(b)(2) drug products as multiple source drugs, and potentially assigning lower payment limit, would generate cost savings. MedPAC reiterated their 2021 PFS comment, which supported CMS codifying its longstanding process for assigning certain section 505(b)(2) drug products into multiple source billing and payment codes. A third commenter expressed concern regarding the price of legacy drugs approved through the section 505(b)(2) pathway.

Response: We thank all the commenters for providing feedback on this comment solicitation regarding the framework and how it aligns with the statutory definitions of single source and multiple source drugs; how the framework distinguishes situations in which a section 505(b)(2) drug product is not described by an existing multiple source drug code; and potential impacts of the framework on Medicare beneficiaries, the government, and other stakeholders. We will take these comments into consideration for future rulemaking.

F. Appropriate Use Criteria for Advanced Diagnostic Imaging

Section 218(b) of the Protecting Access to Medicare Act (Pub. L. 113-93, April 1, 2014) (PAMA) amended Title XVIII of the Act to add section 1834(q) of the Act directing us to establish a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. We have taken steps to implement this program over several years, and codified the AUC program in our regulations at 42 CFR 414.94. In CY 2020, we began conducting an educational and operations testing period for the claims-based reporting of AUC consultation information, which has been extended through CY 2021.

The CY 2016 PFS final rule with comment period (80 FR 70886) addressed the initial component of the new Medicare AUC program, specifying applicable AUC. In the CY 2016 PFS final rule with comment period, we established an evidence-based process and transparency requirements for the development of AUC, defined provider-led entities (PLEs) and established the process by which PLEs may become qualified to develop, modify or endorse AUC. The first list of qualified PLEs was posted on the CMS website at the end of June 2016 at which time their AUC libraries became specified applicable AUC for purposes of section 1834(q)(2)(A) of the Act.

The CY 2017 PFS final rule (81 FR 80170) addressed the second component of this program, specification of qualified clinical decision support mechanisms (CDSMs). In the CY 2017 PFS final rule, we defined CDSM, identified the requirements CDSMs must meet for qualification, including preliminary qualification for mechanisms documenting how and when each requirement is reasonably expected to be met, and established a process by which CDSMs may become qualified. We also defined applicable payment systems under this program, specified the first list of priority clinical areas, and identified exceptions to the requirement that ordering professionals consult specified applicable AUC when ordering applicable imaging services. The first list of qualified CDSMs was posted on the CMS website in July 2017.

The CY 2018 PFS final rule (82 FR 53190) addressed the third component of this program, the consultation and reporting requirements. In the CY 2018 PFS final rule, we established the start date of January 1, 2020 for the Medicare AUC program for advanced diagnostic imaging services. Specifically, for services ordered on and after January 1, 2020, we established that ordering professionals must consult specified applicable AUC using a qualified CDSM when ordering applicable imaging services, and furnishing professionals must report AUC consultation information on the Medicare claim. We further specified that the AUC program will begin on January 1, 2020 with a year-long educational and operations testing period during which time AUC consultation information is expected to be reported on claims, but claims would not be denied for failure to include proper AUC consultation information. We also established a voluntary period from July 2018 through the end of 2019 that ordering professionals who are ready to participate in the AUC program may consult specified applicable AUC through qualified CDSMs and communicate the results to furnishing professionals; and furnishing professionals who are ready to do so may report AUC consultation information on the claim at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10481.pdf.

Additionally, to incentivize early use of qualified CDSMs to consult AUC, we established in the CY 2018 Updates to the Quality Payment Program; and Quality Payment Program: Extreme and Uncontrollable Circumstances Policy for the Transition Year final rule with comment period and interim final rule (hereinafter “CY 2018 Quality Payment Program final rule”), a high-weight improvement activity for ordering professionals who consult specified AUC using a qualified CDSM for the Merit-based Incentive Payment System (MIPS) performance period that began January 1, 2018 (82 FR 54193).

In the CY 2019 PFS final rule (83 FR 59452), we made further additions and clarifications to the AUC program requirements. We added independent diagnostic testing facility (IDTF) to the definition of applicable settings under § 414.94(b). We also clarified that the furnishing professionals (including provider or supplier entities furnishing advanced diagnostic imaging services in an applicable setting, paid for under an applicable payment system) are required to report AUC consultation information on the claims as specified under § 414.94(k). We established significant hardship exception criteria and process under § 414.94(i)(3) to be specific to the AUC program and independent of other Medicare programs. We specified under § 414.94(j)(2) that when delegated by the ordering professional, clinical staff under the direction of the ordering professional may perform the AUC consultation with a qualified CDSM. Finally, we announced our intention to use G-codes and modifiers to report AUC consultation information on the Medicare claims. In 2020, in response to the Public Health Emergency (PHE) for the Coronavirus Disease 2019 (COVID-19) (PHE for COVID-19), the educational and operations testing period was extended through CY 2021.

1. Background

AUC present information in a manner that links a specific clinical condition or presentation; one or more services; and an assessment of the appropriateness of the service(s). Evidence-based AUC for imaging can assist clinicians in selecting the imaging study that is most likely to improve health outcomes for patients based on their individual clinical presentation. For purposes of this program, AUC is a set or library of individual AUC. Each individual criterion is an evidence-based guideline for a particular clinical scenario based on a patient presenting symptoms or condition.

AUC need to be integrated as seamlessly as possible into the clinical workflow. CDSMs are the electronic portals through which clinicians access the AUC during the patient workup. They can be standalone applications that require direct entry of patient information, but may be more effective when they are integrated into EHRs. Ideally, practitioners would interact directly with the CDSM through their primary user interface, thus minimizing interruption to the clinical workflow.

2. Statutory Authority

Section 218(b) of the PAMA added a new section 1834(q) of the Act entitled, “Recognizing Appropriate Use Criteria for Certain Imaging Services,” which directed the Secretary to establish a program to promote the use of AUC. Section 1834(q)(4) of the Act requires ordering professionals to consult with specified applicable AUC through a qualified CDSM for applicable imaging services furnished in an applicable setting and paid for under an applicable payment system; and payment for such service may only be made if the claim for the service includes information about the ordering professional's consultation of specified applicable AUC through a qualified CDSM.

3. Discussion of Statutory Requirements

There are four major components of the AUC program under section 1834(q) of the Act, and each component has its own implementation date: (1) Establishment of AUC by November 15, 2015 (section 1834(q)(2) of the Act); (2) identification of mechanisms for consultation with AUC by April 1, 2016 (section 1834(q)(3) of the Act); (3) AUC consultation by ordering professionals, and reporting on AUC consultation by January 1, 2017 (section 1834(q)(4) of the Act); and (4) annual identification of outlier ordering professionals for services furnished after January 1, 2017 (section 1834(q)(5) of the Act). We did not identify mechanisms for consultation by April 1, 2016. Therefore, we did not require ordering professionals to consult CDSMs or furnishing professionals to report information on the consultation by the January 1, 2017 date.

a. Establishment of AUC

In the CY 2016 PFS final rule with comment period, we addressed the first component of the Medicare AUC program under section 1834(q)(2) of the Act—the requirements and process for establishment and specification of applicable AUC, along with relevant aspects of the definitions under section 1834(q)(1) of the Act. This included defining the term “provider-led entity” and finalizing requirements for the rigorous, evidence-based process by which a PLE would develop AUC, upon which qualification is based, as provided in section 1834(q)(2)(B) of the Act and in the CY 2016 PFS final rule with comment period. Using this process, once a PLE is qualified by us, the AUC that are developed, modified or endorsed by the qualified PLE are considered to be specified applicable AUC under section 1834(q)(2)(A) of the Act. We defined PLE to include national professional medical societies, health systems, hospitals, clinical practices and collaborations of such entities such as the High Value Healthcare Collaborative or the National Comprehensive Cancer Network. Qualified PLEs may collaborate with third parties that they believe add value to their development of AUC, provided such collaboration is transparent. We expect qualified PLEs to have sufficient infrastructure, resources, and the relevant experience to develop and maintain AUC according to the rigorous, transparent, and evidence-based processes detailed in the CY 2016 PFS final rule with comment period.

In the same rule, we established a timeline and process under § 414.94(c)(2) for PLEs to apply to become qualified. Qualified PLEs are listed at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/PLE.html (OMB Control Number 0938-1288).

b. Mechanism for AUC Consultation

In the CY 2017 PFS final rule, we addressed the second major component of the Medicare AUC program—the specification of qualified CDSMs for use by ordering professionals for consultation with specified applicable AUC under section 1834(q)(3) of the Act, along with relevant aspects of the definitions under section 1834(q)(1) of the Act. This included defining the term CDSM and finalizing functionality requirements of mechanisms, upon which qualification is based, as provided in section 1834(q)(3)(B) of the Act and in the CY 2017 PFS final rule. We defined CDSM as an interactive, electronic tool for use by clinicians that communicates AUC information to the user and assists them in making the most appropriate treatment decision for a patient's specific clinical condition. Tools may be modules within or available through certified EHR technology (as defined in section 1848(o)(4) of the Act) or private sector mechanisms independent from certified EHR technology or a mechanism established by the Secretary.

In the CY 2017 PFS final rule, we established a timeline and process in § 414.94(g)(2) for CDSM developers to apply to have their CDSMs qualified. Qualified CDSMs are listed at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/CDSM.html (OMB Control Number 0938-1315).

c. AUC Consultation and Reporting

In the CY 2018 PFS final rule, we addressed the third major component of the Medicare AUC program—consultation with applicable AUC by the ordering professional and reporting of such consultations under section 1834(q)(4) of the Act. We established a January 1, 2020 effective date for the AUC consultation and reporting requirements for this program. We also established a voluntary period during which early adopters could begin reporting limited consultation information on Medicare claims from July 2018 through December 2019. During the voluntary period, there is no requirement for ordering professionals to consult AUC or furnishing professionals to report information related to the consultation. On January 1, 2020, the program began with an educational and operations testing period and during this time, we have continued to pay claims whether or not they correctly include AUC consultation information. Ordering professionals must consult specified applicable AUC through qualified CDSMs for applicable imaging services furnished in an applicable setting, paid for under an applicable payment system and ordered on or after January 1, 2020; and furnishing professionals must report the AUC consultation information on the Medicare claim for these services ordered on or after January 1, 2020.

Consistent with section 1834(q)(4)(B) of the Act, we also established that the following information must be reported on Medicare claims for advanced diagnostic imaging services as specified in section 1834(q)(1)(C) of the Act and defined in § 414.94(b), furnished in an applicable setting as defined in section 1834(q)(1)(D) of the Act, paid for under an applicable payment system as defined in section 1834(q)(4)(D) of the Act, and ordered on or after January 1, 2020: (1) The qualified CDSM consulted by the ordering professional; (2) whether the service ordered would or would not adhere to specified applicable AUC, or whether the specified applicable AUC consulted was not applicable to the service ordered; and (3) the NPI of the ordering professional (if different from the furnishing professional).

Section 1834(q)(4)(C) of the Act provides for exceptions to the AUC consultation and reporting requirements in the case of: A service ordered for an individual with an emergency medical condition, a service ordered for an inpatient and for which payment is made under Medicare Part A, and a service ordered by an ordering professional for whom the Secretary determines that consultation with applicable AUC would result in a significant hardship. In the CY 2017 PFS final rule, we adopted a regulation at § 414.94(h)(1)(i) to specify the circumstances under which AUC consultation and reporting requirements are not applicable and in the CY 2019 PFS final rule, we updated the significant hardship exception criteria to be specific to the AUC program and independent of other programs. An ordering professional experiencing any of the following when ordering an advanced diagnostic imaging service is not required to consult AUC using a qualified CDSM, and the claim for the applicable imaging service is not required to include AUC consultation information. Significant hardship exceptions under § 414.94(i)(3) include: Insufficient internet access; EHR or CDSM vendor issues; or extreme and uncontrollable circumstances.

We remind readers that, consistent with section 1834(q)(4)(A) of the Act, ordering professionals must consult AUC for every applicable imaging service furnished in an applicable setting and paid under an applicable payment system unless a statutory exception applies.

Section 1834(q)(4)(D) of the Act specifies the applicable payment systems for which AUC consultation and reporting requirements apply. In the CY 2017 PFS final rule, we defined applicable payment system to reflect the statutory requirements in § 414.94(b) as: (1) The PFS established under section 1848(b) of the Act; (2) the PPS for HOPD services under section 1833(t) of the Act; and (3) the ASC payment system under section 1833(i) of the Act.

Section 1834(q)(1)(D) of the Act specifies the applicable settings in which AUC consultation and reporting requirements apply: A physician's office, a HOPD (including an emergency department), an ASC, and any other “provider-led outpatient setting determined appropriate by the Secretary.” In the CY 2017 PFS final rule, we added this definition to § 414.94(b). As noted above, we expanded that definition to add an IDTF in the CY 2019 PFS final rule.

d. Identification of Outliers

The fourth component of the Medicare AUC program is specified in section 1834(q)(5) of the Act, Identification of Outlier Ordering Professionals. The identification of outlier ordering professionals under this paragraph facilitates a prior authorization requirement that applies for outlier professionals beginning January 1, 2020, as specified under section 1834(q)(6) of the Act. Because we established a start date of January 1, 2020 for AUC consultation and reporting requirements, we did not identify any outlier ordering professionals by that date. As such, implementation of the prior authorization component is delayed. However, we did finalize in the CY 2017 PFS final rule the first list of priority clinical areas to guide identification of outlier ordering professionals as follows:

• Coronary artery disease (suspected or diagnosed).
• Suspected pulmonary embolism.
• Headache (traumatic and non-traumatic).
• Hip pain.
• Low back pain.
• Shoulder pain (to include suspected rotator cuff injury).
• Cancer of the lung (primary or metastatic, suspected or diagnosed).
• Cervical or neck pain.

We will use future rulemaking to establish the methodology for the identification of outlier ordering professionals who would eventually be subject to a prior authorization process when ordering advanced diagnostic imaging services.

4. Continuing Implementation

a. Clarification of AUC Program Scope

i. Modified Orders

Updates or modifications to orders for advanced diagnostic imaging services may be warranted in certain situations once the beneficiary is under the care of the furnishing professional. Unless they are also serving as the ordering professional, furnishing professionals may not consult AUC on behalf of or in place of the ordering professional. The Medicare Benefit Policy Manual (BPM) (Pub. L. 100-02) addresses situations where the furnishing professional performs imaging services that differ from ordered services in chapter 15, sections 80.6.1-4 (hereafter in this section, “the BPM”). The BPM on modified orders state that when an interpreting physician determines that a different or additional imaging service not included on the order should be performed, the interpreting physician or testing facility generally may not perform the test until a new order from the treating physician/practitioner has been received. If the treating physician/practitioner cannot be reached to change or obtain a new order, the interpreting physician or testing facility may furnish the additional imaging service under the following circumstances, as documented in the patient's medical record: The treating physician/practitioner could not be reached, the ordered test is performed and an additional diagnostic test is medically necessary because of the abnormal result of that test, delaying performance of the additional test would have an adverse effect on the patient's care, the result of the additional test is communicated to and used by the treating physician/practitioner in the patient's treatment, and the interpreting physician/practitioner documents in the report the reasons for the additional testing.

When the furnishing professional performs additional imaging services not reflected on the order under these circumstances, we do not believe it would be appropriate to consider them to be acting as an ordering professional such that an AUC consultation would be needed. Instead, we believe the furnishing professional in these situations is the interpreting physician/practitioner who is exercising their professional judgment to provide the ordering professional with additional diagnostic test results for use in managing the patient's care. Additionally, they are doing so only because, after performing the ordered test and determining that additional testing is expedient given the results of that test, the ordering professional cannot be reached to request a modified or additional order. Given the conditions under which these additional imaging services are performed, we proposed that when the furnishing professional for an advanced diagnostic imaging service performs one or more additional services under the circumstances described in chapter 15, section 80.6.2-4 of the BPM, neither the ordering professional nor the furnishing professional are required to consult AUC for the additional service(s). In these situations, the AUC consultation information from the original order is to be reported on the claim line for the additional service(s). Where the furnishing professional modifies the order for an advanced diagnostic imaging service without obtaining a new order from the ordering professional, the AUC consultation information provided by the ordering professional with the original order should be reflected on the Medicare claim to demonstrate that the requisite AUC consultation occurred. Because the BPM states that the interpreting physician or testing facility generally may not perform a modified or new test until a new order from the treating physician/practitioner has been received, we expect situations where AUC consultations do not occur for new or modified orders to be infrequent.

We received public comments on the proposal and discussions related to modified orders above. The following is a summary of the comments we received and our responses.

Comment: One commenter stated that CMS does not provide enough data to substantiate that modified orders are infrequent.

Response: We make this statement at the end of the discussion above and after referring to the existing language in the BPM (Chapter 15, sections 80.6.2-4). The BPM states that when an interpreting physician determines that a different or additional imaging service not included on the order should be performed, the interpreting physician or testing facility generally may not perform the test until a new order from the treating physician/practitioner has been received and, if the treating physician/practitioner cannot be reached to change or obtain a new order, only then may the interpreting physician or testing facility furnish the additional imaging service under certain circumstances. Because the expectation is that, except under narrow circumstances, a new or additional order to be placed by the ordering professional, we expect situations where the ordering professional is completely uninvolved, and thus, where we proposed that another AUC consultation would not be performed, to be infrequent. This is not based on information generated from claims or other data as, to the best of our knowledge, claims for modified orders (additional or replacement) do not include unique, identifying information. If orders are in fact being modified frequently, it would suggest to us that practitioners may not be familiar with the provisions of the BPM regarding modified orders.

Comment: Two commenters stated that the proposal conflicts with a response to public comments in the CY 2018 PFS final rule addressing order modifications. These commenters stated that in the CY 2018 PFS final rule, CMS provided guidance that when furnishing professionals must update or modify the order, the AUC consultation information provided by the ordering professional with the original order should be reflected on the claim. These commenters further stated that EHRs implement functionality that automatically applies AUC information from an original order to the modified order without any verification that the requirements for order modification were met. These commenters requested that CMS allow providers to append modifier MH (indicating that the imaging service was not subject to the AUC program requirements) when the furnishing professional determines a new or modified order should be performed without first requesting the new or modified order to submitted by the original ordering professional.

Response: We disagree that the above proposal conflicts with the guidance included in the CY 2018 PFS final rule, but rather believe it provides further clarification. These commenters did not reference the CMS response in its entirety which stated that we do not believe it was the intent of section 218(b) of the PAMA to reverse the rules specified in Chapter 15, sections 80.6.2-4 of the Medicare BPM, and we expect furnishing professionals and facilities to continue to adhere to them. After this statement, we then addressed instances when the furnishing professional must update or modify the order and stated that for these situations, the AUC consultation information provided by the ordering professional with the original order should be reflected on the Medicare claim to demonstrate that the requisite AUC consultation occurred. While the language cited by commenters, when taken out of context of the entire response, appears to instruct practitioners to append the original AUC consultation information to the claim without consideration of ordering professionals submitting an updated order, such interpretation is inconsistent with the whole response which states that we expect furnishing professionals to maintain compliance with the provisions of Chapter 15, sections 80.6.2-4 of the Medicare BPM. As such, the proposals in this year's proposed rule are consistent with prior guidance in rulemaking and existing guidance in the BPM. Additionally, we disagree with the commenter's suggestion that it would be appropriate to append a modifier to claims for such services, indicating that they are not subject to the AUC program requirements. We maintain that when the furnishing professional is unable to reach the ordering professional to obtain a new order and proceeds with additional or different imaging as described in the BPM, the AUC consultation information for the original order is to be appended to the claim for the service(s) ultimately furnished.

Comment: One commenter stated that the proposals for modified orders are confusing and CMS should develop other solutions for how AUC data should be reported on claims for revised/additional advanced diagnostic imaging orders. This commenter further stated that the proposals appear to require furnishing professionals to report erroneous information about the consultation on the claim which could potentially negatively impact the ordering professional when the program moves into the outlier identification and prior authorization component. This commenter requested that CMS clarify how AUC data should be reported on claims for revised/additional imaging orders and how CMS might mitigate negative downstream effects on ordering professionals whose CDSM data were erroneously reported on claims to accommodate this scenario. Another commenter also requested clarification around the applicability and documentation for modified orders.

Response: While we recognize that the claims processing solutions to fully implement the AUC program are imperfect, particularly since our claims processing systems do not have the capability to fully automate claims processing for advanced diagnostic imaging services subject to the AUC program, we believe the proposal specific to modified orders is clear, appropriate and does not in fact require the reporting of erroneous information on the Medicare claim.

First, the proposal is that, in the event a different or additional service is furnished than was originally ordered under the circumstances described in the BPM, the furnishing professional would report on the claim for the imaging service(s) ultimately furnished the AUC information communicated with the original order by the ordering professional. In these situations, no other AUC consultations take place since, under our proposal, the furnishing professional is not originally and does not become the ordering professional. As such, the only AUC consultation information pertinent to the specific patient in question and for the specific clinical scenario in question was obtained when the ordering professional consulted AUC for the original order, and thus this is the only AUC consultation information that could be appended to the claim. In instances where the furnishing professional determines additional or replacement imaging services should be performed and he or she is able to reach the ordering professional for a new order, then the ordering professional will consult AUC for the new order(s) and provide that information with the new order(s) for inclusion on the claim.

Second, these services, when furnished in an applicable setting and paid under an applicable payment system, are not excepted from the AUC program, so appending a modifier to indicate that they are, would be erroneous.

Third, we disagree with the suggestion that this approach would result in negative downstream effects for ordering professionals specific to outlier identification and prior authorization as inclusion of the original consultation information on the claim would meet the requirements for the claim to process and communicate the original consultation information to indicate the level of adherence of the order placed by the ordering professional with AUC. This suggestion raises the question whether the modified order parameters set forth in the Medicare BPM are consistently followed. CMS does not have the authority to establish an exception to the reporting requirements. CMS may consider in subsequent rulemaking whether an additional modifier should be appended to all modified orders (additional and/or revised) for which new orders are not submitted by the original ordering professional to ensure that furnishing professionals are not furnishing advanced diagnostic imaging services unilaterally and without the acknowledgement of the ordering professional. An additional modifier to identify these situations could be useful to mitigate any unintended consequences during the outlier identification and prior authorization component. We note that the AUC program is designed to improve ordering patterns of ordering professionals by further educating them on appropriate use of advanced diagnostic imaging services and this may not be achieved if orders are frequently modified without the involvement of the ordering professional.

Comment: Some commenters expressed general support for the proposal. One commenter expressed agreement with the proposal, in the conditions outlined in the proposed rule, that the ordering professional would not be required to consult AUC for imaging studies that need to be modified once under the care of the furnishing professional. Another commenter specifically expressed support for the proposal to except modified orders from the AUC consultation requirement when a different test is clinically appropriate, additional testing may be needed, and the ordering professional is not available to provide a new order. One commenter stated that furnishing professionals should be able to modify the order without obtaining a new order from the ordering professional and use the original AUC on the claim for modified orders when a radiologist deems it necessary to change the original exam based on best clinical judgement for decisions regarding contrast/non-contrast or scans on contiguous body parts.

Response: We appreciate the comments and remind readers of the specifications in the BPM discussed above.

After consideration of public comments we are finalizing our proposal without change so that furnishing professionals that modify an order for advanced diagnostic imaging services with a replacement and/or additional imaging service, and are unable to reach the ordering professional for a new order as described in Chapter 15, sections 80.6.2-4 of the Medicare BPM, are to append to the Medicare claim for the service(s) the AUC consultation information provided by the ordering professional specific to the original order.

ii. Extreme and Uncontrollable Circumstances Hardship Exception

In the CY 2019 PFS final rule, we describe extreme and uncontrollable circumstances to include disasters, natural or man-made, that have a significant negative impact on healthcare operations, area infrastructure or communication systems. We also explain these may include areas where events occur that have been designated by FEMA as a major disaster or a public health emergency declared by the Secretary. To further clarify, these circumstances are events that are entirely outside the control of the ordering professional that prevent the ordering professional from consulting AUC through a qualified CDSM. We believe the hardship criteria under this program are similar to other programs such as the Promoting Interoperability performance category of the Merit-based Incentive Payment System (MIPS), particularly the flexibility that is given to clinicians to identify what they consider to be extreme and uncontrollable circumstances.

The PHE for COVID-19 has been in effect since January 27, 2020. Stakeholders have described challenges in continuing to prepare for the payment penalty phase of the AUC program due to resource reallocation resulting from the PHE. Some stakeholders have explained that all health technology projects unrelated to the PHE were halted, including projects that impact establishing or updating health IT systems that enable AUC consultation through qualified CDSMs. Stakeholders have also indicated that human resources were reallocated to focus on responding to the PHE. Additionally, we recognize that practitioners have been heavily impacted in their own practice of medicine to respond to the PHE and provide treatment to patients which may have prevented them from focusing on and participating in the educational and operations testing period to prepare for the payment penalty phase. While we are continuing to move forward in implementing the AUC program, we want to assure stakeholders that they may attest to a significant hardship under the AUC program due to extreme and uncontrollable circumstances due to the PHE for COVID-19, and such an attestation may be used as needed by ordering practitioners throughout the PHE. Furthermore, as the AUC program progresses into the payment penalty phase, self-attestation for a significant hardship exception will continue to be available for ordering professionals experiencing extreme and uncontrollable circumstances due to the PHE. We also recognize that ordering professionals may experience significant hardships related to or resulting from the PHE that extend beyond the date the PHE expires and note that AUC program exceptions will continue to be available for such significant hardships as defined at § 414.94(i)(3).

We received public comments on the extreme and uncontrollable significant hardship exception along with comments on other exceptions. The following is a summary of the comments we received and our responses.

Comment: Some commenters agreed with our clarification that the PHE for COVID-19 is a significant hardship and significant hardships due to the PHE may extend beyond the date the PHE expires. Another commenter agreed that the PHE for COVID-19 is a proper circumstance for an extreme and uncontrollable circumstance exception even after the start of the payment penalty phase of the AUC program if the PHE or effects of the PHE impact ordering professionals. Other commenters requested that CMS allow providers to use the extreme and uncontrollable circumstances exemption for at least one year following the start of the payment penalty phase because of the PHE.

Response: We appreciate the support of the commenters. As significant hardship exceptions under the AUC program are self-attested, we did not propose, and decline to specify time frame parameters around experiencing an extreme and uncontrollable circumstances significant hardship due to the PHE for COVID-19.

Comment: One commenter requested that CMS harmonize the hardship exceptions with the Quality Payment Program (QPP) hardship exceptions and allow ordering professionals and furnishing professionals to annually attest to hardship rather than on every claim. One commenter stated that significant hardship exemptions should be included for furnishing professionals.

Response: As discussed in the CY 2019 PFS final rule, the AUC program requires real time reporting of information on the Medicare claims for payment purposes while the QPP is not a real time program, but instead uses data from prior performance years to determine status and potential payment adjustments in future years. We explained in that final rule that this difference along with the statutory differences between the programs necessitates a separate significant hardship exception approach and process for the AUC program. In that final rule, we further discuss that the real time self-attestation process (as opposed to a blanket exception for a predetermined period of time) ensures that clinicians have the ability and flexibility to use the significant hardships allowable under the program. We also noted that applying a blanket exception for a specific period of time for ordering professionals based on a single significant hardship attestation would introduce a level of complexity and burden to the process whereby furnishing professionals would need to keep track of which ordering professionals had attested to a significant hardship and over what applicable period of time every time an order is received and a claim is prepared, submitted and processed. We also note that the statute provides for significant hardships for ordering professionals for whom consultation with AUC would result in a significant hardship but the statute does not provide for significant hardships specific to furnishing professionals.

Comment: One commenter requested that, like QPP, the AUC program include an exception for new physicians for one year and for low volume of Medicare patients.

Response: As discussed in the CY 2019 PFS final rule, we do not have the authority to include exceptions to the AUC program beyond the scope of those specified in section 1834(q)(4)(C) of the Act. As explained in that final rule, we believe that significant hardships are reflective of situations that would impede clinicians from consulting AUC through a CDSM and we do not agree that ordering professionals in practices with a low volume of Medicare patients would be impeded from consulting AUC. Similarly, we stated that we do not believe being a new physician would cause the act of consulting AUC to be particularly difficult or challenging for ordering professionals.

Comment: Two commenters requested exceptions for providers in value-based care models and two commenters requested exceptions for physicians and practices that are already taking on financial risks in advanced payment models (APMs).

Response: The statute does not except participants in certain types of models or initiatives from the AUC program requirements.

Comment: Several commenters requested CMS address how second opinions are to be handled under the AUC program. One commenter stated that it is important to exempt second opinions of already performed and interpreted imaging studies to prevent additional imaging, ensure timely access for patients and limit barriers to evaluation by subspecialty radiologists. Another commenter specifically requested guidance on whether a consulting professional must also consult AUC and how to indicate that consultation was performed particularly if it does not result in a new order and, when it does result in a new order, whether the consulting professional should order the second imaging service and whether the ordering professional must consult AUC a second time. One commenter specifically requested clarification around how the AUC requirements apply to second opinions and how orders that are placed contra-AUC for legitimate clinical reasons are to be identified.

Response: We believe the AUC consultation and reporting requirements apply to second opinions in the same way they apply to original patient assessments and resulting orders for advanced diagnostic imaging serves. If an additional PC is submitted for an imaging services due to a second opinion, the AUC consultation information specific to the advanced diagnostic imaging services that was furnished (the original order) would be appended to the claim for the PC. If, based upon this second opinion, further tests must be ordered, they would require separate and additional AUC consultation as they are new/additional orders. We note that, as introduced by commenters, second opinions are different from modified orders, so if new or additional orders result from the second opinion review, these would be new, subsequent orders and thus be subject to the AUC program requirements as such. We expect second opinions to proceed as they normally would, but with the inclusion of AUC consultation and subsequent reporting on the Medicare claims for and new or additional orders for advanced diagnostic imaging services. When reporting, the appropriate modifier indicating the outcome of the AUC consultation should be appended to the claim, even if the order ultimately placed would not adhere to the AUC consulted albeit for legitimate clinical reasons.

Comment: Some commenters asked if the AUC requirements apply to imaging ordered pursuant to a clinical trial protocol, what modifier should be appended and how to indicate on the claim that the service was pursuant to a clinical trial. Commenters also requested that imaging services performed as part of a clinical trial be excluded from the AUC program and that a separate HCPCS modifier be established to identify such claims.

Response: As discussed above in section III.F.3.c. of this final rule, section 1834(q)(4)(C) of the Act provides for exceptions to the AUC consultation and reporting requirements and these exceptions are codified in our regulations in § 414.94(h)(1)(i). We disagree that advanced diagnostic imaging services furnished pursuant to or as a part of a clinical trial qualify for an exception as specified in the statute and regulations and described above in section III.F.3.c. of this final rule; therefore, we are unable to exclude or except claims for these imaging services. The AUC consultation information relevant to the imaging service that is ordered should be appended on the claim to accurately communicate information about the consultation. Because these services are subject to the AUC program requirements, we do not see a need to establish a separate modifier to identify these services. We note that claims for many clinical trials covered by Medicare must include the national clinical trial (NCT) identifier number, HCPCS modifiers Q0 (zero) or Q1 (one) and also ICD-10 diagnosis code Z00.6, so there are other ways to track claims submitted as part of clinical trials if necessary.

b. Claims Processing

As we move ahead to implement the payment penalty phase of this program, we must address additional operational and administrative issues. We explain these issues here, and our assessments and proposals for addressing them. We solicited comments on whether additional scenarios require our consideration, and whether the proposed solutions adequately address issues raised by stakeholders. We solicited any additional information stakeholders may offer to assist us in developing claims processing system edits or other measures to ensure that only appropriate claims are subject to AUC claims processing edits. The AUC program will be fully implemented when we have the necessary edits established in the claims processing system and we begin using those edits to deny Medicare claims that fail to report the required AUC consultation information. The identification of claims that are or are not subject to the Medicare AUC Program must be precise to avoid inadvertently denying claims that should be paid. Because implementation of this program establishes edits for advanced diagnostic imaging claims, the inadvertent denial of claims would disproportionately impact radiologists, HOPDs and freestanding imaging centers. Also, as we have noted previously, the AUC program is unique in that the burden of consulting AUC and providing AUC consultation information to the furnishing professional falls on the ordering professional, yet the claims that are denied for failing to report AUC consultation information are for services furnished and billed by the professionals and facilities that furnish advance diagnostic imaging.

Two main Medicare claim types are subject to claims processing edits in the AUC program. These are the CMS-1500 and its electronic equivalent (referred to here as the practitioner claim) submitted by physicians and practitioners, ASCs, and IDTFs, and the UB- 04, also called the CMS-1450, (referred to here as the institutional claim) submitted by HOPDs and on-campus and off-campus provider-based departments. These claim types differ in the data elements they contain; therefore, claims processing edits will not be identical across claim types.

We have already issued partial claims processing instructions (CR11268, Transmittal 2404) to support the educational and operations testing period. We established HCPCS Level III G-codes for furnishing professionals to report which CDSM was consulted on a separate claim line. We also established HCPCS modifiers for furnishing professionals to report adherence, non-adherence and not applicable AUC consultation responses on the same claim line as the advanced diagnostic imaging HCPCS code. We established additional HCPCS modifiers for furnishing professionals to report situations in which the ordering professional is not required to consult AUC, which are also reported on the same claim line as the advanced diagnostic imaging HCPCS code. Both G-codes and modifiers are applicable to practitioner and institutional claims. We also established a procedure code list that identifies the advanced diagnostic imaging codes that are subject to the AUC program. Based on a review of CY 2020 Medicare claims (noting for readers that during this year the AUC program was only in the education and operations testing phase with no payment penalties), we estimate between 9-10 percent of all claims subject to the AUC program reported information sufficient to be considered compliant with the program. This means that 90-91 percent of claims would not be considered compliant with AUC program requirements because they do not include either the required AUC consultation information (including the ordering professional NPI, G-code identifying the qualified CDSM consulted, and the modifier specifying the appropriateness of the order) or a modifier indicating an applicable exception to the AUC consultation information reporting requirements. In other words, if the claims processing systems edits had been in place for the payment penalty phase, only 9-10 percent of claims subject to the AUC program would have been paid as opposed to being denied or rejected. An additional 6-7 percent of claims subject to the AUC program included some relevant information, which demonstrates an awareness of the AUC program among these billing entities; but the claims did not include all of the necessary AUC consultation information that will ultimately be required for the claim to be paid.

i. Ordering Professional NPI

There are locations on both the practitioner and institutional claim types to report the NPI of the ordering professional. The institutional claim uses the K3 segment and the practitioner claim uses the referring professional field. However, to fully implement the AUC program, we must establish a claims processing edit to require these fields to be populated on all advanced diagnostic imaging claims subject to the AUC program.

In addition, there currently are situations in which multiple advanced diagnostic imaging services ordered by more than one ordering professional may be reported on a single claim. This would not be workable for purposes of reporting AUC consultation information because the referring professional field is reported at the claim-level and not at the claim line- or service-level for professional claims. Therefore, the furnishing professional will need to submit separate claims for the services ordered by each referring or ordering professional. In other words, only one ordering professional can be reported per claim.

We received comments on this discussion. The following is a summary of the comments we received and our responses.

Comment: One commenter, referencing different sections of the 837 professional claim, requested confirmation that practitioner claims are unable to accommodate line-level identification of the ordering professional NPI as discussed above. This commenter stated that while the referring professional is a claim level element in ASC 5010 837 Professional Claim Loop 2310A, there is also a line-item element for referring professional in Loop 2420F. This commenter requested further clarification in terminology used by CMS, noting that there are different fields on the claim forms for “ordering” and “referring” professionals and whether CMS is placing limitations on the “ordering professional” or “referring professional” elements and how that dictates claims be split. This commenter requested CMS be completely clear on which fields are to be populated with the NPI of the practitioner that ordered the service and whether services for one beneficiary ordered by more than one practitioner must be split into separate claims.

Response: Upon further review of the 837P form, we agree that the practitioner who orders the advanced diagnostic imaging service can be identified at the line level and we will proceed with implementation accordingly. We expect this means the 837P claims will not be required to be submitted separately for each practitioner who orders advanced diagnostic imaging services (the “ordering professional” as defined under the AUC program). We will continue to evaluate which line-item field is most appropriate to populate (the ordering or referring professional fields on the claim).

Comment: One commenter stated that one ordering clinician per claim is not overly burdensome in most situations and another commenter noted that splitting claims is not ideal, but can be done and should not hold up the AUC program. This commenter stated that a significant amount of manual intervention will likely be required. One commenter stated that submitting separate claims to accommodate different ordering professionals will be difficult because their current system groups ordering professional encounters for the same date of service on the same institutional claim. This commenter explained that separate claims will require separate registrations which is more burdensome for registration staff and may dissatisfy patients. Furthermore, this commenter stated that two or more account numbers with the same date of service may increase error for documentation and charging. This commenter asked if Medicare will be able to process two separate ordering professional claims with the same date of service.

Response: As noted in the response above, we believe the 837P claim can identify different practitioners that order advanced diagnostic imaging services at the line level so splitting claims will not be necessary, which will also minimize burden. As we proceed with establishing claims processing instructions for the payment penalty phase of the program, we will continue to explore opportunities to minimize burden.

After consideration of public comments, we will move forward with developing claims processing instructions that allow more than one practitioner that orders advanced diagnostic imaging services to be reported on the practitioner claim.

ii. Critical Access Hospitals

As discussed in the CY 2018 PFS final rule with comment period (82 FR 53192), advanced diagnostic imaging services furnished in an outpatient department of a critical access hospital (CAH) are not subject to the AUC program because, in accordance with section 1833(q)(1)(D) of the Act, a CAH is not an applicable setting under the program. Therefore, we must identify these advanced diagnostic imaging services and allow them to bypass the AUC program claims processing edits. For institutional claims, we intend to apply the AUC program claims processing edits to type of bill 13x, which is used only for outpatient hospital settings. CAHs submit outpatient claims using type of bill 85x, rather than type of bill 13x.

In the CY 2019 PFS final rule (83 FR 59694), we further explained that because section 1834(q)(4)(B) of the Act clearly includes all claims paid under applicable payment systems without exclusion, the claims from both furnishing professionals and facilities must include AUC consultation information. We revised our regulation at § 414.94(k) to specify that AUC consultation information must be reported on Medicare claims for advanced diagnostic imaging services furnished in an applicable setting and paid under an applicable payment system. Prior to this revision, § 414.94(k) required furnishing professionals to report AUC consultation on the claim, without also specifying that facility claims must include the AUC consultation information. In the CY 2019 PFS final rule, we explained that the AUC consultation information would be included on the practitioner's claim for the PC of the service and on the provider's or supplier's claim for the facility portion or TC of the service. Under § 414.94(k), the requirement to report AUC consultation information on the claim applies to both the PC and TC of the imaging services that are furnished in an applicable setting and paid under an applicable payment system. Section 1834(q)(4)(B) of the Act further specifies that the requirement to report AUC consultation information is specific to claims for advanced diagnostic imaging services furnished in an applicable setting and paid under an applicable payment system. We believe that all claims for advanced diagnostic imaging services, both the PC and TC, must include the AUC consultation information when they are furnished both in an applicable setting and paid under an applicable payment system. However, if advanced diagnostic imaging services are not entirely furnished in an applicable setting, we believe that neither the PC nor TC claim should be required to include AUC consultation information. This ensures consistent application of the AUC consultation requirements across claims submitted for advanced diagnostic imaging services even when the PC and TC components of the service are furnished by different furnishing professionals. As such, we proposed that claims submitted by physicians or practitioners for the PC of an advanced diagnostic imaging service when the TC was not furnished in an applicable setting will not be subject to the AUC program since the setting where the TC of the imaging service is furnished is not subject to the AUC program consultation and reporting requirements. If a physician or practitioner submits a claim for the PC of an advanced imaging service for which the TC was performed as an outpatient CAH service, there currently is not a systems-based way for us to recognize that the TC of the service was furnished by a CAH. Place of service codes reported on practitioner claims are not specific enough. We have not yet identified a way to segregate these claims and automatically allow them to bypass AUC program claims processing edits. Therefore, as discussed below, we proposed to establish a separate HCPCS modifier that will be used to identify practitioner claims for advanced diagnostic imaging services that are not subject to the AUC program and that are not otherwise identified using the other AUC program modifiers designated to identify specific situations where the claims are not subject to the AUC program.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Some commenters supported the proposal that the PC for an advanced diagnostic imaging service for which the TC was furnished by a CAH would also not require AUC consultation information appended to the claim. One commenter also supported applying this proposal for any other non-applicable sites. One commenter expressed support for excluding services when the TC is not furnished in an applicable setting. One commenter agreed with the proposal to identify these situations using a modifier on the claim.

Response: We appreciate the comments. We prefer to automate the identification of these claims whenever possible and will continue to search for a mechanism. For example, we recently determined that a CAH can be identified in the CCN by a number 1 in third position and a number 3 in the fourth position. We will explore whether we can automate an edit in the claims processing system to identify CAH claims using the CCN.

Comment: Some commenters urged CMS to extend the exemption to ordering professionals that order advanced diagnostic imaging services in CAHs as CAHs have limited resources.

Response: As discussed in section III.F.3.c. of this final rule, section 1834(q)(4)(C) of the Act provides for exceptions to the AUC consultation and reporting requirements and these exceptions are codified in our regulations in § 414.94(h)(1)(i). We disagree that ordering professionals that order advanced diagnostic imaging services in a CAH qualify for an exception as specified in the statute and regulations and described above in section III.F.3.c. of this final rule.

Comment: Two commenters stated that the MH modifier does not describe this situation so a new modifier would need to be created. One of these commenters further noted that using modifier MH for CAH related claims will impact data integrity by combining CAH providers with those that do not provide AUC consultation information.

Response: We appreciate this comment and further discuss modifier MH in section III.F.4.b.viii. of this final rule.

After consideration of public comments, we are finalizing this proposal that claims submitted by physicians or practitioners for the PC of an advanced diagnostic imaging service when the TC was not furnished in an applicable setting not be subject to the AUC program since the setting where the TC of the imaging service is furnished is not subject to the AUC program consultation and reporting requirements. We are also finalizing the proposal to use a modifier to identify practitioner claims for advanced diagnostic imaging services that are not subject to the AUC program, like those submitted for advanced diagnostic imaging services furnished in a CAH, and that are not otherwise identified using the other AUC program modifiers designated to identify specific situations where the claims are not subject to the AUC program. We further discuss this modifier in section III.F.4.b.viii. of this final rule.

iii. Maryland Total Cost of Care Model

Section 1834(q)(4)(D) of the Act specifies that the applicable payment systems for which AUC consultation and reporting requirements apply are the PFS, the hospital OPPS and the ASC payment system. We define applicable payment system consistent with statute at § 414.94(b) and, as noted above, require AUC consultation information to be reported on Medicare claims for advanced diagnostic imaging services, both the PC and TC, furnished in an applicable setting and paid under an applicable payment system at § 414.94(k). Section 1834(q)(4)(B) of the Act specifies that the requirement to report AUC consultation information is specific to claims for advanced diagnostic imaging services furnished in an applicable setting and paid under an applicable payment system. We believe that all claims for the advanced diagnostic imaging services, both the PC and TC, must include the AUC consultation information when they are furnished both in an applicable setting and paid under an applicable payment system. Therefore, if both the PC and TC for advanced diagnostic imaging services are not paid under an applicable payment system, neither the PC nor TC claim is required to include AUC consultation information. This ensures consistent application of the AUC consultation requirements across claims submitted for advanced diagnostic imaging services even when the PC and TC components of the service are furnished by different furnishing professionals. Similar to claims for the PC of services for which the TC is furnished outside of an applicable setting, and because both practitioner and institutional claims are subject to the AUC program as discussed above, when the practitioner or institutional claim for the advanced imaging service is not subject to the AUC program (for example, payment is not made under an applicable payment system), the corresponding practitioner or institutional claim for the same imaging service is also not subject to the AUC program.

Stakeholders alerted CMS to concerns about whether advanced diagnostic imaging services furnished in hospitals participating in the Maryland Total Cost of Care Model would be subject to the AUC program. We appreciated that this was brought to our attention and we solicited comments on other models. Advanced diagnostic imaging services furnished in outpatient departments of Maryland hospitals that participate in the Hospital Payment Program within the Maryland Total Cost of Care Model are not subject to the AUC program because these services are not paid under an applicable payment system (Maryland hospitals that receive payments under the Hospital Payment Program within the Maryland Total Cost of Care Model are not paid under the OPPS). Because these services are not subject to the AUC program requirements when furnished in a hospital paid under the Hospital Payment Program within the Maryland Total Cost of Care Model, as opposed to an applicable payment system, we propose that the PCs of these advanced diagnostic imaging services, when billed separately, are also not required to include AUC consultation information. We believe we can identify all institutional claims from a hospital that is paid under the Hospital Payment Program within the Maryland Total Cost of Care Model based on their CMS Certification Number (CCN) and allow those claims to bypass AUC program claims processing edits. We understand that when the TC and PC of advanced diagnostic imaging services are billed separately, the professional claim must identify in box 32 the location where the TC of the imaging service was furnished to the patient. Therefore, we believe we will have the ability to identify situations in which the imaging service was furnished in a hospital that is paid under the Hospital Payment Program within the Maryland Total Cost of Care Model and exclude those claims from being subject to AUC program claims processing edits. We believe this can be accomplished by using the CCN and will continue to work to determine if a list of CCNs can be used as the source of our edits in addition to determining the frequency that the list will be updated.

Note that advanced diagnostic imaging services furnished in applicable settings in the State of Maryland and paid under an applicable payment system are subject to the AUC program—the above discussion applies only to the outpatient departments of hospitals that are paid under the Hospital Payment Program within the Maryland Total Cost of Care Model.

We received comments on the Maryland Total Cost of Care Model related proposals. The following is a summary of the comments we received and our responses.

Comment: One commenter expressed concerns with excluding Maryland outpatient hospital departments under the Maryland Total Cost of Care Model from the AUC program requirements and instead recommended that all Maryland ordering professionals be excluded. The commenter stated that excluding outpatient hospital departments under the model will have negative unintended consequences. These include acting as an incentive for ordering professionals to send Medicare patients to hospitals instead of non-hospital entities like imaging centers and IDTFs creating a major competitive disadvantage for imaging centers, IDTFs and other non-hospital imaging providers in Maryland. The commenter stated that it may disrupt existing referral patters and continuity of care, is likely to increase cost to Medicare and patients through higher out of pocket expenses at high priced hospital facilities, will inconvenience patients through longer travel times, scheduling delays resulting from higher demand for hospital based imaging and limited access due to COVID and related staffing shortages. The commenter requested that if Maryland Total Cost of Care Model participating outpatient departments are excluded from the AUC program, CMS explore ways to restore competitive balance between Maryland outpatient departments and non-hospital imaging providers like giving ordering professionals more flexibility in meeting AUC consultation requirements and/or making AUC a required performance metric under the Maryland model. The commenter further requested CMS clarify if hospital-owned imaging centers, whether on-campus or off-campus, that are paid for advanced diagnostic imaging services according to the PFS or OPPS, regardless of provider tax ID number used for billing, are still subject to the AUC program.

Response: We appreciate this comment and understand the concerns expressed, however we are unable to modify the AUC requirements and applicability in the State of Maryland given the statutory provisions that AUC consultation and reporting is required for advanced diagnostic imaging services furnished in an applicable setting and paid for under an applicable payment system. Since services furnished under the Maryland Total Cost of Care Model are not paid under an applicable payment system, the advanced diagnostic imaging services furnished under the model are not subject to the program requirements. We are unable to create an exception for other locations or providers in Maryland to offset the potential impact of the model on settings or providers that are not included in the model. The AUC program requirements apply to advanced diagnostic imaging services furnished in an applicable setting and paid under an applicable payment system as specified in § 414.94 without exclusion of sites based on ownership or the provider tax ID used for billing.

After consideration of public comments, we will continue to work to set up claims processing edits using the CCN in box 32 to identify advanced diagnostic imaging services furnished under the Maryland Total Cost of Care Model, the claims for which, as discussed above, are not subject to the AUC program requirements.

iv. Inpatients Converted to Outpatients

While uncommon, there are situations in which a beneficiary's hospital inpatient status is changed to outpatient. Certain criteria must be met for this to occur and, if met, condition code 44 (inpatient admission changed to outpatient) is appended to the institutional claim ( https://www.cms.gov/regulations-and-guidance/guidance/transmittals/downloads/r299cp.pdf ). We proposed to allow institutional claims with condition code 44 to bypass AUC claims processing edits. We made this proposal because, at the time advanced diagnostic imaging services were ordered and furnished, they were ordered for and furnished to a beneficiary who was in inpatient status. As such, the AUC consultation requirement would not have applied at that time. We believe that any professional claims would include place of service code 21 (inpatient hospital) since the expectation, until just prior to discharge, would be that the patient is in an inpatient status. We expect less than half of one percent of claims will include condition code 44.

We received comments on our proposal to allow institutional claims with condition code 44 to bypass AUC claims processing edits. The following is a summary of the comments we received and our responses.

Comment: Some commenters agreed with this proposal. Two commenters supported the proposal but noted that not all patients moved from inpatient to outpatient will be captured with condition code 44 so CMS should create an exception for any inpatient order for advanced diagnostic imaging services furnished within a short period after the inpatient discharge and use a new modifier for these instances where inpatient imaging orders are performed in the outpatient setting shortly after discharge. One commenter requested that in addition to excepting “inpatient to outpatient”/condition code 44 claims, CMS should also except inpatient part A claims that are self-denied or denied by an auditor and then rebilled to part B, usually with a 131 or 121 claim since imaging services were furnished to an inpatient at the time.

Response: We appreciate the comments and disagree that a modifier is needed to capture relevant claims. In section III.F.4.b.ix. of this final rule, we discuss proposals around what type of bill would be subject to the AUC program edits and do not include type of bill 121 which is used for Medicare Part A/B rebillings for services that occurred during the inpatient period. Type of bill 131 is an outpatient bill type and is included in the type of bill to which we proposed, and are finalizing, to limit claims processing edits. As discussed below, we are finalizing this proposal.

After consideration of public comments, we are finalizing the proposal to allow institutional claims with condition code 44 to bypass AUC claims processing edits.

v. Deny or Return Claims That Fail AUC Claims Processing Edits

As discussed above, claims that do not properly include AUC consultation information will not be paid once we fully implement the AUC claims processing edits. We are considering whether claims that do not pass the AUC claims processing edits, and therefore, will not be paid, should be initially returned to the health care provider so they can be corrected and resubmitted, or should be denied so they can be appealed. On one hand, we expect there will be some errors in reporting AUC consultation information on claims, especially early on, and health care providers might find it helpful to have the opportunity to correct claims. However, there may be situations in which the health care provider would prefer the claim be denied so they have an earlier opportunity to appeal. We requested comments to help us better understand which path would be most appropriate once we fully implement the AUC program claims edits. Additionally, we requested comments on whether the payment penalty phase should begin first with returning claims and then transition to denying claims after a period of time, which may be helpful to furnishing professionals and facilities as they become more proficient in submitting claims under the AUC program.

We received public comments on which path would be most appropriate once we fully implement the AUC program claims edits and whether the payment penalty phase should begin first with returning claims and then transition to denying claims after a period of time. The following is a summary of the comments we received and our responses.

Comment: Some commenters recommended that claims be returned for correction instead of being denied. Some of these commenters noted that returning claims affords practitioners the opportunity to correct and resubmit which is a faster, easier and less costly process than denying and appealing. Other commenters suggested claims be returned at least initially for similar reasons. Two of these commenters suggested returning claims for the first year of the payment penalty phase and then transition to denials, one supported transitioning to denials but did not identify a timeframe within which to transition, and two commenters suggested revisiting the approach at some point in the future to determine if it should be revised. One commenter recommended that CMS should allow for correction of claims without complete information on the front-end by indicating the claim cannot be accepted for processing until it contains necessary information. One commenter stated that if CMS decides to deny claims, the denials should be for the line-item if AUC information is not present instead of denying the whole claim. One commenter suggested that instead of deciding whether to deny or return claims, CMS should ensure the program does not result in substantial number of claims submission issues for furnishing provider claims.

Response: We appreciate the recommendations and perspectives shared by commenters and assure commenters that we working to establish claims processing solutions amenable to the practitioners and providers impacted by this program to the best of our ability given the constraints of the claims processing systems and specifications set forth in statute.

Comment: Two commenters requested CMS clearly outline the claim denial process and how it pertains to ordering and furnishing providers. One commenter requested further detail and elaboration of criteria used in claims processing and auditing as soon as possible so institutions can incorporate internal review prior to claims submissions.

Response: We remind readers that the reporting requirements are specific to the furnishing professionals as AUC consultation information is required on the claim for the advanced diagnostic imaging service. Since the ordering professional, unless they are also the furnishing professional, does not submit a claim for the advanced diagnostic imaging service, the claim denial process would not impact them. As we proceed through the process of establishing claims processing systems edits and instructions, we will post those documents on the AUC website: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program.

After consideration of public comments, we agree that returning claims for correction and resubmission when the payment penalty phase begins would be most appropriate. If needed, we may revisit whether claims denials are appropriate at some point in the future once practitioners become more comfortable with the claims processing requirements.

vi. Medicare as a Secondary Payer

We understand based on feedback from stakeholders that, in some EHRs, the primary payer information is readily available and known to the ordering professional; however, secondary payer information typically is not available. Additionally, it is possible that when Medicare is the secondary payer that no Medicare payment would be made at all after the primary payer makes payment. Medicare is reported as the secondary payer for approximately 1.5 percent of advanced diagnostic imaging services that are subject to the AUC program. Because the secondary payer information for a patient generally is not available to the ordering professional, and because no Medicare payment may be involved at all when Medicare is the secondary payer, we proposed to exclude claims that identify Medicare as the secondary payer from application of the AUC consultation and reporting requirements. Specifically, we proposed to allow claims that identify Medicare as the secondary payer (using block 1 or the electronic equivalent of the practitioner claims and using FL 50/51 or the electronic equivalent of institutional claims) to bypass the AUC program claims processing edits.

We received public comments on excluding claims that identify Medicare as the secondary payer from application of the AUC consultation and reporting requirements. The following is a summary of the comments we received and our responses.

Comment: Several commenters agreed with the proposal to exclude claims that identify Medicare as the secondary payer from the AUC consultation and reporting requirements. Two commenters stated that if this proposal is implemented, it would change how primary and secondary payer information is captured in health information technology (HIT) so HIT systems would need sufficient advance notice to update accordingly. One commenter specified that HIT systems would need a minimum of 18 months to scope, develop, test and implement new requirements.

Response: We appreciate the comments and will work to issue claims processing instructions as expeditiously as possible.

Comment: One commenter asked if Medicare Managed Care claims require AUC consultation information.

Response: The AUC program requirements under our regulations are specific to fee-for-service Medicare, so Medicare Advantage organizations (MAOs) are not required to follow the AUC program requirements, and the requirements do not apply to Medicaid. However, MAOs might require their contracted providers to follow Medicare AUC program procedures, so you would need to contact the MAOs (and any other types of plans) for more information about their requirements specific to AUC.

After consideration of public comments, we are finalizing as proposed to allow claims that identify Medicare as the secondary payer (using block 1 or the electronic equivalent of the practitioner claims and using FL 50/51 or the electronic equivalent of institutional claims) to bypass the AUC program claims processing edits.

vii. Date of Service and Date of Order

We will specify a start date for the AUC program claims processing edits to take effect. Medicare claims include a date of service but do not allow for the date of an imaging order to be recorded. Because we cannot identify the order date for an advanced imaging service based on claims, we proposed that the AUC program claims processing edits for the payment penalty phase will be applicable for advanced imaging services furnished on or after the effective date of the claims edits. For imaging services ordered prior to, but furnished on or after the effective date of the AUC program claims processing edits, the furnishing professional would apply the separate HCPCS modifier discussed in section III.F.4.b.ii. (Critical Access Hospitals) of this final rule to indicate that the claim is not subject to the AUC claims processing edits.

We received public comments on this proposal. The following is a summary of the comments we received and our responses.

Comment: Two commenters disagreed with this proposal and instead recommended that for services ordered prior to the penalty phase but furnished after it begins, CMS should have a grace period within the penalty phase for these services which would eliminate the burden associated with returning claims. This commenter suggested soft edits to establish the end of the grace period based on a decrease in potential returns. Some commenters supported this proposal and agreed with denoting these claims with a separate modifier.

Response: Because the time over which advanced diagnostic imaging services are ordered for patients with chronic or ongoing conditions necessitating repeat imaging is different for each patient, we disagree that establishing a grace period to account for these situations is a viable option. We believe allowing these claims to instead bypass edits based on the presence of a modifier is more appropriate, particularly since all other advanced diagnostic imaging services will be subject to payment penalties when the payment penalty phase begins. This approach would essentially extend the educational and operations testing period further.

After consideration of public comments, we are finalizing as proposed our proposal to identify claims for imaging services ordered prior to, but furnished on or after the effective date of the AUC program claims processing edits, using the separate HCPCS modifier we will create to identify claims that are not subject to AUC claims processing edits.

viii. HCPCS Modifiers

We established two primary sets of HCPCS modifiers for this program. In the proposed rule we erroneously stated that the first set of modifiers, which report whether the imaging service adheres to the AUC consulted (modifier ME), does not adhere to the AUC (modifier MF), or the qualified CDSM does not contain AUC that applies to the order (modifier MG), is to be included on the same claim line as the G-code identifying the CDSM that was consulted. This is incorrect and we are correcting this mistake with the following revised description of modifier placement, consistent with the previously released MLN Matters article 11268. The first set, modifiers ME, MF and MG, is to be included on the same claim line as the CPT code for the advanced diagnostic imaging service. We intend for these modifiers to continue to be used when the program enters the payment penalty phase. Additionally, reporting of these modifiers should be limited to one per qualified CDSM G-code (listed on a separate claim line) since these modifiers are mutually exclusive.

The second set of HCPCS modifiers is available for use when the ordering professional does not consult a qualified CDSM. On these claims, providers would not add a G-code for a CDSM because a consultation did not take place, and the HCPCS modifier would be included on the same line as the procedure code for the advanced diagnostic imaging service that was furnished. These HCPCS modifiers include the three that were created to describe significant hardship exceptions (insufficient internet access (modifier MB), EHR or CDSM vendor issues (modifier MC) and extreme and uncontrollable circumstances (modifier MD)). Additionally, section 1834(q)(4)(C) of the Act includes an exception for services ordered for an individual with an emergency medical condition and modifier MA is available to identify claims for patients with a suspected or confirmed emergency medical condition. This set of codes is mutually exclusive and we expect only one to be reported per procedure code-level claim line.

Modifier QQ was created for use during the voluntary period, before more detailed modifiers and codes were created, to indicate that an ordering professional consulted a qualified CDSM for the service and related AUC consultation information was provided to the furnishing professional. The descriptor for this code explains that the ordering professional consulted a qualified CDSM for this service and the related information was provided to the furnishing professional. Modifier QQ continues to be available for use through the educational and operations testing period, but we intend to end the use of that modifier and not carry it forward into the payment penalty phase since we have established and will require the use of distinct modifiers to communicate specific AUC consultation information.

Modifier MH was created for use during the educational and operations testing phase to identify claims for which AUC consultation information was not provided to the furnishing professional and furnishing facility. When the AUC program enters the payment penalty phase, we will no longer have a need for this modifier because claims will be required to include AUC consultation information or indicate a reason the information is not required in order to avoid AUC program claims processing edits. Beginning for services furnished on and after the effective date of the AUC program claims processing edits, we proposed to redefine modifier MH to describe situations in which the ordering professional is not required to consult AUC and the claim is not required to report AUC consultation information. For example, we proposed to repurpose modifier MH to be used in the scenarios described in sections III.F.4.b.ii. (Critical Access Hospitals), III.F.4.b.iii (Maryland Total Cost of Care Model) if other options to identify claims are not feasible, and III.F.4.b.vii. (Date of Service and Date of Order) of this final rule as those scenarios would fall outside the scope of the AUC program requirements.

We received comments on the modifier discussion and proposals. The following is a summary of the comments we received and our responses.

Comment: Two commenters requested clarification on where the modifiers are to be placed on the claim. They noted that the proposed rule states that the modifier should be placed on the same line as the G-code denoting which qualified CDSM was consulted, however prior guidance in MLN Matters article 11268 states that the modifier should be placed on the same line as the CPT code for the imaging service.

Response: Thank you for bringing this to our attention and we apologize for the confusion. The description in the proposed rule was incorrect and has been revised in this final rule to be consistent with the previously communicated instructions in MLN Matters article 11268.

Comment: One commenter agreed with the proposed modifier clarifications. Three commenters supported the proposal to end the use of modifier QQ when the payment penalty phase of the program begins.

Response: We appreciate the comments.

Comment: Several commenters requested more clarification around the use of modifier MA. One commenter asked if MA can only be used in the emergency department and another commenter asked if MA applies to EMTALA patients generally or only to patients with certain conditions. One commenter requested more specific information including guidelines for accurate and appropriate use of modifier MA to avoid overuse. Another commenter requested that CMS confirm modifier MA includes suspected or confirmed emergency medical conditions and recommended adding “suspected or confirmed” to the regulatory text. One commenter requested that CMS ensure this exception accounts for the time-sensitive evaluation needs of emergency patients.

Response: We have addressed and provided clarification on the emergency services exception, denoted with modifier MA, in notice and comment rulemaking in prior years. The statute and regulations do not limit the use of this exception, and thus modifier MA, to emergency department settings. The exception, as specified in both statute and regulation, is for applicable imaging services for individuals with an emergency medical condition, which the statute defines with a cross reference to section 1867(e)(1) of the Act. The exception may be used consistent with the regulations and additional clarification as discussed in prior rulemaking. Most recently, in the CY 2019 PFS final rule (83 FR 59699), which reiterated clarifications from the CY 2017 PFS final rule, we reminded readers that we agree that exceptions granted for an individual with an emergency medical condition include instances where an emergency medical condition is suspected, but not yet confirmed. We further stated that this may include, for example, instances of severe pain or severe allergic reactions. In these instances, the exception is applicable even if it is determined later that the patient did not in fact have an emergency medical condition. Given the clarifications previously communicated through rulemaking and the existing description for modifier MA, we disagree that the regulatory text for the emergency services exception requires modification or further clarification.

Comment: One commenter asked what modifier is to be used for patients in the emergency department who do not qualify for the emergency services exception, but whose insurance is unknown when treated (as hospitals do not collect insurance information prior to emergency department medical screening), and therefore, a CDSM is not triggered. Another commenter requested that all emergency department visits be excluded since hospitals approach every patient as if they have an emergency medical condition thus requiring AUC consultations for emergency room patients without an emergency medical condition causes confusion and inconsistent practices within the emergency department.

Response: Because the statute explicitly includes the emergency department as an applicable setting under the AUC program, we are unable to categorically exclude all advanced diagnostic imaging services furnished in the emergency department, including those furnished to patients whose insurance is unknown at the time of treatment.

Comment: One commenter asked whether, and if so, how to report low acuity scores from CDSM consultations and whether low acuity scores will be reimbursed. Another commenter requested CMS clarify if claims with modifier MF or MG will be denied during the penalty phase.

Response: We believe the commenter asking about low acuity scores is referring to consultations where the order for the imaging service would not adhere to the AUC consulted (modifier MF) and are responding under this assumption. The statute specifies that, in order for a claim to be paid, information about the appropriateness of the ordered service is to be included on the claim. This reflects the certification or documentation qualified CDSMs are required to generate at the time of order under § 414.94(g)(1)(vi) when an ordering professional consults AUC and includes whether the service would adhere to the AUC consulted, whether the service would not adhere to the AUC consulted and whether the AUC consulted was not applicable to the service. As such, both modifier MF or MG may be appended to the claim to meet this requirement and the inclusion of these modifiers would not cause the claim for the service to be denied during the payment penalty phase.

Comment: We received many comments on our proposals for modifier MH. Two commenters supported the proposals to repurpose modifier MH for use in situations in which the ordering professional is not required to consult AUC and the claim is not required to report AUC consultation information when other modifiers do not apply and claims system edits cannot automatically exclude the claims. Two commenters recommended repurposing modifier QQ instead of MH and four commenters requested modifier MH be maintained and CMS instead create a separate modifier for these scenarios. Commenters cited a variety of reasons for their disagreement with this proposal. Other commenters requested CMS maintain modifier MH unchanged because it will continue to be needed to identify situations when the ordering professional does not consult or provide AUC information to the furnishing professional. Some commenters noted that modifier MH is needed to identify outliers for the prior authorization component and two commenters stated that modifier MH was specifically created to indicate which ordering professionals were outliers so the Secretary can impose requirements to ensure the AUC program is followed. Still, other commenters stated that maintaining modifier MH is important to avoid imposing burden, like regulatory enforcement or follow-up with ordering professionals to track down AUC information, on furnishing professionals and facilities. Some commenters supported maintaining modifier MH to avoid delays or impediments to care. One commenter requested modifier MH be maintained at the start of the payment penalty phase as a failsafe to avoid delays in care if the ordering professional has not provided AUC consultation information. One commenter stated that requiring furnishing providers not to provide imaging services for non-compliant clinicians could create a dangerous situation where patients are unable to obtain medically necessary care. One commenter disagreed with repurposing MH because their systems have already been programmed for the current use of MH and significant resources would be needed to reprogram and train if MH is repurposed. Other commenters recommended creating a new modifier instead of repurposing modifier MH to avoid confusion and continued reporting of MH for its current use.

Response: To avoid confusion, CMS agrees with commenters that modifier MH should not be repurposed for use on claims as proposed. However, we do not agree with commenters requesting that modifier MH be maintained for current usage once the payment penalty phase begins because such a provision was not specified in statute. The statute requires consultations to occur and for specific consultation information to be reported on the claim for the subsequently furnished imaging service in order for the claim to be paid. Unless an exception applies, Congress did not include a caveat excluding claims for services ordered by ordering professionals who either did not consult AUC or failed to provide consultation information to the furnishing professional from the statutory reporting requirements. As such, CMS does not have the authority to exclude these scenarios from the AUC program requirements. We also note that modifier MH was not created specifically to inform the outlier identification and prior authorization component of the program, as some commenters believe. Instead the other modifiers created to report the appropriateness of the consultation will be integral for identifying outlier ordering professionals as directed by the statute. Section 1834(q)(5)(B)(i) of the Act describes that the determination of an outlier ordering professional is to be based on low adherence to applicable AUC without mention of ordering professionals who fail to comply with the program requirements altogether. The statute does not provide a means for excusing or otherwise acknowledging these ordering professionals and we do not believe continued use of modifier MH during the payment penalty phase is within the parameters of the statute. Therefore, we intend to fully retire modifier MH when the payment penalty phase of the program begins.

Comment: One commenter asked if an ordering professional would be expected to do something on a pro forma basis to see if the order did adhere to applicable AUC guidelines and urged CMS to provide some grounding of good faith expectation for the furnishing provider to address missing AUC data to correct a claim when the AUC information was not originally provided. One commenter recommended that CMS create a document for furnishing professionals to use that would assist them in explaining to ordering professionals why they are required to consult AUC and provide that information with the order because there will be situations where the ordering professionals continue to fail to provide consultation information which causes the furnishing professionals to either provide the service for free or refuse to provide the service until the ordering professional provides necessary information.

Response: The AUC program requirements do not include provisions for further or additional AUC consultations by ordering professionals. We recognize and have discussed the challenging nature of this program where the furnishing professional is subject to immediate penalty based on the actions (or lack thereof) of the ordering professional, whose behavior the furnishing professional is unable to control. Regardless, CMS is obligated to implement these statutory provisions and does not have the authority to modify or mitigate the requirements. We will continue to work on education and outreach and explore opportunities to update and expand our written outreach materials which may help to inform or remind ordering professionals of their responsibilities under the AUC program. Below, we summarize and respond to comments on education and outreach, as well as the general nature, utility and appropriateness of the AUC program.

Comment: One commenter stated that, similar to issues with patient relationship codes, automatic crossover to non-Medicare secondary payers results in denials from secondary insurance when AUC modifiers are sent. The claims are denied for invalid modifiers and CMS should find a way to strip out the modifiers before submission to secondary non-Medicare payers to reduce denials. Two commenters suggested CMS consider requesting a new value code to be used for facility reporting on a UB-04 when the entity is exempt. One commenter stated that CMS has not specified what G-codes or modifiers would be required for reporting and this approach has been rejected by the National Uniform Claim Committee (NUCC) and National Uniform Billing Committee (NUBC) which stated that G-codes and modifiers would be administratively burdensome. One commenter requested that CMS ensure there is a simplified tracking and reporting system.

Response: The modifiers the AUC program are valid HCPCS modifiers. Health Insurance Portability and Accountability Act of 1996 (HIPAA) transaction and code set regulations require all payers to accept all valid HCPCS modifiers. We will continue to consider all claims processing options. However, through extensive research and engagement with stakeholders including the NUCC and NUBC, we have not identified a more streamlined and less burdensome approach to capturing all statutorily required information on the Medicare claim in real time.

After consideration of public comments, we are finalizing our proposals and ending the use of modifier QQ when the payment penalty phase begins. We will establish a new modifier to identify claims for services where the ordering professional is not required to consult AUC and the already established modifiers do not apply. This new modifier will apply when claims system edits cannot automatically exclude the claims to include the scenarios discussed in this final rule. Therefore, we are not finalizing our proposal to repurpose modifier MH for this use and instead, we intend to end the use of modifier MH when the payment penalty phase begins.

ix. Additional Claims Processing Information

Section 1834(q)(1)(D) of the Act specifies the applicable settings for the AUC program as a physician's office, a HOPD (including an emergency department), and ASC and any other provider-led outpatient setting determined appropriate by the Secretary. As discussed in the CY 2019 PFS final rule (83 FR 59690 and 59691), we added IDTFs to the definition of applicable setting at § 414.94(b) to the three applicable settings specified in statute because it is a provider-led outpatient setting in which advanced diagnostic imaging services are furnished by licensed, certified nonphysician personnel under appropriate physician supervision. To identify these settings through the Medicare claims system we evaluated type of bill and place of service codes to identify those aligned with applicable settings under the AUC program. For institutional claims, we proposed to limit AUC program claims processing edits to apply only to type of bill 13x (hospital outpatient). This claim type code encompasses the HOPD and the emergency department which represent all applicable settings under the program that will bill Medicare using institutional claims. For practitioner claims, we proposed to limit the edits to claims with place of service codes 11 (office), 15 (mobile unit), 19 (off campus outpatient hospital), 22 (on campus outpatient hospital), 23 (emergency room) and 24 (ASC). These place of service codes should encompass all applicable settings under the AUC program as defined at § 414.94(b). Because these type of bill and place of service codes reflect the applicable settings within which advanced diagnostic imaging services must be furnished to be subject to the AUC program requirements, we believe setting these parameters will allow us to more accurately pay claims while avoiding the need for other types of professionals and facilities to append modifiers to their claims.

We received public comments on limiting AUC program claims processing edits to apply only to institutional claims with type of bill 13x (hospital outpatient) and limiting the edits to professional claims with place of service codes 11 (office), 15 (mobile unit), 19 (off campus outpatient hospital), 22 (on campus outpatient hospital), 23 (emergency room) and 24 (ASC). The following is a summary of the comments we received and our responses.

Comment: One commenter noted that the proposals do not include claim types or place of service codes for IDTFs and requested that CMS clarify how claims processing edits would apply to IDTFs. Two commenters agreed with the place of service code proposals.

Response: We believe the institutional type of bill and professional claim place of service codes proposed above include all the applicable settings, including IDTFs, within which advanced diagnostic imaging services must be furnished to be subject to the AUC program requirements. We appreciate the comments.

After consideration of public comments, we are finalizing as proposed.

x. Claims Processing Summary

We have presented above some of the scenarios that CMS and stakeholders have identified as being potentially challenging or impracticable for application of the AUC program claims processing edits for purposes of the payment penalty phase. We requested feedback on whether additional scenarios require consideration and whether the proposed claims processing solutions will adequately address the issues raised. We also requested feedback on areas that stakeholders believe need more education to inform our ongoing outreach and education efforts. While much of the discussion is about identifying claims that are not subject to the AUC program, we note that physicians and other practitioners, or providers submitting claims for advanced imaging services that are not subject to the AUC program can voluntarily report AUC consultation information. We intend to allow those claims to process through the system. We requested commenters to provide additional information to assist us in developing edits that ensure only appropriate claims are subject to AUC claims processing edits.

c. Timing of Payment Penalties

We had previously announced in August 2020, via the CMS AUC website, that the education and operations testing period of the AUC program would be extended through 2021 and the payment penalty phase will begin in January 2022. However, given the many complexities around the scope and application of AUC program claims processing edits, we believe that notice and comment rulemaking is the most appropriate means for us to discuss the implementation and claims processing issues, the start date of the payment penalty phase, and to obtain stakeholder feedback before subsequently finalizing a course of action in the final rule. This process will help ensure that we will appropriately identify claims for denial when the payment penalty phase of the program begins. In addition, we acknowledge the circumstances of physicians and other practitioners, and providers, due to the PHE for COVID-19 and that additional time may be needed to prepare for the payment penalty phase given the challenges and practice disruptions they have experienced while responding to the PHE.

The earliest that our claims processing system can begin screening claims using the AUC program claims processing edits for the payment penalty phase is October 2022. This is because it would not be possible for us to finalize implementation and claims processing plans in this final rule (typically published on or before November 1) and make those decisions effective any earlier than the 3rd calendar quarter of 2022. Implementing the types of claims processing edits necessary for this program generally requires a long lead time. However, we note that an effective date for the claims processing edits in October 2022 may be misaligned with typical annual updates to the systems used by the health care providers that are subject to the AUC program such as EHR, CDSM or claims submission systems. Therefore, we believe the earliest practicable effective date for the AUC program claims processing edits and payment penalty phase is January 1, 2023.

While the above date takes into account technical system and programming concerns, it does not expressly take into the account the impact that the PHE for COVID-19 has had, and may yet have, on practitioners, providers and beneficiaries. Therefore, we proposed a flexible effective date for AUC program claims processing edits and payment penalty phase to begin the later of January 1, 2023, or the January 1 that follows the declared end of the PHE for COVID-19.

We acknowledge that the AUC program has been significantly delayed. We solicited public comment on this proposal for the payment penalty phase to begin, and whether we have appropriately taken into account the PHE for COVID-19 and other factors. We recognize that some practitioners and institutions have already invested in qualified CDSMs, while others have had to redirect their resources during the PHE. We solicited information from the public on the state of readiness of practitioners, facilities, and EHR and CDSM vendors.

We received public comments on these proposals for the start of the payment penalty phase of the AUC program. The following is a summary of the comments we received and our responses.

Comment: One commenter requested no further delay to starting the program, and 94 commenters supported the proposal to begin the payment penalty of the program on the later of January 1, 2023 or the January 1 of the year after the year in which the PHE for COVID-19 ends. One commenter supported delaying the start of the payment penalty phase in 2022, but encouraged full implementation in 2023, another commenter requested CMS ensure full implementation in 2023. One commenter requested the payment penalty phase be delayed until 2024, while other commenters requested the payment penalty phase not begin until January 1, 2024 or January 1 of the year after the year in which the PHE ends, whichever is later. One of these commenters recommended this timeframe to ensure a testing year with all coding and billing requirements in place to allow time for HIT developers to make software changes to accommodate claims processing requirements. One commenter stated that physicians must be given at least 12 months to prepare for the penalty phase of the program once CMS makes public that all claims processing edits have been made and tested successfully. One commenter stressed the importance of ensuring physicians have the opportunity to adjust to the AUC program in a thoughtful and deliberate manner that would allow interoperability and the opportunity to develop solutions for data exchange between the ordering and furnishing professionals to leverage IT to reduce burden and suggested gradual implementation where claims are paid regardless of whether information is included on the claim. One commenter recommended using 2023 as an educational year where claims with errors are returned for correction without any financial penalty or denial due to AUC and implement the payment penalty phase no earlier than 2024. Another commenter suggested that CMS continue voluntary participation where AUC consultation using a CDSM is not required and reimbursement is not contingent on documentation of consultation on the furnishing professional's claim.

Two commenters stated that they do not support the AUC program, one commenter requested that the AUC program should be abandoned and another commenter requested that the policy be revoked because it impacts timely access to care. Two commenters, citing implementation challenges and costs, stated that it is inconsistent with the best interests of Medicare and practices to divert resources from patient care to fully implement the AUC program. Another commenter asserted that imposing AUC requirements on ordering professionals for radiologists to be paid will be an “administrative nightmare.” One commenter noted that hospitals are working on the implementation of AUC within their systems and the process has not been easy. Several commenters addressed the burden of the AUC program requesting that CMS ensure a least burdensome approach for implementation and work to alleviate burden and improve relevance of the program to physicians and Medicare. One commenter noted that, as designed, the AUC program does not foster the type of education about AUC that is necessary for AUC to have its intended effect.

Other commenters offered suggestions on further delays. Some commenters suggested the program not progress to the payment penalty phase until the vast majority of claims would meet the requirements to be paid. One commenter encouraged CMS to continue to analyze claims to ensure significantly higher percentage of claims report compliant AUC information and consider additional delays in the future. Another commenter also requested that CMS continue to monitor claims and consider deferring the payment penalty phase until at least 75 percent of claims for advanced diagnostic imaging services for the particular clinical specialty include adequate information for payment. Two commenters recommended CMS delay the program and solicit feedback on whether it requires updating before full implementation. Two commenters suggested additional delays and one commenter suggested indefinite delay. One commenter supported further delay in the absence of full program repeal with consideration for the overlap and duplicative burden with Medicare quality programs.

Commenters offered additional opinions on the AUC program in light of Medicare quality programs. Seven commenters asserted that the AUC program is unnecessary for APM participants because they are accountable for quality and cost of care, including incentives to reduce unnecessary imaging. These commenters noted that the AUC program does not consider quality, patient outcomes or other important factors more appropriately addressed in APMs. Two commenters requested CMS consider if a stand-alone AUC program is necessary or if requirements are redundant for QPP participants and one commenter requested CMS consider combining the AUC program with existing quality programs. One commenter suggested CMS consider aligning the goals and requirements of the AUC program with APMs and quality reporting programs to minimize burden and duplication. Other commenters requested CMS reduce burden of the AUC program since it has been superseded by the QPP. One commenter expressed disappointment at the absence of dialogue about how existing quality programs can be leveraged to encourage AUC consultation.

Some commenters suggested alternate options for enforcing compliance with AUC consultation requirements. Two commenters recommended allowing the use of qualified clinical data registries and another commenter recommended collecting requisite data directly from CDSMs. One commenter requested an annual attestation and CDSM audit approach and another suggested replacing claim-by-claim adjudication with provider attestation. Two commenters recommended CMS consider limiting AUC reporting to priority areas. Two commenters suggested revising the program so that payment penalties are paid by the referring physician and not the rendering provider. One commenter recommended CMS re-evaluate the foundational design of the program and the value it brings relative to potential burden and disruptions to clinical workflow. One commenter suggested a better solution than the AUC program would be to have rheumatology societies, orthopedic societies and primary care societies write best practice white papers, incorporate those guidelines into training and into a quality measure for those specialties.

Some commenters recommended that CMS engage with Congress to address the future of the AUC program. Two commenters requested the program be further delayed so CMS can work with Congress to re-evaluate the feasibility and utility of the program and how appropriate use of imaging can be addressed through the QPP or other value-based initiatives and one commenter recommended CMS work with Congress to evaluate the validity of the AUC program given the significant time lapse between program inception and implementation. Some commenters also referenced the provision accompanying H.R. 4502 directing CMS to prepare a report to Congress on program implementation. Specifically, H. Rept. 117-96 “requests a report within 180 days of enactment of this Act on implementation of this program, including challenges and successes. In this report, CMS shall consider existing quality improvement programs and relevant models authorized under section 1115A of the Act and their influence on encouraging appropriate use of advanced diagnostic imaging. The Committee directs CMS to consult with stakeholders, including medical professional societies and developers of AUC and clinical guidelines, when formulating its report.” One commenter requested that CMS work expeditiously and in consultation with medical societies to fulfill the Congressional request once the appropriations bill is finalized and that the report include a comprehensive examination of existing and emerging quality improvement programs and relevant models being pursued by CMS Innovation Center and how they can influence appropriate use of advanced diagnostic imaging.

Many commenters requested that CMS use the additional time resulting from the proposed delay of the payment penalty phase to increase education and outreach efforts. One commenter shared that radiology practices are finding that ordering professionals are non-compliant and hospitals are non-responsive, thinking that they are not required to comply with the AUC program requirements so more education and webinars are needed. Commenters encouraged stakeholder engagement and identification of additional guidance and new flexibilities, significant education and technical assistance efforts, ongoing dialogue with providers and CDSM vendors to resolve remaining implementation issues and feedback on best practices. One commenter requested CMS provide regular program updates quarterly beginning at the end of the first quarter of 2022 on the status of implementation and the anticipated payment penalty start date. One commenter stated that CMS initiate an education and outreach campaign akin to efforts for operationalizing the new Medicare Beneficiary Identifier. Several commenters requested CMS release claims information more frequently. One commenter requested quarterly claims data updates about AUC reporting uptake and common errors. One commenter requested that CMS release more detailed information on claims that were compliant with AUC, particularly what percentage included modifier MH. This commenter stated that a high percentage of claims with modifier MH would indicate that citing a 9-10 percent compliance rate in the proposed rule is disingenuous since modifier MH likely indicates that the ordering professional and furnishing professional have not established a communication process and those claims would have been denied in the payment penalty phase.

Response: We appreciate the extensive and thoughtful comments and recommendations on the AUC program and the proposal to begin the payment penalty phase of the program on the later of January 1, 2023, or the January 1 that follows the declared end of the PHE for COVID-19. We also appreciate that stakeholders would like CMS to do more to address the extensive concerns stakeholders have about the appropriateness of the AUC program. However, we note that this program is required by statute, and must implement the program within the bounds of our statutory authority. We will continue to explore opportunities for reducing burden of the AUC program by leveraging other quality programs within the provisions set forth in statute. We further appreciate the requests and suggestions for expanded education and outreach efforts. We will continue to make information available on the AUC website and explore more opportunities for increasing these efforts and the scope of information available, including reporting compliance during the remainder of the educational and operations testing period, to assist all stakeholders in better understanding and complying with the AUC program requirements.

After consideration of public comments, we are finalizing our proposal to begin the payment penalty phase of the AUC program on the later of January 1, 2023 or the January 1 that follows the declared end of the PHE for COVID-19.

5. Summary

In summary, we provided clarifications and proposals around the scope of the AUC program specifically pertaining to updates or modifications to orders for advanced diagnostic imaging services and the extreme and uncontrollable circumstances significant hardship exception. We also proposed several claims processing solutions to ensure accurate identification of claims that are and are not subject to the AUC program requirements. These proposals addressed special circumstances related to: services furnished by a CAH, services paid under the Maryland Total Cost of Care Model, inpatients converted to outpatients, situations when Medicare is the secondary payer, and imaging services ordered prior to the payment penalty phase but furnished on or after the start of the payment penalty phase. We also discussed identifying the ordering professional on practitioner claims for the imaging service and request feedback on whether it is more appropriate to deny or return claims that fail AUC claims processing edits. We also proposed to begin the AUC claims processing systems edits and payment penalty phase of the program on the later of January 1, 2023, or the January 1 of the year after the year in which the PHE for COVID-19 ends. We invited the public to submit comments on these clarifications and proposals.

We are finalizing all proposals except our proposal to repurpose modifier MH. Specifically, we are finalizing the following:

Provisions specific to orders for advanced diagnostic imaging services that are modified in accordance with chapter 15, sections 80.6.1-4 of the Medicare BPM. When the ordering professional cannot be reached to submit a new order, the AUC consultation information that accompanied the original order is to be included on the claim for the imaging service(s) ultimately furnished.

Claims submitted by physicians or practitioners for the PC of an advanced diagnostic imaging service when the TC was not furnished in an applicable setting are not subject to the AUC program since the setting where the TC of the imaging service is furnished is not subject to the AUC program consultation and reporting requirements. A new HCPCS modifier will be established to identify claims for services where the ordering professional is not required to consult AUC and when previously established modifiers described above (MA-MG) do not apply. These are claims for which system edits cannot automatically exclude the claim. This new modifier will be used to identify practitioner claims for the PC of advanced diagnostic imaging services that are not subject to the AUC program because the TC was not furnished in an applicable setting and when CMS has not identified an automated mechanism to identify the claim.

We will allow institutional claims with condition code 44 to bypass AUC claims processing edits.

We will allow claims that identify Medicare as the secondary payer (using block 1 or the electronic equivalent of the practitioner claims and using FL 50/51 or the electronic equivalent of institutional claims) to bypass the AUC program claims processing edits.

For imaging services ordered prior to, but furnished on or after the effective date of the AUC program claims processing edits, the furnishing professional is to apply the new HCPCS modifier that will be created as discussed above for use on claims for advanced diagnostic imaging services that are not subject to the AUC program that are not otherwise identified by modifiers MA—MG or edits within the claims processing system.

End the use of modifier QQ when the payment penalty phase begins and use a specific modifier to identify scenarios where the ordering professional is not required to consult AUC and the claim is not required to report AUC consultation information when other modifiers do not apply and claims system edits cannot automatically exclude the claims. We will not finalize as proposed, to repurpose modifier MH for this purpose. Instead, we will establish a new HCPCS modifier and intend to end the use of modifier MH when the payment penalty phase begins.

Limit AUC program claims processing edits to apply only to institutional claim type of bill 13x (hospital outpatient) and, for professional claims, limit the edits to claims with place of service codes 11 (office), 15 (mobile unit), 19 (off campus outpatient hospital), 22 (on campus outpatient hospital), 23 (emergency room) and 24 (ASC).

Begin the payment penalty phase to begin the later of January 1, 2023, or the January 1 that follows the declared end of the PHE for COVID-19.

We will continue to post information on our website for this program, accessible at www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html.

G. Removal of Selected National Coverage Determinations

CMS periodically identifies and removes National Coverage Determinations (NCDs) that no longer contain clinically pertinent and current information, in other words those items and services that no longer reflect current medical practice, or that involve items or services that are used infrequently by beneficiaries. Clinical science and technology evolve, and items and services that were once considered state-of-the-art or cutting edge and experimental may be established as reasonable and necessary for Medicare beneficiaries or replaced by more beneficial technologies or clinical paradigms.

In the CY 2021 PFS final rule (85 FR 84472), we established rulemaking as an appropriate vehicle for receiving public comment on removing outdated NCDs, replacing the prior subregulatory administrative process used on two occasions in 2013 and 2015. Using rulemaking under section 1871(a)(2) of the Act allows us to consider removal of several NCDs at once as compared to the public comment process established in section 1862(l) of the Act, to be used in making and reconsidering individual NCDs.

Eliminating an NCD that provides national coverage for items and services means that the item or service will no longer be automatically covered by Medicare (42 CFR 405.1060). Instead, the initial coverage determinations for those items and services will be made by local Medicare Administrative Contractors (MACs). On the other hand, removing an NCD that bars coverage for an item or service under title XVIII of the Act (that is, national noncoverage NCD), allows MACs to cover the item or service if the MAC determines that such action is appropriate under the statute. Removing a national non-coverage NCD may permit more immediate access to technologies that may now be beneficial for some uses. As the scientific community continues to conduct research, which produces new evidence, the evidence base we previously reviewed may have evolved to support other policy conclusions.

In the CY 2021 PFS final rule, we did not establish an exclusive list of criteria that we would use for identifying and evaluating NCDs for removal. Instead, based on recommendations in public comments, and to be more flexible and nimble, we added considerations to the six factors established in 2013 to guide our decision making process. In addition to the six factors listed below, we also consider the general age of an NCD, changes in medical practice/standard of care, the pace of medical technology development since the last determination, and availability and quality of clinical evidence and information to support removal of an NCD. We would consider proposing the removal of an NCD if any of the following factors are present:

• We believe that allowing local contractor discretion to make a coverage decision better serves the needs of the Medicare program and its beneficiaries.
• The technology is generally acknowledged to be obsolete and is no longer marketed.
• In the case of a noncoverage NCD based on the experimental status of an item or service, the item or service in the NCD is no longer considered experimental.
• The NCD has been superseded by subsequent Medicare policy.
• The national policy does not meet the definition of an “NCD” as defined in sections 1862(l) or 1869(f) of the Act.
• The benefit category determination is no longer consistent with a category in the statute.

When we evaluate particular NCDs for removal, we take into account information gathered from stakeholders, the claims data for those items and services, and factors such as whether there may be documentation requirements within the NCD that are outdated and create a barrier to coverage. The rulemaking process provides an opportunity to consider public input before the NCD would be removed. We could decide to retain those NCDs after considering public comments.

In Table 33, we list the NCDs that we proposed to remove. In addition to conducting an internal review to identify appropriate NCDs for removal, we receive removal requests from a variety of external stakeholders, such as medical specialty societies, device manufacturers, beneficiaries, physicians and providers, and other interested individuals. Additionally, sometimes topics are brought to our attention by the MAC medical directors. Also, we received comments to the NCD Removal proposal in response to the CY 2021 PFS proposed rule suggesting another seven NCDs for CMS to consider removing. After reviewing those comments and considering other available evidence and information, we proposed to remove one of those seven NCDs in this rulemaking cycle. We have opened a national coverage analysis (NCA) using the NCD process for one and stated in the CY 2021 PFS proposed rule that we believed the other five NCDs should be retained.

We solicited comment on the two NCDs discussed in Table 33, as well as comments recommending other NCDs for CMS to consider for removal in a future rulemaking or through the NCD process.

The following outlines each NCD and provides a summary of the rationale for removal. Each of the current NCDs below is available in the Medicare National Coverage Determinations Manual located at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS014961 .

1. NCD 180.2 Enteral and Parenteral Nutritional Therapy (July 11, 1984)

• Circumstances/Factor: We believe that allowing local contractor discretion to make a coverage decision better serves the needs of the Medicare program and its beneficiaries.

• Rationale: External stakeholders suggested that portions of this NCD are outdated. Enteral nutrition is the delivery of food to a patient with a functioning gastrointestinal tract who, due to pathology to, or non-function of the structures that normally permit food to reach the digestive tract, cannot maintain weight and strength. Enteral nutrition is provided through a nasogastric, jejunostomy, or gastrostomy tube. Parenteral nutrition is provided intravenously to the patient with pathology of the alimentary tract severe enough, that it does not allow for absorption of sufficient nutrients. This NCD does not provide as a matter of course, for pharmacy prepared parental solutions, which would increase patient safety. It also unnecessarily adds to patient and provider burden as it requires repeated reviews of medical necessity for those individuals who need enteral or parenteral nutrition services as a result of chronic diseases that affect the ability to eat or to digest/absorb nutrition. Local contractors have proposed LCDs that, if finalized, would provide parenteral and enteral nutrition coverage for certain Medicare beneficiaries. Therefore, we believe that removing this NCD would better serve the needs of the Medicare program and its beneficiaries.

2. NCD 220.6 Positron Emission Tomography (PET) Scans (September 3, 2013)

• Circumstances/Factor: We believe that allowing local contractor discretion to make a coverage decision better serves the needs of the Medicare program and its beneficiaries.

• Rationale: External stakeholders suggested this NCD may be outdated. NCD 220.6 established broad national non-coverage for non-oncologic indications of PET and was established in 2000. Thus, we required that every non-oncologic indication for PET must have its own NCD in order to receive coverage. In 2013, we reconsidered the NCD to allow coverage for diagnostic PET imaging for oncologic uses not already determined by an NCD, to be made at the discretion of local MACs, due to “various improvements in the technical, regulatory and professional aspects of PET imaging for diagnosis.” Since the 2013 reconsideration, new non-oncologic PET agents have been approved by the FDA and multiple professional medical societies have published guidelines relevant to appropriate use of these agents. We believe that local contractor discretion provides an immediate avenue to potential coverage in appropriate candidates for non-oncologic indications. Therefore, we proposed to eliminate subsection 220.6 to remove the broad national bar to coverage of PET scans for non-oncologic indications, thus allowing local Medicare contractors to make a coverage determination under section 1862(a)(1)(A) of the Act for beneficiaries. We believe this framework better serves the needs of the Medicare program and its beneficiaries. For clarity, we did not propose to change any other subsections of 220.6. Thus, the NCDs listed at 220.6.1 through 220.6.20 will not be changed by removing this NCD.

In summary, we solicited comment on the proposal to remove the two NCDs, as well as comments recommending other NCDs for CMS to consider for future removal. We requested commenters include a rationale to support their comments. We use the public comments to help inform our decision to take one of three actions on the three NCDs proposed for removal:

• Remove the NCD, as proposed, allowing for coverage to be determined by the MACs.
• Retain the current policy as an NCD.
• Reconsider the NCD by opening a National Coverage Analysis. Comments suggesting that the NCD should be revised, rather than eliminated, should include new evidence that was not previously available at the time of the original NCD or at the time the NCD was last reconsidered, in order to support a change in national coverage.

We received public comments on the Removal of Selected National Coverage Determinations (NCDs). The following is a summary of the comments we received and our responses.

Comment: Many commenters supported removing NCD 220.6 Positron Emission Tomography (PET) Scans. No commenters opposed removing this NCD. Several commenters additionally offered suggestions for replacement language to be placed in Pub. 100-3 the Medicare National Coverage Determinations (NCD) Manual to specify that non-oncologic uses of PET will be at MAC discretion.

Response: We thank commenters for their support and for suggested revisions to the NCD Manual. We will finalize removal as proposed. When we remove an NCD, as part of the implementation process we update the applicable section of the Manual. We generally replace the prior NCD Manual section with language indicating that the NCD has been removed and that in the absence of an NCD, coverage determinations will be made by the MACs under section 1862(a)(1)(A) of the Act.

Comment: One commenter, while supporting removal of NCD 220.6, expressed concern that we might also remove NCDs 220.6.1 PET for Perfusion of the Heart and 220.6.8 FDG PET for Myocardial Viability.

Response: We did not propose to remove NCDs 220.6.1 or 220.6.8. The NCDs listed at 220.6.1 through 220.6.20 are not repealed or changed.

Comment: Several commenters supported the removal of NCD 180.2 Enteral and Parenteral Nutritional Therapy. One commenter stated that local coverage will create opportunities for new guidance through new coverage articles and coding guidance and will increase the opportunity to for the commenter to provide the best care possible to Medicare beneficiaries. Several commenters agreed that the 1984 NCD is outdated and does not reflect current clinical practice. Several commenters agreed with CMS' goal of improving patient access, as well as efficacy and safety and several agreed that removing this NCD would better serve the needs of the Medicare program and its beneficiaries.

Response: We thank commenters for their support.

Comment: Several commenters requested that instead of removing NCD 180.2 that CMS reconsider the NCD. A few of these commenters also cited general concerns about allowing MACs to make local coverage determinations (LCDs) including perceived discrepancies in the availability of coverage across regions of the country.

Response: We appreciate the commenters' suggestion, but because the current NCD is outdated we believe it should be removed, rather than revised through the NCD process. As we have noted, the NCD does not provide as a matter of course, for coverage of pharmacy prepared parenteral solutions. Removing the NCD is the fastest way to enable coverage for pharmacy developed formulas and to advance patient safety. The NCD also unnecessarily adds to patient and provider burden as it requires repeated reviews of medical necessity for those individuals who need enteral or parenteral nutrition services as a result of chronic diseases that affect the ability to eat or to digest/absorb nutrition. Therefore, we believe that removing this NCD would better serve the needs of the Medicare program and its beneficiaries, instead of reconsidering and revising the NCD.

Comment: Some commenters requested that CMS reconsider NCD 180.2 and create a new benefit category for enteral and parenteral nutrition to encompass more than the current statutory definition of prosthetic devices. We also received several comments requesting that CMS either reconsider NCD 180.2 or open a new NCA to add coverage for amino acid supplements and medical foods for Inborn Errors of Metabolism (IEM), such as Phenylketonuria, Maple Syrup Urine Disease, and Homocystinuria.

Response: The scope of benefits available to eligible Medicare beneficiaries under Parts A and B is prescribed by law in title XVIII of the Act. See sections 1812, 1833, and 1861(s) (definition of medical and other health services) of the Act. Congress has not empowered the Secretary to establish and add new benefit categories. We have covered parenteral and enteral nutrition based on the prosthetic devices benefit in section 1861(s)(8) of the Act for certain patients. Enteral nutrition is the delivery of food to a patient with a functioning gastrointestinal tract who, due to pathology to, or non-function of the structures that normally permit food to reach the digestive tract, cannot maintain weight and strength. Enteral nutrition is provided through a nasogastric, jejunostomy, or gastrostomy tube. Parenteral nutrition is provided intravenously to the patient with pathology of the alimentary tract severe enough, that it does not allow for absorption of sufficient nutrients. We do not have the authority to establish new Medicare benefit categories or to establish coverage through NCDs for items or services that fall outside the scope of the Medicare Part A or Part B benefits prescribed in the Act. We do not have authority under the current statute to cover oral nutritional material for patients whose medical condition would not require a prosthetic device.

Comment: Some commenters stated that nutritional supplements for IEM should be considered and covered as medications.

Response: Although Medicare does cover certain drugs and biologicals under Part B, the nutritional materials do not meet the statutory definition of drugs under the statutory definition in section1861(t)(1) of the Act because they do not have a monograph in USP-NF (the United States Pharmacopeia (USP) and the National Formulary (NF)).

Comment: Some commenters discussing coverage for IEM expressed fears that the proposal to remove NCD 180.2 will take away their current coverage for these nutritional formulas for their children or family members under other health insurance programs.

Response: A Medicare NCD establishes whether or not an item or service is covered nationally under Title XVIII of the Act. Although the NCD is a controlling authority for Medicare contractors and Administrative Law Judges as specified in § 405.1060, it does not have the force of law and is not controlling for other programs.

Comment: One commenter requested that CMS require the MACs to act quickly to update local coverage decisions and applicable coverage articles.

Response: We understand that the MACs have completed updates to two LCDs, one each for enteral nutrition and parenteral nutrition, and associated coverage articles which became effective for services performed on or after September 5, 2021, and apply to each of the DME MACs.

Comment: Several commenters were also concerned that the new LCDs that recently became effective in September 2021, as well as other CMS manuals and local coverage articles still follow and reference NCD 180.2.

Response: Once our NCD is removed from the National Coverage Determinations Manual, we will coordinate any necessary technical changes to remove cross-references to the removed NCD 180.2 from any, LCDs, CMS manuals, guidance documents, or articles.

Comment: A few commenters requested that CMS address in NCD 180.2 the role of registered dietician nutritionists (RDNs) as part of the health care team in supporting both the ordering physician and the Medicare beneficiary in developing, implementing, and monitoring the enteral or parental nutrition plan of care. The commenters also requested CMS provide coverage for medical nutrition therapy (MNT) provided by RDNs for enteral and parenteral nutrition therapy.

Response: The Enteral and Parenteral Nutritional Therapy NCD (NCD 180.2) does not include a discussion of coverage for related practitioner services or Medical Nutrition Therapy that is addressed in a separate regulation. We are not accepting the commenters' suggestion to retain and revise the NCD to address those issues. We are, however, addressing other issues related to Medical Nutrition Therapy separately in this final rule.

Comment: Some commenters recommended additional NCDs for future removal including: NCD 20.7 Percutaneous Transluminal Angioplasty (PTA); NCD 140.1 Abortion; NCD 160.22 Ambulatory EEG Monitoring; NCD 220.6.19 Positron Emission Tomography (NaF-18) to Identify Bone Metastasis of Cancer; NCD 220.6.20 Beta Amyloid Positron Tomography in Dementia and Neurodegenerative Disease; NCD 220.13 Percutaneous Image-Guided Breast Biopsy; NCD 230.2 Uroflowmetric Evaluations; NCD 230.11 Diagnostic Pap Smears; and NCD 230.16 Bladder Stimulators (Pacemakers).

Response: We thank commenters for their recommendations and will take the suggestions under advisement for future review.

Comment: One commenter, while agreeing with using the rulemaking process to remove NCDs, stated that 10 years may be too long to keep pace with current science and clinical developments. The commenter suggested that a “hybrid of annual review as an opportunity to remove obviously outdated NCDs with 10 years as a marker for an additional level of scrutiny may be effective to maintain NCD relevance”. The commenter stated that this would require an additional level of effort and commitment that may prove challenging for CMS and stakeholders to manage.

Response: We appreciate the commenter's recommendation and agree that this would prove challenging for CMS to manage. We will consider whether the hybrid approach could be included as part of our internal process. We acknowledge the rapid pace of medical technology development and changes in standard of care and/or clinical evidence may occur more rapidly than every 10 years, and we will consider those factors, as well as we evaluate whether existing NCDs should be removed.

After consideration of public comments, we are finalizing as proposed removal of both NCD 180.2 Enteral and Parenteral Nutrition Therapy and NCD 220.6 Positron Emission Tomography (PET) Scans because removing these two NCDs better serves the needs of the Medicare program and its beneficiaries.

H. Pulmonary Rehabilitation, Cardiac Rehabilitation and Intensive Cardiac Rehabilitation

Conditions of coverage for pulmonary rehabilitation (PR), cardiac rehabilitation (CR) and intensive cardiac rehabilitation (ICR) are codified at 42 CFR 410.47 and 410.49. We proposed revisions to the PR and CR/ICR regulations to emphasize that though one program treats a respiratory disease and one treats cardiac conditions, both types of programs aim to improve quality of life for their participants using similar methods. Because many components are shared between PR and CR/ICR, we strive to ensure consistency in the regulatory language used for these therapeutic programs. Additionally, we proposed to more closely conform the PR and CR regulations by removing a PR requirement, and to add COVID-19 as a covered condition for PR for certain beneficiaries. As discussed by Fleg and colleagues (2020), CR and PR continue to be severely underutilized despite clear benefits on clinical and patient-centered outcomes. In fact, Million Hearts® 2022, a national initiative co-led by the Centers for Disease Control and Prevention (CDC) and CMS to prevent 1 million heart attacks and strokes within 5 years, has incorporated a goal for increasing CR utilization. Million Hearts® worked with CR professionals to set a goal of 70 percent CR participation for eligible patients. With these proposals to improve accuracy and consistency of the regulatory language specifying Medicare conditions of coverage for PR and CR/ICR, we hope to assist programs to better understand the PR and CR/ICR conditions of coverage.

We received 29 public comments on these proposals. Commenters overwhelmingly supported adding COVID-19 as a covered condition for PR for certain beneficiaries. Commenters also largely agreed with the proposed revisions to the PR and CR/ICR regulatory text to improve consistency and accuracy across PR and CR/ICR conditions of coverage.

In the following sections, we provide detailed summaries and responses to the comments submitted on these proposals.

1. Statutory Authority

Section 144(a) of the Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275, July 15, 2008) (MIPPA) amended Title XVIII to add new section 1861(eee) of the Act to provide coverage of CR and ICR under Medicare part B, as well as new section 1861(fff) of the Act to provide coverage of PR under Medicare part B. The statute specified certain conditions for coverage of these services and an effective date of January 1, 2010. Conditions of coverage for PR, CR and ICR consistent with the statutory provisions of section 144(a) of the MIPPA were codified in §§ 410.47 and 410.49 respectively through the CY 2010 PFS final rule with comment period (74 FR 61872 through 61886 and 62002 through 62003 (PR) 62004 through 62005 (CR/ICR)).

2. Background

Under § 410.47(b), Medicare part B covers PR for beneficiaries with moderate to very severe chronic obstructive pulmonary disease (COPD) (defined as GOLD classification II, III and IV), when referred by the physician treating the chronic respiratory disease and allows additional medical indications to be established through a national coverage determination (NCD). We have not expanded coverage of PR further using the NCD process.

The conditions of coverage for CR and ICR set forth in MIPPA were codified in § 410.49 through the CY 2010 PFS final rule with comment period. In 2014, we expanded coverage of CR through the NCD process (NCD 20.10.1, Cardiac Rehabilitation Programs for Chronic Heart Failure (Pub. 100-03) to beneficiaries with stable, chronic heart failure. Section 51004 of the Bipartisan Budget Act (Pub. L. 115-123, February 9, 2018) (BBA of 2018), amended section 1861(eee)(4)(B) of the Act to expand coverage of ICR to include patients with stable, chronic heart failure. Section 410.49 was updated to codify this expansion through the CY 2020 PFS final rule (84 FR 62897 through 62899 and 63188).

Under § 410.49(b), Medicare part B covers CR and ICR for beneficiaries who have experienced one or more of the following: (1) An acute myocardial infarction within the preceding 12 months; (2) a coronary artery bypass surgery; (3) current stable angina pectoris; (4) heart valve repair or replacement; (5) percutaneous transluminal coronary angioplasty (PTCA) or coronary stenting; (6) a heart or heart-lung transplant; (7) stable, chronic heart failure defined as patients with left ventricular ejection fraction of 35 percent or less and New York Heart Association (NYHA) class II to IV symptoms despite being on optimal heart failure therapy for at least 6 weeks, on or after February 18, 2014 for cardiac rehabilitation and on or after February 9, 2018 for intensive cardiac rehabilitation; or (8) other cardiac conditions as specified through an NCD. The NCD process may also be used to specify non-coverage of a cardiac condition for ICR if coverage is not supported by clinical evidence.

As set forth in statute, PR, CR and ICR are programs furnishing physician-supervised items and services that may be furnished in a physician's office or hospital outpatient setting or in other settings determined appropriate by the Secretary. When items and services are furnished under these programs, a physician must be immediately available and accessible for medical consultation and medical emergencies. PR, CR and ICR programs must include: Physician-prescribed exercise, psychosocial assessment, outcomes assessment, cardiac risk factor modification (for CR/ICR) and education or training (for PR), and individualized treatment plans (ITPs) established, reviewed and signed by a physician every 30 days. The statute also includes physician requirements for PR and CR/ICR programs. Namely, section 1861(eee)(5) of the Act requires that the Secretary establish standards to ensure that a physician with expertise in the management of individuals with cardiac pathophysiology is responsible for the CR/ICR program and that such physician, in consultation with appropriate staff, is involved substantially in directing the progress of individual in the program. Section 1861(fff)(3) of the Act similarly requires the Secretary establish standards that ensure that a physician with expertise in the management of individuals with respiratory pathophysiology is responsible for the PR program and, in consultation with appropriate staff, is involved substantially in directing the progress of individual in the program. We established physician standards for PR at § 410.47 and for CR/ICR at § 410.49.

Under the statute, PR and CR/ICR programs include individualized treatment that is furnished under a written plan established, reviewed, and signed by a physician every 30 days. We codified this requirement in §§ 410.47 and 410.49 by defining and describing the ITP which must be established, reviewed, and signed by a physician every 30 days. Because the statute requires a plan to be established, reviewed, and signed by a physician every 30 days, we cannot alter this requirement.

Stakeholders have indicated to us that it is very challenging for a program to fulfill these tasks on each patient's first day of PR or CR/ICR. Stakeholders have also expressed concerns that there is not separate and additional payment for medical directors or other physicians to develop and sign the ITPs. In response to these concerns, we note that the medical director and any staff physician(s) working in the PR or CR/ICR program who is involved in the patient's care and has knowledge related to the patient's condition, or the patient's treating and/or referring physician, may establish, review and sign ITPs. When appropriate and when all billing requirements are met, a separately billable E/M service may be furnished by the medical director or other PR or CR/ICR staff physician(s) working in the program in connection with establishing and signing the ITP on or before the first day of PR or CR/ICR. Additionally, physicians treating patients for their cardiovascular or respiratory conditions, but who are not staff of the PR or CR/ICR programs, are not precluded from developing and signing ITPs for their patients before they begin PR or CR/ICR programs. While the CY 2010 PFS final rule for PR (74 FR at 61883) stated that the PR physician must review and sign the ITP prior to initiation of PR even if the plan was developed by a different physician, we recognize that this imposes greater burden and may potentially delay treatment. ITPs developed and signed on or before the first day of PR by a physician who is treating the patient's respiratory condition outside of the PR program will not require an additional signature from the PR medical director (or any other physician working in the program) on or before the first day of PR. Similarly, ITPs developed and signed on or before the first day of CR/ICR by a physician outside of the CR/ICR program treating the patient's cardiovascular condition, do not require an additional signature from the CR/ICR medical director (or other physician working in the program) on or before the first day of CR/ICR. The PR and CR/ICR medical director and other appropriate staff would review these ITPs on or before the first day services are furnished. The medical director or other physician working in the program, in consultation with staff, may revise the ITP as needed to ensure the plan is appropriately individualized, regardless of which physician establishes and signs the plan.

3. Revisions

As described above, PR and CR/ICR programs are subject to many of the same statutory requirements. Despite the consistency in requirements set forth in statute, we recognize that some of the conditions of coverage codified in regulation are not identical across both programs. We proposed conforming changes to the regulatory text for both PR and CR/ICR to establish consistency in terminology, definitions and requirements where appropriate which will result in clearer and more streamlined regulatory text. We also proposed to adjust the regulatory structure of § 410.47 to align with § 410.49. The revisions will also enable stakeholders with interest in both PR and CR/ICR programs to more easily compare requirements and implement programs.

a. Definitions

We proposed revisions to six PR definitions at § 410.47(a), including individualized treatment plan, medical director, outcomes assessment, physician-prescribed exercise, psychosocial assessment and supervising physician; and revisions to three CR/ICR definitions at § 410.49(a), including medical director, outcomes assessment, and physician-prescribed exercise. Specifically, the proposed revisions to the PR definitions of ITP, psychosocial assessment and supervising physician align with the definitions of the same terms for CR/ICR. The proposed revisions to the PR definition of physician-prescribed exercise align with the definition of physician-prescribed exercise for CR/ICR and also include revisions to provide examples of physical activities appropriate to the patient population (which were relocated from the PR components section (previously § 410.47(c)). Similar revisions were proposed for the CR/ICR definition of physician-prescribed exercise. We proposed to modify language in the PR definition of medical director to align with the CR/ICR definition of medical director to more specifically describe the role of the PR medical director. We proposed conforming changes to the CR/ICR definition of medical director. Proposed revisions to the PR and CR/ICR definitions of outcomes assessment removed and revised redundant and unnecessary language. Also, we proposed to clearly state that outcome assessments may be performed by either the physician or the PR or CR/ICR program staff and that all results of these evaluations performed by program staff must be considered by the physician in the development and/or review of ITPs. These proposals are consistent with descriptions provided in the CY 2010 PFS proposed rule (74 FR at 33608, 33613) which state that PR and CR/ICR staff must provide outcomes assessments to the physician and serve to clearly communicate the important supportive role program staff may play to the physicians of these rehabilitation programs. The conforming changes are designed to more accurately define the existing terms and ensure consistency in definitions used for the same terms across PR and CR/ICR programs. We chose to largely maintain the CR/ICR regulatory text and align the PR regulatory text with CR/ICR based on stakeholder feedback and questions regarding the PR requirements. Aligning PR with CR/ICR, as opposed to aligning CR/ICR with PR requirements, better addresses stakeholder feedback and improves consistency in terminology, definitions and descriptions of conditions of coverage. With the proposed revisions and increased consistency, we also aimed to improve program efficiency in implementing the conditions of coverage.

We received 11 public comments generally addressing the conforming changes throughout our proposals. We received two public comments specific to the proposed definition changes. The following is a summary of the comments we received and our responses.

Comment: We received one comment requesting the use of waiver authority (sections 1115A, 1899 and 1135 of the Act) to allow NPs to order, establish plans of care and supervise PR and CR/ICR.

Response: The scope of the proposed rule did not include proposals to use waiver authority to waive any requirements specified under the conditions of coverage at §§ 410.47 and 410.49, and, as such we will not address waivers in this final rule. As referenced above in section III.H.2. of this final rule (background), section 51008 of the BBA of 2018 makes changes to the statute that will permit other specific practitioners, including NPs, to supervise the items and services effective on January 1, 2024.

Comment: One commenter requested clarification on the role of resident level training and fellow level training and their billing status.

Response: The conditions of coverage for PR and CR/ICR do not modify or impact existing rules for residents and fellows. Provisions specific to residents, interns and fellows are included in the Medicare Benefit Policy Manual (Pub. 100-02), Chapter 15, section 30.3, and the Medicare Claims Processing Manual (Pub. 100-04), Chapter 12, section 100. Information is also included in the Medicare Learning Network (MLN) Booklet entitled Guidelines for Teaching Physicians, Interns, and Residents . The existing requirements under Medicare for residents and fellows would apply as appropriate. We note that there are not separate provisions for residents, fellows and interns specific to PR and CR/ICR services.

Comment: Some commenters generally supported the proposed revisions for consistency and accuracy throughout the PR and CR/ICR regulatory text. One commenter specifically expressed agreement with the proposed definition changes. Another commenter supported the proposed changes to the outcomes assessment definition incorporating language recognizing the important role program staff serve with respect to developing and/or reviewing ITPs.

Response: We appreciate the commenters that submitted these supportive comments.

After consideration of public comments, we are finalizing the definition revisions as proposed.

b. Covered Conditions

The definition for PR at § 410.47(a) specifies that PR is a physician-supervised program for COPD and certain other chronic respiratory diseases. The CDC uses the term post-COVID conditions to describe health issues that persist more than 4 weeks after first being infected with the causative virus indicating that this timeframe provides a rough approximation of effects that occur beyond the acute period. Similarly, the National Institute for Health and Care Excellence (NICE), the Scottish Intercollegiate Guidelines Network (SIGN) and the Royal College of General Practitioners (RCGP) have jointly used 4 weeks to differentiate the acute symptoms of COVID from ‘long COVID,’ the signs and symptoms that continue or develop after acute COVID-19. Based on the information from the CDC, NICE, SIGN and RCGP, we consider COVID-19 to be chronic when symptoms persist for more than 4 weeks. Symptoms include dyspnea, depression and anxiety which can impair physical function and cause incapacitation. We proposed to cover PR for Medicare beneficiaries who have been diagnosed with severe manifestations of COVID-19, defined as requiring hospitalization in the ICU or otherwise, and who experience continuing symptomatology, including respiratory dysfunction, for at least 4 weeks post discharge.

Management of COVID-19 post-acute syndrome is an evolving issue in the health of our beneficiaries. We recognize that there is limited evidence available assessing the benefits that PR may provide for patients who were diagnosed with COVID-19. However, early research and consensus statements emphasize the restorative role that PR will likely play in the patient recovering from COVID-19. We solicited comments regarding the appropriateness of the coverage criteria for PR for beneficiaries diagnosed with COVID-19, including both the characteristics of the patients for whom PR is covered and the timing of their symptoms as presented above.

We received public comments on this proposal to cover PR for Medicare beneficiaries who have been diagnosed with severe manifestations of COVID-19, defined as requiring hospitalization in the ICU or otherwise, and who experience continuing symptomatology, including respiratory dysfunction, for at least 4 weeks post discharge, as well as the appropriateness of the proposed coverage criteria. The following is a summary of the comments we received and our responses.

Comment: All commenters supported expanding coverage of PR to include beneficiaries who had COVID-19; however, commenters had varying opinions regarding the specific coverage parameters appropriate for this patient population. Some commenters expressed agreement with the coverage parameters as proposed. Other commenters recommended expanding coverage to include all beneficiaries who have been diagnosed with severe COVID-19 and are experiencing post-COVID syndrome and further noted that the PR conditions of coverage should evolve and change as the definition and understanding of post-COVID syndrome improve. Some commenters requested that the requirements for patients to be hospitalized and also wait 4 weeks after hospitalization to participate in PR be removed. Other commenters recommended removing the hospitalization requirement. One commenter requested that CMS confirm that the proposal would mean any hospitalized patient would be eligible for PR if they have symptoms beyond 4 weeks. This commenter requested that CMS clarify the phrasing of the policy. Commenters requesting further expansion of the proposed coverage criteria to include patients who were not hospitalized cited data and publications that continue to be released as more information becomes available to inform treatment options for COVID-19 patients. These commenters noted that early experience indicates that, in addition to hospitalized patients, patients who are not hospitalized may still experience severe and persistent symptoms from COVID-19 and PR has helped to improve such patients' conditions. One commenter requested that coverage not be limited to only patients with “severe manifestations” of COVID-19 because mild cases can also result in ongoing pulmonary complications. Another commenter supported the proposed language covering PR for patients with “severe manifestations of COVID-19” and stated it is not diagnosis driven and these patients should be treated similarly to patients with emphysema and COPD.

Response: We agree that coverage of PR for beneficiaries who experienced COVID-19 is important in treating ongoing symptoms and complications of the disease. We recognize that patients recovering from COVID-19 who were able to be treated at home, also exhibit long-term symptoms of this disease, though usually of a lesser severity than those who were hospitalized for their treatment (Boutou, et al., 2021). In a series of 150 outpatients treated for COVID-19 studied by Lougue, et al., 2021, persistent symptoms were reported by one-third of outpatients at a median 169 days (SD 37.1) after illness onset. Though the most frequent symptoms were those of fatigue and loss of smell, persistent breathing difficulties were reported by approximately 5-10 percent of these individuals.

Therefore, after consideration of public comments and the rapidly evolving evidence base, we believe it prudent to further expand coverage of PR for COVID-19 beyond our proposal. As such, we are finalizing that PR is covered for beneficiaries who have had confirmed or suspected COVID-19 and experience persistent symptoms that include respiratory dysfunction for at least 4 weeks. To be clear, this includes beneficiaries regardless of whether they were hospitalized as this expanded coverage is agnostic to the setting in which they were treated for COVID-19. A positive COVID-19 test is not required, however eligible beneficiaries must have had confirmed or suspected COVID-19, and they must experience persistent symptoms of COVID-19 that include respiratory dysfunction for at least 4 weeks. The 4-week time frame may begin with symptom onset. We believe this expansion of coverage will equip healthcare providers with another tool to assist patients in overcoming long-lasting, residual symptoms of COVID-19 that, for many, significantly impact activities of daily living. Furthermore, we are aware that data suggests individuals belonging to racial and ethnic minority groups are at an increased risk of acquiring COVID-19 compared to other individuals and also that they may experience worse clinical outcomes from the disease. Expanding coverage of PR will afford physicians the ability to refer more individuals who require restorative therapies to rehabilitation services that may allow for as full a recovery as possible. This expansion of PR coverage to beneficiaries that had COVID-19, whether hospitalized or not, offers an important treatment option, especially for those in racial and ethnic minority groups that have been disproportionately affected by COVID-19.

We will continue to monitor the evidence base for PR and COVID-19 and revisit this policy when and if appropriate based on clinical evidence.

Comment: Two commenters requested further expansion of covered conditions for PR and CR/ICR. One commenter requested coverage of PR for conditions like adult respiratory distress syndrome. One commenter requested that under the CR/ICR regulation, chronic heart failure patients should not have to wait 6 weeks after hospital discharge to participate in CR if they are able to tolerate rehabilitation sooner, as determined by their physician.

Response: In our proposed rule, we only sought to expand coverage of PR for beneficiaries who experienced COVID-19. We believe it is important to make changes to coverage provisions, including covered conditions, with the public's input using processes like notice and comment rulemaking or the NCD process. Because we did not propose to cover other conditions (nor receive public comments on proposals to cover other conditions), we will not expand coverage to other conditions in this final rule. As discussed in section III.H.2. (background) of this final rule, we may use the NCD process to cover additional conditions for PR, CR and ICR. Information on how to request an NCD is available at https://www.cms.gov/Medicare/Coverage/DeterminationProcess/howtorequestanNCD.

After consideration of public comments and the evolving evidence base, we are finalizing that PR is covered for beneficiaries who have had confirmed or suspected COVID-19 and experience persistent symptoms that include respiratory dysfunction for at least 4 weeks.

c. Components

We proposed revisions to the description of each of the five PR components under § 410.47(b)(2) (previously § 410.47(c)). Revisions to the descriptions of physician prescribed exercise, psychosocial assessment and outcomes assessment include removing language already used in the definition of each term or references to the definitions in § 410.47(a). The inclusion of already established definition language is redundant, and therefore, unnecessary. Revisions to the education or training component more concisely explain, but do not change, the existing requirements for meeting this component. Revisions to the description of the ITP align with the description used for the CR/ICR ITP. As noted in the section above, we largely aligned the PR regulatory text with CR/ICR to better address stakeholder feedback and improve consistency in terminology, definitions and descriptions of conditions of coverage to assist in improving program efficiency in implementing the conditions of coverage.

We received 11 public comments generally addressing the conforming changes throughout our proposals. We also received several comments related to requirements we did not propose to change. The following is a summary of the comments we received and our responses.

Comment: Commenters expressed general support of the revisions for consistency and accuracy throughout the PR and CR/ICR regulatory text.

Response: We appreciate these comments.

Comment: One commenter requested clarification that NPPs may provide prescribed exercises for beneficiaries in a PR program.

Response: We are not adopting the commenter's suggestion because our regulations do not specify staff requirements or responsibilities. The medical director is responsible for the program, and thus, the staff roles and responsibilities.

Comment: Several commenters offered feedback on the requirement for the ITP to be signed by a physician by the first day PR or CR/ICR services are furnished. Specifically, one commenter requested that the regulations allow more time to acquire the appropriate signatures on the treatment plan because sometimes providers are unavailable to immediately sign off on the first day, with another commenter echoing this concern by explaining that it is challenging to obtain a physician signature on the ITP no later than the same date of the first PR or CR/ICR session.

Response: As we discussed above in section III.H.2. of this final rule (background) that, under the statute, PR and CR/ICR programs include individualized treatment that is furnished under a written plan established, reviewed, and signed by a physician every 30 days. Because this timeframe is specified in statute, we do not have the authority to allow for the ITP to be signed by a physician after the first day services are furnished. In section III.H.2. of this final rule, we also address potential opportunities for the ITPs to be established and signed by a physician during separate E/M visits prior to a beneficiary's first session of PR or CR/ICR.

Comment: One commenter indicated that the clarification was helpful in section III.H.2. of this final rule (background) that a separately billable E/M visit may be furnished by the program medical director or other program staff physicians in connection with establishing and signing the ITP on or before the first PR or CR/ICR session. This commenter stated that this will not be billable by outside physicians, but did not further expand on this statement.

Response: Our regulations do not preclude outside physicians (who are independent from the PR or CR/ICR program) from developing and signing ITPs during E/M visits for the treatment of the respiratory or cardiac condition.

After consideration of public comments, we are finalizing the revisions to the component descriptions as proposed.

d. Settings

We proposed minor edits to align the PR setting text in § 410.47(b)(3)(i) (previously § 410.47(d)(1)) with the CR/ICR setting text and reorganize this section to move and update, consistent with the corresponding CR/ICR section, the requirement that all settings must have a physician immediately available and accessible for medical consultations and emergencies.

We received 11 public comments generally addressing the conforming changes throughout our proposals. We also received several comments requesting coverage of PR in additional settings and comments requesting revisions to the requirement that a physician be immediately available and accessible. The following is a summary of the comments we received and our responses.

Comment: One commenter requested physical therapy and occupational therapy private practices and rehabilitation agency settings be added to covered settings. One commenter requested coverage for in home virtual CR (without reference to the separate telehealth provisions discussed in other sections of the proposed rule).

Response: The scope of the proposed revisions to the setting requirements for PR were limited to reorganizing and updating the language for consistency and accuracy with corresponding CR/ICR regulatory text. We did not consider or propose to add settings. We believe it is important to make changes to coverage provisions, including covered settings, with the public's input using notice and comment rulemaking. Because we did not propose and receive public comments on covering other settings, we will not expand coverage to other settings in this final rule. If supported by clinical evidence and within the parameters set forth in statute, we may consider other settings in future notice and comment rulemaking. In response to the PHE for COVID-19, we established numerous temporary waivers and flexibilities. For example, effective through the end of the year in which the PHE for COVID-19 ends, direct supervision of PR and CR/ICR can include a virtual presence of the physician through two-way, audio-video communications technology. Additionally, the HCPCS codes for PR, CR and ICR, were added to the Medicare telehealth services list on a temporary basis for the duration of the PHE which means providers can furnish these services in accordance with the telehealth flexibilities available during the PHE using audio and video equipment permitting two-way, real-time interactive communication. Furthermore, through the Hospitals without Walls initiative, PR, CR and ICR services can be furnished in a patient's home that is serving as part of the hospital during the PHE for COVID-19, provided the patient is registered as a hospital outpatient when the services are furnished and other conditions are met. Additional information about PHE related waivers and flexibilities is available on the CMS website at https://www.cms.gov/About-CMS/Agency-Information/Emergency/EPRO/Current-Emergencies/Current-Emergencies-page. Additional information about telehealth rules and requirements are available both in this final rule and on the CMS website at https://www.cms.gov/medicare/medicare-general-information/telehealth.

Comment: One commenter requested that the PR and CR/ICR regulations be updated to allow PR and CR/ICR patients to be treated in the same setting at the same time. This commenter stated that currently the services cannot be provided in the same location at the same time.

Response: We believe this commenter is referencing situations where a distinct patient or group of patients are participating in PR while a separate distinct patient or group of patients are participating in CR/ICR in the same location. We do not interpret this comment as referencing a single patient receiving PR and CR/ICR at the same time during the same session. The conditions of coverage for PR and CR/ICR do not prohibit PR services from being furnished to PR patients in the same setting and at the same time that CR/ICR services are furnished to CR/ICR patients. However, all coverage requirements for each distinct program must be met to comply with the conditions of coverage specified in the regulations. Both PR and CR/ICR services may not be furnished to a single patient at the same time. In other words, programs may not furnish and bill for PR and CR/ICR services furnished to the same patient during a single session. If a patient is participating in both PR and CR/ICR, the patient would need to separately complete sessions for each program and cannot receive PR program services during the same session in which they are receiving CR/ICR program services.

Comment: Several commenters stated that requiring a physician to be immediately available and accessible is an insurmountable obstacle in rural areas. These commenters requested the CR NCD be revised to allow CR programs to operate under general supervision of a physician when an automated external defibrillator (AED) is immediately available and the patient is attended by nursing staff currently trained in Basic Life Support and AED use.

Response: The requirement for a physician to be immediately available and accessible is specified in statute at section 1861(eee)(2)(B) of the Act and we are not waiving this requirement for rural areas.

Comment: Several commenters suggested that CMS permit the CR supervising physician to be immediately available and accessible through a virtual presence, particularly in rural areas.

Response: In response to the PHE for COVID-19, we established numerous temporary waivers and flexibilities. For example, effective through the end of the year in which the PHE for COVID-19 ends, direct supervision of PR and CR/ICR can include a virtual presence of the physician through two-way, audio-video communications technology. Additionally, the HCPCS codes for PR, CR and ICR, were added to the Medicare telehealth services list on a temporary basis for the duration of the PHE which means providers can furnish these services in accordance with the telehealth flexibilities available during the PHE using audio and video equipment permitting two-way, real-time interactive communication.

Comment: Some commenters expressed general support of the revisions for consistency and accuracy throughout the PR and CR/ICR regulatory text.

Response: We appreciate the support.

After consideration of public comments, we are finalizing the setting revisions as proposed.

e. Physician Standards

We proposed revisions to align regulatory text regarding the standards for the PR medical director and the supervising physician found at § 410.47(c) and (d) (previously § 410.47(e)) with the corresponding CR/ICR medical director and supervising physician text and minor conforming changes to CR/ICR language § 410.49(d) and (e). These revisions will not only align similar requirements for PR and CR/ICR programs, but also more accurately describe the roles and responsibilities of physicians in PR programs, and thereby address stakeholder feedback requesting more specificity around the roles and standards for the physicians involved in PR programs. Specifically, we proposed to replace the existing PR “physician standards” section with two separate sections. The first, entitled “medical director standards” delineates requirements for the PR medical director, and the second, “supervising physician standards” delineates requirements for physicians fulfilling the supervising physician role when PR items and services are furnished. These revisions also include removing language that is redundant to the definition for medical director already set forth in § 410.47(a) and the requirement that a physician have “direct patient contact related to the periodic review of his or her treatment plan.” We proposed to remove the direct patient contact language because this requirement is overly burdensome and unnecessary since a physician is already required to, in consultation with staff, review patient ITPs every 30 days. Direct physician-patient contact can be written into an ITP for patients who require such attention; however, it is not necessary for every patient and the need for it should instead be specified by the clinician. Furthermore, while we believe direct physician-patient contact within the PR program every 30 days is not necessary for every PR patient, we note that patients are seen by PR staff and their progress is tracked at each session where staff are able to identify the need for direct physician-patient contact as appropriate. Additionally, patients participating in PR generally continue to have ongoing interactions with their treating physicians outside of PR. Because the need for direct physician-patient contact is individualized and patients continue to engage with their treating physicians outside of PR, we proposed to remove the requirement for direct physician-patient contact within the PR program every 30 days. We requested public comment on whether removing the regulatory requirement for direct physician-patient contact every 30 days would be potentially detrimental to PR patients by eliminating a critical physician interaction, or if necessary interactions are already occurring outside of the PR program at appropriate intervals as determined by a physician treating the patient for his or her respiratory condition.

These revisions and clearer delineations of the roles and standards for the PR medical director and, separately, the supervising physician, are important to address stakeholder feedback and reduce burden on PR programs, physicians and patients while ensuring treatment is truly individualized as directed by statute. As these revisions, more accurately describe and delineate the roles and standards for the medical director and the supervising physician, please note that the PR or CR/ICR medical director may serve as a supervising physician if he or she also meets the requirements for a supervising physician. Two different physicians are not necessarily required, as long as the definitions and descriptions in §§ 410.47 and 410.49 are met.

The following is a summary of the comments we received and our responses.

Comment: Some commenters expressed general support of the revisions for consistency and accuracy throughout the PR and CR/ICR regulatory text. One commenter specifically supported the proposed alignment of standards between CR/ICR and PR for the medical director and supervising physician standards.

Response: We appreciate the support.

Comment: One commenter requested that the requirement for the medical director to possess a license from the State in which the program is offered be removed and instead allow a license from any State.

Response: Under sections 1861(eee)(5) and (fff)(3) of the Act, the physician responsible for both PR and CR/ICR programs (the medical director as defined in regulation) is required to be licensed to practice medicine in the State in which the PR or CR/ICR program is offered. Because this requirement is specified in statute, we do not have the authority to modify it.

Comment: Some commenters supported removing the PR requirement that a physician have “direct patient contact related to the periodic review of his or her treatment plan.” All commenters agreed with this proposal and no commenters indicated that removing the requirement would be potentially detrimental to PR patients.

Response: We appreciate the support.

After consideration of public comments, we are finalizing the physician standards revisions as proposed, including removal of the direct physician-patient contact requirement. We reiterate that for patients that may require greater interaction with a physician, such direct physician-patient contact may be included in the patient's ITP. However, as discussed above, we believe this requirement is overly burdensome and unnecessary for all patients and, as such, we are finalizing our proposal to remove the requirement.

f. Limitations

We proposed conforming changes to §§ 410.47(e) (previously § 410.47(f)) and 410.49(f) to improve clarity of these sections and more closely align the descriptions for session duration, number of sessions covered and time-period over which sessions must be provided.

Comment: Some commenters expressed general support the revisions for consistency and accuracy throughout the PR and CR/ICR regulatory text.

Response: We appreciate the support.

After consideration of public comments, we are finalizing the revisions in this section as proposed.

4. Summary

To improve consistency and accuracy across PR and CR/ICR conditions of coverage, we proposed largely conforming changes throughout §§ 410.47 and 410.49. We also proposed to add coverage of PR for beneficiaries who were hospitalized with a COVID-19 diagnosis and experience persistent symptoms, including respiratory dysfunction, for least 4 weeks after hospital discharge and to remove a PR program requirement that is overly burdensome and unnecessary for all PR patients which was also not expressly required in statute. After considering public comments and additional clinical evidence, we are finalizing the revisions to improve consistency and accuracy across PR and CR/ICR conditions of coverage as proposed. We are also finalizing the removal of the PR requirement for direct physician-patient contact. We are expanding upon our proposal to cover PR for beneficiaries who were hospitalized with a COVID-19 diagnosis and experience persistent symptoms, including respiratory dysfunction, for at least 4 weeks after hospital discharge. We are removing the proposed hospitalization requirement and finalizing coverage of PR for beneficiaries who have had confirmed or suspected COVID-19 and experience persistent symptoms that include respiratory dysfunction for at least 4 weeks.

We believe these revisions will result in clearer and more streamlined regulatory text and better assist stakeholders in understanding and implementing PR, CR and ICR programs. Furthermore, we believe coverage of PR for beneficiaries who experienced COVID-19 is an important treatment option for patients as they recover.

I. Medical Nutrition Therapy

Medical nutrition therapy became a distinct Medicare benefit under section 1861(s)(2) of the Act under section 105 of the Medicare, Medicaid, and SCHIP Benefits Improvement Protection Act of 2000 (BIPA). Medicare beneficiaries with diabetes or renal disease can receive individualized medical nutrition therapy (MNT) provided by a registered dietitian or nutrition professional, pursuant to a referral by a physician (as defined in section 1861(r)(1) of the Act), with no cost to the beneficiary. Currently, 42 CFR 410.132(c), further requires that the referral must be made by the treating physician. The treating physician was defined as the primary care physician or specialist, coordinating care for the beneficiary with diabetes or renal disease. The regulation also specifically defines renal disease as including chronic renal insufficiency based on glomerular filtration rate (GFR) eligibility criteria.

The National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), National Kidney Foundation and Academy of Nutrition and Dietetics support MNT for adults with chronic kidney disease (CKD). The National Kidney Foundation and the Academy of Nutrition and Dietetics' Clinical Practice Guideline on Nutrition in Chronic Kidney Disease acknowledges that the goals of MNT are to optimize nutritional status, and to minimize risks imposed by comorbid conditions and alterations in metabolism on the progression of kidney disease and on adverse clinical outcomes. The authors recognize that patients with CKD have changing needs according to their disease stage and they recommended MNT for each stage of CKD.

In addition, evidence supports the use of MNT as a component of quality diabetes care, including its integration into the medical management of diabetes. Nutrition therapy that includes the development of an eating plan designed to improve blood glucose, blood pressure, and lipid profiles is important in the management of diabetes and can lower the risk of cardiovascular disease, coronary heart disease, and stroke. Despite these findings and endorsement by leading clinical societies, including the American Diabetes Association, American College of Cardiology and the National Kidney Foundation, less than 2 percent of the estimated 14 million eligible Medicare beneficiaries have accessed MNT.

Over the years, we have heard from several stakeholder groups requesting that we update the MNT regulations to improve beneficiary access. In the proposed rule, we provided background on the MNT services, discussed the MNT regulation revisions, and included proposals to implement these modifications. We proposed to make changes to the treating physician requirements and update the chronic renal insufficiency GFR criteria in order to improve access and utilization of the MNT benefit. The statute expressly requires the order of a physician; therefore, we are unable to extend referral privileges to NPPs.

1. Background: MNT

MNT is defined in sections 1861(s)(2)(V) and 1861(vv)(1) of the Act and codified in §§ 410.130 (definitions), 410.132 (MNT), and 410.134 (provider qualifications).

a. Definitions (§ 410.130)

In 42 CFR subpart G, we define the following definitions that apply to MNT at § 410.130:

• Chronic renal insufficiency.
• Diabetes.
• Episode of care.
• Medical nutrition therapy services.
• Physician.
• Renal disease.
• Treating physician.

b. Medical Nutrition Therapy (§ 410.132).

In § 410.132(a), we outline the conditions for coverage of MNT services. That is, Medicare Part B pays for MNT services provided by a registered dietitian or nutrition professional as defined in § 410.134 when the beneficiary is referred for the service by the treating physician. Services covered consist of face-to-face nutritional assessments and interventions in accordance with nationally-accepted dietary or nutritional protocols. The regulation contains an exception that permits MNT services to be provided as telehealth services under § 410.78.

In § 410.132(b), we outline the limitations on coverage of MNT services. First, the MNT services based on a diagnosis of renal disease as described in 42 CFR subpart G are not covered for beneficiaries receiving maintenance dialysis for which payment is made under section 1881 of the Act. Also, a beneficiary may only receive the maximum number of hours covered under the DSMT benefit for both DSMT and MNT during the initial DSMT training period unless additional hours are determined to be medically necessary under the national coverage determination (NCD) process. In years when the beneficiary is eligible for MNT and follow-up DSMT, Medicare will cover the maximum number of hours covered under MNT unless additional hours are determined to be medically necessary under the NCD process. Under the current MNT NCD (NCD 180.1), Medicare covers 3 hours of MNT the initial year of referral and up to 2 hours of MNT for subsequent years. In addition, if a beneficiary has both diabetes and renal disease, Medicare will cover the maximum number of hours covered under the renal MNT benefit in one episode of care unless he or she is receiving initial DSMT services, in which case the beneficiary would receive whichever is greater. Finally, an exception to the maximum number of hours described here may be made when the treating physician determines that there is a change of diagnosis, medical condition, or treatment regimen related to diabetes or renal disease that requires a change in MNT during an episode of care.

At § 410.132(c), we discuss that a referral may only be made by the treating physician when the beneficiary has been diagnosed with diabetes or renal disease as defined in 42 CFR subpart G with documentation maintained by the referring physician in the beneficiary's medical record. We also note that referrals must be made for each episode of care and any additional assessments or interventions required by a change of diagnosis, medical condition, or treatment regimen during an episode of care.

c. Provider Qualifications (§ 410.134)

For Medicare Part B coverage of MNT, only a registered dietitian or nutrition professional may provide the services. At § 410.134, we define registered dietitian or nutrition professional as an individual who, on or after December 22, 2000: (1) Holds a bachelor's or higher degree granted by a regionally accredited college or university in the United States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics accredited by an appropriate national accreditation organization recognized for this purpose; (2) has completed at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional; and (3) is licensed or certified as a dietitian or nutrition professional by the State in which the services are performed. In a State that does not provide for licensure or certification, the individual will be deemed to have met this requirement if he or she is recognized as a registered dietitian by the Commission on Dietetic Registration or its successor organization. However, a dietitian or nutritionist licensed or certified in a State as of December 21, 2000 is not required to hold a bachelor's or higher degree granted by a regionally accredited college or university in the United States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics accredited by an appropriate national accreditation organization recognized for this purpose; (2) and need not complete at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional. In addition, a registered dietitian in good standing, as recognized by the Commission of Dietetic Registration or its successor organization, is deemed to have met these requirements.

2. Proposal for MNT Revisions

a. Removal of the Treating Physician Restriction

For CY 2022, we proposed to revise the regulations at §§ 410.130 and 410.132. Sections 1861(s)(2)(V) and 1861(vv)(1) of the Act define MNT services as nutritional diagnostic, therapy, and counseling services for the purpose of disease management which are furnished by a registered dietitian or nutrition professional pursuant to a referral by a physician (either an M.D. or D.O.) (as defined in section 1861(r)(1) of the Act). The current regulation further provides that Medicare pays for MNT services when the beneficiary is referred for the service by the treating physician, which is defined as the primary care physician or specialist coordinating care for the beneficiary with diabetes or renal disease. As discussed above in section III.I.2. of this final rule and codified at § 410.132(c), we required referrals only by the treating physician when the beneficiary has been diagnosed with diabetes or a renal disease, with documentation maintained by the referring physician in the beneficiary's medical record. In the CY 2002 PFS final rule (66 FR 55246, November 1, 2001), we believed the treating physician requirement was necessary to ensure coordination of care by the primary care physician or specialist for beneficiaries with chronic diseases in order to assure quality (66 FR 55277). This relatively narrow definition, however, is now believed to have contributed to the low uptake of referrals to MNT services, although we note that few studies have examined MNT use.

We proposed to eliminate the requirement that the referral be made by the treating physician and, consistent with the language of the statute, require MNT services to be pursuant to a referral by a physician (as defined in section 1861(r)(1) of the Act) at §§ 410.130 and 410.132. It would be reasonable for any physician to refer a beneficiary to MNT. The treating physician restriction is no longer necessary to expect care to be coordinated. Care coordination between the hospital or post-acute care provider and the primary care provider is the goal and a standard of care in today's medical environment. We have worked to improve, through various efforts, the exchange of patient information between healthcare settings, and that a patient's healthcare information follows them after discharge from a hospital or post-acute care provider. Such improved transitions of care and exchange of information helps to assure that Medicare beneficiaries will continue to receive quality services. We proposed to delete the term treating and the definition of treating physician, as there is a separate definition for physician within this provision. Therefore, we did not propose any change to Medicare's definition of treating physician and the deletion of treating physician only applies to this provision.

b. Update the GFR Eligibility Criteria for Patients With CKD

We proposed to revise the regulations at § 410.130. Section 1861(s)(2)(V) of the Act states that MNT services are available to beneficiaries with diabetes or a renal disease. In 2001, we established the definition of chronic renal insufficiency for the purpose of the MNT benefit using definitions from the Institute of Medicine report, “The Role of Nutrition in Maintaining Health in the Nation's Elderly.” The definitions and staging of CKD have evolved since the release of the report and stakeholders have noted that our definition does not reflect current medical practice. Therefore, we proposed to update the GFR eligibility criteria so that it aligns with up to date accepted standards for CKD stage 3 through stage 4, specifically GFR 15—59 mL/min/1.73m2. The accepted CKD staging system separates stage 3 into two parts: Stage 3-a; and Stage 3-b. Stage 3-a is GFR 45—59 mL/min/1.73m2. The existing regulatory upper limit of 50 mL/min/1.73m2 is mid stage 3-a and does not meet the widely accepted standard of when a person is diagnosed with moderate kidney disease. The NIDDK and National Kidney Foundation's staging of CKD align with the proposed change in GFR criteria.

We note that health care providers use estimated glomerular filtration rate, or eGFR, calculations to classify the severity of a person's disease, from mild loss of kidney function to end-stage kidney disease. The eGFR helps determine prognosis and treatment, such as when hemodialysis or a transplant may be needed. Since 1999, race has been a variable used in estimating GFR. Current eGFR calculations also use a person's age, sex, and serum creatinine levels. Serum creatinine, which the kidneys filter out, is a waste product from the normal metabolism of muscle cells in one's body. Studies have shown that Black Americans, on average, can have higher levels of serum creatinine in their blood, independent of kidney function. To account for this difference, eGFR calculations include a person's self-reported race to give more valid results. The use of self-reported race has been controversial. Misdiagnosis could lead to a person receiving incorrect drug dosing or delays in receiving dialysis or a kidney transplant. Current eGFR calculations could be exacerbating racial inequities in a disease that disproportionately affects Black people. Health care providers should be aware of ongoing research and evolving recommendations on GFR estimation in order to reduce and eliminate racial and ethnic disparities.

3. Summary of Regulatory Text Changes

We proposed to make changes to the treating physician requirements and GFR eligibility criteria outlined in §§ 410.130 and 410.132, consistent with statutory limitations. We proposed to revise §§ 410.130 (definitions) and 410.132 (MNT) by: (1) Revising the chronic renal insufficiency definition; (2) striking the treating physician definition; and (3) revising conditions for coverage of MNT services, limitations on coverage of MNT services, and referrals.

(1) Definition of Chronic Renal Insufficiency

We proposed to revise § 410.130 by revising the chronic renal insufficiency definition by removing the GFR eligibility criteria of 13—50 ml/min/1.73m2 and replacing with 15—59 ml/min/1.73m2.

(2) Definition of Treating Physician

We proposed to revise § 410.130 by removing the definition of treating physician.

(3) Proposed Changes to Conditions for Coverage of MNT Services, Limitations on Coverage of MNT Services, and Referrals

At § 410.132, we proposed to revise conditions for coverage of MNT services, limitations on coverage of MNT services, and referrals by removing the terms “the” and “treating,” and replacing them with “a,” at paragraphs (a), (b)(5), and (c). In paragraph (c), we also proposed to strike the term, “maintained,” and replace it with the term, “noted.”

4. Summary of Public Comments and Responses

We received public comments on the proposed revisions to the MNT benefit. The following is a summary of the comments we received and our responses.

Comment: The majority of commenters supported the proposals to remove the treating physician requirement and update the chronic renal insufficiency GFR criteria at §§ 410.130 and 410.132. The commenters stated that they believe that by removing the requirement that the MNT referral be made by the treating physician, CMS will expand the reach of this important benefit. Commenters also supported aligning the chronic renal insufficiency criteria to reflect current medical practice regarding the standards for CKD stages 3 through 4, which is GFR 15—59 mL/min/1.73m2.

Response: We appreciate the commenters for their support of CMS' efforts to improve access and utilization of the MNT benefit.

Comment: Numerous commenters requested that CMS expand coverage of MNT services to individuals with other diseases and conditions, including malnutrition, prediabetes, obesity, eating disorders, cancer, HIV/AIDS, hypertension, dyslipidemia, gastrointestinal diseases, cardiovascular disease, and other conditions causing unintended weight loss.

Response: We do not have the authority to extend coverage beyond beneficiaries with diabetes or a renal disease as the benefit is defined in statute in section 1861(s)(2)(V) of the Act.

Comment: Several commenters requested that the definition of diabetes in § 410.130 include Hemoglobin A1C greater than 6.5 percent, as they noted is recommended in national standards of medical care for diabetes. They believe that the MNT regulation definition of diabetes is outdated. They noted that both the USPSTF and the American Diabetes Association Standards of Care recommend use of any of the following three testing methods to screen for abnormal blood glucose: Fasting plasma glucose; Hemoglobin A1C; and 2-hour plasma glucose.

Response: We appreciate the submission of this additional information from the commenters. We believe it is important to make changes to coverage provisions, including definitions, with the public's input using processes like notice and comment rulemaking. Because we did not propose and receive public comments on the definition of diabetes, we will not amend the definition in this final rule. We will consider revisions to the § 410.130 definition of diabetes with future rulemaking, with the opportunity for further public feedback.

Comment: Commenters advocated further expansion of the definition of renal disease in § 410.130 to include CKD stage 1 and stage 2. They noted that section 1861(s)(2)(V)(ii) of the Act allows for MNT for a beneficiary with diabetes or a renal disease who is not receiving maintenance dialysis.

Response: We appreciate the comment but we are not adopting the suggested changes in the definition of renal disease to refer to stages 1 and 2. We believe chronic renal insufficiency or CKD stages 3-4 (cross-referenced in the definition of renal disease, both defined in § 410.130) is the stage that interventions are often initiated in attempts to prevent progression of kidney disease to kidney failure and does not align with CKD stage 1 or stage 2. Furthermore, our definition of renal disease provides coverage of MNT for beneficiaries with chronic renal insufficiency (CKD stages 3-4) or end-stage renal disease (CKD stage 5 or kidney failure) when dialysis is not received, or post-transplantation kidney patients for 36 months; however, this does not include MNT services for beneficiaries with CKD stage 1 or stage 2.

Comment: Several commenters requested that CMS allow NPPs to make referrals to MNT, including NPs, PAs, and CNSs. One commenter described a few ways that they believe CMS could authorize NPs to refer for MNT, including: Utilizing the waiver authorities under sections 1115A (CMS Innovation Center Model) and 1899 (Medicare Shared Savings Program) of the Act; and clarifying that NPs are authorized to refer for MNT services as a component of the initial preventive physical examination (IPPE) and the annual wellness visit (AWV). They stated that the IPPE and AWV are Medicare covered services when furnished by NPs, which include MNT referrals.

Response: As noted previously in this section of the final rule, section 1861(vv)(1) of the Act expressly requires the order of a physician for MNT to be covered under Part B; therefore, we are unable to extend MNT referral privileges to NPPs even if the NPP attempted to provide a referral for the service as a participant in the Medicare Shared Savings Program (section 1899 of the Act) or as part of the IPPE or AWV. The comments addressing CMS 1115A waiver authorities are appreciated and we will take these comments into consideration; although, the process for the Center for Medicare and Medicaid Innovation to develop and select a test model is out of scope of this proposed rule, and therefore, we are not addressing in this final rule.

Comment: A few commenters expressed concern that the quality of care may be compromised if the treating physician requirement is removed. One commenter requested a reporting requirement to the treating physician by the registered dietician or nutrition professional at the onset of the MNT services, and periodic updates to the treating physician during the course of treatment. The commenter stated that the primary care physician or specialist is primarily responsible for coordinating all the patient's care and must be kept up to date on all critical services and resulting outcomes.

Response: We believe a reporting requirement would place undue burden on the registered dietitian or nutrition professional providing the MNT service. As noted previously in this section of the final rule, we believe the treating physician restriction is no longer necessary to expect care coordination between the referring provider and the primary care provider, and therefore, does not require a regulatory mandate for reporting. We have worked to advance the appropriate access and sharing of a beneficiary's medical information between health care settings. Such efforts help to improve the quality, safety, and efficiency of health care delivery.

After consideration of public comments, we are finalizing the changes as proposed to the treating physician requirement and to update the GFR criteria in the regulations at §§ 410.130 and 410.132. Therefore, we are also finalizing the regulatory language as proposed.

5. Summary

The MNT services may help reduce illnesses and improve quality of life for people with diabetes or renal disease. We believe the changes to the treating physician requirements and GFR eligibility criteria are in the best interest of the Medicare program and its beneficiaries. The physician requirement change will increase the capacity and availability of physicians who can refer beneficiaries to MNT, which would alleviate some of the demand on primary care physicians as the usual source to perform this particular function. We note that stakeholders have contacted us and suggested such flexibility in the past. We recognize that MNT is not a highly utilized service and we believe these revisions will allow for Medicare patients to gain greater access to MNT services.

J. Medicare Shared Savings Program

On March 23, 2010, the Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted, followed by enactment of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) on March 30, 2010, which amended certain provisions of the Patient Protection and Affordable Care Act (hereinafter collectively referred to as “the Affordable Care Act”). Section 3022 of the Affordable Care Act amended Title XVIII of the Act (42 U.S.C. 1395 et seq. ) by adding section 1899 to the Act to establish the Medicare Shared Savings Program (Shared Savings Program) to facilitate coordination and cooperation among healthcare providers to improve the quality of care for Medicare FFS beneficiaries and reduce the rate of growth in expenditures under Medicare Parts A and B. (See 42 U.S.C. 1395jjj.) Eligible groups of providers and suppliers, including physicians, hospitals, and other healthcare providers, may participate in the Shared Savings Program by forming or participating in an Accountable Care Organization (ACO). Under the Shared Savings Program, providers of services and suppliers that participate in an ACO continue to receive traditional Medicare FFS payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements.

Section 1899 of the Act has been amended through subsequent legislation. The requirements for assignment of Medicare FFS beneficiaries to ACOs participating under the program were amended by the 21st Century Cures Act (the CURES Act) (Pub. L. 114-255, December 13, 2016). The Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9, 2018), further amended section 1899 of the Act to provide for the following: Expanded use of telehealth services by physicians or practitioners participating in an applicable ACO to furnish services to prospectively assigned beneficiaries; greater flexibility in the assignment of Medicare FFS beneficiaries to ACOs by allowing ACOs in tracks under retrospective beneficiary assignment a choice of prospective assignment for the agreement period; permitting Medicare FFS beneficiaries to voluntarily identify an ACO professional as their primary care provider and requiring that such beneficiaries be notified of the ability to make and change such identification, and mandating that any such voluntary identification will supersede claims-based assignment; and allowing ACOs under certain two-sided models to establish CMS-approved beneficiary incentive programs.

The Shared Savings Program regulations are codified at 42 CFR part 425. The final rule establishing the Shared Savings Program appeared in the November 2, 2011 Federal Register (Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations; final rule (76 FR 67802) (hereinafter referred to as the “November 2011 final rule”)). A subsequent major update to the program rules appeared in the June 9, 2015 Federal Register (Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations; final rule (80 FR 32692) (hereinafter referred to as the “June 2015 final rule”)). The final rule entitled, “Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations—Revised Benchmark Rebasing Methodology, Facilitating Transition to Performance-Based Risk, and Administrative Finality of Financial Calculations,” which addressed changes related to the program's financial benchmark methodology, appeared in the June 10, 2016 Federal Register (81 FR 37950) (hereinafter referred to as the “June 2016 final rule”). A final rule, “Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2019; Medicare Shared Savings Program Requirements; Quality Payment Program; Medicaid Promoting Interoperability Program; Quality Payment Program—Extreme and Uncontrollable Circumstance Policy for the 2019 MIPS Payment Year; Provisions From the Medicare Shared Savings Program—Accountable Care Organizations—Pathways to Success; and Expanding the Use of Telehealth Services for the Treatment of Opioid Use Disorder Under the Substance Use- Disorder Prevention That Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act”, appeared in the November 23, 2018 Federal Register (83 FR 59452) (hereinafter referred to as the “November 2018 final rule” or the “CY 2019 PFS final rule”). In the November 2018 final rule, we finalized a voluntary 6-month extension for existing ACOs whose participation agreements would otherwise expire on December 31, 2018; allowed beneficiaries greater flexibility in designating their primary care provider and in the use of that designation for purposes of assigning the beneficiary to an ACO if the clinician they align with is participating in an ACO; revised the definition of primary care services used in beneficiary assignment; provided relief for ACOs and their clinicians impacted by extreme and uncontrollable circumstances in performance year 2018 and subsequent years; established a new Certified Electronic Health Record Technology (CEHRT) use threshold requirement; and reduced the Shared Savings Program quality measure set from 31 to 23 measures (83 FR 59940 through 59990 and 59707 through 59715).

A final rule redesigning the Shared Savings Program appeared in the December 31, 2018 Federal Register (Medicare Program: Medicare Shared Savings Program; Accountable Care Organizations-Pathways to Success and Uncontrollable Circumstances Policies for Performance Year 2017; final rule) (83 FR 67816) (hereinafter referred to as the “December 2018 final rule”). In the December 2018 final rule, we finalized a number of policies for the Shared Savings Program, including a redesign of the participation options available under the program to encourage ACOs to transition to two-sided models; new tools to support coordination of care across settings and strengthen beneficiary engagement; and revisions to ensure rigorous benchmarking.

In the interim final rule with comment period (IFC) entitled “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency”, which was effective on the March 31, 2020 date of display and appeared in the April 6, 2020 Federal Register (85 FR 19230) (hereinafter referred to as the “March 31, 2020 COVID-19 IFC”), we removed the restriction which prevented the application of the Shared Savings Program extreme and uncontrollable circumstances policy for disasters that occur during the quality reporting period if the reporting period is extended, to offer relief under the Shared Savings Program to all ACOs that may be unable to completely and accurately report quality data for 2019 due to the PHE for COVID-19 (85 FR 19267 and 19268).

In the IFC entitled “Medicare and Medicaid Programs; Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program” which was effective on May 8, 2020, and appeared in the May 8, 2020 Federal Register (85 FR 27573 through 27587) (hereinafter referred to as the “May 8, 2020 COVID-19 IFC”), we modified Shared Savings Program policies to: (1) Allow ACOs whose current agreement periods expire on December 31, 2020, the option to extend their existing agreement period by 1-year, and allow ACOs in the BASIC track's glide path the option to elect to maintain their current level of participation for performance year 2021; (2) adjust program calculations to remove payment amounts for episodes of care for treatment of COVID-19; and (3) expand the definition of primary care services for purposes of determining beneficiary assignment to include telehealth codes for virtual check-ins, e-visits, and telephonic communication. We also clarified the applicability of the program's extreme and uncontrollable circumstances policy to mitigate shared losses for the period of the PHE for COVID-19 starting in January 2020.

We have also made use of the annual CY PFS rules to address quality reporting for the Shared Savings Program and certain other issues. Refer to the CY 2020 PFS proposed rule for a summary of policies finalized in prior PFS rules (84 FR 40705). In the CY 2020 PFS final rule (84 FR 62903 through 62914), we finalized refinements to the Shared Savings Program quality measure set and a technical change to the SNF 3-day rule waiver provision of the Shared Savings Program regulations. In the CY 2021 PFS final rule, we finalized new Shared Savings Program quality reporting requirements that align with the Alternative Payment Model (APM) Performance Pathway (APP) under the Quality Payment Program and revised the quality performance standard for performance years beginning on or after January 1, 2021, to reduce reporting burden and focus on patient outcomes. We also finalized a policy that waived the requirement that ACOs administer the Consumer Assessment of Healthcare Providers and Systems (CAHPS) for ACOs survey for performance year 2020. In addition, we finalized updates to the definition of primary care services used for beneficiary assignment, and policies to reduce burden associated with repayment mechanisms. In the CY 2021 PFS final rule, we also finalized the Shared Savings Program provisions included in the March 31, 2020 COVID-19 IFC and the May 8, 2020 COVID-19 IFC, with several modifications in response to public comments received.

Policies applicable to Shared Savings Program ACOs for purposes of reporting for other programs have also continued to evolve based on changes in the statute. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, April 16, 2015) established the Quality Payment Program. In the CY 2017 Quality Payment Program final rule with comment period (81 FR 77008), we established regulations for the Merit-Based Incentive Payment System (MIPS) and Advanced APMs and related policies applicable to eligible clinicians who participate in APMs, including the Shared Savings Program.

In sections III.J.1 through III.J.5. of this final rule, we summarize and respond to comments we received on the proposed modifications to the Shared Savings Program's policies discussed in section III.J of the CY 2022 PFS proposed rule (86 FR 39261 through 39291). Some commenters' suggestions for modifications to Shared Savings Program policies went beyond the scope of the policies addressed in section III.J. of the CY 2022 PFS proposed rule, and will not be addressed in this section of this final rule. As a general summary, in sections III.J.1 through III.J.5 of this final rule, we are finalizing the following changes to Shared Savings Program policies to:

• Amend the reporting requirements under the APM Performance Pathway (APP) for performance year 2022 and subsequent performance years.

++ Update the APM Performance Pathway (APP) measure set to remove the Risk-Standardized, All-Cause Unplanned Admissions for Multiple Chronic Conditions (MCC) for ACOs and replace it with the Risk Standardized, All-Cause Unplanned Admissions for Multiple Chronic Conditions for MIPS.

• Amend the quality performance standard for performance year 2023 by freezing the quality performance standard at the 30th percentile MIPS Quality performance category score and publicly displaying prior year performance scores that equate to the 30th or 40th percentile MIPS Quality performance category scores.

• Revise the extreme and uncontrollable circumstances policy to align with the decision to freeze the quality performance standard at the 30th percentile MIPS Quality performance category score for performance year 2023.
• Update the definition of primary care services used in beneficiary assignment at § 425.400(c).
• Revise the repayment mechanism arrangement policy in the following manner:

++ To reduce the percentages used in the existing methodology for determining the repayment mechanism amount and to specify the number of assigned beneficiaries used as a multiplier in the calculations, such that the ACO's repayment mechanism amount would be calculated as the lesser of the following: (1) One-half percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures and the number of assigned beneficiaries for the most recent calendar year for which 12 months of data are available; or (2) 1 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available, and based on the ACO's number of assigned beneficiaries for the most recent calendar year for which 12 months of data are available.

++ To specify how we identify the number of assigned beneficiaries used in the repayment mechanism amount calculation and the annual repayment mechanism amount recalculation.

++ To allow a one-time opportunity for certain ACOs that established a repayment mechanism to support their participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, to elect to decrease the amount of their existing repayment mechanisms.

++ To revise the threshold for determining whether an increase in the repayment mechanism amount is required.

• Streamline the application process by revising requirements concerning the disclosure of prior participation in the Shared Savings Program by the ACO, ACO participants, and ACO providers/suppliers, in light of other requirements that consider an ACO's prior participation.
• Reduce the frequency and circumstances under which ACOs submit sample ACO participant agreements and executed ACO participant agreements to CMS.
• Amend the beneficiary notification requirement as it applies to ACOs under prospective assignment and ACOs under preliminary prospective assignment with retrospective reconciliation.

We also describe several comment solicitations that were included in section III.J of the CY 2022 PFS proposed rule in the following sections of this final rule: III.J.1.c.(1) (Addressing Health Disparities and Promoting Health Equity), III.J.1.c.(2) (Feasibility of TIN Level Reporting and Sampling for eCQMs/MIPS CQMs), III.J.1.c.(3) (Reporting Options for Specialist Providers within an ACO), and section III.J.6 (Considerations Related to the Use of Regional FFS Expenditures and the Risk Adjustment Methodology in Establishing, Adjusting, Updating, and Resetting the ACO's Historical Benchmark).

1. Quality and Other Reporting Requirements

a. Background

Section 1899(b)(3)(C) of the Act states that the Secretary shall establish quality performance standards to assess the quality of care furnished by ACOs and seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new measures, or both. As we stated in the November 2011 final rule establishing the Shared Savings Program (76 FR 67872), our principal goal in selecting quality measures for ACOs has been to identify measures of success in the delivery of high-quality health care at the individual and population levels, with a focus on outcomes. In the November 2011 final rule, we adopted a quality measure set spanning four domains: Patient experience of care, care coordination/patient safety, preventative health, and at-risk population (76 FR 67872 through 67891). We subsequently updated the measures comprising the quality performance measure set for the Shared Savings Program through rulemaking in the CY 2015, 2016, 2017, and 2019 PFS final rules (79 FR 67907 through 67920, 80 FR 71263 through 71268, 81 FR 80484 through 80489, and 83 FR 59707 through 59715 respectively).

Between performance years 2017 (the first performance year under MIPS) and 2020, eligible clinicians who were participating in an ACO and who were subject to MIPS (MIPS eligible clinicians) were scored under the APM scoring standard under MIPS (81 FR 77260). These clinicians include any MIPS eligible clinicians who were participating in an ACO in a track, or payment model within a track (Track 1 and Levels A through D of the BASIC track) of the Shared Savings Program that is not an Advanced APM, as well as those MIPS eligible clinicians participating in an ACO in a track, or payment model within a track (Track 2, Level E of the BASIC track, and the ENHANCED track, or the Medicare ACO Track 1+ Model (Track 1+ Model)) that is an Advanced APM, but who do not become Qualifying APM Participants (QPs) as specified in § 414.1425, and are not otherwise excluded from MIPS.

In the CY 2021 PFS final rule, CMS finalized modifications to the Shared Savings Program quality reporting requirements and quality performance standard for performance year 2021 and subsequent performance years (85 FR 84720 through 84736). For performance year 2021 and subsequent years, ACOs are required to report quality data via the APP. In addition, CMS finalized a phase-in approach to the new Shared Savings Program quality performance standard that ACOs must achieve in order to be eligible to share in savings or avoid maximum losses. This phase-in allows for a gradual increase of the quality performance standard from a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores in performance years 2021 and 2022 to a quality performance score that is equivalent to or higher than the 40th percentile across all MIPS Quality performance category scores in performance year 2023 and subsequent years.

b. Clarification of the Application of CAHPS for MIPS Sampling Policies to Shared Savings Program ACOs

In the CY 2021 PFS final rule (85 FR 84722), we finalized that beginning in performance year 2021, Shared Savings Program Accountable Care Organizations (ACOs) are required to report quality data via the Alternative Payment Model (APM) Performance Pathway (APP). As part of the APP, ACOs are required to administer the CAHPS for MIPS survey (85 FR 84730 through 84732).

In the CY 2021 PFS final rule, we noted, in response to public comments, that the CAHPS for MIPS survey uses the same survey instrument to assess the same patient experience domains (or Summary Survey Measures (SSMs)) as the CAHPS for ACO survey. We noted that both the CAHPS for MIPS and the CAHPS for ACOs survey use the same shortened, streamlined version of the survey that we implemented for both CAHPS for ACOs and CAHPS for MIPS in 2018, reflecting efforts by CMS to reduce the number of questions. Moreover, in 2019, the two programs used identical survey instruments.

As discussed in the CY 2021 PFS final rule, we conducted analyses to assess the impact of aligning CAHPS scoring and benchmarking using 2019 CAHPS for ACOs and CAHPS for MIPS data. The results of these analyses indicate that scoring ACOs using the MIPS methodology resulted in ACOs having a similar distribution of quality points as MIPS groups. This distribution was wider than the distribution of quality points using the ACO scoring methodology largely due to differences across the two programs in the approach to benchmarking (85 FR 84731).

In addition, we clarified that beneficiaries assigned to an ACO or MIPS group, who are eligible for the CAHPS for MIPS or CAHPS for ACOs survey, are randomly selected for inclusion in the sample. Samples are drawn at the ACO level for CAHPS for ACOs and at the TIN level for MIPS groups. Therefore, each ACO or MIPS group sample is representative of the ACO or group population.

We stated that due to the alignment of CAHPS for ACOs with CAHPS for MIPS, we will use the benchmarking and scoring methodology for CAHPS for MIPS to assess ACOs' performance on the CAHPS survey measures. We explained that a single set of benchmarks will be calculated using data from all applicable CAHPS for MIPS reporters. We score the CAHPS for MIPS survey as one quality measure, which is a different scoring approach from the Shared Savings Program quality scoring methodology, which scored the 10 CAHPS for ACOs SSMs in one patient/caregiver experience quality domain. As described in the CY 2017 Quality Payment Program final rule (81 FR 77284), each scored SSM has an individual benchmark and is scored individually and compared against the benchmark to establish the number of points earned. The CAHPS score is the average number of points across scored SSMs.

As stated in the CY 2021 PFS final rule (85 FR 84731), eligible beneficiaries assigned to an ACO or MIPS group are randomly selected to be included in the sample for the CAHPS for ACOs or CAHPS for MIPS survey. In the CY 2021 PFS final rule, we explained that the target sample size for CAHPS samples for all participating ACOs, groups, and virtual groups is 860; for ACOs, groups, and virtual groups with 860 or more survey-eligible patients, a random sample of 860 patients is drawn. We also noted that groups and virtual groups with fewer than 860 survey-eligible patients are eligible to participate in the CAHPS for MIPS if they meet the minimum sampling thresholds for CAHPS for MIPS:

• Large groups or virtual groups with 100 or more eligible clinicians: 416 eligible patients.
• Medium groups or virtual groups with 25-99 eligible clinicians: 255 eligible patients.
• Small groups or virtual groups with 2-24 eligible clinicians: 125 eligible patients.

These minimum sampling thresholds are necessary to ensure that groups have an adequate sample size to ensure that the survey responses will be representative of the care furnished by the clinicians in the group. Groups that do not have an adequate sample size would be at risk for not receiving enough survey responses to be representative of the care provided.

In the CY 2021 PFS final rule, we stated that we will continue to draw the CAHPS survey samples for Shared Savings Program ACOs administering the CAHPS for MIPS survey at the Shared Savings Program ACO level, with a target sample size of 860 going forward. Although we did not specifically state in the CY 2021 PFS final rule that the MIPS minimum sampling thresholds would also apply to ACOs participating in the Shared Savings Program, in the CY 2022 PFS proposed rule (86 FR 39264), we clarified that the sampling thresholds apply for performance year 2021 and subsequent years. As we explained in the CY 2022 PFS proposed rule, by adopting the APP as the reporting mechanism for Shared Savings Program ACOs, we replaced the CAHPS for ACOs that was previously used in the Shared Savings Program with the CAHPS for MIPS. In the CY 2022 PFS proposed rule, we stated that our intent in including the CAHPS for MIPS in the APP was to align reporting requirements under the Shared Savings Program with MIPS. Thus, as we noted in the CY 2022 PFS proposed rule, we believe that the discussion in the CY 2021 PFS final rule regarding the CAHPS for MIPS minimum sampling thresholds for groups and virtual groups can be reasonably understood to indicate that the CAHPS for MIPS minimum sampling thresholds would also apply to Shared Savings Program ACOs. We also noted that we had received stakeholder feedback after the publication of the CY 2021 PFS final rule asking whether the CAHPS for MIPS minimum sampling thresholds would also apply to Shared Savings Program ACOs. As stated in the CY 2022 PFS proposed rule, based on the feedback we had received, we determined that it was necessary to clarify that the minimum sampling threshold will apply.

As discussed in the CY 2022 PFS proposed rule, minimum sampling thresholds are necessary to ensure that ACOs have an adequate sample size to ensure that the survey responses will be representative of the care furnished by the ACO clinicians. As we stated in the proposed rule, we do not want ACOs to be required to contract with a vendor to administer the survey if there is a high risk that the ACO will not have a sufficient sample size to generate a response rate for the survey that will be sufficient to reliably calculate a score for the CAHPS for MIPS survey. We noted that aligning the minimum sampling thresholds for ACOs with the CAHPS for MIPS minimum sampling thresholds allows for consistency across all entities reporting the CAHPS for MIPS. Furthermore, we noted our belief that applying the CAHPS for MIPS minimum sampling thresholds does not negatively impact Shared Savings Program ACOs because only a few ACOs would potentially be impacted by these minimum sampling thresholds.

In the proposed rule, we noted that based on the analysis of proxy data from 2020, nearly all ACOs will fall into the large size classification; that is, they will have 100 or more eligible clinicians that have assigned their billing to TINs participating in the ACO. To quantify the actual number of eligible clinicians associated with each ACO, we used the latest available reassignment and claims data from an internal file that is regularly created twice each performance year to identify the number of individual providers (NPIs) associated with each ACO's participant TINs. We conducted an analysis with proxy ACO sampling frames from 2020 and 44 ACOs fell into the medium size category of 25-99 eligible clinicians, and no ACOs were determined to have fewer than 24 eligible clinicians. Based on this analysis, we estimated that few ACOs would not be able to administer the CAHPS for MIPS due to sample size. All ACOs classified as medium-sized had more than 860 beneficiaries eligible for sampling. However, based on our analysis, we noted that one large-sized ACO would not have been able to administer the CAHPS survey for performance year 2020, if we had required ACOs to administer a CAHPS for MIPS survey in performance year 2020 and these sampling rules had applied at that time because the sample size requirements would not have been met. Two additional large-sized ACOs were close to the minimum sampling threshold and would have been at risk for not being able to administer the CAHPS for MIPS survey for performance year 2020. We noted that in both cases, these ACOs would have been eligible for CAHPS sampling based on their counts of assigned, quality-eligible beneficiaries with two visits during the performance year; however, a large proportion (over 50 percent) of the beneficiaries assigned to these ACOs were residing in nursing homes and institutionalized beneficiaries are excluded from CAHPS for MIPS sampling.

Given that the minimum sampling sizes are set to ensure that groups or ACOs receive enough responses to be representative of the care their clinicians provide, we stated in the proposed rule that we believe it is important that we should not burden ACOs that fall below the thresholds with the cost of hiring a vendor and fielding a CAHPS for MIPS survey that may not produce enough responses to calculate the CAHPS for MIPS score. Accordingly, we stated that we will inform any ACO that is at risk of falling below the minimum sampling threshold that it may not have enough beneficiaries to field a CAHPS for MIPS survey prior to the deadline for contracting with a CAHPS for MIPS survey vendor. An ACO that does not meet the minimum sampling threshold to administer the survey will not receive a score for the CAHPS for MIPS survey under the APP. When an ACO fails to meet the sampling threshold and is unable to administer the survey, the ACO's measure set will be scored accordingly, and the number of measures included in the calculation of the ACO's quality performance score will be reduced from 10 to 9 measures or from 6 to 5 measures in the APP for performance year 2021. This means that the denominator used to calculate the quality score will be lower, such that an ACO that falls below the minimum threshold will not be penalized for its inability to administer a CAHPS for MIPS survey.

We solicited comment on this clarification. The following is a summary of the comments we received and our responses.

Comment: One commenter supported CMS' decision not to penalize ACOs that are unable to administer the CAHPS for MIPS survey because they fall below the minimum sampling threshold.

Response: We thank the commenter for their support.

Comment: One commenter expressed concern that the 860-beneficiary sample size is the same for all ACOs regardless of their size and may not adequately represent an ACO's full population.

Response: Although the overall number of assigned beneficiaries may differ between small, medium, and large ACOs, we believe that a sample size of 860 beneficiaries is reasonable and will produce scores on the CAHPS for MIPS measure meeting the adequate reliability threshold regardless of the size of an ACO's assigned beneficiary population. As we explained in the CY 2021 PFS final rule (85 FR 84731), eligible beneficiaries who are assigned to an ACO or MIPS group are randomly selected to be included in the sample for the CAHPS for MIPS survey. The use of a randomly selected survey sample ensures that the sample will be representative of the overall population served by the ACO or MIPS group. The target sample size of 860 beneficiaries was established using the results of analyses that sought to establish measures that allowed for meaningful comparisons to be made across ACOs and MIPS groups.

Accordingly, consistent with the clarification discussed in the CY 2022 PFS proposed rule, the CAHPS for MIPS minimum sampling thresholds will apply to Shared Savings Program ACOs for performance year 2021 and subsequent performance years.

In the CY 2022 PFS proposed rule (86 FR 39265), we also noted that the term “performance period” is used to describe the time-period over which quality performance is assessed under MIPS, which is a full calendar year (January 1 through December 31) (except as otherwise specified for administrative claims-based measures in the MIPS final list of quality measures). In contrast, the Shared Savings Program uses the term “performance year” to describe each period for which ACOs' quality performance is assessed. For performance year 2021 and subsequent performance years, the relevant period is also the full calendar year. Therefore, in the proposed rule, we further clarified that while the terminology used in the Shared Savings Program and MIPS differs, the period of time for which quality performance is assessed under the APP is the same for both programs.

c. Amending the Reporting Requirements Under the APM Performance Pathway for Performance Years 2022 and 2023

In the CY 2021 PFS final rule, we finalized a change to the quality reporting requirements for purposes of the Shared Savings Program (85 FR 84720 through 84734). Effective for performance year 2021 and subsequent performance years, Shared Savings Program ACOs are required to report quality data via the APP. The quality reporting requirements under the Shared Savings Program align with the requirements that apply under the APP under the Quality Payment Program. Under this new approach, ACOs only need to report one set of quality metrics via the APP to satisfy the quality reporting requirements under both the Shared Savings Program and the MIPS. The quality measures reported via the APP for purposes of the MIPS Quality performance category will also be used to determine the quality performance of the ACO for purposes of determining eligibility for shared savings and calculating shared losses, where applicable. We refer readers to the CY 2022 PFS proposed rule (86 FR 39265 and 39266) for an overview of the requirements for ACOs reporting under the APP that were adopted in the CY 2021 PFS final rule.

In the CY 2022 PFS proposed rule (86 FR 39266), we explained that, since the CY 2021 PFS final rule was issued, stakeholders have continued to express concerns about requiring ACOs to report eCQMs/MIPS CQMs via the APP due to the cost of purchasing and implementing a system wide infrastructure to aggregate data from multiple ACO participant TINs and varying EHR systems. We noted that for performance years beginning on or after January 1, 2019, ACOs are required to certify that they meet the CEHRT use requirements as specified at § 425.506(f). Specifically, an ACO in a track that:

• Does not meet the financial risk standard to be an Advanced APM must certify that the percentage of eligible clinicians participating in the ACO that use CEHRT to document and communicate clinical care to their patients or other health care providers meets or exceeds 50 percent; or

• Meets the financial risk standard to be an Advanced APM must certify that the percentage of eligible clinicians participating in the ACO that use CEHRT to document and communicate clinical care to their patients or other health care providers meets or exceeds the threshold established under § 414.1415(a)(1)(i).

We noted that we define CEHRT for purposes of the Shared Savings Program at § 425.20 and the term has the same meaning as provided under § 414.1305 for purposes of the Quality Payment Program. For 2019 and subsequent years, CEHRT is defined to mean EHR technology that meets the 2015 Edition Base EHR definition and that has been certified to the 2015 Edition health IT certification criteria necessary to report on applicable objectives and measures specified for the MIPS Promoting Interoperability performance category and includes clinical quality measure certification criteria that support the calculation and reporting of clinical quality measures that can be electronically accepted by CMS. Health IT certified to clinical quality measure certification criteria can help to support ACOs' efforts to meet quality measure reporting requirements.

We stated that, according to a National Association of Accountable Care Organizations (NAACOS) survey regarding the readiness of ACOs to report eCQM/MIPS CQM data, 77 percent of respondents had indicated they do not have the infrastructure in place to aggregate data on behalf of their ACO participant TINs on quality performance across all payers starting in 2022. On average, an ACO has 36 ACO participant TINs and the largest Shared Savings Program ACO has 436 ACO participant TINs. The NAACOS survey also noted that almost 40 percent of ACOs have more than 15 EHR systems. Additionally, we noted that stakeholders had raised privacy and other concerns about reporting eCQMs/MIPS CQMs on all-payer populations, rather than a sample of assigned Medicare beneficiaries, as required for the CMS web interface measures. These concerns focused on perceived HIPAA Privacy Rule limitations on sharing protected health information (PHI) for non-Medicare beneficiaries with an ACO.

We also stated in the proposed rule (85 FR 39266) that we had heard concerns from ACOs that are acting, for the purpose of HIPAA compliance, as business associates of their health care provider ACO participants regarding their ability to update their business associate agreements (BAAs) to include the PHI of patients who are not covered by Medicare. Stakeholders indicated that their current agreements may only address sharing the PHI of Medicare beneficiaries. Therefore, they raised concerns that reporting all payer eCQMs would violate their BAAs, as well as the HIPAA Privacy Rule business associate requirements at 45 CFR 164.502(a) and 164.504(e).

As we noted in the proposed rule, to report eCQMs successfully, health care providers must adhere to the requirements identified by the CMS quality program in which they intend to participate (86 FR 39266). For purposes of reporting eCQMs/MIPS CQMs under MIPS, clinicians are expressly required under § 414.1340(a) to submit data on the applicable percentage of patients that meet the measure's denominator criteria, regardless of payer. Under § 414.1380(b)(1)(i)(B)(1)( iii ), failure to meet this requirement may result in the clinician receiving zero points for the measure, which may adversely impact their MIPS final score and payment adjustment. As such, in the proposed rule, we stated our belief that the disclosure of all-payer data to CMS as required by § 414.1340(a) would be permitted by the HIPAA Privacy Rule under the provision that permits disclosures of PHI as “required by law.” Under this provision, a HIPAA covered entity, or its business associate when authorized by its BAA, may use or disclose PHI to the extent that such use or disclosure is required by law and the use or disclosure complies with and is limited to the relevant requirements of such law. We also noted that the HIPAA Privacy Rule minimum necessary standard does not apply to uses or disclosures that are required by law.

Furthermore, we stated that the HIPAA Privacy Rule generally permits a covered entity to disclose PHI to a business associate and to allow a business associate to create, receive, maintain, or transmit PHI on its behalf, provided that the parties have a BAA that meets the requirements of 45 CFR 164.504(e) and permits the business associate to use or disclose PHI only as permitted or required by its BAA or as required by law. The BAA must, among other things, establish the permitted and required uses and disclosures of PHI by the business associate. Accordingly, we explained that ACO providers and suppliers that are MIPS eligible clinicians will need to review and update any relevant BAAs as necessary to include the disclosure of all-payer data, in addition to data for Medicare beneficiaries to the ACO. We stated that we believe ACO providers/suppliers should be able to update those agreements, in consultation with their legal counsel as necessary, to reflect the need to share data for patients covered by all payers with the ACO, in order to permit the ACO to completely and accurately report data on eCQMs/MIPS CQMs consistent with the MIPS reporting requirements.

In addition, we corrected a statement from the CY 2021 PFS final rule (85 FR 84730). In that final rule, we provided an example of how an ACO could aggregate eCQM measure data. In this example, we stated that an ACO could, on behalf of its ACO participants, combine the results from all the ACO participant TIN QRDA 3 files, by adding numerators, denominators, etc. and create an aggregate QRDA 3 file (or other compliant file format) and submit as an ACO to CMS. However, as explained in the CY 2022 PFS proposed rule (86 FR 39267), this example did not take into account the potential for duplicate patients for a given measure across the ACO participant TINs within an ACO. It also did not take into account that two of the three eCQMs require that the most recent blood pressure or HgbA1c be captured to assess performance for those measures. Accordingly, we clarified that an ACO that submits eCQM quality data to CMS must de-duplicate the patient level measures data across its ACO providers/suppliers to ensure that the aggregated QRDA 3 file that is submitted to CMS incorporates only quality data that meets the intent of the measure.

As discussed in section IV.A.3.d.(1)(d) of the CY 2022 PFS proposed rule, we proposed to extend the CMS Web Interface as a collection type for the Quality Payment Program for PY 2022 for MIPS Groups, Virtual groups, and Shared Savings Program ACOs reporting under the APP. For PY 2023, we proposed that the CMS Web Interface would be a collection type under the APP only for Shared Savings Program ACOs. Accordingly, we proposed to modify the quality measure set that must be reported by Shared Savings Program ACOs under the APP, as discussed in section III J.1.c. and section IV.A.3.c.(2)(a) of the CY 2022 PFS proposed rule.

To further address stakeholder feedback about ACOs' readiness to report all-payer measures, and in particular the concerns regarding aggregation of eCQM/MIPS CQM data across multiple ACO participant TINs using multiple different EHR technology, while also providing incentives for ACOs to take the steps necessary to report all-payer measures, we proposed that:

• For performance year 2022: An ACO would be required to report on either:

++ The ten CMS Web Interface measures and administer a CAHPS for MIPS survey and CMS would calculate the two claims-based measures included under the APP, or

++ The three eCQM/MIPS CQMs and administer a CAHPS for MIPS survey and CMS would calculate the two claims-based measures included under the APP. If an ACO selects this option, meets the data completeness requirement at § 414.1340 and the case minimum requirement at § 414.1380 for all three eCQMs/MIPS CQMs, and achieves a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one measure in the APP measure set, the ACO would meet the quality performance standard used to determine eligibility for shared savings and to avoid maximum shared losses, if applicable, for that performance year. In the CY 2022 PFS proposed rule (86 FR 39267), we stated that we believed that allowing ACOs that report eCQMs/MIPS CQMs to meet the quality performance standard if they achieve a score that is equivalent to or higher than the 30th percentile benchmark on one measure in the APP measure set would provide an incentive to ACOs to report the eCQMs/MIPS CQMs, while allowing them time to gauge their performance on the eCQMs/MIPS CQMs before full reporting of these measures required beginning in performance year 2024. We proposed that if an ACO chooses this option, its performance on all three eCQMs/MIPS CQMs would be used for purposes of MIPS scoring under the APP. We also noted that if an ACO decides to report both the ten CMS Web Interface measures and the three eCQMs/MIPS CQMs, it will receive the higher of the two quality scores for purposes of the MIPS Quality performance category.

If an ACO does not report any of the ten CMS Web Interface measures or any of the three eCQMs/MIPS CQMs and does not administer a CAHPS for MIPS survey under the APP, the ACO would not meet the quality performance standard. We proposed that:

• For performance year 2023: The ACO would be required to report on either:

++ The ten CMS Web Interface measures, at least one eCQM/MIPS CQM, and administer a CAHPS for MIPS survey and CMS would calculate the two claims-based measures included under the APP; or

++ The three eCQMs/MIPS CQMs and administer a CAHPS for MIPS survey and CMS would calculate the two claims-based measures included under the APP. If an ACO selects this option, meets the data completeness requirement at § 414.1340 and the case minimum requirement at § 414.1380 for all three eCQMs/MIPS CQMs, and achieves a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one measure in the APP measure set, the ACO would meet the quality performance standard used to determine eligibility for shared savings and to avoid maximum shared losses, if applicable, for that performance year. If an ACO chooses this option, its performance on all three eCQMs/MIPS CQMs would be used for purposes of MIPS scoring under the APP. We also noted that if an ACO decides to report both the ten CMS Web Interface measures and the three eCQMs/MIPS CQMs, it will receive the higher of the two quality scores for purposes of the MIPS Quality performance category.

We also proposed that if an ACO does not report at least one eCQM/MIPS CQM in the APP measure set, the ACO would not meet the quality performance standard.

• For performance year 2024 and subsequent performance years: The ACO would be required to report the three eCQMs/MIPS CQMs and administer a CAHPS for MIPS survey and CMS would calculate the two claims-based measures included under the APP. If an ACO does not report any of the three eCQMs/MIPS CQMs and does not administer a CAHPS for MIPS survey under the APP, the ACO would not meet the quality performance standard.

Finally, for the first performance year of an ACO's first agreement period under the Shared Savings Program, if the ACO meets MIPS data completeness and case minimum requirements, we proposed that the ACO would meet the quality performance standard, if:

• For performance year 2022. The ACO reports the ten CMS Web Interface measures or the three eCQMs/MIPS CQMs and administers a CAHPS for MIPS survey under the APP.
• For performance year 2023. The ACO reports the ten CMS Web Interface measures and at least one eCQM/MIPS CQM measure or reports the three eCQMs/MIPS CQMs, and administers a CAHPS for MIPS survey under the APP.
• For performance year 2024 and subsequent performance years. The ACO reports on the three eCQMs/MIPS CQMs and administers a CAHPS for MIPS survey under the APP.

We proposed changes to the regulation at § 425.512(a) to reflect these changes to the quality reporting requirements for performance years 2022 and 2023.

We solicited comment on these proposed updates to the reporting requirements under the APP for performance year 2022 and subsequent years. In addition, we solicited comment on whether we should extend the CMS Web Interface collection type for more than the 2 years proposed. We explained our belief that the proposed 2-year extension would provide sufficient time to allow ACOs and their ACO participants to take the necessary steps to address the concerns raised by stakeholders, but noted that we were interested in hearing if stakeholders believe additional time would be needed to enable ACOs and their ACO participants to prepare for eCQM/MIPS CQM reporting.

We received several public comments on the proposed updates to the reporting requirements under the APP for Shared Savings Program ACOs for performance year 2022 and subsequent years. We also received several public comments in response to our comment solicitation on the extension of the CMS Web Interface as a collection type. The following is a summary of the comments we received and our responses.

Comment: We received several comments in support of the proposed updates to the reporting requirements under the APP for Shared Savings Program ACOs. Several commenters supported CMS' acknowledgement of the complexity of the transition to all-payer eCQMs/MIPS CQMs. Another commenter appreciated the ability to test the reporting of eCQMs without the risk of being penalized. One commenter supported CMS' plans to improve data collection and reduce burden through digital quality measurement and applauded CMS for being responsive to ACO and other stakeholder concerns regarding the timeline. Several commenters appreciated CMS' proposal to provide more time to implement new systems to allow for aggregating all-payer data across multiple EHR systems and multiple health care practices. One commenter supported the transition to the reporting and submission of all-payer data for the three eCQMs/MIPS CQMs and stated their organization's readiness to support ACOs to be able to report on these measures. Another commenter encouraged CMS to improve education and guidance to support the transition.

Response: We have provided many resources and will continue to provide such resources to support ACOs as they transition to reporting the 3 eCQMs/MIPS CQMs. Commenters should refer to the “PY2021 APM Performance Pathway Toolkit” that is available on the Quality Payment Program Resource Library website at https://qpp.cms.gov/resources/resource-library. This toolkit contains multiple documents on how to report under the APP for performance year 2021 and how to aggregate data to the ACO level, a scoring guide, and a document describing the specific APP policies that apply to Shared Savings Program ACOs. These documents will be updated for each upcoming performance year.

Comment: Several commenters expressed concerns about the proposed updates to the quality reporting requirements and the timeline for ACOs to transition to reporting eCQMs/MIPS CQMs given that it could be difficult for an ACO to test eCQM reporting. Further, these commenters expressed concerns regarding industry's readiness to implement, test, and prepare all systems to report eCQMs/MIPS CQMs in 2 years. Several commenters appreciated the gradual transition to reporting eCQMs/MIPS CQMs, but stated that the proposal to require reporting on just one eCQM/MIPS CQM would require the same technological and administrative lift as reporting on all three eCQMs/MIPS CQMs and recommended that CMS remove its proposal to require reporting on at least one eCQM/MIPS CQM in 2023.

Several commenters recommended that CMS delay the eCQM/MIPS CQM reporting requirements. Some commenters suggested a delay of 2-5 years, and a few commenters suggested delaying until there have been sufficient EHR and IT improvements to make reporting eCQMs “feasible,” including more standard data fields and interoperability to resolve issues with aggregating eCQM data at the ACO level. Some commenters stated that the need for IT improvements disproportionately impacts independent physician practices, and those serving rural and underserved populations.

Response: We interpret the commenters' note about the infeasibility of reporting eCQMs as a reference to the inability of ACOs to update their infrastructure and establish the workflows needed to aggregate data and report on the 3 eCQMs/MIPS CQMs. As such, we believe allowing an additional year beyond the 2-year extension of the CMS Web Interface collection type proposed in the CY 2022 PFS proposed rule will provide ACOs with the time necessary to prepare to implement and report on the eCQM/MIPS CQMs. This further extension will allow ACOs additional time to ensure that they have the necessary infrastructure in place to successfully meet the new quality reporting requirements. We further believe that this additional time will help to ensure appropriate development and testing of the systems necessary to collect and aggregate data across ACO participants. The additional time will also ensure that ACOs can begin to create the workflows in their systems and make the necessary updates to report on the eCQM/MIPS CQMs. We believe this extended transition will also address commenters' concerns about the impact of the new reporting requirements on independent physician practices serving rural and underserved populations.

We understand the concern that the components of implementing an interoperable system are the same regardless of the number of eCQM/MIPS CQMs required to be reported. As a result, we also understand commenters' concern that our proposed requirement that ACOs report on at least one eCQM/MIPS CQM for performance year 2023 would likely impose the same burden as reporting all three eCQM/MIPS CQMs, given the necessary updates to their EHR systems, data aggregation, and workflow mappings that would be required to report one eCQM/MIPS CQM. In light of these concerns, we are not finalizing our proposal to require ACOs to report on at least one eCQM/MIPS CQM for performance year 2023 as discussed in section III.J.1.c of this final rule.

Comment: Many commenters generally supported the use of eCQMs, but had concerns about whether accurate, complete, and comparable eCQM reporting can be accomplished in the proposed 2-year extension period and supported further extending the timeframe until these challenges have been addressed. One commenter had concerns about including data from patients who receive care from non-ACO physicians or specialists in the same practice locations as physicians who are ACO providers/suppliers. Another commenter had concerns with the inclusion of emergency physicians, who may be participating in a Shared Savings Program ACO, but may not have an active role in the ACO. Another commenter recommended that CMS allow ACOs to exclude ACO participant TINs that use EMRs with insufficient quality data reporting capabilities. Another commenter questioned how data completeness standards could be met, given the issues of de-duplication and patients adding or moving insurance coverage. Many commenters called for CMS to provide more education and guidance to support ACOs in successfully transitioning to eCQM reporting given the complexities. A few commenters pointed out the added difficulty of making the changes necessary to transition to eCQM reporting during a global pandemic. One commenter expressed concern that eCQMs include data from an ACO's entire patient population, stating that this could penalize ACOs that include safety net clinics whose patients face social determinants of health (SDOH) barriers that drive down quality results. One commenter shared their concern regarding the shift from comparing the quality of care provided between ACOs to broadening this comparison to include all MIPS eligible clinicians. This commenter noted that the quality data reported by ACOs reflects coordination of care across the care continuum while MIPS reporting reflects care provided by individual clinicians and groups.

Response: We understand the concerns raised by the commenters regarding reporting on care from non-ACO practitioners. The determination of whether a service provided by a non-ACO practitioner would be attributed to the ACO TIN depends on the type of care being provided, the timing of the service, and confirmation by the ACO TIN that the patient received the service. If a physician or other practitioner does not bill under the TIN of an ACO participant, and thus, is not considered to be participating in the ACO, then a visit with this health care provider would not need to be included in the denominator for a measure's performance data. However, actions taken by a practitioner outside the ACO could be included in the measure's numerator of the ACO if the action of the practitioner occurs within the same reporting period and meets the criteria for the measure's numerator and the practitioner is coordinating with health care providers in the ACO.

We appreciate the commenters' concerns and recommendations regarding the shift from comparing quality performance between ACOs to comparing all MIPS eligible clinicians. We believe by assessing ACO quality performance in relation to all Medicare FFS reporters, MIPS eligible clinicians, APM entities and other ACOs eliminates differences in the way ACOs are scored compared to their MIPS eligible clinicians.

In reference to the commenter's concern regarding how data completeness could be met given issues of de-duplication, we note that the ACO would utilize the QRDA I format, which specifies patient level collection of data from each of the ACO's participant TINs. The ACO would then aggregate these data across the ACO and submit them to CMS in the QRDA III format. Collecting and aggregating these data in the QRDA I format allows for de-duplication given the granularity of the data. In reference to patients who change or add different insurance, we note that patients regularly change coverage but that does not remove the patients' data from the EHR. We believe requiring ACOs to transition to reporting eCQMs/MIPS CQMs should help further align quality measurement and improvement efforts, improving quality of care provided.

Comment : Several commenters expressed concerns regarding technical aspects of the data aggregation that is needed to report eCQMs/MIPS CQMs. One commenter cited that QRDA III files provide de-identified aggregate data, making it difficult to aggregate data or report eCQMs at the ACO level. Another commenter expressed concern that aggregated summary-level data submitted with QRDA III files for eCQMs, including data reported by specialists, would not be representative of the primary care received by the patient. A few commenters were concerned that aggregation of data would raise HIPAA concerns and require patient consent, to share non-Medicare patient information with the ACO and with CMS for a population that is not assigned to the ACO. They noted that obtaining this consent would be an additional burden.

Response: As noted previously, use of the QRDA I format does not have the same limitations with respect to de-identified aggregate data that make the QRDA III ill-suited for compiling the information needed to report eCQMs/MIPS CQMs at the ACO level.

We will continue to add documents to the “PY2021 APM Performance Pathway Toolkit” that is available on the Quality Payment Program Resource Library website at https://qpp.cms.gov/resources/resource-library to provide guidance on how the data should be reported to CMS.

We also recommend that ACOs refer to the measure specifications for each of the eCQMs. Specifications for all eCQMs can be found in the QPP resource library in the zip file titled “2021 Electronic Clinical Quality Measures (eCQMs) Specifications”. These documents can be found in the QPP resource library at https://qpp.cms.gov/resources/resource-library.

With respect to the HIPAA concerns raised by commenters, for the reasons discussed in the CY 2022 PFS proposed rule (86 FR 39266 and 39267), we believe the disclosure of all-payer protected health information to CMS as required by § 414.1340(a) is permitted by the HIPAA Privacy rule under the provision that permits disclosures as “required by law” of an individual's PHI “without the written authorization of the individual . . . or the opportunity for the individual to agree or to object.” As we noted in the proposed rule, the HIPAA Privacy Rule minimum necessary standard does not apply to uses or disclosures that are required by law.

Regarding disclosures of PHI between an ACO participant TIN and the ACO, we encourage ACOs and their ACO participants to consult with their legal counsels as necessary to ensure that their Business Associate Agreements (BAAs) address the need to share data for patients covered by all payers with the ACO to permit the ACO to comply with its legal obligation to completely and accurately report data to CMS on eCQMs/MIPS CQMs. We noted in the proposed rule that the HIPAA Privacy rule generally permits a covered entity to disclose PHI to a business associate and to allow a business associate to create, receive, maintain, or transmit PHI on its behalf, provided that the parties have a BAA that meets the requirements of 45 CFR 164.504(e) and permits the business associate to use or disclose PHI only as permitted or required by its BAA or as required by law. We also note that we are considering whether it would be appropriate to revise the regulations at §§ 425.702(c)(5) and 425.704(b) to allow data sharing with an ACO that has structured its relationship with its ACO participants as an organized health care arrangement (OHCA), as that term is defined in the HIPAA regulations at 45 CFR 160.103. Any changes to the current requirements governing data sharing with ACOs would be addressed in notice-and-comment rulemaking for future performance years.

In light of the concerns raised by the commenters about the proposed timeline for implementing the eCQM/MIPS CQM reporting requirements under the APP for Shared Savings Program ACOs, we are finalizing our proposed changes to the quality reporting requirements with the following modifications. As discussed in section IV.A.3.d.(1)(d) of this final rule, we are extending the use of the CMS Web Interface as a collection type for the Quality Payment Program for performance years 2022, 2023, and 2024 for Shared Savings Program ACOs reporting under the APP. The CMS Web Interface will be unavailable starting with CY 2025. Accordingly, we are modifying the quality measure set for the APP for Shared Savings Program ACOs to retain the CMS Web Interface as an additional reporting option for performance year 2024, as discussed in sections IV.A.3.c.(2)(a) and IV.A.3.d.(1)(d) of this final rule. In addition, we are not finalizing the proposed requirement that an ACO must report at least one eCQM/MIPS CQM in performance year 2023 in order to meet the quality performance standard.

Accordingly, for performance year 2022 and subsequent performance years, ACOs must meet the requirements described below and summarized in Table 34 in order to meet the quality reporting requirements under the Shared Savings Program. Please see Table 35 of this final rule for the final APP measure set that must be reported by Shared Savings Program ACOs for performance year 2022 and subsequent performance years.

• For performance years 2022, 2023, and 2024: An ACO must report on either:

++ The 10 CMS Web Interface measures and administer a CAHPS for MIPS survey and CMS will calculate the two claims-based measures included under the APP, or

++ The three eCQM/MIPS CQMs and administer a CAHPS for MIPS survey and CMS will calculate the two claims-based measures included under the APP.

If an ACO (1) does not report any of the 10 CMS Web Interface measures or any of the three eCQMs/MIPS CQMs and (2) does not administer a CAHPS for MIPS survey under the APP, the ACO will not meet the quality performance standard.

To provide an incentive for ACOs to begin the transition to eCQM/MIPS CQM reporting before performance year 2025, we are finalizing in section III.J.A.1.d. of this final rule that, for performance years 2022 and 2023, if an ACO reports the three eCQMs/MIPS CQMs, meets the data completeness requirement at § 414.1340 and the case minimum requirement at § 414.1380 for all three eCQMs/MIPS CQMs, and achieves a quality performance score equivalent to or higher than the 10th percentile of the performance benchmark on at least one of the four outcome measures in the APP measure set and a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one of the remaining five measures in the APP measure set, the ACO will meet the quality performance standard used to determine eligibility for shared savings and to avoid maximum shared losses, if applicable, for that performance year.

We believe that the quality performance standard policies we are finalizing for performance years 2022 and 2023 will provide an incentive to ACOs to report the eCQMs/MIPS CQMs, while allowing them time to gauge their performance on the eCQMs/MIPS CQMs before full reporting of these measures is required beginning in performance year 2025.

We note that if an ACO chooses to report the three eCQMs/MIPS CQMs, its performance on all three eCQMs/MIPS CQMs will be used for purposes of MIPS scoring under the APP. If an ACO decides to report both the 10 CMS Web Interface measures and the three eCQMs/MIPS CQMs, it will receive the higher of the two quality scores for purposes of the MIPS Quality performance category.

Please note that, as indicated in Tables 34 and 51 of this final rule, three of the CMS Web Interface measures (Statin Therapy for the Prevention and Treatment of Cardiovascular Disease (Quality ID# 438); Depression Remission at Twelve Months (Quality ID# 370), and Preventive Care and Screening: Tobacco Cessation: Screening and Cessation Intervention (Quality ID# 226)) do not have benchmarks for performance year 2022, and therefore, will not be scored. However, these measures are required to be reported in order to complete the CMS Web Interface dataset. Based on the ACO's chosen reporting option, either 6 (three eCQMs/MIPS CQMs + two claims-based measures + CAHPS for MIPs Survey measure) or 10 measures (seven CMS Web Interface measures + two claims-based measures + CAHPS for MIPS Survey measure) will be included in the calculation of the ACO's quality performance score.

• For performance year 2025 and subsequent performance years: The ACO must report the three eCQMs/MIPS CQMs and administer a CAHPS for MIPS survey and CMS will calculate the two claims-based measures included under the APP. If an ACO does not report any of the three eCQMs/MIPS CQMs and does not administer a CAHPS for MIPS survey under the APP, the ACO will not meet the quality performance standard.

We believe providing ACOs a total of 4 years (from performance year 2021 to performance year 2024) to transition to eCQM/MIPS CQM reporting is responsive to the commenters' concerns that it could take ACOs 3 to 5 years to transition to all-payer reporting. We believe this timeline will allow ACOs sufficient time to put IT infrastructure in place to capture, aggregate, and report all-payer quality measure data to CMS. Additionally, the removal of the proposed requirement that ACOs reporting the 10 CMS Web Interface measures in performance year 2023 must also report at least one of the three eCQMs/MIPS CQMs under the APP will prevent duplicate reporting of quality data given that the three eCQMs/MIPS CQMs are also CMS Web Interface measures. The removal of this proposed requirement also reduces burden for ACOs that elect to report through the CMS Web Interface in performance year 2023, by eliminating the requirement that these ACOs also take the steps necessary to report one eCQM/MIPS CQM.

We note that in addition to the comments discussed above regarding ACOs' readiness to report eCQMs/MIPS CQMs, in a recent ACO Learning System webinar entitled “Harnessing Data to Improve Quality”, participants were asked, “where is your ACO in your journey to implement eCQMs?”. In response, many ACOs indicated that they are reviewing measure specifications for the transition to reporting eCQMs/MIPS CQMs. Of the 46 respondents, half were reviewing measure specifications (50 percent), nearly half were engaging with ACO leadership on issues related to eCQM implementation (48 percent), and a number were beginning to educate providers on eCQMs (24 percent). Only 15 percent of respondents reported they had not yet started eCQM implementation. Since hearing concerns from stakeholders earlier this year regarding the burdens imposed by the requirement to report on eCQM/MIPS CQMs, we have been working with the CMS Office of Burden Reduction and Health Informatics (OBRHI) and ONC to identify barriers to implementation and plan to provide technical assistance to ACOs and IT vendors. OBRHI is developing case studies to assist ACOs in making the transition to eCQMs/MIPS CQMs, and we are in discussions with ONC regarding providing technical assistance to address the unique challenges facing ACOs with respect to reporting eCQMs/MIPS CQMs.

As noted previously in this section of the final rule, we also suggest that ACOs refer to the “PY2021 APM Performance Pathway Toolkit” that is available on the Quality Payment Program Resource Library website at https://qpp.cms.gov/resources/resource-library. This toolkit contains multiple documents related to how to report under the APP for performance year 2021, including a scoring guide and a document that specifically addresses the APP policies applicable to Shared Savings Program ACOs. These documents will be updated for each upcoming performance year. Furthermore, as stated in one of our previous responses, we have specifications for all eCQMs (including the three eCQMs/MIPS eCQMs that ACOs will report on under the APP) that can be found in the QPP resource library in the zip file titled “2021 Electronic Clinical Quality Measures (eCQMs) Specifications”.

We did not receive any comments on the proposed quality performance standard for ACOs in the first performance year of their first agreement period under the Shared Savings Program. However, we are finalizing our proposal with modifications in order to align with the quality reporting requirements we are finalizing for performance year 2022 and subsequent years, as described below.

Accordingly, for the first performance year of an ACO's first agreement period under the Shared Savings Program, if the ACO meets MIPS data completeness and case minimum requirements, the ACO will meet the quality performance standard under the Shared Savings Program, if:

• For performance years 2022, 2023 and 2024. The ACO reports the ten CMS Web Interface measures or the three eCQMs/MIPS CQMs and administers a CAHPS for MIPS survey under the APP.
• For performance year 2025 and subsequent performance years. The ACO reports on the three eCQMs/MIPS CQMs and administers a CAHPS for MIPS survey under the APP.

We are also finalizing changes to the regulation at § 425.512(a) to reflect the final quality reporting requirements under the Shared Savings Program for performance years 2022 and subsequent performance years that we are adopting in this final rule. We note that it is now our preference to omit the word “measures” when describing the eCQMs/MIPS CQMs in order to avoid redundancy. Therefore, we are revising all references to “eCQM/MIPS CQM measures” in § 425.512(a) to read “eCQMs/MIPS CQMs”.

(1) Solicitation of Comments on Addressing Health Disparities and Promoting Health Equity

In the CY 2022 PFS proposed rule (86 FR 39269 and 39270), we solicited comments and recommendations on how ACOs can utilize their resources to ensure that patients, regardless of racial/ethnic group, geographic location and/or income status, have access to equal care and how ACOs can improve the quality of care provided to certain communities, while addressing the disparities that currently exist in healthcare. We also solicited comments and recommendations on how we can encourage health care providers serving vulnerable populations to participate in ACOs and other value-based care initiatives, including whether any adjustments should be made to quality measure benchmarks to take into account ACOs serving vulnerable populations. We appreciate the feedback we received in response to this comment solicitation. We may consider this information to inform future rulemaking.

(2) Solicitation of Comments on Feasibility of TIN Level Reporting and Sampling for eCQMs/MIPS CQMs

We also solicited comment on allowing ACO providers/suppliers to submit eCQMs/MIPS CQMs to CMS at the ACO participant TIN level and potential approaches CMS could use to calculate/aggregate the TIN level quality data to create an ACO level score. We solicited comment on how stakeholders would envision CMS determining an appropriate beneficiary population. We also solicited comment on whether CMS should create a specific sampling methodology for ACOs, alternate sampling methodologies that could be used, as well as phase-in and tiered implementation strategies. We appreciate the feedback we received in response to this comment solicitation. We may consider this information to inform future rulemaking.

(3) Comment Solicitation for Reporting Options for Specialist Providers Within an ACO

In order to address measure applicability for specialist providers, we solicited comment on allowing ACO participant TINs to report either the eCQMs/MIPS CQMs in the APP measure set at the TIN level or the applicable MIPS Value Pathways, including how APP and MIPS Value Pathway data reported at the ACO participant TIN level could be aggregated in order to assess ACO quality performance. In addition, we solicited input on the role specialists play in ACOs and what specialty measures in the current eCQM or MIPS CQM set should be considered for inclusion in the Shared Savings Program quality measure set in future performance years. We appreciate the feedback we received in response to this comment solicitation. We may consider this information to inform future rulemaking.

(4) Updates to the APM Performance Pathway (APP) Measure Set

In the CY 2022 PFS proposed rule, we proposed to replace the Risk-Standardized, All-Cause Unplanned Admissions for Multiple Chronic Conditions for ACOs (MCC for ACOs measure) with the Risk Standardized, All-Cause Unplanned Admissions for Multiple Chronic Conditions for MIPS (MCC for MIPS measure) for performance year 2022 (86 FR 39270 and 39271). We also proposed to remove the MCC for ACOs measure from the APP measure set in order to reduce the potential for confusion around performance scores and feedback for MIPS eligible clinicians who might otherwise have been scored on both measures with differing results. We noted that this proposed change would continue the transition towards alignment of the quality measures reported by MIPS eligible clinicians who are not participants in APMs, such as the Shared Savings Program, and those who are, as discussed in the CY 2021 PFS final rule (85 FR 84720).

We explained that by removing the MCC for ACOs measure and aligning the quality measure set for the Shared Savings Program with MIPS, we would have the opportunity to align quality measurement between CMS programs. In addition, given that the Hospital-Wide, 30-day, All-Cause Unplanned Readmission (HWR) Rate for MIPS Eligible Clinician Groups measure included in the APP looks at an ACO's all Medicare population rather than just the ACO's assigned beneficiary population, we stated that we believed the proposal to move to the MCC for MIPS measure would be consistent with the approach under the APP of assessing, measuring and improving quality of care across a broader population of patients.

Table 25 of the CY 2022 PFS proposed rule (86 FR 39271) set forth the proposed measure set under the APP that we proposed would be reported by Shared Savings Program ACOs for performance year 2022 and subsequent performance years.

We received many public comments on our proposal to replace the MCC for ACOs measure with the MCC for MIPS measure and on the proposed APP measure set for performance year 2022 and subsequent performance years. The following is a summary of the comments we received and our responses.

Comment: Several commenters supported our proposal to replace the MCC for ACOs measure in the APP measure set with the MCC for MIPS measure for performance year 2022 and subsequent performance years. Some commenters stated that this change would reduce confusion for MIPS eligible clinicians who might otherwise have been scored on both measures with differing results and that it supports the agency's effort to align quality measures between MIPS and APMs. Other commenters explained that they support consolidation of measures across programs to reduce complexity. One commenter stated that adding the MCC for MIPS measure to the APP will create an opportunity for clinicians to become more familiar with the measure before transitioning to reporting under the APP.

Response: We agree that replacing the MCC for ACOs measure with the MCC for MIPS measure would permit the use of a single measure across both the Shared Savings Program and MIPS. We note that this policy is also consistent with our goal to align the measures and quality reporting requirements under the Shared Savings Program with MIPS as stated in the CY 2021 PFS final rule (85 FR 84720 through 84722). Further, this policy also improves the ability to compare performance across ACO participants and MIPS eligible clinicians.

Comment: A few commenters were opposed to the proposal and requested that CMS retain the current MCC for ACOs measure. Some commenters expressed concern that ACOs may not have the ability to meaningfully influence treatment of beneficiaries not assigned to the ACO. These commenters stated that the rationale for changing to the MCC for MIPS measure is likely flawed and that further testing is needed to assess the impact of the proposed change. The commenters explained that the broader denominator that will be produced when applying the MCC for MIPS measure to ACOs will be reflective of MIPS eligible clinicians' performance who may not participate in the Shared Savings Program, rather than the performance of ACOs, because many ACOs contract with a broad set of provider types that may or may not have an agreement with the ACO. The commenters recommended that CMS conduct analyses of the two MCC measures, such as comparisons of the measure denominators and resulting performance scores for ACOs and the associated eligible clinicians, to determine whether the assumption that scores will likely be similar is correct prior to finalizing this change. Another commenter cited the infeasibility of taking on responsibility for the full Medicare population in its ACO practices as a result of their patient population's preference to access care at the local Emergency Room (ER). Therefore, they are concerned that they do not have knowledge of these patients to assist with chronic disease management and care coordination needs.

Response: We acknowledge the concerns raised by the commenters regarding our proposal to include the MCC for MIPS measure in the APP measure set. In proposing to shift to the MCC for MIPS measure for ACOs beginning in performance year 2022, we were guided by our goal of harmonizing measures across CMS programs. In addition, we cannot evaluate clinician group performance across CMS programs without eliminating the use of multiple benchmarks for the same measure. The shift to a single MCC measure allows us to compare the performance of ACOs to that of TINs in the traditional MIPS as part of a combined calculation that includes both MIPS providers and ACOs and generates a single distribution of scores for benchmarking.

The MCC for MIPS measure uses an office visit-based attribution algorithm to identify the clinician most responsible for the patient's care for purposes of determining the population to include in the measure denominator. The visit codes used for the attribution algorithm are the same as the visit codes used for the ACO beneficiary assignment. Based on the attribution algorithm, the patient is assigned to a primary care provider or to a relevant specialist based on the number and pattern of their visits. The patient then “follows” their clinician to the TIN designated by the clinician (that is, they are assigned to their clinician's TIN). ACO-level scores are determined after the TINs of ACO participants are mapped to their respective ACOs.

In our preliminary analysis comparing the MCC for MIPS measure with the MCC for ACOs measure, we note that there is a high correlation of 0.89 between ACO-level scores obtained using the old ACO MCC measure and the MIPS MCC measure. However, we acknowledge that ACOs' scores on the MCC measure may change as a result of including the MCC for MIPS measure in the APP measure set. We intend to conduct additional analyses to further model the impact of the shift to the MCC for MIPS measure on ACOs' scores for the MCC measure. The MCC for MIPS measure attribution considers only certain types of providers (primary care providers or specialists including cardiologists, pulmonologists, nephrologists, neurologists, and endocrinologists) who care for patients with MCCs, and excludes patients who would be attributed to hematologists/oncologists. In reference to commenters' concerns about taking on responsibilities of the full Medicare population, we continue to believe that moving to the MCC for MIPS measure will reduce the potential for confusion around performance scores and feedback for MIPS eligible clinicians who might otherwise have been scored on both measures with differing results. We also note that there is a strong overlap between the assigned beneficiary population for the MCC for ACOs measure and the attributed beneficiary population for the MCC for MIPS measure. Accordingly, we are finalizing our proposal to replace the MCC for ACOs measure with the MCC for MIPS measure in the APP measure set for performance year 2022 and subsequent performance years. Further details on the specifications for the MCC for MIPS measure can be found in Table A-5 in Appendix A of this final rule.

Comment: Several commenters generally supported the overall proposed APP measure set. One commenter applauded the inclusion of the evidence-based eCQMs combined with CAHPS and administrative measures of utilization. Another commenter appreciated the reduced number of measures because it will ease provider burden.

Response: We thank commenters for their positive feedback on the proposed APP quality measure set. The reduced measure set is intended to reduce reporting burden on ACOs and focus on quality measures that address patient outcomes.

Comment: Several commenters noted that the measure set selected for the APP is narrowly focused and could result in a greater emphasis being placed on patient satisfaction as there will only be three clinical measures. Some commenters stated that the measure set selected for the APP would result in an ACO's entire performance hinging on only two or three measures, with a commenter noting that a very small measure set may overemphasize certain metrics or underlying beneficiary conditions, or create clinical disruption. Several commenters stated it was inappropriate for an ACO's performance to be based on only a couple of measures in a program where ACOs are financially accountable for total cost of care losses for a large population.

One commenter expressed concern that the proposed measure set does not encourage or promote patient care. Another commenter stated that CMS had not yet struck the right balance between quality of care and minimizing burden. One commenter applauded CMS for moving toward more outcomes-based, primary care measures, but explained that this measure set did not yet achieve this goal. Several commenters mentioned that evaluating the totality of an ACO's quality performance on such a small measure set was inappropriate and unfair. Another commenter requested that CMS consult with the ACO community and patient representatives as it works to determine the measure set.

Response: As we stated in the CY 2021 PFS final rule (85 FR 84728), the transition to the APP measure set was intended to reduce reporting burden and eliminate differences in the way ACOs are scored under the Shared Savings Program compared to the way their MIPS eligible clinicians are scored under MIPS, while also moving toward a more outcome-based, primary care focused measure set. Additionally, we selected the measures to be included in the measure set because they are broadly applicable for the primary care population and population health goals that are associated with the Shared Savings Program. These measures align with the Meaningful Measures framework while also being appropriate for assessing ACO quality performance as they focus on prevalent and high priority chronic health conditions. These measures are also relevant in assessing the quality of care furnished by the broad range of clinicians in a variety of specialties that participate in ACOs. For example, hypertension and diabetes are chronic conditions that are applicable to both primary care practitioners and specialists. Also, as noted in the CY 2021 PFS final rule (85 FR 84728), the APP measure set is intended to assess a sample of the areas where ACOs should be focused on improving the quality of care.

After consideration of the comments received, we are finalizing the APP measure set as proposed. Table 35 lists the measures included in the final APP measure set that will be reported by Shared Savings Program ACOs for performance year 2022 and subsequent performance years. As discussed in section III.J.1.c. of this final rule, we are finalizing the following quality reporting requirements for Shared Savings Program ACOs for performance year 2022 and subsequent performance years:

• For performance years 2022, 2023 and 2024: An ACO will be required to report either:

++ The 10 CMS Web Interface measures and administer a CAHPS for MIPS survey and CMS will calculate the two claims-based measures included under the APP, or

++ The three eCQM/MIPS CQMs and administer a CAHPS for MIPS survey and CMS will calculate the two claims-based measures included under the APP.

• For performance year 2025 and subsequent performance years: An ACO will be required to report the three eCQMs/MIPS CQMs and administer a CAHPS for MIPS survey and CMS will calculate the two claims-based measures included under the APP.

d. Shared Savings Program Quality Performance Standard

(1) Freezing the Quality Performance Standard at the 30th percentile of All MIPS Quality Performance Category Scores for Performance Year 2023

The quality performance standard is the minimum performance level ACOs must achieve in order to be eligible to share in any savings earned, avoid maximum shared losses under certain payment tracks, and avoid quality-related compliance actions. As noted above, in the CY 2021 PFS final rule we finalized a gradual phase in of the revised quality performance standard.

Specifically, an ACO would meet the quality performance standard if:

• For performance years 2021 and 2022, the ACO achieves a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring; and

• For performance year 2023 and subsequent performance years, the ACO achieves a quality performance score that is equivalent to or higher than the 40th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring (85 FR 84735).

We finalized this phase-in approach to address the concerns raised by commenters about the limited time for ACOs to gain familiarity with the new quality reporting requirements under the APP and potential challenges in meeting the new quality performance standard, as well as concerns regarding the shift from a domain-based scoring approach to the original proposal to require an ACO to achieve an overall quality score equivalent to the 40th percentile across all MIPS quality performance category scores starting in performance year 2021. In conjunction with the decision to phase-in the quality performance standard, we also adopted a phase-in of the reporting requirements under the APP for Shared Savings Program ACOs, as described previously.

In the CY 2021 PFS final rule, we also discussed the potential impact of the final policies on ACO quality performance. We projected that, absent an improvement in quality performance by ACOs, roughly 1-in-5 ACOs, or approximately 20 percent of ACOs, could fall below the 40th percentile MIPS Quality performance category score by performance year 2023, and would not be eligible to share in savings or would owe maximum shared losses, if applicable (85 FR 85007 through 85008). For the CY 2021 rulemaking, we conducted an analysis in order to understand better how well ACOs might perform once the CMS Web Interface is no longer an available collection type. The analysis simulated ACO performance on eCQMs/MIPS CQMs using 2018 and 2019 quality data submitted via the CMS Web Interface. Based on the analysis of the 2018 and 2019 data, there were two differing estimates of the number of ACOs that would not meet the quality performance standard. The estimated percent of Shared Savings Program ACOs falling below the 40th percentile MIPS Quality performance category score was 6.5 percent based on a simulation using 2018 data and 22.9 percent based on a simulation using 2019 data.

In the CY 2022 PFS proposed rule (86 FR 39272), we acknowledged that even with the steps that ACOs are taking to develop their capacity for reporting of the eCQMs/MIPS CQMs and our proposals to phase-in reporting of these measures, transitioning to eCQM/MIPS CQM quality data reporting and aggregation may come with unforeseen data collection and/or system operational issues. Therefore, we explained that we had concluded that it would be appropriate to freeze the quality performance at the 30th percentile MIPS Quality performance category score for an additional year before raising the quality performance standard to the 40th percentile starting in performance year 2024. We explained that we believed this proposal, in conjunction with our proposal to extend the CMS Web Interface to allow for a gradual phase in of reporting the three eCQMs/MIPS CQMs, would be responsive to stakeholder concerns related to the transition to eCQMs/MIPS CQMs and the need for data aggregation and would provide time for both ACOs and EHR vendors to put in place processes and systems, such that ACOs will be well positioned to report eCQM/MIPS CQMs by performance year 2024.

As discussed earlier in this final rule, as part of the gradual phase-in to full reporting of eCQMs/MIPS CQMs, in the CY 2022 PFS proposed rule (86 FR 39272) we proposed to include incentives to encourage the early adoption of full eCQM/MIPS CQM reporting prior to performance year 2024. As part of the phase-in, and in order to transition ACOs to reporting all-payer eCQMs/MIPS CQMs, for performance year 2023 we proposed to require an ACO to report at least one eCQM/MIPS CQM (that meets data completeness and case minimum requirements) in addition to the CMS Web Interface measures in order to meet the quality performance standard. In addition, we also proposed for both performance year 2022 and performance year 2023 that ACOs that elect to report all three eCQMs/MIPS CQMs and meet the data completeness requirement and case minimum requirement for all three measures would meet the quality performance standard if they achieve a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one measure in the APP measure set.

In the proposed rule, we noted that we believed our proposal to freeze the quality performance standard at the 30th percentile for an additional year was consistent with the requirement in the statute that CMS increase the quality performance standard over time. We explained that two ways to increase the quality performance standard are: (1) By increasing the threshold for the quality performance standard, and (2) by moving to a requirement that ACOs report for on all-payer measure populations for purposes of assessing Shared Savings Program quality performance. We proposed to do both by requiring that ACOs begin the transition to reporting all-payer measures before increasing the quality performance standard starting in performance year 2024.

Therefore, we proposed to freeze the quality performance standard at the 30th percentile across all MIPS Quality performance category scores for performance year 2023, and to establish incentives to encourage ACOs to begin the transition to eCQM/MIPS CQM reporting in performance year 2022 and performance year 2023. Under this proposal, CMS would designate the quality performance standard for Shared Savings Program ACOs as the ACO reporting via the APP established under § 414.1367 and for:

• Performance year 2022, if an ACO reports:

++ The 10 CMS Web Interface measures and achieves a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, or

++ The three eCQMs/MIPS CQMs, meeting the data completeness requirement at § 414.1340 and the case minimum requirement at § 414.1380 for all three measures, and achieves a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one measure in the APP measure set.

If the ACO does not report any of the 10 CMS Web Interface measures or any of the three eCQMs/MIPS CQMs and does not administer a CAHPS for MIPS survey, the ACO would not meet the quality performance standard.

• Performance year 2023, if an ACO reports:

++ The 10 CMS Web Interface measures and at least one eCQM/MIPS CQM measure, and achieves a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, or

++ The three eCQMs/MIPS CQMs, meeting the data completeness requirement at § 414.1340 and the case minimum requirement at § 414.1380 for all three measures, and achieves a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one measure in the APP measure set.

If the ACO does not report at least one eCQM/MIPS CQM, the ACO would not meet the quality performance standard.

We also proposed that for performance year 2024 and all subsequent performance years, we would designate the quality performance standard for all Shared Savings Program ACOs, with the exception of ACOs in the first performance year of their first agreement period under the Shared Savings Program, as the ACO reporting quality data via the APP established under § 414.1367 according to the method of submission established by CMS and achieving a quality performance score that is equivalent to or higher than the 40th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring. We also proposed to revise the regulation at § 425.512 to reflect the extended phase-in of the ACO quality performance standard.

In the proposed rule, we recognized the change from the CMS Web Interface collection type to the eCQM/MIPS CQM collection type would add complexity for ACOs as they may need to utilize new approaches to combining data across EHR systems to allow for a new data submission type, as well as aggregating ACO participant data for submission to CMS. However, we indicated that we believed the proposal to delay the increase in the quality performance standard, coupled with the proposal to extend the CMS Web Interface, with incentives for early adoption of eCQM/MIPS CQM reporting, would give ACOs ample time to prepare for the transition to full eCQM/MIPS CQM reporting in performance year 2024 and the incremental increase in the quality performance standard to the 40th percentile MIPS Quality performance category score. We also stated our belief that the proposed timeline for phasing in the new quality performance requirements under the Shared Savings Program would signal to ACOs, EHR vendors, and other stakeholders that eCQM/MIPS CQM reporting is the path forward for the Shared Savings Program and clearly establish the standard that ACOs would need to achieve in order to be eligible to share in maximum savings and avoid owing the maximum shared losses, if applicable.

Additionally, as noted in the proposed rule, we also considered the possibility of extending the freeze of the Shared Savings Program quality performance standard at the 30th percentile MIPS Quality performance category score for performance year 2024. We explained that this alternative would delay the incremental increase in the quality performance standard until all ACOs have at least one year of experience in reporting data for all three eCQM/MIPS CQM measures. This delay would allow ACOs additional time to gain experience reporting on the eCQMs/MIPS CQMs and also provide CMS with more information on ACO performance on all-payer measures and the ability of ACOs to aggregate data across multiple EHR systems and multiple practices, in order to inform the quality performance standard in outlying years.

We solicited comment on our proposal to freeze the Shared Savings Program quality performance standard at the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring for performance year 2023 and to increase the quality performance standard to the 40th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring starting in performance year 2024. In addition, we solicited comment on the alternative of freezing the Shared Savings Program quality performance standard at the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring for PYs 2023 and 2024.

We received many public comments on our proposal and the alternative discussed in the proposed rule. The following is a summary of the comments we received and our responses.

Comment: Several commenters expressed concerns with the proposed approach of setting the quality performance standard at the 30th percentile across all MIPS Quality performance category scores starting in performance year 2023. Commenters also had concerns about the quality scoring methodology, citing concerns with the comparison to the MIPS final quality scores. Specifically, the commenters found the current methodology to be unfair to ACOs, as ACOs must report on a set list of measures, while MIPS reporters may select from a broader measure set, making these groups incomparable. Commenters expressed concern that the current methodology would result in many ACOs not being able to meet the 40th percentile threshold for performance year 2024. One commenter indicated that the proposed increase could result in physician practices leaving the Shared Savings Program and suggested CMS allow more time for further questions about the transition to the APP to be clarified. Some commenters suggested reverting to the previous methodology for determining if an ACO met the quality performance standard, while other commenters suggested providing quality benchmarks ahead of the performance year and comparing ACOs only to other similarly situated ACOs. In addition, the commenters that supported establishing prospective quality benchmarks indicated that including 2020 data would be unfair on account of the challenges presented by the PHE for COVID-19. Another commenter indicated that freezing the quality performance standard would not resolve transparency issues surrounding the calculation of the quality performance score. Other commenters recommended CMS provide more information about how the threshold is calculated, indicating that without proper transparency, an increase to the 40th percentile would be too significant for many ACOs to achieve, especially those new to the program.

Response: We appreciate the commenters' concerns regarding the proposal to increase the quality performance standard to the 40th percentile across all MIPS Quality performance category scores starting in performance year 2023. The Shared Savings Program quality reporting requirements and quality performance standard that we are finalizing for performance year 2022 and subsequent performance years are described in sections III.J.1.c. and III.J.1.d. of this final rule, respectively. We stated in the CY 2021 PFS final rule (85 FR 84735) that each ACO's quality performance score will be calculated using the ACO's performance on the measures reported under the APP, any applicable MIPS bonus points, and quality improvement points. The methodology used to calculate MIPS Quality performance category scores is described in the “2021 APM Performance Pathway Scoring Guide” and the “2021 APM Performance Pathway for Shared Savings Program Accountable Care Organizations (ACOs) User Guide” found within the “PY2021 APM Performance Pathway Toolkit” that is available on the Quality Payment Program Resource Library website at https://qpp.cms.gov/resources/resource-library. These documents will be updated for each upcoming performance year. We believe that assessing an ACO's quality performance score against the quality performance scores for all individuals, groups, and APM entities is consistent with our goal to align the quality reporting requirements under the Shared Savings Program with the requirements that will apply under the APP for purposes of the Quality Payment Program.

It is important to note that ACOs can earn up to 10 additional percentage points based on their improvement in the quality performance category from the previous year which should help to increase the ACOs' scores and alleviate concerns about other MIPS eligible clinicians being able to pick the measures they report. We believe the ability to earn points for quality improvement will assist ACOs in achieving quality performance scores equivalent to or higher than the 30th or 40th percentile across all MIPS Quality performance category scores. As noted in the CY 2022 PFS proposed rule (86 FR 39274) and in section III.J.1.d.(2). of this final rule, for performance year 2018, the MIPS Quality performance category score at the 30th percentile was equivalent to 83.9 and the MIPS Quality performance category score at the 40th percentile was equivalent to 93.3. For performance year 2019, the MIPS Quality performance category score at 30th percentile was equivalent to 87.9 and the MIPS Quality performance category score at the 40th percentile was equivalent to 95.7.

As discussed in section IV.A.3.e.(1)(c)(ii) of this final rule, we are not finalizing the proposal to use performance period benchmarks or data from the CY 2019 performance period/2021 MIPS payment year to calculate quality measure benchmarks for the CY 2022 performance period/2024 MIPS payment year. Analysis of the CY 2020 performance period/2022 MIPS payment year data supports its use for benchmarking purposes. Those quality measure benchmarks will be made available to clinicians before the start of the CY 2022 performance period.

Since the publication of the CY 2022 PFS proposed rule, we have identified standards in our regulations that prevent us from finalizing without modification our proposal to allow ACOs that elect to fully report all three eCQMs/MIPS CQMs to meet the quality performance standard if they achieve a quality performance score equivalent to or higher than the 30th percentile on at least one measure in the APP measure set. Adopting this policy would result in the ENHANCED track and the BASIC track level E of the Shared Savings Program no longer qualifying as Advanced APMs. This, in turn, would prevent eligible clinicians in the ACOs that participate in these tracks from becoming Qualifying APM Participants (QPs) based on their participation in the Shared Savings Program during performance years 2022 and 2023. They would instead be subject to the MIPS reporting requirements and payment adjustment. Therefore, we are finalizing a modified policy that avoids this result while still providing an incentive for ACOs to fully report all three eCQMs/MIPS CQMs.

Section 414.1410(a) provides that an APM is an Advanced APM for a payment year if CMS determines that it meets the criteria in § 414.1415 during the QP Performance Period. Section 414.1415(b)(1) requires that, to be an Advanced APM, an APM must include quality measure performance as a factor when determining payment to participants for covered professional services under the terms of the APM. Section 414.1415(b)(2) requires, in relevant part, that at least one of the quality measures used in the payment arrangement be a MIPS-comparable measure. Section 414.1415(b)(3) provides that in addition to the quality measure described under paragraph (b)(2), the quality measures upon which an Advanced APM bases payment must include at least one additional measure that is an outcome measure unless CMS determines that there are no available or applicable outcome measures included in the MIPS final quality measures list for the Advanced APM's first QP Performance Period.

Our proposal to permit an ACO that reports the three eCQMs/MIPS CQMs and scores above the 30th percentile on at least one measure in the APP measure set is inconsistent with the requirements of § 414.1415(b)(1) through (3) for two reasons. First, under the proposed policy, the Shared Savings Program would base the quality performance scores for certain ACOs, and therefore, these ACOs' payments, on a single measure when § 414.1415(b)(1) and (3) require that payment be based on at least two measures. Second, our proposal did not require that one of the measures that is used to determine the quality performance score be an outcome measure, which is also required by § 414.1415(b)(1) and (3). As CMS must determine whether an APM is an Advanced APM based in part on the APM's compliance with the standards of § 414.1415(b), finalizing our proposal would require CMS to determine that the ENHANCED track and the BASIC track level E of the Shared Savings Program are not Advanced APMs.

While the policy options we can adopt in this final rule are limited by the aforementioned regulations and the scope of our proposal, based on the comments received raising concerns related to the current quality performance standard, we are already considering a broader set of policy options for performance year 2023 and future years that would provide an incentive for ACOs to transition to full eCQM/MIPS CQM reporting. Among other things, we are considering reinstating the sliding scale quality performance standard methodology for determining shared savings and shared losses in next year's rulemaking for ACOs that report on the three eCQMs/MIPS CQMs Under the sliding scale methodology, we would multiply the ACO's quality score, based on the ACO's performance on the three eCQMs/MIPS CQMs as reported by the ACO, the two claims-based measures calculated by CMS, and the CAHPS for MIPS survey, by the sharing rate for the track (or payment model within a track) to determine the ACO's shared savings. We believe this approach would avoid the all or nothing approach under the current regulations, under which ACOs that fail to achieve the required minimum quality performance score are ineligible to share in any of the savings they achieve. Given the high level of performance in the MIPS Quality performance category and the challenge of transitioning to full eCQM/MIPS CQM reporting, we believe it is appropriate to offer some reward to ACOs that elect to report the eCQM/MIPS CQMs, but may not be able to achieve a quality performance score equivalent to the 30th or 40th percentile across all MIPS Quality performance category scores. As a result, we believe a sliding scale methodology for calculating shared savings could provide an incentive for continuous improvement and also encourage ACOs, particularly ACOs that serve large vulnerable populations or have large numbers of specialists who may not perform as well on the eCQMs/MIPS CQMs, to take the steps necessary to transition to eCQM/MIPS CQM reporting.

We are finalizing, with modifications, our proposal to freeze the quality performance standard at the 30th percentile across all MIPS Quality performance category scores for performance year 2023, and to establish incentives to encourage ACOs to begin the transition to eCQM/MIPS CQM reporting in performance year 2022 and performance year 2023. Our final policies address the commenters' concerns by lowering the quality performance standard ACOs must meet in order to share in savings or avoid maximum shared losses, if applicable, during the transition to new reporting mechanisms. These final policies with respect to the quality performance standard are also aligned with the final quality reporting requirements discussed in section III.J.1.c. of this final rule. Accordingly, we are designating the quality performance standard for all Shared Savings Program ACOs, with the exception of ACOs in the first performance year of their first agreement period, as the ACO reporting quality data via the APP established under § 414.1367 according to the method of submission established by CMS and for:

• Performance years 2022 and 2023:

++ Achieving a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, or

++ If the ACO reports the three eCQMs/MIPS CQMs, meeting the data completeness requirement at § 414.1340 and the case minimum requirement at § 414.1380 for all three measures, and achieves a quality performance score equivalent to or higher than the 10th percentile of the performance benchmark on at least one of the four outcome measures in the APP measure set and a quality performance score equivalent to or higher than the 30th percentile of the performance benchmark on at least one of the remaining five measures in the APP measure set. Consequently, the ACO would be required to meet the performance benchmark on either 2 outcome measures (one measure at the 10th percentile and the other at the 30th percentile), or 1 outcome measure at the 10th percentile and any other measure in the APP measure set at the 30th percentile. The outcome measures in the APP measure set are listed in Table 36.

If the ACO (1) does not report any of the 10 CMS Web Interface measures or any of the three eCQMs/MIPS CQMs and (2) does not administer a CAHPS for MIPS survey, the ACO would not meet the quality performance standard.

• Performance year 2024 and subsequent performance years: Achieving a quality performance score that is equivalent to or higher than the 40th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring.

If the ACO (1) does not report any of the 10 CMS Web Interface measures or any of the three eCQMs/MIPS CQMs and (2) does not administer a CAHPS for MIPS survey, the ACO would not meet the quality performance standard.

We are also finalizing conforming revisions to the regulation at § 425.512(a) to reflect the extended phase-in of the ACO quality performance standard adopted in this final rule.

We will continue to monitor the ACOs' performance under the APP and determine whether they meet the quality performance standard and may revisit these policies in future rulemaking if necessary to promote an attainable quality performance standard and degree of improvement.

Comment: Several commenters supported the alternative of freezing the Shared Savings Program quality performance standard at the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring for performance years 2023 and 2024, with commenters citing their appreciation for the additional flexibility allowed by freezing the quality performance standard for an additional year. Commenters also noted that this alternative would give health care providers and ACOs sufficient time to adjust to the new reporting requirements and to recover from any financial and operational losses sustained as a result of the PHE for COVID-19. A commenter suggested that CMS freeze the standard through 2025, explaining that the additional time would provide ACOs with more time to adjust to the revised quality performance standard methodology.

Response: We appreciate the commenters' input on this alternative. However, we believe that the additional year of keeping the quality performance category score at the 30th percentile is sufficient, especially given the fact that we are extending the CMS Web Interface as a collection type until 2024 and ACOs typically perform well on the CMS Web Interface measures. We believe that the extension of the CMS Web Interface and the incentive to report eCQMs/MIPS CQMs will in fact help improve the ACOs' performance. However, we will continue to monitor the ACOs' performance under the APP and may consider this feedback in developing policies for future rulemaking.

(2) Comment Solicitation on Publicly Displaying Prior Year Performance Scores That Equate to the 30th or 40th Percentile Across MIPS Quality Performance Category Scores

In the CY 2022 PFS proposed rule (86 FR 39274), we explained that stakeholders have expressed concerns regarding the lack of information on the level of quality performance that would equate to the 30th or 40th percentile MIPS Quality performance category score and that would enable an ACO to be eligible to share in savings or to avoid maximum shared losses, if applicable. We noted that stakeholders have expressed concern that these data are not publicly available prior to the start of a performance year and that they do not believe that ACOs have a way of determining what quality score they would need to achieve to meet the quality performance standard. For a given performance year, the 30th or 40th percentile MIPS Quality performance category score is calculated based on the distribution across all MIPS Quality performance category scores, excluding entities/providers eligible for scoring for facility-based scoring, only once MIPS final scoring is complete.

Therefore, we stated there is no information that can be provided prior to or during the performance year. However, we noted that for performance year 2018 the MIPS Quality performance category score at the 30th percentile was equivalent to 83.9 and the MIPS Quality performance category score at the 40th percentile was equivalent to 93.3. For performance year 2019 the MIPS Quality performance category score at 30th percentile was equivalent to 87.9 and the MIPS Quality performance category score at the 40th percentile was equivalent to 95.7.

We solicited comment on whether publicly displaying prior year performance scores that equate to the 30th or 40th MIPS Quality performance category scores would help to address ACOs' concerns regarding the lack of advance information regarding the quality performance score they must meet in order to satisfy the quality performance standard under the Shared Savings Program. We also solicited comment on other ways we could address these concerns.

The following is a summary of the public comments we received on this comment solicitation and our response.

Comment: Several commenters supported publicly displaying prior year performance scores that equate to the 30th or 40th percentile across all MIPS Quality category performance scores. Commenters explained that publicly displaying the information will promote transparency, enable ACOs to be better informed about the quality standards they must meet, and ensure ACOs' ability to appropriately track performance and increase the likelihood of achieving high-quality performance scores. One commenter expressed concern that publicly displaying prior year performance scores is not the optimal way to address stakeholder concerns and indicated that performance is volatile and the 30th (or 40th) percentile may change significantly from year to year depending upon changes in quality performance in MIPS. A few commenters suggested that CMS provide more information on the methodology used to calculate this standard.

Response: We thank commenters for their suggestions. As noted above and in the CY 2022 PFS proposed rule (86 FR 39274), the performance year 2018 MIPS Quality performance category score at the 30th percentile was equivalent to 83.9 and the MIPS Quality performance category score at the 40th percentile was equivalent to 93.3. For performance year 2019 the MIPS Quality performance category score at 30th percentile was equivalent to 87.9 and the MIPS Quality performance category score at the 40th percentile was equivalent to 95.7.

We will work toward providing additional historical information on performance scores as it becomes available. However, as noted in the CY 2022 PFS proposed rule (86 FR 39274), for a given performance year, the 30th or 40th percentile across all MIPS Quality performance category scores is calculated after MIPS final scoring is complete based on the distribution across all MIPS Quality performance category scores, excluding entities/providers eligible for scoring for facility-based scoring. Therefore, we are not able to provide this information prior to or during the performance year. Nevertheless, we believe that publicly displaying prior year performance scores that equate to the 30th and 40th percentile across all MIPS Quality performance category scores for the applicable performance year would still provide helpful information for ACOs to determine what level of quality performance they would need to meet in order to satisfy the quality performance standard under the Shared Savings Program. We will release this historical information on the Shared Savings Program website as soon as it becomes available.

Comment: One commenter requested that CMS provide additional information regarding how “entities eligible for facility-based scoring” will be removed from the calculations used to determine the 30th and 40th percentile across all MIPS Quality category performance scores, and whether, when reporting eCQMs/MIPS CQMs under the APP, ACOs will be accountable for reporting quality data for facilities such as FQHCs, and/or other entities eligible for facility-based scoring.

Response: Under the policies finalized in the CY 2021 PFS final rule (85 FR 84735), we exclude entities/providers eligible for facility-based scoring from the determination of the overall MIPS Quality performance category score because facility-based scoring is determined using the Hospital Value Based Purchasing (HVBP) Total Performance Score (TPS), which includes quality and cost. Facility-based provider scores are not considered as part of ACO quality scores, and APM participants (including ACO participants) have not typically been eligible for facility-based scoring in previous years. As a result, ACO quality scores will not be impacted by this exemption.

e. Revisions to the Extreme and Uncontrollable Circumstances Policy

In the CY 2021 PFS final rule (85 FR 84744 through 84747), we updated the extreme and uncontrollable circumstances policy for performance year 2021 and subsequent performance years to align with the gradual phase in of the revised quality performance standard. Specifically, we finalized that for:

• Performance year 2021 and performance year 2022, the minimum quality performance score for an ACO affected by an extreme and uncontrollable circumstance during the performance year, including the applicable quality data reporting period for the performance year, will be set equal to the 30th percentile MIPS Quality performance category score. If the ACO is able to report quality data and meets the MIPS data completeness and case minimum requirements, we will use the higher of the ACO's quality performance score or the 30th percentile MIPS Quality performance category score. If an ACO is unable to report quality data and meet the MIPS Quality data completeness and case minimum requirements due to an extreme and uncontrollable circumstance, we will apply the 30th percentile MIPS Quality performance category score.

• Performance year 2023, the minimum quality performance score for an ACO affected by an extreme and uncontrollable circumstance during the performance year, including the applicable quality data reporting period for the performance year, will be set equal to the 40th percentile MIPS Quality performance category score. If the ACO is able to report quality data and meets the MIPS data completeness and case minimum requirements, we will use the higher of the ACO's quality performance score or the 40th percentile MIPS Quality performance category score. If an ACO is unable to report quality data and meet the MIPS Quality data completeness and case minimum requirements due to an extreme and uncontrollable circumstance, we will apply the 40th percentile MIPS Quality performance category score (85 FR 84746).

In the CY 2022 PFS proposed rule (86 FR 39274), we also proposed to update the extreme and uncontrollable circumstances policy under the Shared Savings Program consistent with our proposal to freeze the quality performance standard for Shared Savings Program ACOS at the 30th percentile for performance year 2023. Specifically, we proposed to set the minimum quality performance score for an ACO affected by an extreme and uncontrollable circumstance during performance year 2023, including the applicable quality data reporting period for the performance year, to equal the 30th percentile MIPS Quality performance category score across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, for the relevant performance year.

If the ACO is able to report quality data via the APP, including at least one eCQM/MIPS CQM, and meets data completeness and case minimum requirements, we proposed to use the higher of the ACO's quality performance score or the equivalent of the 30th percentile MIPS Quality performance category score. If the ACO is unable to report quality data and meet the MIPS Quality data completeness and case minimum requirements due to an extreme and uncontrollable circumstance, we proposed to apply the 30th percentile MIPS Quality performance category score.

Similarly, we proposed that for performance year 2024 and subsequent years, the minimum quality performance score for an ACO affected by an extreme and uncontrollable circumstance during the performance year, including the applicable quality data reporting period for the performance year, would be set equal to the 40th percentile MIPS Quality performance category score across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, for the relevant performance year. We stated in the proposed rule that if the ACO is able to report quality data via the APP and meets the MIPS data completeness and case minimum requirements, we would use the higher of the ACO's MIPS Quality performance category score or the 40th percentile MIPS Quality performance category score. If the ACO is unable to report quality data and meet the MIPS Quality data completeness and case minimum requirements due to an extreme and uncontrollable circumstance, we proposed to apply the 40th percentile MIPS Quality performance category score. We noted our belief that these proposed updates were appropriate to align with the proposed changes to the quality performance standard in the CY 2022 PFS proposed rule, and would also allow impacted ACOs to be eligible to share in savings at their maximum sharing rate or to avoid maximum shared losses, if applicable (86 FR 39274 and 3975). We also proposed to make conforming changes to the Shared Savings Program regulations at § 425.512(b) to reflect these proposed revisions to the extreme and uncontrollable circumstances policy.

We solicited comment on the proposed revisions to the extreme and uncontrollable circumstances policy and received few public comments. The following is a summary of the comments we received and our responses.

Comment: A few commenters supported the proposed updates to the extreme and uncontrollable circumstances policy under the Shared Savings Program to align with the proposed changes to the quality performance standard.

Response: We appreciate the commenters' support.

As discussed in section III.J.1.d. of this final rule, we are finalizing the proposed updates to the quality performance standard with modifications. Therefore, we are finalizing the proposed changes to the extreme and uncontrollable circumstances policy under the Shared Savings Program with modifications to conform to the final policies we are adopting in this final rule regarding the quality performance standard.

For performance year 2023, if the ACO is able to report quality data via the APP and meets the MIPS data completeness and case minimum requirements, we will use the higher of the ACO's MIPS Quality performance category score or the 30th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, for the relevant performance year. If the ACO is unable to report quality data and meet the MIPS Quality data completeness and case minimum requirements due to an extreme and uncontrollable circumstance, we will apply the 30th percentile across all MIPS Quality performance category score.

For performance year 2024 and subsequent performance years, the minimum quality performance score for an ACO affected by an extreme and uncontrollable circumstance during the performance year, including the applicable quality data reporting period for the performance year, will be set equal to the 40th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, for the relevant performance year. If the ACO is able to report quality data via the APP and meets the MIPS data completeness and case minimum requirements, we will use the higher of the ACO's MIPS Quality performance category score or the 40th percentile across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, for the relevant performance year. If the ACO is unable to report quality data and meet the MIPS Quality data completeness and case minimum requirements due to an extreme and uncontrollable circumstance, we will apply the 40th percentile MIPS Quality performance category score.

We are also finalizing changes to the Shared Savings Program regulations at § 425.512(b)(2) and (b)(3) to reflect these revisions to the extreme and uncontrollable circumstances policy. We note that the changes to § 425.512(b)(3)(i) and (ii) we are adopting in this final rule differ slightly from the proposed rule because we are eliminating the references to the ACO reporting quality data via the APP and meeting the data completeness and case minimum requirements as duplicative of the existing introductory language in § 425.512(b)(3).

2. Revisions to the Definition of Primary Care Services Used in Shared Savings Program Beneficiary Assignment

a. Background

Section 1899(c)(1) of the Act, as amended by the CURES Act and the Bipartisan Budget Act of 2018, provides that for performance years beginning on or after January 1, 2019, the Secretary shall assign beneficiaries to an ACO based on their utilization of primary care services provided by a physician who is an ACO professional and all services furnished by RHCs and FQHCs. However, the statute does not specify a list of services considered to be primary care services for purposes of beneficiary assignment.

In the November 2011 final rule (76 FR 67853), we established the initial list of services, identified by Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes, that we considered to be primary care services. In that final rule, we indicated that we intended to monitor CPT and HCPCS codes and would consider making changes to the definition of primary care services to add or delete codes used to identify primary care services, if there were sufficient evidence that revisions were warranted. We have updated the list of primary care service codes in subsequent rulemaking to reflect additions or modifications to the codes that have been recognized for payment under the Medicare PFS and to incorporate other changes to the definition of primary care services for purposes of the Shared Savings Program.

In the June 2015 final rule (80 FR 32746 through 32748), we expanded the definition of primary care services to include two transitional care management (TCM) codes (CPT codes 99495 and 99496), and one chronic care management (CCM) code (CPT code 99490). As discussed in the final rule, the TCM codes were established to pay a patient's physician or practitioner to coordinate the patient's care in the 30 days following a hospital or SNF stay. Including these codes in the definition of primary care services reflects our belief that the work of community physicians and practitioners in managing a patient's care following discharge from a hospital or nursing facility (NF) to ensure better continuity of care for these patients and help reduce avoidable readmissions is a key aspect of primary care.

In the CY 2016 PFS final rule (80 FR 71270 through 71273), we revised the definition of primary care services to exclude services billed under CPT codes 99304 through 99318, containing the place of service 31 modifier specifying that the service was furnished in a SNF. We also revised the definition of primary care services to include claims submitted by Electing Teaching Amendment (ETA) hospitals.

In the CY 2018 PFS final rule (82 FR 53212 and 53213), we revised the definition of primary care services to include three additional CCM service codes, 99487, 99489, and G0506, and four behavioral health integration (BHI) service codes, G0502, G0503, G0504 and G0507.

We further revised the definition of primary care services in the November 2018 final rule (also referred to as the CY 2019 PFS final rule) (83 FR 59964 through 59968), by adding new codes to the definition of primary care services (CPT codes 99497, 99498, 96160, 96161, 99354, and 99355, and HCPCS codes G0444, G0442, and G0443), and by revising how we determine whether services identified by CPT codes 99304 through 99318 were furnished in a SNF.

In the May 8, 2020 COVID-19 IFC (85 FR 27582 through 27586), we revised the definition of primary care services for purposes of beneficiary assignment for the performance year starting on January 1, 2020, and for any subsequent performance year that starts during the COVID-19 PHE defined in § 400.200, to include the following additions specified in § 425.400(c)(2): (1) HCPCS code G2010 (remote evaluation of patient video/images) and HCPCS code G2012 (virtual check-in); (2) CPT codes 99421, 99422 and 99423 (online digital evaluation and management service (e-visit)); and (3) CPT codes 99441, 99442, and 99443 (telephone evaluation and management services).

In the CY 2021 PFS final rule (85 FR 84786 through 84793), we finalized the additional primary care service codes adopted in the May 8, 2020 COVID-19 IFC with modifications to allow these codes to be used in determining beneficiary assignment when the assignment window (as defined at § 425.20) for a benchmark or performance year includes any months during the PHE for COVID-19 defined in § 400.200, and to apply these additional primary care service codes to all months of the assignment window, when the assignment window includes any month(s) during the PHE for COVID-19.

In the CY 2021 PFS final rule (85 FR 84748 through 84755), we expanded the definition of primary care services for purposes of determining beneficiary assignment to include: Online digital E/M CPT codes 99421, 99422, and 99423; assessment of and care planning for patients with cognitive impairment CPT code 99483; chronic care management code CPT code 99491; exclusion of advance care planning CPT code 99497 and the add-on code 99498 when billed in an inpatient care setting; remote evaluation of patient video/images HCPCS codes G2010; virtual check-in HCPCS code G2012; non-complex chronic care management HCPCS code G2058 and its replacement CPT code 99439; principal care management HCPCS codes G2064 and G2065; and psychiatric collaborative care model HCPCS code G2214. In this same final rule (85 FR 84755 through 84756), we finalized revisions to the existing exclusion for professional services billed under CPT codes 99304 through 99318 that are furnished in a SNF to include services reported on an FQHC or RHC claim that includes CPT codes 99304 through 99318, when those services are furnished in a SNF.

For performance years beginning on January 1, 2021, and subsequent performance years, we defined primary care services in § 425.400(c)(1)(v) for purposes of assigning beneficiaries to ACOs under § 425.402 as the set of services identified by the following HCPCS/CPT codes:

CPT Codes

(1) 96160 and 96161 (codes for administration of health risk assessment).

(2) 99201 through 99215 (codes for office or other outpatient visit for the evaluation and management of a patient).

(3) 99304 through 99318 (codes for professional services furnished in a nursing facility; professional services or services reported on an FQHC or RHC claim identified by these codes are excluded when furnished in a SNF).

(4) 99319 through 99340 (codes for patient domiciliary, rest home, or custodial care visit).

(5) 99341 through 99350 (codes for evaluation and management services furnished in a patient's home for claims identified by place of service modifier 12).

(6) 99354 and 99355 (add-on codes, for prolonged evaluation and management or psychotherapy services beyond the typical service time of the primary procedure; when the base code is also a primary care service code under § 425.400(c)(1)(v)).

(7) 99421, 99422, and 99423 (codes for online digital evaluation and management).

(8) 99439 (code for non-complex chronic care management).

(9) 99483 (code for assessment of and care planning for patients with cognitive impairment).

(10) 99484, 99492, 99493 and 99494 (codes for behavioral health integration services).

(11) 99487, 99489, 99490 and 99491 (codes for chronic care management).

(12) 99495 and 99496 (codes for transitional care management services).

(13) 99497 and 99498 (codes for advance care planning; services identified by these codes furnished in an inpatient setting are excluded).

HCPCS Codes

(1) G0402 (code for the Welcome to Medicare visit).

(2) G0438 and G0439 (codes for the annual wellness visits).

(3) G0442 (code for alcohol misuse screening service).

(4) G0443 (code for alcohol misuse counseling service).

(5) G0444 (code for annual depression screening service).

(6) G0463 (code for services furnished in Electing Teaching Amendment hospitals).

(7) G0506 (code for chronic care management).

(8) G2010 (code for the remote evaluation of patient video/images).

(9) G2012 (code for virtual check-in).

(10) G2058 (code for non-complex chronic care management).

(11) G2064 and G2065 (codes for principal care management services).

(12) G2214 (code for psychiatric collaborative care model).

b. Revisions

(1) HCPCS and CPT Codes Used in Assignment

In the CY 2022 PFS proposed rule (86 FR 39276), we explained that based on feedback from ACOs and our further review of the HCPCS and CPT codes currently recognized for payment under the PFS, we believed it would be appropriate to amend the definition of primary care services used in the Shared Savings Program assignment methodology to include certain additional codes and to make other technical changes to the definition of primary care services, for use in determining beneficiary assignment for the performance year starting on January 1, 2022, and subsequent performance years.

We proposed to revise the definition of primary care services in the Shared Savings Program regulations to include the following additions: (1) Chronic Care Management (CCM) CPT code 99X21, if finalized through the CY 2022 PFS rulemaking; (2) Principal Care Management (PCM) CPT codes 99X22, 99X23, 99X24, and 99X25, if finalized through the CY 2022 PFS rulemaking; (3) Prolonged office or other outpatient evaluation and management (E/M) service HCPCS code G2212; and (4) Communication Technology-Based Service (CTBS) HCPCS code G2252, if payment for this code is made permanent through the CY 2022 PFS rulemaking. The following provides additional information about the CPT codes and HCPCS codes that we proposed to add to the definition of primary care services used in assignment:

• Chronic Care Management (CCM) CPT code 99X21. For CY 2022, the American Medical Association (AMA) CPT Editorial Panel created a new CPT code that describes CCM services furnished by clinical staff under the supervision of a physician or NPP who can bill E/M services, and CCM services personally furnished by a physician or NPP. In the proposed rule, we proposed valuation of CPT code 99X21 ( Chronic care management services with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions that place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised, or monitored; each additional 30 minutes by a physician or other qualified health care professional, per calendar month ). CPT code 99X21 is being finalized as CPT code 99437, as discussed elsewhere in this final rule.

In earlier rulemaking, we finalized the inclusion of CCM CPT codes 99487, 99489, 99490, and 99491 (codes for chronic care management) in the definition of primary care services for the Shared Savings Program. Refer to the June 2015 final rule (80 FR 32746 through 32748), CY 2018 PFS final rule (82 FR 53212 through 53213), and CY 2021 PFS final rule (85 FR 84749 through 84750 and 84754). “Non-complex” CCM services (CPT codes 99490 and 99491), and “complex” CCM services (CPT codes 99487 and 99489) share a common set of service elements, including the following: (1) Initiating visit, (2) structured recording of patient information using certified electronic health record technology (EHR), (3) 24/7 access to physicians or other qualified health care professionals or clinical staff and continuity of care, (4) comprehensive care management including systematic assessment of the patient's medical, functional, and psychosocial needs, (5) comprehensive care plan including a comprehensive care plan for all health issues with particular focus on the chronic conditions being managed, and (6) management of care transitions. They differ in the amount of clinical staff service time provided, the involvement and work of the billing practitioner, and the extent of care planning performed.

In the proposed rule, we explained that the CCM services that will be furnished under the new CPT code 99X21 are similar to the CCM services that are billed under the existing CCM codes that are included in the Shared Savings Program's current definition of primary care services, which includes CCM CPT codes 99487, 99489, 99490, 99491 and HCPCS code G0506. Because the Shared Savings Program's definition of primary care services includes other CCM CPT codes and HCPCS codes, we proposed to include CPT code 99X21, if finalized, in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2022, and subsequent performance years.

• Principal Care Management (PCM) services CPT Codes 99X22, 99X23, 99X24, and 99X25. The AMA CPT Editorial Panel has created the following new CPT codes that describe PCM services furnished by clinical staff under the supervision of a physician or NPP who can bill E/M services, and PCM services personally furnished by a physician or NPP:

++ 99X22 ( Principal care management services, for a single high-risk disease, with the following required elements: One complex chronic condition expected to last at least 3 months, and which places the patient at significant risk of hospitalization, acute exacerbation/decompensation, functional decline, or death, the condition requires development, monitoring, or revision of disease-specific care plan, the condition requires frequent adjustments in the medication regimen, and/or the management of the condition is unusually complex due to comorbidities; ongoing communication and care coordination between relevant practitioners furnishing care; first 30 minutes provided personally by a physician or other qualified health care professional, per calendar month).

++ 99X23 (Principal care management services, for a single high-risk disease, with the following required elements: One complex chronic condition expected to last at least 3 months, and which places the patient at significant risk of hospitalization, acute exacerbation/decompensation, functional decline, or death; the condition requires development, monitoring, or revision of disease-specific care plan, the condition requires frequent adjustments in the medication regimen, and/or the management of the condition is unusually complex due to comorbidities; ongoing communication and care coordination between relevant practitioners furnishing care; additional 30 minutes provided personally by a physician or other qualified health care professional, per calendar month).

++ 99X24 ( Principal care management services, for a single high-risk disease, with the following required elements: One complex chronic condition expected to last at least 3 months, and which places the patient at significant risk of hospitalization, acute exacerbation/decompensation, functional decline, or death; the condition requires development, monitoring, or revision of disease-specific care plan; the condition requires frequent adjustments in the medication regimen, and/or the management of the condition is unusually complex due to comorbidities; ongoing communication and care coordination between relevant practitioners furnishing care; first 30 minutes of clinical staff time directed by physician or other qualified health care professional, per calendar month ).

++ 99X25 ( Principal care management services, for a single high-risk disease, with the following required elements: One complex chronic condition expected to last at least 3 months, and which places the patient at significant risk of hospitalization, acute exacerbation/decompensation, functional decline, or death; the condition requires development, monitoring, or revision of disease-specific care plan; the condition requires frequent adjustments in the medication regimen, and/or the management of the condition is unusually complex due to comorbidities; ongoing communication and care coordination between relevant practitioners furnishing care; each additional 30 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month ). As discussed elsewhere in this final rule, CPT code 99X22 is being finalized as CPT code 99424, CPT code 99X23 is being finalized as CPT code 99425, CPT code 99X24 is being finalized as CPT code 99426, and CPT code 99X25 is being finalized as CPT code 99427.

In the CY 2022 PFS proposed rule (86 FR 39277), we explained our belief that because the Shared Savings Program's definition of primary care services already includes the temporary HCPCS codes G2064 and G2065 that will be replaced by the permanent CPT codes 99X22 and 99X24, and CPT codes 99X23 and 99X25 represent the same services furnished for a greater length of time, it would be appropriate to include CPT code 99X22, 99X23, 99X24, and 99X25, as finalized through the CY 2022 PFS rulemaking, in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2022, and subsequent performance years. Although the temporary HCPCS codes G2064 and G2065 will be replaced by the permanent CPT codes, we stated that the Shared Savings Program would retain the temporary HCPCS codes in the definition of primary care services used for assignment, to be used in conducting beneficiary assignment for benchmark years.

• Prolonged office or other outpatient evaluation and management (E/M) service HCPCS code G2212: In the CY 2021 PFS final rule (85 FR 84573 through 84574), CMS finalized a new HCPCS code G2212 ( Prolonged office or other outpatient evaluation and management service(s) beyond the maximum required time of the primary procedure which has been selected using total time on the date of the primary service; each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact (List separately in addition to CPT codes 99205, 99215 for office or other outpatient evaluation and management services) (Do not report G2212 on the same date of service as 99354, 99355, 99358, 99359, 99415, 99416). (Do not report G2212 for any time unit less than 15 minutes) ) to be used when billing Medicare for prolonged office/outpatient E/M visits instead of CPT code 99417, starting in 2021. We stated our belief that the creation of HCPCS code G2212 will serve to resolve the potential differences between Medicare and other interpretations of CPT rules, and better address questions about the required times and what time may be counted toward the required time to report prolonged office/outpatient E/M visits (see the CY 2020 PFS final rule for a more detailed discussion of this issue, (84 FR 62849 through 62850)).

The current definition of primary care services used in the Shared Savings Program assignment methodology includes CPT codes 99201 and 99215 (codes for office or other outpatient visit for the E/M of a patient). Because HCPCS code G2212 is defined as an add-on code for those office/outpatient E/M services, representing the same underlying services being furnished for a longer period of time, we proposed to include HCPCS code G2212 in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2022, and subsequent performance years.

• Communication Technology-Based Service (CTBS) HCPCS code G2252: In the CY 2021 PFS final rule (85 FR 84536), CMS established additional coding and payment for services delivered via synchronous communication technology, which can include audio-only communication on an interim basis for CY 2021. We stated our belief that establishing payment for a longer service (11-20 minutes) on an interim basis would support access to care for beneficiaries who may be reluctant to return to in-person visits unless absolutely necessary, and allow us to consider whether this policy should be adopted on a permanent basis. Therefore, for CY 2021, on an interim basis, we established HCPCS code G2252 ( Brief communication technology-based service, e.g., virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 11-20 minutes of medical discussion) . As discussed elsewhere in this final rule, we are finalizing our proposal to permanently establish separate coding and payment for the longer virtual check-in service described by HCPCS code G2252.

HCPCS code G2252 is similar to G2012 ( Brief communication technology-based service, e.g. virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion) , but allows for an extended period of medical discussion. Because G2012 is already included the definition of primary care services at § 425.400(c), in the CY 2022 PFS proposed rule (86 FR 39277), we explained our belief that including G2252 in the Shared Savings Program definition of primary care services used for assignment, beginning with performance year 2022, would result in more accurate assignment of beneficiaries based on where they receive the plurality of their primary care services. Accordingly, we proposed to include HCPCS code G2252 in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2022, and subsequent performance years.

We proposed to specify a revised definition of primary care services in a new provision of the Shared Savings Program regulations at § 425.400(c)(1)(vi) to include the list of HCPCS and CPT codes specified in § 425.400(c)(1)(v) with the additional CPT codes 99X21, 99X22, 99X23, 99X24, and 99X25, and HCPCS codes G2212 and G2252, if finalized through the CY 2022 PFS rulemaking. As noted previously, elsewhere in this final rule, we are finalizing CPT code 99X21 as 99437, CPT code 99X22 as 99424, CPT code 99X23 as 99425, CPT code 99X24 as 99426, and CPT code 99X25 as 99427. We proposed that the new provision at § 425.400(c)(1)(vi) would be applicable for use in determining beneficiary assignment for the performance year starting on January 1, 2022, and subsequent performance years. Further, we proposed technical modifications to the introductory text in § 425.400(c)(1)(v) to specify the applicability of this provision for determining beneficiary assignment for the performance year starting on January 1, 2021.

(2) Extending the Applicability of the Expanded Definition of Primary Care Services in Response to the PHE for COVID-19

As previously described in this section III.J.2.a. of this final rule, in the May 8, 2020 COVID-19 IFC (85 FR 27582 through 27586), we adopted an expanded definition of primary care services for purposes of beneficiary assignment to reflect services furnished during the PHE for COVID-19. This expanded definition was finalized with modifications in the CY 2021 PFS final rule (85 FR 84785 through 84793). According to § 425.400(c)(2), when the assignment window (as defined in § 425.20) for a benchmark or performance year includes any month(s) during the PHE for COVID-19 defined in § 400.200, in determining beneficiary assignment, we use the primary care service codes identified in § 425.400(c)(1), and additional primary care service codes as follows:

CPT codes:

(1) 99421, 99422, and 99423 (codes for online digital evaluation and management services).

(2) 99441, 99442, and 99443 (codes for telephone evaluation and management services).

HCPCS codes:

(1) G2010 (code for the remote evaluation of patient video/images).

(2) G2012 (code for virtual check-in).

These additional primary care services are applicable to all months of the assignment window, when the assignment window includes any month(s) during the COVID-19 PHE defined in § 400.200.

In the CY 2021 PFS final rule (85 FR 84748 through 84755), we updated the definition of primary care services under § 425.400(c) permanently for purposes of determining beneficiary assignment under § 425.402 for the performance year starting on January 1, 2021, and subsequent performance years, so that the following codes would not be linked to the duration of the PHE for COVID-19: (1) HCPCS code G2010 (remote evaluation of patient video/images) and HCPCS code G2012 (virtual check-in); (2) CPT codes 99421, 99422 and 99423 (online digital evaluation and management service (e-visit)).

In the CY 2021 PFS final rule, we noted that we did not consider including CPT codes 99441, 99442, and 99443 in the definition of primary care services at § 425.400(c) on a permanent basis (85 FR 84751). Telephone E/M services CPT codes 99441 ( Telephone evaluation and management service by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 5-10 minutes of medical discussion ); 99442 ( Telephone evaluation and management service by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 11-20 minutes of medical discussion ); and 99443 ( Telephone evaluation and management service by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient, parent, or guardian not originating from a related E/M service provided within the previous 7 days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 21-30 minutes of medical discussion ) are non-covered services when not provided during the PHE for COVID-19, as defined in § 400.200, and so could not be included in the definition of primary care services for purposes of assignment outside the context of the PHE.

In the CY 2022 PFS proposed rule, we proposed to revise the timeframe for services added on a temporary basis to the Medicare telehealth services list to allow additional time for stakeholders to perform an adequate analysis of those services for consideration in determining whether to include them on the Medicare telehealth services list on a permanent basis. As discussed in section II.D of this final rule, we are finalizing this revised timeframe, as proposed, and will retain all services added to the Medicare telehealth services list on a temporary, Category 3 basis until the end of CY 2023.

In order to remain consistent with Medicare FFS payment policies, in the CY 2022 PFS proposed rule (86 FR 39278), we proposed to revise our existing definition of primary care services for purposes of beneficiary assignment in order to include CPT codes 99441, 99442, and 99443 until they are no longer payable under the Medicare FFS payment policies as specified under section 1834(m) of the Act and §§ 410.78 and 414.65. We proposed to specify this modification by revising § 425.400(c)(2)(i)(A)(2) to include an exception to the applicability of the expanded definition of primary care services, to extend the timeframe for use of CPT codes 99441, 99442, and 99443, and by making conforming revisions to paragraphs (c)(2)(i) and (c)(2)(ii).

(3) Incorporation of Replacement Codes Into the Definition of Primary Care Services to Reflect Current Coding

In the June 2015 final rule (80 FR 32746 through 32748), we established a policy under which we make any revisions to the definition of primary care services for purposes of beneficiary assignment through the annual PFS rulemaking process. We established this policy in order to promote flexibility for the Shared Savings Program and to allow the definition of primary care services used for assignment in the Shared Savings Program to respond quickly to HCPCS/CPT coding changes made in the annual PFS rulemaking process. Accordingly, as part of the PFS rulemaking process, we periodically update the definition of primary care services used for assignment to include additional codes that we designate as primary care services for purposes of the Shared Savings Program, including new HCPCS/CPT codes or revenue codes and any subsequently modified or replacement codes.

On a routine basis, the CPT Editorial Panel may delete existing CPT codes and replace them with new CPT codes. In addition, one use of HCPCS G-codes is to identify professional healthcare procedures and services that may not have assigned CPT codes. Thus, the CPT Editorial Panel may also create new CPT codes to replace these temporary HCPCS codes.

Currently, there may be a period of time between the issuance of a replacement code and the effective date of the final rule that incorporates the replacement code into the definition of primary care services, when the replacement code is not captured in the Shared Savings Program assignment methodology. Therefore, in the CY 2022 PFS proposed rule (86 FR 39279), we proposed to incorporate into the definition of primary care services a permanent CPT code when it directly replaces another CPT code or a temporary HCPCS code (for example, a G-code) that is already included in the definition of primary care services for purposes of determining beneficiary assignment under the Shared Savings Program. In general, we would expect to determine that a code is a direct replacement for another code based either on it having a substantially similar code description or the relevant discussion in CMS rulemaking establishing payment for the replacement code. We explained that this approach would help to ensure the appropriate identification of primary care services used in the Shared Savings Program's assignment methodology by allowing for the immediate inclusion of replacement CPT codes in the determination of beneficiary assignment and lead to continuity in the assignment of beneficiaries receiving those services based on current coding. This continuity would improve predictability for ACOs, while also increasing the consistency of care coordination for their assigned beneficiaries.

We further proposed that such replacement codes would be incorporated into the definition of the primary care services for purposes of determining beneficiary assignment for the performance year starting on January 1, 2022, and subsequent performance years, when the assignment window for a benchmark or performance year (as defined in § 425.20) includes any day on or after the effective date of the replacement code for payment purposes under FFS Medicare. For ACOs under preliminary prospective assignment with retrospective reconciliation, CMS assigns beneficiaries in a preliminary manner at the beginning of a performance year and quarterly based on the most recent 12 months of data available. For final assignment for a 12-month benchmark year or performance year, the assignment window is the 12-month calendar year that corresponds to the performance year or benchmark year. We stated that under this proposal, a replacement CPT code that becomes effective during a 12-month initial, quarterly, or final assignment window would be included in the definition of primary care services used to determine beneficiary assignment for the applicable performance year or benchmark year. For ACOs under prospective assignment, claims-based beneficiary assignment is determined prospectively at the beginning of each benchmark and performance year based on the beneficiary's use of primary care services in the most recent 12 months for which data are available, based on an offset assignment window before the start of the benchmark or performance year. We explained that under this proposal, a replacement CPT code that becomes effective during the offset assignment window would be included in the definition of primary care services used to determine beneficiary assignment for the applicable performance year or benchmark year.

In the CY 2022 PFS proposed rule, we noted that we anticipated that we would continue to undergo periodic notice and comment rulemaking, through the annual PFS rulemaking, to amend the list of CPT codes and HCPCS codes that make up the definition of primary care services used for assignment in the Shared Savings Program to codify the applicable replacement CPT codes.

We proposed to incorporate the revised definition of primary care services used for assignment in a new provision of the Shared Savings Program regulations at § 425.400(c)(1)(vi), applicable for use in determining beneficiary assignment for the performance year starting on January 1, 2022, and subsequent performance years. As part of this revised definition, we proposed to incorporate a provision in paragraph (c)(1)(vi)(C), specifying that the primary care service codes for purposes of assigning beneficiaries include a CPT code identified by CMS that directly replaces a CPT code specified in § 425.400(c)(1)(vi)(A) or a HCPCS code specified in § 425.400(c)(1)(vi)(B), when the assignment window (as defined in § 425.20) for a benchmark or performance year includes any day on or after the effective date of the replacement code for payment purposes under FFS Medicare.

We solicited comment on these changes to the definition of primary care services used for assigning beneficiaries to Shared Savings Program ACOs for the performance year starting on January 1, 2022, and subsequent performance years. We also welcomed comments on any other existing HCPCS or CPT codes, and new HCPCS or CPT codes proposed elsewhere in the proposed rule, that we should consider adding to the definition of primary care services for purposes of assignment in future rulemaking.

We received public comments on these proposed changes to the definition of primary care services used for assigning beneficiaries to Shared Savings Program ACOs for the performance year starting on January 1, 2022, and subsequent performance years. Additionally, we received one comment suggesting further changes to the HCPCS and CPT codes that are considered for purposes of beneficiary assignment. The following is a summary of the comments we received and our responses.

Comment: Several commenters supported our proposals regarding the expansion of the definition of primary care services for purposes of assignment in the Shared Savings Program regulations. Many commenters agreed that the proposed updates to the definition of primary care services will help to improve the accuracy of beneficiary assignment to ACOs participating in the Shared Savings Program by keeping assignment closely aligned with primary care relationships. Several commenters agreed that the proposed additions are similar to services already included on the list of primary care services considered for purposes of assignment. One commenter indicated that including chronic care management and principal care management codes ensures that patients are correctly linked through the assignment process to the providers who provide their holistic spectrum of care. Another commenter appreciated the inclusion of care management services and stated that successful care coordination is a foundational element of ACOs' work and these codes are frequently used by ACO participants. An additional commenter supported the proposed changes and stated that the updates would increase opportunities for advanced practice registered nurses (APRNs) to participate in ACOs and would allow their patients to be assigned to ACOs participating in the Shared Savings Program through claims-based assignment. Another commenter, although supportive of the proposed changes, stated that CMS needs to continue to refine the existing assignment methodology by continuing the transition toward primary care as a base, but did not provide specific suggestions for additional modifications.

Response: We appreciate the commenters' support for our proposal to revise the definition of primary care services used for assignment under the Shared Savings Program regulations to include the following additions: (1) Chronic Care Management (CCM) CPT code 99X21, which is being finalized as 99437 as discussed elsewhere in this final rule; (2) Principal Care Management (PCM) CPT codes 99X22, 99X23, 99X24, and 99X25, which are being finalized as CPT codes 99424, 99425, 99426, and 99427, respectively, as discussed elsewhere in this final rule; (3) Prolonged office or other outpatient evaluation and management (E/M) service HCPCS code G2212; and (4) Communication Technology-Based Service (CTBS) HCPCS code G2252. We agree that expanding the definition of primary care services used for beneficiary assignment as proposed will allow for more accurate assignment and that maintaining an updated list of codes that includes chronic care management (CCM), principal care management (PCM), and other E/M services is important in determining where patients receive most of their primary care while also ensuring that the definition of primary care services used for purposes of assignment remains in alignment with HCPCS/CPT coding changes made under the PFS.

After consideration of public comments, we are finalizing our proposal to incorporate the aforementioned codes into the definition of primary care services that will be used in determining beneficiary assignment for the performance year starting on January 1, 2022, and subsequent performance years. We are also finalizing our proposal to specify the updated definition of primary care services used in assignment for these performance years in a new provision of the regulations at § 425.400(c)(1)(vi). We note that we have updated the organization of § 425.400(c)(1)(vi) for purposes of this final rule to ensure that the new CPT codes, as finalized elsewhere in this final rule, are listed in numerical order for simplicity and ease of identification.

Comment: Several commenters supported our proposal to revise the existing definition of primary care services for purposes of beneficiary assignment in order to include CPT codes 99441, 99442, and 99443 until they are no longer payable under the Medicare FFS payment policies as specified under section 1834(m) of the Act and §§ 410.78 and 414.65. Many commenters stated that they believe this proposal would align with payment policies under the PFS and help to ensure that beneficiaries are appropriately aligned with an ACO based on their receipt of primary care services, which will strengthen the Shared Savings Program assignment methodology. A few commenters noted that they supported our proposal to continue using CPT codes 99441, 99442, and 99443 in Shared Savings Program assignment until these codes are no longer payable under Medicare FFS policies, because telehealth has been an important lifeline during the pandemic for patients, who are able to receive necessary care while avoiding risks of in-person visits. These commenters described how they have relied on telehealth to maintain patient relationships during the PHE for COVID-19, including the audio-only telephone E/M services that were temporarily added to the list of services eligible to be delivered via telehealth during the PHE for COVID-19. One commenter stated that the extension of the use of telephone E&M CPT codes 99441 through 99443 would help to facilitate ACO participants' adaptation to changing clinical environments in response to the PHE. Another commenter appreciated CMS' proposal to extend these codes to allow time to conduct further analysis to determine if they should be permanently added to the Medicare telehealth service list. Another commenter fully supported the extension of these services' inclusion on the Medicare telehealth services list but requested that CMS closely monitor the impact telehealth has on populations assigned to ACOs. In particular, the commenter suggested that if ACOs are losing assigned beneficiaries as a result of telehealth visits with telehealth vendors that are not ACO participants, CMS should consider establishing a requirement that the telehealth vendor be an ACO participant or preferred provider in order for the services to be considered in beneficiary assignment.

Response: We agree that including CPT codes 99441, 99442, and 99443 in the definition of primary care services used for beneficiary assignment until they are no longer payable under the PFS FFS payment policies will allow for more accurate assignment and promote continuity of care. With regard to the impact of telehealth utilization on beneficiary assignment, we conduct ongoing monitoring of the impact of telehealth utilization on assignment and thus far the impact has been minimal and has not warranted policy changes.

After consideration of public comments, we are finalizing our proposal to revise the existing definition of primary care services for purposes of beneficiary assignment in order to include CPT codes 99441, 99442, and 99443 until they are no longer payable under Medicare FFS payment policies as specified under section 1834(m) of the Act and §§ 410.78 and 414.65.

Comment: Several commenters supported our proposal to incorporate into the definition of primary care services used for assignment a permanent CPT code when it directly replaces another CPT code or a temporary HCPCS code (for example, a G-code) that is already included in the definition of primary care services for purposes of determining beneficiary assignment under the Shared Savings Program. One commenter supported the finalization of this policy because it would streamline use of these services across the healthcare industry, presumably by accounting for the transition between the temporary and permanent codes and encouraging the adoption and use of new, permanent codes. Another commenter was supportive of the proposal because it would shorten the gap between when codes are updated and when they are available for use in assignment, which will align the claims-based assignment methodology with the PFS and help to ensure beneficiaries are appropriately aligned with the ACO that is responsible for their overall care.

Response: We agree that finalizing this proposal will ensure alignment between the Shared Savings Program assignment methodology and payment and coding guidelines under the PFS.

After consideration of the public comments, we are finalizing our proposal to incorporate into the definition of primary care services used for assignment a permanent CPT code when it directly replaces another CPT code or a temporary HCPCS code (for example, G-code) that is already included in the definition of primary care services for purposes of determining beneficiary assignment under the Shared Savings Program.

Comment: Regarding our solicitation for comment on any other existing HCPCS or CPT codes, and new HCPCS or CPT codes that we should consider adding to the definition of primary care services for purposes of assignment, one commenter stated that we should consider deleting HCPCS code G0506 (Comprehensive assessment of and care planning by the physician or other qualified health care professional for patients requiring chronic care management services) from the current definition of primary care services for the Medicare Shared Savings Program patient assignment methodology. The commenter stated that HCPCS code G0506 was identified as potentially misvalued in October 2020 and potentially duplicates the physician work valued under CPT code 99491, and therefore, CMS should consider deleting G0506.

Response: We appreciate this feedback and will consider it for future rulemaking.

3. Repayment Mechanisms

a. Background

An ACO that will participate in a two-sided model must demonstrate that it has established an adequate repayment mechanism to provide CMS assurance of its ability to repay shared losses for which the ACO may be liable upon reconciliation for each performance year. The requirements for an ACO to establish and maintain an adequate repayment mechanism are described in § 425.204(f), and we have provided additional program guidance on repayment mechanism arrangements. We established the repayment mechanism requirements through earlier rulemaking, and recently modified the repayment mechanism requirements in the December 2018 final rule (83 FR 67928 through 67938) and the CY 2021 PFS final rule (85 FR 84756 through 84763).

According to § 425.204(f)(4)(ii), for a BASIC track or ENHANCED track ACO, the repayment mechanism amount must be equal to the lesser of the following: (1) 1 percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available; or (2) 2 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available. As discussed in the December 2018 final rule (83 FR 67866), this approach allows CMS to use the same sources of revenue and expenditure data during the program's annual application cycle to estimate the ACO's repayment mechanism amount and to determine the ACO's participation options according to whether the ACO is categorized as a low revenue ACO or high revenue ACO.

As specified under § 425.204(f)(4)(iii), for agreement periods beginning on or after July 1, 2019, CMS recalculates the ACO's repayment mechanism amount before the second and each subsequent performance year in the agreement period based on the certified ACO participant list for the relevant performance year. We require an increase in the repayment mechanism amount if the recalculated repayment mechanism amount exceeds the existing repayment mechanism amount by at least 50 percent or $1,000,000, whichever is the lesser value. Under § 425.204(f)(4)(iii), an ACO cannot decrease the amount of its repayment mechanism during its agreement period as a result of changes in its composition.

As discussed in prior rulemaking, program stakeholders have continued to identify the repayment mechanism requirement as a potential barrier for some ACOs to enter into performance-based risk tracks, particularly small, physician-only and rural ACOs that may lack access to the capital that is needed to establish a repayment mechanism with a large dollar amount (see for example, 83 FR 67929).

The design of the current repayment mechanism amount calculation, which is based on a percentage of expenditures for the ACO's assigned beneficiaries or a percentage of ACO participant revenue, seeks to approximate a percentage of the ACO's maximum possible shared losses, according to the loss recoupment limits (also referred to as the loss sharing limits) applicable to ACOs under two-sided models. As described in the CY 2022 PFS proposed rule (86 FR 39280), comparing the calculations for determining repayment mechanism amounts to the calculations for determining the loss sharing limits indicates that repayment mechanisms cover approximately 25 percent of estimated maximum possible losses for ACOs in the BASIC track (determined by dividing 1 percent, the percentage used in the repayment mechanism amount calculation under § 425.204(f)(4)(ii)(A), by 4 percent, the percentage of the benchmark-based loss sharing limit under Level E of the BASIC track under § 425.605(d)(1)(v)(D)(2)), and 7 percent of estimated maximum possible losses for ACOs in the ENHANCED track (determined by dividing 1 percent, the percentage used in the repayment mechanism amount calculation under § 425.204(f)(4)(ii)(A), by 15 percent, the percentage of the benchmark-based loss sharing limit under the ENHANCED track under § 425.610(g)). Based on operational experience, we have found that the repayment mechanism amounts for most ACOs are much larger than needed to cover actual losses, as repayment mechanism amount calculations have been based on a percentage of an amount that approximates the ACO's loss sharing limit (which is as high as 15 percent of updated benchmark expenditures in the ENHANCED track), and actual historical shared losses have been much lower than the loss sharing limit, averaging 0.96 percent of the ACO's benchmark. Some ACOs have been required to establish repayment mechanisms with amounts that are 9 times greater than their actual shared losses. Additionally, of the 35 times ACOs have owed shared losses, as determined based on reconciliation for the Shared Savings Program's first performance year concluding on December 31, 2013, through performance years (or a performance period) in 2019, only one ACO has neglected to repay CMS timely, and most ACOs chose to repay shared losses without the use of their repayment mechanism arrangements. For the one ACO that did not repay CMS, we were able to recoup more than half of the shared losses owed using the ACO's repayment mechanism, and the remaining debt was referred to the Department of Treasury for collection.

As we explained in the CY 2022 PFS proposed rule (86 FR 39280), considering this experience, which suggests there may be low risk to the Shared Savings Program by allowing lower repayment mechanism amounts, and the potential reduction in burden on ACOs by lower repayment mechanism amounts, we believe it is appropriate to modify the approach to calculating repayment mechanism amounts. Further, we noted that we believe reducing the required amounts of repayment mechanisms may allow ACOs to use these funds to improve patient care and coordination and reduce a potential barrier to entry into performance-based risk models.

In the CY 2022 PFS proposed rule (86 FR 39279 through 39288), we discussed four proposed policy changes regarding required repayment mechanism amounts. Under the first policy, we would modify the methodology for calculating repayment mechanism amounts to reduce the required amounts. Second, we would specify how we identify the number of assigned beneficiaries used in the repayment mechanism amount calculation and the annual repayment mechanism amount recalculation. Third, we would permit eligible ACOs that established a repayment mechanism to support their participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, to elect to reduce the amount of their existing repayment mechanisms if their recalculated repayment mechanism amount for performance year 2022 is lower than their existing repayment mechanism amount. Fourth, we would modify the threshold for determining whether an ACO is required to increase its repayment mechanism amount during its ACO's agreement period.

Within this section of this final rule we respond to more general comments received on the proposed modifications to the Shared Savings Program's repayment mechanism requirements, and summarize comments that go beyond the scope of these proposals. In section III.J.3.b of this final rule, we summarize and respond to public comments we received on the proposed changes more specifically.

Comment: Several commenters explained that securing a repayment mechanism is a time consuming, costly regulatory burden for ACOs. Some commenters explained that the administrative burden and financial cost of securing a repayment mechanism pose barriers for ACOs to move to two-sided models, can act as a deterrent to ACO participation, or cause ACOs to divert resources away from care improvement initiatives. Some commenters stated more generally their appreciation for and support of CMS proposing ways to minimize the burdens associated with the repayment mechanisms. Several commenters pointed to CMS' determination, as described in the CY 2022 PFS proposed rule, that the repayment mechanism amounts for most ACOs are larger than needed to cover actual losses, and reduced repayment mechanism amounts would better reflect the amounts needed to cover potential shared losses under the Shared Savings Program.

Commenters addressing the proposed revisions to required repayment mechanism amounts expressed support for a combination of policies that would decrease the amount of repayment mechanisms, including all or several of the following: Modifying the methodology for calculating repayment mechanism amounts, permitting eligible ACOs in two-sided models a one-time opportunity to reduce their repayment mechanism amount, and modifying the threshold for when an ACO needs to increase its repayment mechanism amount during an ongoing agreement period. Some commenters explained that such changes would decrease the administrative burden and financial burden of participation in the Shared Savings Program. Several commenters indicated that these changes could free financial resources for investing in other aspects of ACO operations, including patient care and coordination, and initiatives to improve quality, access, and patient experience. A commenter described the proposed modifications to repayment mechanism obligations as “ACO-friendly” and welcomed the additional flexibility in the Shared Savings Program.

Response: We appreciate commenters' support for the modifications to the repayment mechanism calculation methodology that we proposed in the CY 2022 PFS proposed rule that would result in lower required repayment mechanism amounts for ACOs. We appreciate commenters' support for our assessment that lower repayment mechanism amounts under the proposed calculation methodology would better reflect the amounts needed to cover actual shared losses under the Shared Savings Program. These comments also reaffirm our belief that lower repayment mechanism amounts under the proposed approach would reduce administrative burden and financial costs on ACOs, potentially allowing ACOs to use these funds to improve patient care and coordination and reduce a potential barrier to entry into performance-based risk models. Further, we continue to believe that the lower repayment mechanism amounts under the proposals would provide CMS with reasonable assurance of an ACO's ability to repay shared losses and would help protect the Medicare trust funds in the event CMS uses an ACO's repayment mechanism funds to support recoupment of shared losses.

As described in greater detail in section III.J.3.b of this final rule, we are finalizing our proposed modifications to the Shared Savings Programs' repayment mechanism requirements. Although not addressed specifically in the CY 2022 PFS proposed rule, we believe this collection of repayment mechanism policy changes may have a number of beneficial health equity impacts on Shared Savings Program ACOs and the populations of Medicare FFS beneficiaries they serve. Lower repayment mechanism requirements would require ACOs to set aside relatively smaller dollar amounts, such as for ACOs establishing and maintaining an escrow account as their repayment mechanism, or could result in lower fees charged by financial institutions for letters of credit and by insurance companies for surety bonds. As a result, low revenue ACOs and smaller, rural and physician-only ACOs may be better able to afford repayment mechanisms, and therefore, may more readily transition to performance-based risk. We have indicated in earlier rulemaking that ACOs under performance-based risk models, and specifically those participating under higher levels of risk and potential reward, have greater potential to control their assigned beneficiaries' Medicare Parts A and B FFS expenditures by coordinating care across care settings, and thus may achieve significant change in spending. Additionally, we anticipate that relatively lower repayment mechanism amounts and less frequent repayment mechanism amount increases during the ACO's agreement period would give ACOs an opportunity to repurpose these funds for other uses, such as to improve patient care and coordination, or support quality improvement activities. That, in turn, may lead to care improvements for the ACO's Medicare FFS beneficiaries generally, including care for medically complex and high-risk populations. Further, repayment mechanism amount requirements based on either a percentage of expenditures for an ACO's assigned beneficiaries or percentage of its ACO participant revenue, reflect the higher cost of care that may be associated with serving medically complex Medicare FFS beneficiaries. We believe that reducing the percentages used in these repayment mechanism amount calculations will result in relatively lower burden on ACOs serving medically complex populations, and such ACOs may see a larger absolute dollar value reduction in their repayment mechanism amounts compared to other ACOs.

Comment: Some commenters suggested changes to repayment mechanism policies that were outside the scope of this rulemaking, including the following:

• Suggestions that CMS share its lessons learned about the amount of repayment mechanisms for Shared Savings Program ACOs with the Innovation Center, and that CMS consider lowering the financial collateral requirements for the Global and Professional Direct Contracting (GPDC) model and Comprehensive Kidney Care Contracting (CKCC) under the Kidney Care Choices model.
• Requests for additional modifications to Shared Savings Program requirements, including that CMS eliminate the requirement for ACOs to maintain their repayment mechanism for the 12-month “tail period” beyond the expiration of their agreement period which was described as creating unnecessary, additional burden which is costly for ACOs.
• Suggestions that CMS provide greater flexibility for ACOs needing to adjust their repayment mechanisms over time, such as by permitting the release funds for a limited window, such as 60 days, for ACOs changing repayment mechanisms.
• Suggestions that CMS expand the permissible repayment mechanism types under the Shared Savings Program, to include reinsurance and withholding Medicare payments.

Response: Comments of this nature are beyond the scope of the policies and are not being addressed in this final rule.

b. Revisions

(1) Repayment Mechanism Amount Calculations

In the CY 2022 PFS proposed rule (86 FR 39280 through 39283), we considered two options for modifying the calculation of repayment mechanism amounts to result in lower amounts: (1) Reducing the percentages used in the existing repayment mechanism amount calculations specified in § 425.204(f)(4)(ii); or (2) revising the methodology to use a per beneficiary dollar amount estimation methodology. In evaluating these options, we considered the potential impact on low revenue ACOs and high revenue ACOs, as defined according to § 425.20. We also considered a balance of factors, including whether to retain an approach similar to the existing methodology or to use an alternative approach that could simplify the repayment mechanism amount calculation to make it more predictable. Additionally, we considered the magnitude of potential decreases in the repayment mechanism amounts under each option. We proposed the first option, to reduce the percentages used in the existing repayment mechanism amount calculations, but we solicited comment on the second, alternative option we considered. We proposed to lower the repayment mechanism amounts by reducing the percentages used in our current methodology, under which we calculate the repayment mechanism amount as the lesser of the following: (1) 1 percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available; or (2) 2 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available. Specifically, we proposed to calculate the amount as the lesser of the following: (1) One-half (0.5) percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available; or (2) 1 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available.

As discussed in the CY 2022 PFS proposed rule, under this proposal, ACOs would receive a 50 percent decrease in their repayment mechanism amounts compared to the current methodology. These amounts would offer lower repayment mechanism amounts for ACOs, while still reserving what we believe to be a reasonable amount in the event CMS uses an ACO's repayment mechanism funds to support recoupment of shared losses. Our review of data for ACOs under a two-sided model revealed that if this repayment mechanism amount calculation method were in place for performance year 2021, the amount by which repayment mechanism amounts would be reduced (the “repayment mechanism savings”) would average $297,665 for low revenue ACOs and $2.31 million for high revenue ACOs; the minimum repayment mechanism savings would be $27,030 for low revenue ACOs and $78,106 for high revenue ACOs; and the maximum repayment mechanism savings would be $1.97 million for low revenue ACOs and $11.70 million for high revenue ACOs.

A second, alternative option we considered would be to estimate the repayment mechanism amount using a per beneficiary dollar amount that would be based on a percentage of actual historical median per capita shared losses for Shared Savings Program ACOs, multiplied by an estimate of the size of the ACO's assigned population as identified during the annual application or annual change request cycle. In considering this option, we analyzed data from the 35 instances when Shared Savings Program ACOs in two-sided models have ever incurred shared losses, defined as performance year expenditures above the ACO's benchmark by an amount equal to or greater than the ACO's minimum loss rate. Using data from actual historical shared losses, we determined median per beneficiary shared losses were $100.90 and calculated per beneficiary dollar amounts projected to cover 5 to 25 percent of shared losses for ACOs, as illustrated in Table 37.

Under this second, alternative option, we considered using separate per beneficiary dollar amounts for low revenue ACOs and high revenue ACOs. We stated our belief that using two separate percentages is supported for a number of reasons. Compared to high revenue ACOs, low revenue ACOs are likely to have a lower loss sharing limit in the BASIC track (determined as a percentage of ACO participant revenue not to exceed a percentage of the ACO's updated benchmark), under which eligible low revenue ACOs may participate for up to two agreement periods. Historically, low revenue ACOs have owed shared losses less often and have had lower amounts of per beneficiary shared losses compared to high revenue ACOs. Additionally, we stated that high revenue ACOs, which tend to include institutional providers and are typically larger and better capitalized, are likely better financially prepared to secure a higher amount in their repayment mechanism than low revenue ACOs, which tend to be smaller and have less capital. For low revenue ACOs, to cover 10 percent of median actual historical shared losses, rounding to the nearest $1 increment, we considered requiring a repayment mechanism amount equal to $10 per beneficiary. For high revenue ACOs, to cover 20 percent of median actual historical shared losses we considered requiring $20 per beneficiary (refer to Table 37). These amounts would offer a lower repayment mechanism amount for 99 percent of low and high revenue ACOs with existing repayment mechanisms, while still reserving what we believe to be a reasonable amount in the event CMS uses an ACO's repayment mechanism funds to support recoupment of shared losses. Our review of data for ACOs in a two-sided model revealed that if this repayment mechanism amount calculation method were in place for performance year 2021, the repayment mechanism savings would average $410,682 for low revenue ACOs and $3.84 million for high revenue ACOs; the minimum repayment mechanism savings would be $6,513 for low revenue ACOs and $120,491 for high revenue ACOs; and the maximum repayment mechanism savings would be $3.45 million for low revenue ACOs and $19.73 million for high revenue ACOs.

In the CY 2022 PFS proposed rule, we explained that there are a number of advantages to the option under which we would calculate repayment mechanism amounts using per beneficiary dollar amounts for low revenue ACOs and high revenue ACOs. For one, low revenue ACOs would receive additional relief through lower repayment mechanism amounts, relative to high revenue ACOs, under this approach. We explained our belief that this is appropriate considering the lower potential loss liability for low revenue ACOs and the fact that low revenue ACOs tend to be less well capitalized and may face potential barriers to establishing repayment mechanisms. Second, this approach aligns with the existing repayment mechanism amount calculation methodology, which tends to require proportionally higher amounts for high revenue ACOs because those ACOs tend to have higher average total expenditures for ACO assigned beneficiaries and higher total ACO participant revenue, compared to low revenue ACOs. Third, an approach that uses a per beneficiary dollar amount would simplify the method to calculate the repayment mechanism amount, compared to the existing methodology, and may help ACOs better project repayment mechanism amounts prior to entering two-sided models, either at the point of application to a new agreement period or during the ACO's agreement period within the BASIC track's glide path as ACOs transition from a one-sided model to a two-sided model. Lastly, this approach would lower the mean repayment mechanism amount for ACOs more than the reduction that would occur under our proposal to lower the percentages used in the existing amount calculation methodology.

However, we noted significant concerns with an approach that uses a per beneficiary dollar amount that is applied based on whether an ACO is determined to be a low revenue ACO or a high revenue ACO, which if unresolved outweigh the potential benefits of the approach. For one, there would be a significant repayment mechanism amount difference for ACOs near the 35 percent threshold that differentiates low revenue ACOs and high revenue ACOs, and this difference in repayment mechanism amount may not correlate to covering a significant additional increase in risk.

Second, the determination of whether an ACO is a low revenue ACO or high revenue ACO can change during the application cycle and between performance years within an agreement period. Although changes in ACO composition have the potential to affect repayment mechanism amounts determined under the existing calculation methodology, ACO composition changes could result in a greater magnitude of change in the repayment mechanism amount under an approach that applies a $10 per beneficiary amount for low revenue ACOs and a $20 per beneficiary amount for high revenue ACOs.

For ACOs establishing a repayment mechanism under the per beneficiary dollar amount approach, a change in revenue determination in later stages of the application cycle or change request cycle would delay calculation of an ACO's final repayment mechanism amount. In turn, this could delay when the ACO could submit finalized repayment mechanism documentation to demonstrate it meets the repayment mechanism requirement for entering a two-sided model. We are also concerned that ACOs whose revenue determinations change from low revenue to high revenue would face a substantial increase in the required repayment mechanism amount which they could find challenging to finance. However, based on our operational experience there have been relatively few cases where an ACO's revenue determination changes during the later stages of the application review period or change request cycle.

During an ACO's agreement period, a change in the ACO's revenue determination may cause significant fluctuation in an ACO's repayment mechanism amount under an approach that calculates the repayment mechanism amount using a per beneficiary dollar amount based on whether an ACO is determined to be a low revenue ACO or a high revenue ACO. Based on our operational experience, however, few ACOs entering agreement periods beginning on July 1, 2019, and in subsequent years, have experienced a change in revenue determination during their agreement period. Section 425.600(e) specifies an approach to addressing the circumstance where an ACO that entered an agreement period under Level E of the BASIC track because it was low revenue and experienced with performance-based risk Medicare ACO initiatives, becomes high revenue during its agreement period. This approach requires the ACO to take corrective action to meet the definition of low revenue ACO, or CMS takes compliance action as specified in §§ 425.216 and 425.218, which may include termination of the participation agreement. Further, in the absence of a policy to permit decreases in the repayment mechanism amount during the ACO's agreement period, ACOs that establish a repayment mechanism based on a high revenue ACO determination and are subsequently determined to be a low revenue ACO would need to maintain a relatively higher repayment mechanism amount for the duration of their 5-year agreement period.

To resolve these concerns, we considered using a single per beneficiary dollar amount for all ACOs, based on the values described in Table 37. However, we were unable to identify a single per beneficiary dollar amount that would account for historically higher per beneficiary shared losses owed by high revenue ACOs, while resulting in lower repayment mechanism amounts compared to the existing repayment mechanism calculation approach for most low revenue ACOs. Specifically, the dollar amount that would allow for relatively lower repayment mechanism amounts for all ACOs would be $8 per beneficiary, to cover 7.5 percent of median actual historical shared losses, rounding to the nearest $1 increment, which we believe is too low for high revenue ACOs. A higher per beneficiary dollar amount, such as $15, to cover 15 percent of median actual historical shared losses, rounding to the nearest $1 increment, would be relatively disadvantageous to approximately 20 percent of low revenue ACOs.

As we noted in the CY 2022 PFS proposed rule, both our proposal and the second, alternative option would lower repayment mechanism amounts, and therefore, would reduce the amount available to CMS to support repayment of shared losses. However, we explained our belief that the risk of not collecting shared losses is mitigated for a number of reasons. As noted in the CY 2022 PFS proposed rule, in our analysis of repayment mechanism amounts compared to actual historical shared losses, we believe the lower amounts would continue to provide CMS with reasonable assurance of an ACO's ability to repay shared losses. Further, as discussed in earlier rulemaking (85 FR 50249), the Shared Savings Program's existing policies require ACOs to pay shared losses, in full, within 90 days of written notification from CMS of the amount owed (according to §§ 425.605(e)(3), 425.606(h)(3), and 425.610(h)(3)). ACOs have an interest in fully paying the amount of shared losses owed within the 90-day payment window to remain in compliance with the Shared Savings Program's requirements and avoid compliance actions including involuntary termination from the program. CMS may terminate an ACO's participation agreement for reasons including, but not limited to, non-compliance with requirements in § 425.218(b)(1), such as failure to repay shared losses owed according to the program's regulations and may take pre-termination actions as described in § 425.216(a). Under § 425.221(b)(2)(ii)(B), an ACO under a two-sided model whose participation agreement is terminated by CMS under § 425.218 is liable for a pro-rated share of any shared losses determined for the performance year during which the termination becomes effective. ACOs must also timely repay shared losses owed to avoid accruing interest on any unpaid amounts and to avoid referral of an unpaid debt to the Department of Treasury for collection. Based on our operational experience, nearly all ACOs fully repay shared losses without use of their repayment mechanism arrangement. Under our proposal, ACOs would continue to have the option to secure a repayment mechanism at an amount greater than the CMS required amount, if they believe that is appropriate to prepare their ACO to repay all shared losses.

Furthermore, we explained our belief that reduced repayment mechanism amounts could reduce costs for ACOs in fees charged by financial institutions for letters of credit and by insurance companies for surety bonds, although we would not anticipate a significant reduction in fees charged by banks or credit unions for establishing and maintaining escrow accounts. For example, reducing the required repayment mechanism amount of a given ACO by $1 million, could reduce the cost of obtaining a letter of credit or surety bond by roughly 1 or 2 percent, in this example resulting in $10,000 or $20,000 in reduced fees for the ACO. We estimated that such relief, in total for all participating ACOs, could be worth $2 to $4 million annually under the proposed approach (assuming a reduction of approximately $196 million in repayment mechanism amounts, in aggregate) and $3 to $6 million annually under the second, alternative option (assuming a reduction of approximately $322 million in repayment mechanism amounts, in aggregate).

In light of these considerations, we proposed to revise the regulations at § 425.204(f)(4)(ii) to reduce by one-half the percentages used in the methodology for calculating repayment mechanism amounts for ACOs in a two-sided model of the BASIC track or the ENHANCED track. We proposed to revise the percentage specified in § 425.204(f)(4)(ii)(A), for calculating an amount based on expenditures for the ACO's assigned beneficiaries, from 1 percent to one-half percent. We proposed to revise the percentage specified in § 425.204(f)(4)(ii)(B), for calculating an amount based on ACO participant revenue, from 2 percent to 1 percent. Under this approach for calculating repayment mechanism amounts for ACOs in a two-sided model of the BASIC track or the ENHANCED track, the repayment mechanism amount would be equal to the lesser of the following: (1) One-half percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available; or (2) 1 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available.

We solicited comments on this proposal and the second, alternative option for calculating repayment mechanism amounts using a per beneficiary dollar amount, based on a percentage of actual historical median per capita shared losses for Shared Savings Program ACOs, multiplied by an estimate of the size of the ACO's assigned population as identified during the annual application or annual change request cycle. We also solicited comments on applying different per beneficiary dollar amounts for low revenue ACOs and high revenue ACOs under this alternative approach. We welcomed comments to address the dollar amounts projected to cover the percentage of median actual historical shared losses that would be an appropriate basis for low revenue ACOs (such as $10) and high revenue ACOs (such as $20) under this methodology. Additionally, we solicited comments on approaches for addressing our concerns about changes in revenue determinations significantly affecting an ACO's repayment mechanism amount, such as applying a single per beneficiary dollar amount to all ACOs. We also noted that if we were to adopt such an approach, we would need to address with greater specificity factors including: (1) How we would identify the population of assigned beneficiaries that would be used in the calculation as a multiplier for the per beneficiary dollar amount; and (2) the frequency with which we would consider modifications to the per beneficiary dollar amount. We welcomed comments on these considerations.

We proposed that these modifications would be effective and applicable on January 1, 2022. We noted that the Shared Savings Program's application cycle (for new, renewing and re-entering ACOs) and change request cycle (for ACOs within an agreement period) for the performance year beginning on January 1, 2022 occurs between spring and fall 2021. During this timeframe, ACOs preparing to enter two-sided models for performance year 2022 are awaiting the final repayment mechanism amount for establishing a repayment mechanism, and ACOs within two-sided models are awaiting the determination of whether their repayment mechanism amount must be increased in accordance with § 425.204(f)(4)(iii) (as discussed in section III.J.3.b.(4) of this final rule). We explained that if the proposed modifications to the repayment mechanism amount calculation methodology are finalized and become effective and applicable on January 1, 2022, we would communicate to ACOs their final repayment mechanism amounts after the issuance of the final rule. We committed to ensuring that ACOs do not overfund their repayment mechanism arrangements according to the existing methodology if we finalized the proposed revisions to reduce repayment mechanism amounts.

We received public comments on the proposed modifications to the Shared Savings Program repayment mechanism amount calculations, and the alternative approach on which we solicited comments. The following is a summary of the comments we received and our responses.

Comment: Several commenters supported the proposal to modify the methodology for calculating repayment mechanism amounts to reduce the required amounts by one-half such that the required repayment mechanism amount would be the lesser of the following: (1) One-half percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12-months of data are available; or (2) 1 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12-months of data are available.

More specifically, several commenters suggested that this reduction in the required repayment mechanism amounts would minimize administrative costs of, or reduce administrative barriers for, ACOs participating in the Shared Savings Program. A commenter supporting this proposal stated that the modification would allow ACOs to use these funds to improve patient care and coordination. Several commenters explained their support for this proposed change as it would encourage more providers to enter or stay in the Shared Savings Program, particularly small and rural providers that have not yet had to take on performance-based risk.

Some commenters stated that reducing the required repayment mechanism amounts better reflects an appropriate portion of potential shared losses under the program's financial models.

Response: We agree with commenters and appreciate their support for the proposal.

Comment: Commenters also supported our findings, described in the CY 2022 PFS proposed rule, and restated in section III.J.3.a of this final rule, that the repayment mechanism amounts for most ACOs are much larger than needed to cover actual losses, as determined based on the existing amount calculation methodology and in light of CMS' operational experience at the time of the CY 2022 PFS proposed rule.

Response: We agree with commenters and appreciate their support for the findings underlying our proposed modifications to the repayment mechanism calculation methodology, as described in the CY 2022 PFS proposed rule.

Comment: Several commenters explained that the relatively lower repayment mechanism amounts that would result from the proposed approach are sufficient to prompt third-party due diligence and establish credit worthiness for ACOs seeking to obtain a repayment mechanism arrangement.

Response: We believe that a financial institution issuing a repayment mechanism conducts some form of due diligence on the financial strength, solvency and credit worthiness of the ACO, and this external review serves as further validation of the ACO's financial readiness to participate in a two-sided model. We agree this is an important function of the repayment mechanism requirements.

Comment: Several commenters addressed the alternative approach CMS described for calculating the required repayment amount values using a per beneficiary dollar amount, based on a percentage of actual historical median per capita shared losses for ACOs and multiplied by an estimate of the size of the ACO's assigned population. Several commenters preferred the alternative approach to utilize a per beneficiary dollar amount to calculate required repayment mechanism values, explaining this approach would improve transparency and allow ACOs to better predict their repayment mechanism amount prior to moving to two-sided risk. However, these commenters were not supportive of setting different per beneficiary dollar amounts for high revenue ACOs and low revenue ACOs, explaining that the high-low revenue distinction in the Shared Savings Program is arbitrary and creates an uneven playing field for ACO participants. These commenters suggested that CMS should generally stop distinguishing ACOs based on ACO revenue status in the Shared Savings Program, explaining that it has the unintended consequence of discouraging partnerships between certain types of providers, such as hospitals and specialists, and penalizes ACOs that work to include a variety of provider types in their ACO participant list. A commenter expressed support for the proposal to reduce the percentages used in the repayment mechanism amount calculation, explaining that setting a per Medicare beneficiary amount would not reflect the difference in the per capita costs of Medicare beneficiaries that can vary from $8,500 all the way up to $17,000 even in similarly composed low revenue ACOs.

Response: We appreciate the comments received on the alternative option we considered for calculating repayment mechanism amounts using a per beneficiary dollar amount. We also appreciate comments that inform our consideration of using separate per beneficiary dollar amounts for low revenue ACOs and high revenue ACOs. However, the comments suggesting that CMS should generally stop distinguishing ACOs based on ACO revenue status are beyond the scope of the alternative approach to calculating repayment mechanism amounts, and therefore, will not be addressed in this final rule.

Although several commenters supported the alternative approach that would use per beneficiary dollar amounts to calculate repayment mechanism amounts, we decline to adopt this alternative approach with this final rule. We believe there are a number of aspects of such an approach that would require additional time to develop and evaluate, and we believe that the proposed approach to lowering the percentages in the existing repayment mechanism amount calculations would be a more appropriate method for reducing repayment mechanism burden on ACOs in the near term. In particular, we appreciate the commenter pointing to the variability in per capita costs of Medicare beneficiaries among ACOs, and providing the example of the range in per capita costs for similarly composed low revenue ACOs. We believe this suggests that using a single per beneficiary dollar amount for determining repayment mechanism amounts for each revenue status, or a single per beneficiary dollar amount for all ACOs, could potentially oversimplify the repayment mechanism calculation by removing an ACO-specific measure of costs (such as ACO participant revenue or ACO assigned beneficiary expenditures). This points to the need for additional considerations for identifying an appropriate per beneficiary dollar amount value under the alternative approach. Further, as we described in the CY 2022 PFS proposed rule, and restated elsewhere in this section of this final rule, we would need to decide how to identify the population of assigned beneficiaries that would be used in the calculation as a multiplier for the per beneficiary dollar amount, and the frequency with which we would consider modifications to the per beneficiary dollar amount. We did not receive comments on these other factors. Although we are not adopting an approach that uses per beneficiary dollar amounts to calculate repayment mechanism amounts with this final rule, we continue to believe such an approach could help ACOs better project repayment mechanism amounts prior to entering two-sided models, and therefore, be more transparent. We may revisit considerations for calculating repayment mechanism amounts using an alternative approach, such as per beneficiary dollar amounts, in future notice and comment rulemaking for the Shared Savings Program.

After consideration of public comments, we are finalizing as proposed to revise the percentage specified in § 425.204(f)(4)(ii)(A), for calculating an amount based on expenditures for the ACO's assigned beneficiaries, from 1 percent to one-half percent, and to revise the percentage specified in § 425.204(f)(4)(ii)(B), for calculating an amount based on ACO participant revenue, from 2 percent to 1 percent. Under this approach for calculating repayment mechanism amounts for ACOs in a two-sided model of the BASIC track or the ENHANCED track, the repayment mechanism amount will be equal to the lesser of the following: (1) One-half percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available; or (2) 1 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available.

(2) Population of Assigned Beneficiaries Used in Calculating and Recalculating Repayment Mechanism Amounts

In the CY 2022 PFS proposed rule (86 FR 39283 through 39286), we proposed to amend the regulations at §§ 425.204(f)(4)(ii) and 425.204(f)(4)(iii) to specify how we identify the number of assigned beneficiaries used in calculating and recalculating the repayment mechanism amount (respectively). For context, our current approach for calculating repayment mechanism amounts is described at § 425.204(f)(4)(ii) (for ACOs establishing a repayment mechanism to support their participation under a two-sided model) and under § 425.204(f)(4)(iii) (the annual recalculation to determine if an ACO is required to increase the amount of its repayment mechanism).

In accordance with § 425.204(f)(4)(ii), for ACOs in a two-sided model of the BASIC track, or the ENHANCED track, the repayment mechanism amount must be equal to the lesser of the following: (1) 1 percent of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available (hereinafter referred to as an expenditure-based amount); or (2) 2 percent of the total Medicare Parts A and B FFS revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available (hereinafter referred to as a revenue-based amount).

In the CY 2022 PFS proposed rule, we explained that we use the following steps to calculate the expenditure-based amount specified in § 425.204(f)(4)(ii)(A), which is a percentage of the total per capita Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available (referred to below as the “relevant historical calendar year”):

• Step 1: Identify the beneficiaries that would have been assigned to the ACO for the relevant historical calendar year (determined based on the ACO participant list for the upcoming performance year submitted by the ACO for CMS' review during the application cycle or change request cycle, referred to below as the “ACO participant list for the upcoming performance year”) and multiply the number of such beneficiaries by an assignment growth factor to account for expected growth in assignment.

• Step 2: Determine estimated per capita FFS expenditures by calculating the total per capita Medicare Parts A and B FFS expenditures incurred during the relevant historical calendar year by the beneficiaries identified in step 1, and dividing that amount by the total number of beneficiaries identified in step 1 before the assignment growth factor is applied; and multiplying the resulting per capita FFS expenditure amount by a dollar trend factor to account for expected growth in Medicare FFS expenditures.

• Step 3: Calculate the product of the number of assigned beneficiaries determined according to step 1, and the estimated per capita FFS expenditures determined according to step 2.

• Step 4: Calculate the repayment mechanism amount by multiplying the amount determined in step 3 by the applicable percentage (1 percent under the existing regulations).

We also explained in the proposed rule that we use the following steps in calculating the revenue-based amount specified in § 425.204(f)(4)(ii)(B), which is based on revenue for the most recent calendar year for which 12 months of data are available (referred to below as the “relevant historical calendar year”):

• Step 1: Identify the beneficiaries that would have been assigned to the ACO for the relevant historical calendar year (determined based on the ACO participant list for the upcoming performance year) and multiply the number of such beneficiaries by an assignment growth factor.

• Step 2: Using the ACO participant list for the upcoming performance year, determine the estimated per capita FFS revenues of ACO participants by calculating ACO participants' total Medicare Parts A and B FFS revenue based on claims for services furnished to any beneficiary by ACO participants during the relevant historical calendar year, and dividing the dollar amount by the total number of assigned beneficiaries identified in step 1 before the assignment growth factor is applied; and multiplying the resulting number by a dollar trend factor to account for expected growth in Medicare FFS revenue.

• Step 3: Calculate the product of the number of assigned beneficiaries determined according to step 1, and the estimated per capita FFS revenues of ACO participants determined according to step 2.

• Step 4: Calculate the repayment mechanism amount by multiplying the amount determined in step 3 by the applicable percentage (2 percent under the existing regulations).

Regardless of the ACO's selected assignment methodology, within step 1 of the expenditure-based and revenue-based repayment mechanism amount calculations, CMS uses an assigned beneficiary population identified based on preliminary prospective assignment with retrospective reconciliation as described in § 425.400(a)(2). This ensures that the assignment window used to determine assigned beneficiaries aligns with the relevant historical calendar year used to calculate expenditures and revenue used in step 2 of the expenditure-based amount and revenue-based amount calculation.

In the proposed rule, we explained that there are several important reasons why we use historical data for determining the assigned beneficiary population, Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, and ACO participants' Medicare Parts A and B FFS revenue. For one, this approach ensures CMS' timely determination of final repayment amount estimates for ACOs required to establish a repayment mechanism arrangement prior to the start of a new agreement period under a two-sided model, or prior to start of the upcoming performance year under a two-sided model (for ACOs transitioning from a one-sided to a two-sided model along the BASIC track's glide path). Second, under this approach, the data used to determine repayment mechanism amounts is consistent with the data used in making other determinations during the application cycle and annual change request cycle, including determination of whether an ACO is categorized as a low revenue ACO or high revenue ACO.

In accordance with § 425.204(f)(4)(iii), for agreement periods beginning on or after July 1, 2019, CMS recalculates the ACO's repayment mechanism amount before the second and each subsequent performance year in the agreement period in accordance with § 425.204(f), based on the certified ACO participant list for the relevant performance year. We explained that in annually recalculating ACOs' repayment mechanism amounts we use the same methodology that applies when calculating the expenditure-based amount and revenue-based amount in accordance with § 425.204(f)(4)(ii), which governs the initial repayment mechanism amount calculation that is performed for the first year of an agreement period in which an ACO is required to obtain a repayment mechanism. That is, in recalculating the repayment amount we determine the assigned beneficiary population, Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, and ACO participants' Medicare Parts A and B FFS revenue, for the most recent calendar year for which 12 months of data are available.

In the CY 2022 PFS proposed rule, we proposed to modify the methodology for the annual repayment mechanism amount recalculation. Specifically, we proposed to determine the number of assigned beneficiaries that is used as a multiplier in step 3 of the expenditure-based amount and revenue-based amount calculations, based on more recently available assignment data, rather than using a population projected to be assigned to the ACO based on historical data (that is, for the most recent calendar year for which 12 months of data are available). In determining the number of beneficiaries used as a multiplier in the recalculation estimate, we proposed to determine the size of the ACO's assigned population based on the number of beneficiaries assigned to the ACO at the beginning of the performance year, as specified under § 425.400(a)(2)(i) (for ACOs under preliminary prospective assignment with retrospective reconciliation) or paragraph (a)(3)(i) (for ACOs under prospective assignment). This population of assigned beneficiaries is specified in the ACO's initial assignment list report for the performance year. For all ACOs, this population is identified based on an assignment window that is offset from the calendar year (that is, from October 1 through September 30 prior to the start of the performance year), and which is the basis for determining prospective assignment for the performance year. Under the proposed approach, which uses more recent assignment data in determining the recalculation estimate, we would not apply an assignment growth factor as a multiplier for the population size since we would no longer be using historical data to project the size of the ACO's assigned population. We explained our belief that this proposed approach would help ensure the recalculated repayment mechanism amounts account for an ACO's composition as reflected in the size of its assigned population for the performance year for which the recalculated amount relates, and thereby provide more accurate recalculated amounts.

We explained in the CY 2022 PFS proposed rule that we anticipated performing the annual recalculation of the repayment mechanism amounts shortly before or shortly after the start of the new performance year. We stated that under the proposed approach, CMS would perform the recalculation of the repayment mechanism once the initial assignment list report is available, which is typically delivered to ACOs in the early winter (around mid-December), prior to the start of the relevant future performance year. We also noted that under the existing approach and the proposed approach to determining the assigned population used as a multiplier in the annual recalculation of the repayment mechanism amounts, the effects on ACO's amounts are varied, resulting in relatively higher or lower amounts depending on the change in the size of the population.

In annually recalculating the repayment mechanism amount under the proposed approach, we would follow the previously described steps for calculating the expenditure-based amount and revenue-based amount, except that the number of beneficiaries used as a multiplier in step 3 of the calculations would be based on the population that will be assigned to the ACO for the next performance year, rather than the relevant historical calendar year. Since we are using a recently identified assigned population, we would not apply an assignment growth factor as a multiplier for the population size in step 1 (as previously described). In step 3 of the expenditure-based amount calculation, we would calculate the product of the total number of assigned beneficiaries specified in the ACO's initial assignment list report for the relevant future performance year, and the estimated per capita FFS expenditures determined for the relevant historical calendar year (determined according to step 2). In step 3 of the revenue-based amount calculation, we would calculate the product of the total number of assigned beneficiaries specified within the ACO's initial assignment list report for the relevant future performance year, and the estimated per capita FFS revenues of ACO participants determined for the relevant historical calendar year (determined according to step 2).

In the CY 2022 PFS proposed rule (86 FR 39285 and 39286), we provided two examples to illustrate the calculation and recalculation of the repayment mechanism amounts after the proposals, if finalized, would become effective on January 1, 2022. The first example involved an ACO applying to enter a two-sided model for an agreement period beginning on January 1, 2022. For such an ACO, we stated that we would calculate the repayment mechanism amount during the application cycle which occurs during CY 2021. During this time, CY 2020 is the most recent calendar year for which 12 months of data are available and is the relevant historical calendar year for purposes of calculating the repayment mechanism amount. In this example, the proposed approach to identifying the assigned beneficiary population, Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, and ACO participants' Medicare Parts A and B FFS revenue used within these calculations would be consistent with our current operational approach. This first example provides greater specificity about the repayment mechanism amount calculations than is outlined in the existing regulations at § 425.204(f)(4)(ii), including a description of how CMS identifies the number of beneficiaries used as a multiplier in these calculations.

In step 1 of the expenditure-based amount and revenue-based amount calculations, we would identify the beneficiaries that would have been assigned to the ACO for CY 2020, determined based on the ACO participant list for performance year 2022 submitted with the ACO's application, and determined using preliminary prospective assignment with retrospective reconciliation. That is, we would determine assignment based on the 12-month assignment window from January 1, 2020, through December 31, 2020. We would multiply the number of such beneficiaries by an assignment growth factor.

In step 2 of the expenditure-based amount calculation, we would calculate total Medicare Parts A and B FFS expenditures incurred in CY 2020 by the beneficiaries determined under step 1 to be assigned to the ACO for CY 2020. In step 2 of the revenue-based amount calculation, we would calculate ACO participants' total Medicare Parts A and B FFS revenue, based on claims for services furnished to any beneficiary by ACO participants during CY 2020. We would determine the estimated per capita FFS expenditures, and the estimated per capita FFS revenues of ACO participants, by dividing the CY 2020 dollar amounts by the number of assigned beneficiaries for CY 2020 (determined in accordance with step 1) before the assignment growth factor is applied. We would multiply the resulting numbers by a dollar trend factor.

In step 3 of the expenditure-based amount calculation, the number of assigned beneficiaries for CY 2020 determined under step 1 would be multiplied by the estimated per capita FFS expenditures determined for CY 2020 in accordance with step 2. In step 3 of the revenue-based amount calculation, the number of assigned beneficiaries for CY 2020 determined under step 1 would be multiplied by the estimated per capita Medicare FFS revenues of ACO participants determined for CY 2020 in accordance with step 2.

In step 4, we would calculate the repayment mechanism amount by multiplying the amount determined in step 3 by the applicable percentage. Under the existing regulation, the applicable percentage is 1 percent under the expenditure-based amount calculation, and 2 percent under the revenue-based amount calculation. As described in section III.J.3.b.(1) of this final rule, under the policies we are finalizing, the applicable percentages will be one-half percent under the expenditure-based amount calculation, and 1 percent under the revenue-based amount calculation.

Our second example illustrated how we would perform the annual recalculation of the repayment mechanism amount for performance year 2022 under the proposed policy.

In step 1 of both the expenditure-based amount and revenue-based amount calculations, we use a similar method for identifying the CY 2020 assigned population as described in the first example. That is, we would identify the beneficiaries that would have been assigned to the ACO for CY 2020, determined based on the ACO's certified ACO participant list for performance year 2022, and determined using preliminary prospective assignment with retrospective reconciliation. Again, we would determine assignment based on the 12-month assignment window from January 1, 2020, through December 31, 2020. Unlike in our first example, we would not multiply the number of such beneficiaries by an assignment growth factor.

In step 2 of the expenditure-based amount calculation, we would calculate total Medicare Parts A and B FFS expenditures incurred in CY 2020 by the beneficiaries CMS determined under step 1 would have been assigned to the ACO for CY 2020. In step 2 of the revenue-based amount calculation, we would calculate ACO participants' total Medicare Parts A and B FFS revenue, based on claims for services furnished to any beneficiary by ACO participants during CY 2020, using the ACO's certified ACO participant list for performance year 2022. We would determine the estimated per capita FFS expenditures, and the estimated per capita FFS revenues of ACO participants, by dividing the CY 2020 dollar amounts by the number of assigned beneficiaries for CY 2020 (determined in accordance with step 1, which does not apply an assignment growth factor). We would then multiply the resulting number by a dollar trend factor.

In step 3, we would not use the number of assigned beneficiaries as determined under step 1. Rather, we would identify the total number of assigned beneficiaries specified in the ACO's initial assignment list report for performance year 2022. This population of assigned beneficiaries would be the population identified based on the assignment window from October 1, 2020 through September 30, 2021, and which would be the basis for determining prospective assignment for performance year 2022. Assignment would be determined based on the ACO's certified ACO participant list for performance year 2022. In step 3 of the expenditure-based amount calculation, the number of assigned beneficiaries for performance year 2022 would be multiplied by the estimated per capita FFS expenditures determined for CY 2020 in accordance with step 2. In step 3 of the revenue-based amount calculation, the number of assigned beneficiaries for performance year 2022 would be multiplied by the estimated per capita FFS revenues determined for CY 2020 in accordance with step 2.

In step 4, we would recalculate the repayment mechanism amount by multiplying the amount determined in step 3 by the applicable percentage. Under the policies we are finalizing in this rule, the applicable percentages will be one-half percent under the expenditure-based amount calculation, and 1 percent under the revenue-based amount calculation.

We proposed to modify § 425.204(f)(4)(ii) to more clearly specify the assigned population used as a multiplier in calculating the repayment mechanism amount. Under the existing regulation text at § 425.204(f)(4)(ii)(A), the potential repayment mechanism amount is a specified percentage of total per capita Medicare Parts A and B FFS expenditures “for the ACO's assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available.” We proposed to amend paragraph (f)(4)(ii)(A) to refer to a specified percentage of total per capita Medicare Parts A and B FFS expenditures “for the ACO's assigned beneficiaries, based on expenditures and the number of assigned beneficiaries for the most recent calendar year for which 12 months of data are available” (emphasis added to reflect revised text).

Under the existing regulation text at § 425.204(f)(4)(ii)(B), the potential repayment mechanism amount is a specified percentage of total Medicare Parts A and B FFS revenue “of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available.” We proposed to amend paragraph (f)(4)(ii)(B) to refer to a specified percentage of total Medicare Parts A and B FFS revenue “of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available, and based on the ACO's number of assigned beneficiaries for the most recent calendar year for which 12 months of data are available ” (emphasis added to reflect revised text).

We also proposed technical and conforming changes to the introductory text of § 425.204(f)(4)(iii). We propose to remove as unnecessary and irrelevant the text specifying that the provision applies for agreement periods beginning on or after July 1, 2019. We proposed to revise the introductory text for clarity to specify that CMS will recalculate the ACO's repayment mechanism amount “for” the second and each subsequent performance year in the agreement period, rather than “before” the second and each subsequent performance year in the agreement period. We proposed to make a conforming change to the introductory text of § 425.204(f)(4)(iii) to specify that CMS' recalculation of the ACO's repayment mechanism amount would be in accordance with § 425.204(f)(4)(ii) based on the certified ACO participant list for the relevant performance year, “except that the number of assigned beneficiaries used in the calculations would be the number of beneficiaries assigned to the ACO at the beginning of the relevant performance year under § 425.400(a)(2)(i) (for ACOs under preliminary prospective assignment with retrospective reconciliation) or § 425.400(a)(3)(i) (for ACOs under prospective assignment).”

We proposed that these modifications would be effective and applicable on January 1, 2022. We explained that if finalized as proposed, these policies would be used in the following manner: (1) In determining required repayment mechanism amounts for ACOs establishing a repayment mechanism arrangement to support their participation in a two-sided model beginning with performance year 2022, and in subsequent performance years; (2) in making annual repayment mechanism amount recalculations for performance year 2022 and subsequent performance years; and (3) determining whether an eligible ACO has a one-time opportunity to decrease the amount of its repayment mechanism amount as described in section III.J.3.b.(3) of the CY 2022 PFS proposed rule (refer to section III.J.3.b.(3) of this final rule).

We received public comments on the proposals on the population of assigned beneficiaries used in calculating and recalculating repayment mechanism amounts. The following is a summary of the comments we received and our responses.

Comment: Commenters generally expressed support for CMS' proposals for how to identify the number of assigned beneficiaries used in the repayment mechanism amount calculation and in the annual repayment mechanism amount recalculation.

Response: We appreciate the commenters' support for our proposals.

After consideration of public comments, we are finalizing as proposed to amend the regulations at §§ 425.204(f)(4)(ii) and (iii) to specify how we identify the number of assigned beneficiaries used in calculating and recalculating the repayment mechanism amount (respectively). Further, we received no public comments on our proposed technical and conforming changes to the introductory text of § 425.204(f)(4)(iii), and therefore, are finalizing these changes as proposed. We refer readers to the detailed descriptions of these proposals as restated in this section of this final rule.

(3) Optional One-Time Repayment Mechanism Decrease for Eligible ACOs

As described in the CY 2022 PFS proposed rule (86 FR 39286 and 39287), we proposed to allow certain ACOs a one-time opportunity to decrease the amount of their repayment mechanisms. This proposed optional one-time repayment mechanism decrease was in connection with the proposal for lowering the repayment mechanism amounts specified in the CY 2022 PFS proposed rule (86 FR 39280 through 39283) and in section III.J.3.b.(1) of this final rule. We explained that the purpose of this proposal is to let any ACO that established a repayment mechanism to support its participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, to decrease its repayment mechanism amount before it seeks to renew its agreement under the new proposed policy, which if finalized, would otherwise be the first opportunity for the ACO to reduce its repayment mechanism amount. Along these lines, the one-time decrease would also avoid unnecessary burden that could result if ACOs seek to terminate their participation agreements early and apply to re-enter the program in order to reduce their required repayment mechanism amounts.

We explained that if the proposed repayment mechanism amount policies are finalized and become effective and applicable on January 1, 2022, we would use the revised methodology for calculating repayment mechanism amounts (specified in the CY 2022 PFS proposed rule, 86 FR 39280 through 39283, and in section III.J.3.b.(1) of this final rule) to determine repayment mechanism amounts for ACOs establishing a repayment mechanism to support their participation in a two-sided model beginning with performance year 2022. Therefore, ACOs entering a two-sided model for an agreement period beginning on January 1, 2022, and ACOs with an earlier start date participating in the BASIC track's glide path and entering a two-sided model starting on January 1, 2022, would have repayment mechanism amounts determined according to the proposed amount calculation methodology, if finalized. Therefore, such ACOs would not need or be eligible for the proposed one-time opportunity to decrease the amount of their repayment mechanism.

Under this proposal, an eligible ACO that established a repayment mechanism to support its participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, may elect to decrease the amount of its repayment mechanism if the recalculated repayment mechanism amount for performance year 2022 is less than the existing repayment mechanism amount. To determine if an ACO is eligible to lower its repayment mechanism amount, we proposed to compare the ACO's existing repayment mechanism amount with the recalculated amount of the ACO's repayment mechanism based on its certified ACO participant list for performance year 2022, calculated in accordance with § 425.204(f)(4)(iii) (including any modifications finalized with CY 2022 PFS rulemaking to the recalculation methodology which would be effective and applicable January 1, 2022). If the recalculated repayment mechanism amount for performance year 2022 is less than the existing repayment mechanism amount, the ACO would be eligible to decrease the amount of its repayment mechanism to the recalculated amount. Under this approach, we would permit a one-time decrease in the repayment mechanism amount even for relatively small differences in dollar amounts.

We proposed that CMS would notify the ACO in writing that the ACO may elect to decrease the amount of its repayment mechanism. We explained that if the proposal became final, we anticipated that we would notify an ACO of its opportunity to reduce its repayment mechanism amount after the start of performance year 2022. We also proposed that an ACO must submit such election, and revised repayment mechanism documentation, in a form and manner and by a deadline specified by CMS. We expected that the deadline for submitting the election and revised repayment documentation would be 30 days from the date of the written notice from CMS, although we recognized that there may be circumstances that necessitate a longer timeframe. CMS would review the revised repayment mechanism documentation and may reject the election if the repayment mechanism documentation does not comply with the requirements of § 425.204(f).

We proposed to amend § 425.204 to add paragraph (f)(4)(v) to establish the policy and relevant procedure that would allow eligible ACOs that established a repayment mechanism to support their participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, to elect to lower the amount of their repayment mechanism arrangements.

We received public comments on the proposed optional one-time repayment mechanism decrease for eligible ACOs. The following is a summary of the comments we received and our responses.

Comment: Commenters expressed support for the proposed approach that provides a one-time opportunity for eligible ACOs that established a repayment mechanism to support their participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, to elect to decrease the amount of their existing repayment mechanisms if their recalculated amount for performance year 2022 is less than their existing repayment mechanism amount. Some commenters explained their belief that it would be fair to permit such ACOs to decrease the amount of their repayment mechanisms.

Response: We appreciate the commenters' support for the proposal. As described in section III.J.3.b.(1) of this final rule, we are finalizing our proposal to reduce by one-half the percentages used in the methodology for calculating repayment mechanism amounts for ACOs. We continue to believe the proposed one-time decrease opportunity could avoid unnecessary burden on ACOs from having to maintain their existing repayment mechanism at a potentially higher amount until they seek to renew their agreement, or in the event they would seek to terminate their participation agreements early and apply to re-enter the program in order to reduce their required repayment mechanism amounts.

Comment: One commenter urged that CMS promptly allow reimbursement for any ACOs that have overpaid escrow once this proposal is made final.

Response: As we interpret the comment, we believe the commenter is concerned about the procedure by which an ACO would obtain the excess funds held in its escrow account. If an ACO with an existing repayment mechanism in the form of escrow account is permitted to decrease the amount of its repayment mechanism, and if the ACO elects to so decrease the amount of funds in its escrow account, CMS will instruct the escrow agent to disburse to the ACO any funds above the new minimum required amount. These returned funds would include accrued interest.

After consideration of public comments, we are finalizing as proposed to amend § 425.204 to add paragraph (f)(4)(v)(A) to establish the policy that would allow eligible ACOs that established a repayment mechanism to support their participation in a two-sided model beginning on July 1, 2019, January 1, 2020, or January 1, 2021, to elect to lower the amount of their repayment mechanism arrangements. We received no public comments on the proposed procedures for eligible ACOs to make such election to decrease the amount of their repayment mechanism. Therefore, we are finalizing as proposed to amend § 425.204 to add paragraph (f)(4)(v)(B) specifying that CMS will notify the ACO in writing if the ACO may elect to decrease the amount of its repayment mechanism. We are also finalizing as proposed the policy that the ACO must submit such election, and revised repayment mechanism documentation, in a form and manner and by a deadline specified by CMS. We will review the revised repayment mechanism documentation and may reject the election if the repayment mechanism documentation does not comply with the requirements of § 425.204(f).

(4) Threshold for Increasing Repayment Mechanism Amounts

In accordance with § 425.204(f)(4)(iii), for agreement periods beginning on or after July 1, 2019, CMS recalculates the ACO's repayment mechanism amount before the second and each subsequent performance year in the agreement period based on the certified ACO participant list for the relevant performance year. If the recalculated repayment mechanism amount exceeds the existing repayment mechanism amount by at least 50 percent or $1,000,000, whichever is the lesser value, CMS notifies the ACO in writing that the amount of its repayment mechanism must be increased to the recalculated repayment mechanism amount. Within 90 days after receipt of such written notice from CMS, the ACO must submit for CMS approval documentation that the amount of its repayment mechanism has been increased to the amount specified by CMS.

In establishing the annual repayment mechanism amount recalculation policy in earlier rulemaking (83 FR 67930), we explained the purpose of this approach was to address changes in the ACO's composition of ACO participant TINs and the individuals who bill through the participant TINs over the course of an agreement period and to ensure the adequacy of an ACO's repayment mechanism. In establishing the annual recalculation policy (83 FR 67932), we explained that a threshold of 50 percent or $1,000,000 would likely require an increased repayment mechanism amount only for ACOs that had the largest changes in their estimated repayment mechanism value (the top 5 to 10 percent of ACOs). We believed this approach would minimize an ACO's administrative burden and financial institution fees while adjusting for meaningful changes in repayment mechanism amounts that would help protect the Medicare Trust Funds.

As described in the CY 2022 PFS proposed rule (86 FR 39287), we continue to believe that the annual repayment mechanism amount recalculation serves an important function in identifying the need for repayment mechanism increases when an ACO's composition changes. Such changes could result in higher expenditures for the ACO's assigned beneficiaries, higher ACO participant revenue, or a larger assigned beneficiary population. Each of these changes could increase the amount of potential shared losses for an ACO under a two-sided model.

We stated in the proposed rule that, based on our operational experience with the recalculation policy, we have found that ACOs whose recalculated repayment mechanism amount is at least 50 percent higher than their existing amount, but less than $1,000,000 more, tend to be low revenue ACOs with relatively smaller existing repayment mechanism amounts, typically less than $300,000. We recognized that it is burdensome for ACOs to modify repayment mechanism arrangements to revise the amount of the repayment mechanism. These modifications are time consuming to arrange, and can result in additional fees charged by financial institutions for ACOs to modify their arrangements, in addition to requiring ACOs to set aside additional funds (such as with escrow accounts). We explained our belief that the burden for these ACOs to increase their repayment mechanism amounts is disproportional to the benefit CMS receives by having access to additional repayment mechanism arrangement funds to support repayment of losses.

In light of our proposal to reduce repayment mechanism amounts, we revisited the thresholds that would require an increase in an ACO's repayment mechanism amount upon annual recalculation in accordance with § 425.204(f)(4)(iii). We were concerned that if we finalized our proposal to reduce repayment mechanism amounts, applying the existing 50 percent threshold to a lower repayment mechanism amount would be more burdensome for ACOs because they would be required to amend their repayment mechanisms to reflect relatively smaller increases in their repayment mechanism amounts, which would be even more disproportional to the benefit received by CMS.

In the CY 2022 PFS proposed rule (86 FR 39287), we explained our belief that requiring an increase in the repayment mechanism amount if the recalculated amount for the performance year is at least $1,000,000 greater than the existing amount balances our interest in ensuring the repayment mechanism amount accounts for significant changes in an ACO's composition during its agreement period, while avoiding burdensome repayment mechanism modifications for relatively small dollar amounts. Therefore, we proposed to amend the regulations at § 425.204(f)(4)(iii)(A) to remove the 50 percent threshold from the annual repayment mechanism increase threshold, such that if the recalculated repayment mechanism amount exceeds the existing repayment mechanism amount by at least $1,000,000, we will notify the ACO in writing that the amount of its repayment mechanism must be increased to the recalculated repayment mechanism amount. We anticipated this approach would reduce the number of ACOs required to annually increase their repayment mechanism amounts and would further simplify the repayment mechanism amount calculations.

As specified in the CY 2022 PFS proposed rule (86 FR 39288), we proposed that this modification would be effective and applicable on January 1, 2022. We explained that the revised threshold (if finalized) would be used in determining required repayment mechanism increases for performance year 2022, and subsequent performance years.

We received public comments on the proposed revision to the threshold for determining whether an increase in the repayment mechanism amount is required during the ACO's agreement period. The following is a summary of the comments we received and our responses.

Comment: Commenters generally expressed support for CMS' proposal to modify the threshold for increasing an ACO's repayment mechanism amount during its agreement period by removing the 50 percent threshold, and instead require ACOs to increase their repayment mechanism amount if the recalculated amount is at least $1,000,000 greater than the existing amount.

Some commenters indicated that this approach would minimize administrative burdens for ACOs, such as by reducing administrative complexity, and minimize the financial costs for ACOs of participating in the Shared Savings Program. Several commenters explained that this proposed approach would allow ACOs to focus their limited time and resources on care coordination interventions as opposed to unnecessary administrative requirements.

Response: We agree with commenters that this approach could reduce administrative burden and financial costs on ACOs.

After consideration of public comments, we are finalizing our proposal to amend the regulations at § 425.204(f)(4)(iii)(A) to remove the 50 percent threshold from the annual repayment mechanism increase threshold, such that if the recalculated repayment mechanism amount exceeds the existing repayment mechanism amount by at least $1,000,000, we will notify the ACO in writing that the amount of its repayment mechanism must be increased to the recalculated repayment mechanism amount.

4. Reducing Shared Savings Program Application Burden

a. Background

To participate in the Shared Savings Program, a prospective ACO must submit an application and certify that it satisfies all the eligibility and other requirements of the Shared Savings Program, including regulatory requirements to disclose prior participation. Under § 425.204(b), an ACO must disclose in its Shared Savings Program application whether the ACO, its ACO participants, or its ACO providers/suppliers have participated in the Shared Savings Program under the same or a different name or is related to or affiliated with another Shared Savings Program ACO, and if the related participation agreement was terminated voluntarily or involuntarily.

The application evaluation criteria for renewing and re-entering ACOs are designed to prevent an ACO with a history of poor performance or noncompliance with the Shared Savings Program regulations from participating in the program. Under § 425.224(b), we determine whether to approve an application based on an evaluation of several criteria, including the following: (1) Whether the ACO has a history of noncompliance with the program's requirements, including a failure to meet the quality performance standard; (2) the ACO's history of financial performance; (3) whether an ACO under a two-sided model failed to repay shared losses owed to the program; and (4) whether the ACO has demonstrated in its application that it has corrected the deficiencies that caused it to perform poorly or to be terminated in a prior application cycle.

Additionally, under § 425.204(c)(6), all applicants, including initial, renewing, and re-entering applicants, must submit as part of the application process and upon request by CMS, documents demonstrating that their ACO participants, ACO providers/suppliers, and other individuals or entities performing functions or services related to ACO activities are required to comply with the requirements of the Shared Savings Program. Currently, such documents must include a sample or form agreement and the first and signature pages of each executed ACO participant agreement. In some instances, we may request all pages of an executed ACO participant agreement to confirm that it conforms to the sample form agreement submitted by the ACO. The ACO is also required to certify that each of its ACO participant agreements meet all Shared Savings Program requirements in 42 CFR part 425. Additionally, under § 425.116(c), we require an ACO to submit an executed ACO participant agreement for each ACO participant at the time of its initial application, participation agreement renewal process, and when making additions to its list of ACO participants in accordance with § 425.118. The agreements may be submitted in the form and manner specified under § 425.204(c)(6) or as otherwise specified by CMS.

In conducting Shared Savings Program application reviews, we have found that the document submission requirements in §§ 425.204(b) and (c)(6), and 425.116(c) substantially increase applicant burden without lending significant value to our review of an organization's application to confirm that the ACO meets all the eligibility requirements for participation. As described in the CY 2022 PFS proposed rule, we proposed specific policy refinements aimed at reducing administrative burden during the application process.

b. Revisions

In the CY 2022 PFS proposed rule, we proposed to modify § 425.204(b) so that the prior participation disclosure requirement is prescribed only at the request of CMS during the application process—rather than as a mandatory submission with the ACO's initial or renewal application. We stated that, in accordance with § 425.224(b), we will continue to review an ACO's history of compliance with Shared Savings Program regulations, and quality and financial performance results and, when appropriate, request additional information from an ACO regarding prior participation.

We also proposed to modify § 425.204(c)(6) to remove provisions requiring an ACO to submit sample ACO participant agreements during the application process. Under this proposal, sample ACO participant agreements and the first and signature pages of each executed ACO participant agreement would need to be submitted during the application process only if requested by CMS, rather than as a mandatory submission with the ACO's initial or renewal application. The ACO must continue to certify that all ACO participant agreements comply with the regulatory requirements of the Shared Savings Program, and CMS retains the discretion to request ACO participant agreement documentation at any time during an agreement period.

In addition, we proposed to modify § 425.116(c) to remove provisions requiring an ACO to submit an executed ACO participant agreement for each ACO participant at the time of its initial application or participation agreement renewal process. We stated that we would retain the requirement that an ACO must submit an executed ACO participant agreement for new ACO participants that it requests to add to its list of ACO participants.

We stated in the proposed rule that we believe these three proposals will collectively reduce the administrative and programmatic burden for ACOs significantly, and without sacrificing program integrity. We reinforced that ACOs are responsible for ensuring that their ACO participant agreements meet Shared Savings Program requirements.

We received several comments on our proposals aimed at reducing burden during the Shared Savings Program application process. Commenters were generally supportive of CMS' efforts to reduce administrative burden for ACOs during the application process noting that the proposed changes would continue to ensure program integrity, greatly reduce administrative burden and control programmatic costs, and increase participation among ACOs. We describe the proposals and respond to comments below.

(1) Prior Participation Requirement (§ 425.204(b))

In the CY 2022 PFS proposed rule, we proposed to modify § 425.204(b) so that the prior participation disclosure requirement is prescribed only at the request of CMS, rather than as a mandatory submission with the ACO's initial or renewal application. During the application cycle and for the purposes of evaluating program eligibility, we already determine prior participation for initial and re-entering ACO applicants by reviewing ACO and ACO participant-level information. We screen all ACO applicants, initial ACOs and re-entering ACOs, to determine if they have participated in the Shared Savings Program, including if their prior participation agreement was terminated early (voluntarily or involuntarily). We also identify initial ACOs as re-entering ACOs if greater than 50 percent of their ACO participants were included on the ACO participant list, under § 425.118, of the same ACO in any of the 5 most recent performance years prior to the agreement start date (§ 425.20), in order to hold these ACOs accountable for their ACO participants' experience with the program.

Additionally, all ACO participants and ACO providers/suppliers undergo a rigorous screening process during the application cycle (and throughout the agreement period, if approved to participate in the program) to ensure they meet certain program requirements. CMS' screening processes are protective of the program and provide CMS with eligibility information about individual ACO participants including: Medicare-enrollment status (§ 425.20); program integrity history (§ 425.305(a)); any participation in other Medicare shared savings initiatives (§ 425.114); and participation in other Shared Savings Program ACOs, including whether the ACO participant submitted claims used in beneficiary assignment (§ 425.306). These robust application screening processes for ACO participants and ACO providers/suppliers provide necessary information about ACOs and individual ACO participants.

We proposed to revise § 425.204(b) to provide that, upon request by CMS during the application cycle, the ACO must submit information regarding prior participation in the Shared Savings Program by the ACO, its ACO participants, or its ACO providers/suppliers, including such information as may be necessary for CMS to determine whether to approve an ACO's application in accordance with § 425.224(b). As described in the CY 2022 PFS proposed rule (86 FR 39289), to ensure future compliance we may request additional information from an ACO concerning its prior participation or the prior participation of their ACO participants or its ACO providers/suppliers. In that case, we would require the ACO to include in its response assurances describing how they will remain in compliance with program requirements—particularly as to the quality performance standard and financial performance—while completing the full term of the participation agreement. In conjunction with the robust evaluation criteria of § 425.224(b) for renewing and re-entering ACOs, and the application screening processes for ACO participants and providers/suppliers, we believe CMS can effectively evaluate an ACO's prior participation and determine its suitability to participate in the program without requiring ACOs to self-identify prior participation under § 425.204(b), including the cause of termination (if any), and what safeguards have been put into place.

The following is a summary of the comments we received and our responses.

Comment: Commenters unanimously supported the proposed change to the Shared Savings Program application process to eliminate the requirement for an ACO to inform CMS about past participation, but to make this information available upon CMS request, and confirmed CMS' belief that this refinement would reduce program burden during the application cycle without sacrificing program integrity.

Response: We appreciate the commenters for their support of this proposal.

After consideration of the public comments, we are finalizing without modification the proposed change to § 425.204(b) so that the prior participation disclosure requirement is prescribed only at the request of CMS, rather than as a mandatory submission with the ACO's initial or renewal application.

(2) Submission of Sample Agreements (§ 425.204(c)(6))

In the CY 2022 PFS proposed rule, we proposed to revise § 425.204(c)(6) to require an ACO to submit sample or form ACO participant agreement documents during the application cycle only upon request by CMS. As stated in the proposed rule, we review sample agreements to ensure they contain the language required under § 425.116. However, it is ultimately the ACO's responsibility to ensure that all of its ACO participant agreements comply with the Shared Savings Program requirements. We also noted our concerns that CMS review of sample participant agreements gave the incorrect impression that CMS had determined that an agreement met all regulatory requirements.

We explained our belief that removing the requirement at § 425.204(c)(6) to submit sample agreements reduces administrative burden on both ACOs and CMS in the submission and reviewing of sample agreements. Under our proposal, we retained the ability to request ACO sample participant agreements during the application cycle and at any point during an agreement period. We also noted that we do not expect to routinely make such requests during the application cycle, but that such requests could be particularly useful in cases where an ACO has a history of noncompliance with § 425.116 or other program requirements.

Under our proposal, we retained the requirement in § 425.204(c)(6) that the ACO must certify that each of its ACO participant agreements comply with the requirements of the Shared Savings Program. We explained that we believe this modification to § 425.204(c)(6) more clearly prescribes that the ACO is ultimately responsible for compliance with all program requirements.

The following is a summary of the comments we received and our responses.

Comment: The majority of commenters supported CMS' proposal to reduce the frequency and circumstances under which ACOs must submit sample ACO participant agreements to CMS and noted that this policy refinement reduces administrative burden during the application process.

Response: We appreciate the commenters' support.

Comment: Several commenters suggested alternative proposals to those outlined in the proposed rule. One commenter noted that the proposed changes would place a tremendous burden on ACOs, and therefore, opposed the policy change, recommending that CMS continue with compliance checks through the application process and submission of signed participant agreements. One commenter suggested permitting ACOs to request a CMS review of their sample ACO participant agreements prior to the ACO participant list change request review cycle. This commenter noted that an ACO-requested review and subsequent CMS approval of the sample agreement would mitigate ACO concerns that an agreement could be deemed noncompliant after submission of any executed agreements. Another commenter requested CMS to provide tools to help ACOs create agreements that comply with Shared Savings Program requirements.

Response: We thank the commenters and understand ACOs' concern for ensuring program compliance with respect to ACO participant agreements. However, we continue to believe that the proposed policy will uphold program integrity while easing administrative burden. We acknowledge that submission of documentation will impose some administrative burden for those ACOs that receive such a request. But because ACOs will no longer be required to submit the documentation routinely, the overall administrative burden to ACOs is reduced. Each year CMS will continue to oversee the application processes and when warranted, request appropriate documentation from an ACO to determine compliance with Shared Savings program requirements.

When CMS chooses to request sample ACO participant agreements, we will review them for compliance with § 425.116, but we reiterate that each ACO is responsible for ensuring that all of their ACO participant agreements are compliant with § 425.116 and all other applicable laws and regulations. Any CMS review of ACO participant agreements is limited only to determining compliance with one or more specific Shared Savings Program requirements and does not preclude CMS, HHS, or any other Federal or State agency from enforcing any applicable laws and regulations.

CMS is not a party to ACO participant agreements, which may include other terms and conditions beyond those that are required in the regulation. Additionally, based on our 9 years of program experience, we have found it is no longer necessary to go through this extensive sample agreement review process. We have utilized our experience to develop guidance for ACOs intended to assist with crafting their ACO participant agreements in compliance with our regulations. Specifically, before, during, and after the Shared Savings Program application cycle and/or performance year, CMS makes guidance documents (at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/program-guidance-and-specifications ) and technical assistance resources available to ACOs (through assigned ACO Coordinators and the Shared Savings Program Helpdesk for email inquiries) requesting help with any questions and/or concerns that allow ACOs to receive timely responses to their questions.

After considering the public comments, we are finalizing without modification the proposed revision to § 425.204(c)(6) to require an ACO to submit sample or form ACO participant agreement documents during the application cycle only upon request by CMS.

(3) Submission of Executed Participant Agreements (§ 425.116(c))

We proposed to modify § 425.116(c) to remove language requiring an ACO to submit an executed ACO participant agreement for each ACO participant at the time of its initial application and during the participation agreement renewal process. We explained that the submission of agreements at the time of initial application is governed by § 425.204(c)(6) and does not need to be addressed in § 425.116(c). We further explained that, unless there have been amendments to an ACO participant agreement, we would not need to collect for a second time executed ACO participant agreements with ACO participants who are actively participating in an ACO at the time it is applying to renew its participation agreement with the program.

We proposed to retain the remainder of § 425.116(c), which requires an ACO to submit ACO participant agreements when requesting additions to their ACO participant list in accordance with § 425.118 and specifies that the agreements may be submitted in the form and manner specified under § 425.204(c)(6). We noted that although ACOs may request additions to an ACO participant list at specified times during a performance year, all approved ACO participant list additions become effective on January 1 of the following performance year (§ 425.118(b)(1)(ii)). We stated that we continue to find value in reviewing executed ACO participant agreements in these circumstances. ACO participant additions may take the form of an initial applicant or renewing ACO submitting proposed ACO participants (that may or may not have participated with another ACO), or a currently participating ACO adding proposed participants (that may or may not be participating with another ACO) to their ACO participant list. Collecting executed agreements (which may include collecting only the first and signature page(s) under § 425.204(c)(6)) for additions to an ACO's participant list provides CMS with evidence that the ACO and the participant are each aware of the agreement and are participating together in the Shared Savings Program. If CMS needs to review executed participant agreements other than when ACOs are adding to their list of ACO participants, CMS can request them at that time under § 425.204(c)(6) or under its audit authority in accordance with § 425.314.

The following is a summary of the comments we received and our responses.

Comment: All commenters supported CMS' proposal to reduce the frequency with which ACOs must submit executed ACO participant agreements to CMS. One commenter noted that this proposed modification was appreciated because the work involved is time consuming and duplicative. Another commenter contended that re-executing agreements for all existing ACO participants at the time of a renewal application is particularly difficult for large ACOs and appreciated the proposed policy change.

Response: We appreciate the commenters' support for this proposal and wish to clarify that renewal or early renewal applicants entering into a new Shared Savings Program agreement period are not required to submit a newly executed ACO participant agreement for any ACO participant with which the ACO already has an ACO participant agreement if that ACO participant will continue to participate in the ACO during the new agreement period. When renewal or early renewal applicants indicate that an existing ACO participant will continue to participate in the ACO during the new agreement period, the ACO has the option to either submit a newly executed ACO participant agreement or to resubmit the existing ACO participant agreement executed by the ACO and the ACO participant. In either case, the agreement must meet the Shared Savings Program requirements under § 425.116.

Comment: A few commenters suggested other burden reduction changes to the ACO application process that were outside the scope of this rulemaking. These commenters suggested that CMS extend the deadline for ACOs to add participants and to provide ACOs direct access to PECOS so that they can manage participant agreements directly in the CMS database.

Response: Comments of this nature are beyond the scope of the policies discussed in the CY 2022 PFS proposed rule and are not being addressed in this final rule.

After considering the public comments, we are finalizing without change our proposal to amend § 425.116(c) to remove language requiring an ACO to submit an executed ACO participant agreement for each ACO participant at the time of its initial application and during the participation agreement renewal process.

In summary, we are finalizing without change our proposal to modify section § 425.204(b) regarding the disclosure of prior participation information. Specifically, under this final rule, an ACO will be obligated to submit prior participation information only at the request of CMS during the application process. We are finalizing without change our proposal to modify § 425.204(c)(6) regarding the submission of sample ACO participant agreements during the application process. Specifically, under this final rule, an ACO will obligated to submit such documents only upon the request of CMS. Lastly, we are finalizing without change our proposal to modify § 425.116(c) by removing language requiring an ACO to submit an executed ACO participant agreement for each ACO participant at the time of its initial application or participation agreement renewal process. Under this final rule, an ACO is obligated to submit an executed ACO participant agreement only for those ACO participants that the ACO seeks to add to its list of ACO participants.

5. Beneficiary Information Notices for ACOs With Prospective Assignment

a. Background

To ensure full transparency between Shared Savings Program ACOs and the beneficiaries they serve, § 425.312(a)(1) provides that an ACO must ensure that Medicare FFS beneficiaries are notified about all of the following: (1) That its ACO providers/suppliers are participating in the Shared Savings Program; (2) the beneficiary's opportunity to decline claims data sharing; and (3) the beneficiary's ability to, and the process by which, he or she may identify or change identification of the individual he or she designated as their primary clinician for purposes of voluntary alignment. Under § 425.312(a)(2)(i), we require this information to be furnished by an ACO participant posting signs in its facilities and, in settings in which beneficiaries receive primary care services, making standardized written notices available upon request.

In the December 2018 final rule, we specified at § 425.312(a)(2)(ii) that, during the performance year beginning on July 1, 2019 and each subsequent performance year, the information must also be furnished by an ACO or ACO participant providing each beneficiary with a standardized written notice prior to or at the first primary care visit of the performance year in the form and manner specified by CMS. While we continued to encourage ACO participants to distribute the notice to beneficiaries at the point of care to address any beneficiary questions or concerns, the flexibility was granted so that an ACO or its ACO participants could distribute beneficiary notifications through electronic transmission (such as email) or mail. We note that, regardless of the method of notification used, CMS may review evidence related to the dissemination of the beneficiary information notice at any time under its audit authority in accordance with § 425.314.

We believe the modifications made to the beneficiary notification requirements in the December 2018 final rule help empower beneficiary choice, support beneficiary engagement, improve transparency, and ensure that beneficiaries are informed about the program and how it may affect their care and the use of their data. In making the decision to provide a CMS-approved template, we aimed to make the notification a comprehensive resource that compiled information about the program and what participation in the program means for beneficiary care. In addition, we believed that the availability of CMS-approved beneficiary notification templates would mitigate the potential for administrative and operational burden on providers.

b. Revisions

In considering the several different iterations of the beneficiary notice requirement over the history of the program, we have concluded that the current requirement to provide beneficiary notifications prior to or at the first primary care visit of the performance year is overly broad with respect to ACOs that have selected the prospective assignment methodology. Such ACOs are currently required to provide the beneficiary notice to beneficiaries who will never be assigned to the ACO for the performance year.

As noted in the CY 2022 PFS proposed rule, the purpose of the beneficiary notification is to empower beneficiaries, encourage beneficiary engagement, and improve transparency. For an ACO participating under the prospective assignment methodology, as described in § 425.400(a)(3), all of the ACO's beneficiaries are assigned at the beginning of the performance year. Under § 425.704(d)(1)(ii), such ACOs may request beneficiary identifiable claims data only for FFS beneficiaries that appear on the ACOs' prospective assignment list at the beginning of the performance year and who have not opted out of data sharing. Beneficiaries who are not assigned at the beginning of the performance year to an ACO that has selected prospective assignment will never be assigned to the ACO during the relevant performance year and will not be subject to data sharing with the ACO. In short, such beneficiaries have no need to receive any information about the Shared Savings Program during the performance year. Therefore, as stated in the CY 2022 PFS proposed rule, we believe that it causes unnecessary confusion for beneficiaries to receive the notice if they are not prospectively assigned to an ACO because the notice describes details that will not apply to them (for example, information on data sharing and the SNF 3-day rule waiver).

In contrast, for ACOs under preliminarily prospective assignment with retrospective reconciliation, the preliminary prospective assignment list provided to the ACO at the beginning of the performance year does not include all FFS beneficiaries who may ultimately be assigned to the ACO. As such, we continue to believe all FFS beneficiaries receiving primary care services from ACO providers and/or suppliers participating in ACOs that have selected preliminary prospective assignment with retrospective reconciliation should receive the notice. This ensures that all beneficiaries ultimately assigned to the ACO will be informed of their right to decline data sharing.

In the CY 2022 PFS proposed rule, we proposed to amend § 425.312(a)(2) to set forth different beneficiary notification obligations depending on the assignment methodology selected by the ACO. Specifically, we proposed at § 425.312(a)(2)(ii) to provide that, in the case of an ACO that has selected preliminary prospective assignment with retrospective reconciliation, the ACO or ACO participant must provide the standardized written beneficiary notice to each FFS beneficiary prior to or at the first primary care visit of the performance year. We proposed to add at § 425.312(a)(2)(iii) that, in the case of an ACO that has selected prospective assignment, the ACO or ACO participant must provide the standardized written notice to each prospectively assigned beneficiary prior to or at the first primary care visit of the performance year.

In the CY 2022 PFS proposed rule, we stated that we continue to believe that the requirement to provide the beneficiary information notice is important to empowering beneficiaries and providing important information about their care, but we also understand that the current requirement of disseminating the beneficiary information notice annually may have the potential to be overly burdensome to ACOs and/or their ACO participants. We solicited comment from stakeholders on whether we should modify the frequency with which the beneficiary information notice must be furnished, for example, by reducing the frequency of the existing requirement from annually to once per agreement period.

We received public comments on our proposal to eliminate the requirement for ACOs that have selected the prospective assignment methodology to provide the beneficiary information notice to beneficiaries who are not prospectively assigned, and therefore, to whom it would not affect. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported the proposal to amend the beneficiary notification requirement such that ACOs that have selected prospective assignment do not have to send notification to beneficiaries who are not prospectively assigned to them.

Response: We appreciate the commenters' support.

Comment: Many commenters advocated that CMS remove the obligation for ACOs to furnish standardized written beneficiary information notices. These commenters stated that the requirement to provide written beneficiary notices is redundant and imposes an unnecessary burden on ACOs. The commenters stated that the same effect is achieved by providing notice via in-office posters, the Medicare & You handbook, and/or after-visit summaries. Some commenters shared that if CMS believes it is necessary to inform patients about ACO goals and objectives using methods other than the posted notices that are already a requirement of the Shared Savings Program, that CMS should provide such notifications. The commenters noted that if CMS furnished such notifications, beneficiaries would not receive notifications from multiple ACOs, which would reduce the cost and burden currently placed on ACOs.

Response: While we appreciate commenters' feedback, we decline to eliminate the requirement that ACOs furnish the standardized written beneficiary notifications required under § 425.312. For several reasons, we continue to believe that it is important for ACOs to furnish these notifications. First, such notices provide important information to beneficiaries about their care and serve to improve transparency. For example, the standardized written notice informs a beneficiary that CMS may share the beneficiary's claims data with the ACO and that the beneficiary can prevent such claims data sharing by following instructions provided in the notice. In the absence of such notification, a beneficiary may incorrectly assume that there is no difference between receiving care from an ACO participant and receiving care from a provider or supplier that is not participating in an ACO. Second, the standardized written notices provide an opportunity for direct engagement of the beneficiary with the ACO or an ACO participant, thereby serving to strengthen the beneficiary's relationship with the ACO and ACO participants from whom the beneficiary may receive care. Because the notice is furnished by the ACO or an ACO participant, it is qualitatively different from a notice furnished by CMS. For this reason, we decline to accept the commenters' suggestion that CMS furnish the required beneficiary notifications.

We do not agree with the commenters' assertion that the requirement to provide written beneficiary notices is redundant and that the same effect is achieved by providing notice via in-office posters, the Medicare & You handbook, or “after-visit summaries.” We note that “after-visit summaries” are not required by our regulations and are therefore not a reliable mechanism for ensuring that beneficiaries receive the required information. Although posters and the Medicare & You handbook may be a sufficient notification mechanism for some beneficiaries, not all beneficiaries will read the posters or the Medicare & You handbook. Moreover, the information contained in the Medicare & You handbook cannot be as complete as the information that must be included in the standardized written notices required under § 425.312(a)(2). For example, the Medicare & You handbook would not identify the specific ACO with which CMS may share the beneficiary's claims data. Written notifications distributed directly to beneficiaries by ACOs and ACO participants offer an additional avenue for ensuring that more beneficiaries are aware of their healthcare provider's participation in an ACO, the claims data that CMS may share with the ACO, the opportunity to prevent such claims data sharing, and the opportunity to designate a particular practitioner for purposes of voluntary alignment to the ACO. Simply put, the standardized written beneficiary notices are not redundant; rather, they are one of multiple notice mechanisms that together ensure that beneficiaries are likely to receive and understand comprehensive information regarding the significance of receiving care from a provider or supplier participating in the Shared Savings Program.

We appreciate the commenters' desire to reduce the burden on ACOs by eliminating the chance of a beneficiary receiving notices from multiple ACOs. We note that under this final rule, a beneficiary aligned to an ACO that has selected prospective assignment will not receive notifications from multiple ACOs.

We received public comments on whether we should modify the frequency with which the beneficiary information notice must be furnished, for example, by reducing the frequency of the existing requirement from annually to once per agreement period. The following is a summary of the comments we received and our responses.

Comment: A few commenters expressed support for reducing the frequency of the beneficiary information notice to once per agreement period. Commenters related that requiring ACOs to notify beneficiaries annually when there have been no programmatic changes can cause unnecessary confusion and burden on patients. Some commenters also suggested modifying the language within the notice to be plainer and more beneficiary-friendly. Additionally, commenters noted that removing the annual requirement would significantly reduce burden on ACOs, both administratively with paperwork, and financially, in terms of expenses and resources.

Response: We appreciate the commenters for the feedback. We will consider this information in future rulemaking.

After consideration of public comments, we are finalizing the proposed policy without modification. Accordingly, we are finalizing the amendment of § 425.312(a)(2) to set forth different beneficiary notification obligations depending on the assignment methodology selected by the ACO. Specifically, we will finalize our proposal at § 425.312(a)(2)(ii) to provide that, in the case of an ACO that has selected preliminary prospective assignment with retrospective reconciliation, the ACO or ACO participant must provide the standardized written beneficiary notice to each FFS beneficiary prior to or at the first primary care visit of the performance year. We will also finalize our proposal to add at § 425.312(a)(2)(iii) that, in the case of an ACO that has selected prospective assignment, the ACO or ACO participant must provide the standardized written notice to each prospectively assigned beneficiary prior to or at the first primary care visit of the performance year.

6. Comments on Considerations Related to the Use of Regional FFS Expenditures and the Risk Adjustment Methodology in Establishing, Adjusting, Updating, and Resetting the ACO's Historical Benchmark

a. Background on the Shared Savings Program Benchmarking Methodology

Section 1899(d)(1)(B)(ii) of the Act addresses how ACO benchmarks are to be established and updated under the Shared Savings Program. This provision specifies that the Secretary shall estimate a benchmark for each agreement period for each ACO using the most recent available 3 years of per beneficiary expenditures for Parts A and B services for Medicare FFS beneficiaries assigned to the ACO. This benchmark shall be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate and updated by the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare FFS program, as estimated by the Secretary. The benchmark shall be reset at the start of each agreement period. In addition to the statutory benchmarking methodology established in section 1899(d) of the Act, section 1899(i)(3) of the Act grants the Secretary the authority to use other payment models, including payment models that would use alternative benchmarking methodologies, if the Secretary determines that doing so would improve the quality and efficiency of items and services furnished under the Medicare program and that the alternative methodology would result in program expenditures equal to or lower than those that would result under the statutory payment model.

In the November 2011 final rule establishing the Shared Savings Program, we adopted policies for establishing, updating, and resetting the benchmark at § 425.602. The Shared Savings Program's regulations have since evolved to include different benchmarking methodologies, including modifications to § 425.602, and the addition of separate benchmarking policies for ACOs entering a second or subsequent agreement period at § 425.603. Benchmarking policies applicable to all ACOs in agreement periods beginning on July 1, 2019, and in subsequent years, are specified in § 425.601. We refer readers to discussions of the benchmark calculations in earlier rulemaking for details on the development of the current policies (see November 2011 final rule, 76 FR 67909 through 67927; June 2015 final rule, 80 FR 32785 through 32796; June 2016 final rule, 81 FR 37953 through 37991; and December 2018 final rule, 83 FR 68005 through 68030).

For details on the benchmarking calculations, we refer readers to the regulations at 42 CFR part 425, subpart G, as well as the Medicare Shared Savings Program, Shared Savings and Losses and Assignment Methodology Specifications (version #9, February 2021), available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-0.

In section III.J.6 of the CY 2022 PFS proposed rule (86 FR 39291 through 39295), we summarized select aspects of the Shared Savings Program's benchmarking methodology and related concerns that have been expressed by ACOs and other stakeholders. We specified some considerations based on our initial analyses of these issues, and solicited comment on considerations that may inform future policy developments. However, we noted that we are still in the process of monitoring program calculations based on the initial performance years of experience under the new participation options and program modifications that were adopted as part of the Pathways to Success rulemaking and are applicable for ACOs in agreement periods beginning on July 1, 2019, and in subsequent years, including changes to the benchmarking methodology (finalized in the December 2018 final rule (83 FR 67816)). In addition, we also specified that we are monitoring the impact of any anomalies in Medicare FFS expenditures and healthcare utilization by Medicare FFS beneficiaries resulting from the PHE for COVID-19, which we anticipate could further inform our considerations of future modifications to Shared Savings Program benchmarking policies (see for example, discussion in the CY 2021 PFS final rule, 85 FR 84770 through 84785).

We appreciate commenters' careful consideration of these issues, as reflected in the public comments we received about the current Shared Savings Program benchmarking methodology, and the potential alternative benchmarking approaches described in the proposed rule. In this section of this final rule, we review the comment solicitations, and summarize the comments received. We appreciate the ongoing dialogue between CMS, ACOs and other program stakeholders on considerations for improving the Shared Savings Program's benchmarking policies. Because we sought comments on these issues for purposes of informing future rulemaking and did not propose any changes to the Shared Savings Program's benchmarking methodology, we decline at this time to provide detailed responses to the commenters' suggestions and concerns. However, we will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies. We will propose any specific policy changes in future notice and comment rulemaking.

b. Comments on Calculation of the Regional Adjustment and Blended National-Regional Growth Rates for Trending and Updating the Benchmark

In the CY 2022 PFS proposed rule (86 FR 39291 through 39294), we discussed some of our considerations based on our initial analyses of stakeholders' concerns about the methodology for calculating regional FFS expenditures used in certain benchmark calculations, specifically the regional adjustment and the blended national-regional growth rates used in trending and updating the benchmark. We explained that we were investigating these concerns and performing additional simulations. We solicited comments on these considerations and other related issues, as well as suggested approaches to modifying the program's benchmarking methodology, which could inform future rulemaking.

We received public comments on the alternative benchmarking methodologies discussed in the proposed rule. The following is a summary of the comment solicitations, the comments we received and our responses.

(1) Overview of Benchmarking Policies Using Regional FFS Expenditures

As we described in the CY 2022 PFS proposed rule, in calculating the historical benchmark, we use historical expenditures for the ACO's assigned beneficiaries, as well as factors based on regional FFS expenditures, factors based on national FFS expenditures, and factors based on a blend of national and regional FFS expenditures. As we have described in earlier rulemaking, incorporating regional expenditures into benchmark calculations makes the ACO's cost target more independent of its historical expenditures and more reflective of FFS spending in its region (see for example, 81 FR 37950, 37951 and 37955). We have also acknowledged in earlier rulemaking that the incorporation of factors based on regional FFS expenditures into ACO benchmarks will have varying effects on ACOs depending on each organization's individual circumstances (see for example, 81 FR 37950, 37954 through 37957, and 81 FR 37975 through 37977; and 83 FR 67816, 68017 and 68026).

In accordance with § 425.601(a)(8), we adjust historical benchmark expenditures by Medicare enrollment type (ESRD, disabled, aged/dual eligible, aged/non-dual eligible) by a percentage of the difference between the average per capita expenditure amount for the ACO's regional service area and the ACO's historical benchmark amount (referred to herein as the “regional adjustment”). The percentage that is applied in calculating the regional adjustment is determined in accordance with § 425.601(f) and depends on whether the ACO has lower or higher spending compared to the ACO's regional service area and the agreement period for which the ACO is subject to the regional adjustment, according to the phase-in schedule of the applicable weights. CMS caps the per capita dollar amount of the regional adjustment for each Medicare enrollment type at a dollar amount equal to ±5 percent of national per capita expenditures for Parts A and B services under the original Medicare FFS program in benchmark year (BY) 3 for assignable beneficiaries (as defined in § 425.20) in that Medicare enrollment type identified for the 12-month calendar year corresponding to BY3.

In accordance with § 425.601(a)(5), in establishing and resetting an ACO's benchmark, CMS trends forward expenditures for each benchmark year (BY1 and BY2) to BY3 dollars using a blend of national and regional growth rates, making separate calculations for each Medicare enrollment type. Similarly, in accordance with § 425.601(b), CMS updates the historical benchmark annually for each year of the agreement period using a blend of national and regional growth rates between BY3 and the performance year. As described in the December 2018 final rule (83 FR 68024 through 68030), we used our statutory authority under section 1899(i)(3) of the Act to adopt this policy under which we update the historical benchmark using a blend of national and regional growth rates, rather than the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare FFS program as required under section 1899(d)(1)(B)(ii) of the Act. CMS accounts for an ACO's penetration in its region when calculating the national-regional blended growth rates, by placing a higher weight on the national component of the blend and a lower weight on the regional component as the ACO's penetration in its region increases.

In determining regional FFS expenditures, CMS uses average county FFS expenditures for assignable beneficiaries, including the ACO's assigned beneficiaries, in each county in the ACO's regional service area for the 12-month calendar year corresponding to the relevant benchmark or performance year. CMS weights these county-level FFS expenditure amounts by the proportion of the ACO's assigned beneficiaries residing in each county, with all calculations performed separately by Medicare enrollment type. Refer to § 425.601(c) (calculating county expenditures) and (d) (calculating regional expenditures).

As described in the CY 2022 PFS proposed rule (86 FR 39292), ACOs and other program stakeholders have expressed concerns with the approach to determining regional FFS expenditures using a population of assignable beneficiaries that includes the ACO's assigned beneficiaries, including with respect to the impact on the calculation of the regional adjustment and the blended national-regional growth rate used to trend and update an ACO's historical benchmark, suggesting this policy results in relatively lower benchmarks for ACOs, particularly ACOs with high market penetration in their regional service area, which may tend to be ACOs located in rural areas. For example, the National Association of ACOs' (NAACOS') summary “Fixing the Rural Glitch” explains its belief that by including the costs of all beneficiaries in the regional adjustment—both those assigned to the ACO and those who are not—CMS penalizes an ACO for reducing costs relative to its regional competitors. That is, as an ACO reduces the costs of its own assigned beneficiaries, it also reduces the average regional costs. According to NAACOS, this will ultimately reduce savings for efficient ACOs in all areas, but the effect may be most dramatic for rural ACOs because they will tend to care for a greater portion of their region's total beneficiary population than an urban ACO. As another example, a stakeholder suggests that incorporating factors based on regional FFS expenditures into the Shared Savings Program's benchmarking methodology systemically penalizes ACOs with a large market share when they reduce costs, leading to disparate payments to ACOs with identical performance. ACOs and other program stakeholders have suggested that CMS remove the effects of the ACO's own performance from factors based on regional FFS expenditures, such as by excluding an ACO's assigned beneficiaries from the population of assignable beneficiaries used to determine regional FFS expenditures. Other alternatives that have been suggested to address these concerns include capping an ACO's penetration in the region at 50 percent by Medicare enrollment type, or expanding the ACO's region. In recent years, legislative changes have been introduced, which if enacted would require the removal of the ACO's assigned beneficiaries from regional expenditure calculations. In the CY 2022 PFS proposed rule, we expressed our appreciation for ACOs and other program stakeholders bringing their concerns, and suggested alternatives, to our attention. We stated that we had begun to analyze these concerns about the use of factors based on regional FFS expenditures in calculating ACO benchmarks, and to consider possible modifications to the Shared Savings Program's benchmarking methodology to ensure the sustainability of the program's financial models. We noted that any such modifications would need to be adopted through notice and comment rulemaking.

The following is a summary of the public comments we received and our response.

Comment: Several commenters, including MedPAC, did not support amending the Shared Savings Program benchmarking methodology to remove an ACO's assigned beneficiaries from the assignable beneficiary population used in determining regional FFS expenditures. These commenters noted that the balance of current Shared Savings Program incentives already tends to favor ACOs that are efficient within their region (that is, historically low-spending ACOs) and this imbalance would be exacerbated by removing an ACO's assigned beneficiary expenditures from its benchmark. Among other factors, these commenters noted that such an approach could create a situation that would reward low-spending ACOs without improving their efficiency of care and would reduce incentives for participation among high spending ACOs (including ACOs serving high-spending beneficiaries in a region, or operating in high cost or high need areas) that the commenters stated were likely to have the greatest opportunity for efficiency improvements. One commenter indicated that an approach that removes the ACO's assigned beneficiaries from benchmark calculations may advantage experienced ACOs that are already successful in lowering spending for their assigned population, more so than new ACOs. This commenter also explained that in circumstances where an ACO's beneficiaries are removed and the remaining population for the benchmark calculation is healthier or utilizing fewer health care services, the ACO will be left to compete against an unattainable benchmark.

Some comments pointed to the need for further clarity from CMS on the impact of removing the ACO's assigned beneficiaries from the assignable population used to determine regional FFS expenditures. A commenter stated that they were unsure how they would be impacted (positively or negatively) by an approach that would reduce the influence of an ACO's assigned beneficiaries on regional expenditure calculations, and recommended CMS propose and allow time for response to any such alternative policies. A few commenters suggested that ACOs that include physicians or facilities providing specialist care might be negatively impacted as these health care providers serve patients with high costs of care and requested that CMS provide more information about the potential impacts on these ACOs.

Many commenters who responded to the comment solicitation favored CMS making regulatory changes to remove ACO-assigned beneficiaries from the regional reference population used in the current benchmarking methodology, raising concerns about the impact of the existing approach to calculating regional expenditures more broadly or specifically with respect to the regional adjustment or the blended national-regional factors used to trend and update the benchmark. Most commenters favoring this approach called for the changes to be made as soon as possible, with some commenters suggesting that CMS finalize a policy change in this final rule. A commenter requested that the changes be made retroactively, calling on CMS to re-calculate shared savings and losses from prior years and to pay additional shared savings to ACOs that were negatively affected by the current policy. While noting it was important to address calculation of regional FFS expenditures in the Shared Savings Program, several commenters recommended that CMS also review methodologies used in existing and developing Innovation Center models to ensure they appropriately account for an APM participant's regional presence.

Some commenters described the current policy on calculating regional expenditures as penalizing ACOs when they reduce costs by also reducing the regional costs against which the ACO is compared. Commenters suggested that this can hinder an ACO's ability to generate savings and earn shared savings. A commenter suggested the policy would reduce the financial incentives for ACOs to fund critical care improvement initiatives that are fundamental to total cost of care reduction. The same commenter noted that ACOs could ultimately face shared losses even if they have the same performance as a prior year in which they achieved savings due to continually decreasing benchmarks. Some commenters stressed that removing the ACO's assigned beneficiaries from the regional reference population was important for creating more fair and accurate benchmarks and a level playing field for ACOs which, in turn, would help the Shared Savings Program to attract and retain participants. Some commenters noted that accurate and reliable benchmarking is critical for the long-term success of the Shared Savings Program and APMs more generally.

Many commenters maintained that the current approach to determining regional FFS expenditures particularly disadvantages rural ACOs or ACOs with high market penetration in their regional service areas, which may tend to be ACOs operating in rural areas. Some commenters referred to the issue as the “rural glitch”. Several commenters described this aspect of the Shared Savings Program's benchmarking methodology as creating a value-based care equity issue, because it systematically disadvantages ACOs in rural areas by making it harder for them to achieve savings even when they improve quality and reduce costs on par with their counterparts in urban areas. Several commenters underscored the importance of and urgency for CMS to remove ACO assigned beneficiary costs from the regional factors used in Shared Savings Program benchmarking to create sustainability for value-based care in rural communities. More specifically, a commenter suggested that CMS should take this approach to allow Medicare patients in rural areas to have the same or similar ability to access providers participating in innovative delivery system models as their urban counterparts.

While acknowledging the potential impact on rural ACOs, some commenters noted that the current policy also adversely affects many suburban and urban ACOs. A few commenters described the current policy as penalizing ACOs that are successful or the most efficient providers in their market.

Some commenters indicated their support for the Value in Health Care Act of 2021, particularly regarding the removal of ACO assigned beneficiaries from the methodology for calculating the regional expenditures used to establish, adjust and update the benchmark. A commenter suggested CMS support another piece of legislation, the Accountable Care in Rural America Act, to address exclusion of ACO assigned beneficiaries from the methodology for calculating regional expenditures. At least one commenter explained that while they have endorsed legislation aimed at fixing the “rural glitch”, they believe that it is fully within CMS' authority to fix this issue through rulemaking.

Response: We will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies and will propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking.

(2) Methodology for Removing ACO Assigned Beneficiaries From Regional FFS Expenditures

As we explained in the CY 2022 PFS proposed rule (86 FR 39292 and 39293), there may be several possible approaches that we could consider for removing an ACO's assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations, which would vary in the degree of additional program calculations and the level of complexity. As we described in the proposed rule, we simulated the impact of removing an ACO's assigned beneficiaries from the regional expenditure calculations using an approach that would pose relatively limited operational burden and would leverage data elements already computed under the current benchmarking methodology. This approach relies on the premise that per capita risk-adjusted regional FFS expenditures for all assignable beneficiaries in an ACO's regional service area (a) can be interpreted as a weighted average of per capita risk-adjusted FFS expenditures for the ACO's assigned beneficiaries (b) and per capita risk-adjusted FFS expenditures for assignable beneficiaries in the region who are not assigned to the ACO (c), where the weight on (b) is the ACO's regional market share and the weight on (c) is one minus the ACO's regional market share. Shown as an equation this is:

(a) = [(b) × (ACO's regional market share)] + [(c) × (1−ACO's regional market share)].

Thus, to remove the ACO's assigned beneficiaries from the regional expenditure calculation, we would insert the applicable values into the above equation and solve for (c) by rearranging the equation as follows:

(c) = {(a)−[(b) × (ACO's regional market share)]}/(1−ACO's regional market share).

By using such ACO- and regional-level values, this approach, performed separately by Medicare enrollment type, would avoid the need to calculate individualized ACO county-level risk-adjusted expenditures. We solicited comment on the approach we outlined, or alternative approaches to calculating regional FFS expenditures without an ACO's assigned beneficiaries. In particular, we solicited comment on specific approaches that would strike the balance of achieving the desired outcome of removing the ACO's assigned beneficiaries from program calculations without introducing an inordinate amount of operational and administrative complexity such that the steps and data included in the calculations can be understood by ACOs and other program stakeholders, and the potential for calculation errors is minimized.

As we explained in the CY 2022 PFS proposed rule (86 FR 39293), we performed initial simulations, for a subset of Shared Savings Program ACOs, using data for the 6-month performance year starting on July 1, 2019 (sometimes referred to as performance year 2019A), for which expenditures were determined based on expenditures for CY 2019, to observe the effects of potential modifications to the benchmarking methodology. In performing these simulations, we used the aforementioned approach for removing expenditures for the ACO's assigned beneficiaries from the calculation of regional FFS expenditures, by removing the impact of an ACO's assigned beneficiaries from the assignable population as weighted by the ACO's regional market share. Specifically, we simulated the effects on the per capita updated benchmark of several alternate policies that would remove an ACO's assigned beneficiaries from regional expenditures used to trend and update the benchmark (either alone or as part of a national-regional blend) or from regional expenditures used to calculate the regional adjustment, or from both. When looking at average impacts by quintile of the ACO's penetration in its regional service area (that is, market share) and rural or non-rural status, the various alternatives resulted in estimated increases in the updated benchmark by amounts ranging from 0.1 percent to 1.4 percent, with ACOs with higher market shares tending to see slightly higher average increases than ACOs with lower market shares and rural ACOs seeing slightly higher average increases than non-rural ACOs. We also observed that some ACOs experienced decreases in their benchmark amounts, ranging from −0.02 percent to −1.5 percent under these simulations of alternate benchmarking policies. We noted that additional analysis would be needed to consider the impact of such policies on a broader set of ACOs participating in the Shared Savings Program, including ACOs that did not participate in a 6-month performance year from July 1, 2019, through December 31, 2019. We solicited comment on this estimated range of impacts on ACO benchmark values, and on the potential mixed effects on ACOs that could result from modifications to the benchmarking methodology.

In the CY 2022 PFS proposed rule (86 FR 39293), we explained our belief that in considering alternative benchmarking methodologies to address ACOs' penetration in their regional service areas it would be important to consider what would constitute heavy penetration by an ACO in its regional service area, and the extent to which market penetration should be considered in benchmark calculations. Based on preliminary analysis of data for CY 2019 using performance year 2021 ACO Participant Lists for all ACOs participating in the program as of January 1, 2021, the median ACO regional market share was approximately 16.2 percent, with a minimum of 0.9 percent and a maximum of 59.2 percent. Further, 90 percent of ACOs had a regional market share of less than 37.8 percent, and 80 percent of ACOs had a regional market share of less than 29.3 percent. Accordingly, we solicited comment on what would constitute heavy penetration in the ACO's regional service area and how removing the ACO's assigned beneficiaries from regional calculations, dependent on the level of penetration, could either increase or decrease the ACO's benchmark. We also solicited comment on approaches that could strike a balance between adjusting program policies to address impacts on the potentially few ACOs that are heavily penetrated in their regional service area while maintaining stability for most ACOs that have relatively low penetration in their regional service area.

The following is a summary of the public comments we received and our response.

Comment: Some commenters addressed the question of how to remove an ACO's assigned beneficiaries from the reference population used in calculating factors based on regional FFS expenditures. A few commenters directly addressed the formula CMS presented in the CY 2022 PFS proposed rule, appearing to support the potential approach for performing this exclusion. Some commenters indicated CMS' mathematical approach was “directionally correct”, relatively simple, and works well in nearly every case while using data that CMS already produces. One commenter appreciated the transparency of the approach laid out by CMS but sought further clarification on whether the time period for measuring the ACO's market share would be the same period used to calculate expenditures.

Several commenters addressed CMS' analyses simulating the effect of removing an ACOs' assigned beneficiaries from regional expenditure calculations on ACO benchmarks. A few commenters noted that CMS showed a range of results, both positive and negative, but did not state how many ACOs would benefit versus be harmed. By their own analysis, a commenter found that nearly 80 percent of ACOs would benefit and that there was no consistent pattern among ACOs that would benefit versus those that would be harmed. Another commenter expressed their belief that CMS' analysis made it clear that the current benchmarking methodology could be made more fair. A commenter remarked that CMS' simulations found that removing each ACO's assigned beneficiaries would slightly increase the average benchmark, even for ACOs with low market share or those in urban areas. This commenter surmised that the ACOs that saw negative effects were likely to be historically high-spending ACOs. Another commenter responding to CMS' simulation results recommended that CMS set a cap on the adjustment to the benchmark for ACOs that would be harmed.

Some commenters addressed the issue of how to identify the population of Medicare FFS beneficiaries to remove from the assignable population used to determine regional FFS expenditures. Several commenters generally supported excluding ACO assigned beneficiaries from the regional reference population but did not clarify whether they preferred to see only an ACO's own beneficiaries removed or all ACO assigned beneficiaries. Suggestions from other commenters included removing all of a respective region's ACO-assigned beneficiaries, or beneficiaries attributed to all Medicare ACO initiatives, including the Global and Professional Direct Contracting Model. However, commenters acknowledged the possibility that the remaining beneficiary population could be too small, which, as a commenter indicated, could lead to significant variability in the regional component of the benchmark.

Some commenters responded directly to CMS' request for comment on what would constitute heavy penetration by an ACO in its regional service area, and the extent to which market penetration should be considered in benchmark calculations. A commenter recommended that CMS set the high penetration mark at 30 percent, but did not provide specific suggestions for how this penetration level might be incorporated into the Shared Savings Program's benchmarking methodology. Some commenters discussed using 50 percent market share as a threshold in certain benchmark calculations. MedPAC noted that CMS found relatively few Shared Savings Program ACOs with high market share, which was consistent with its own analyses and believed that this relatively small number of ACOs with high market penetration is not enough to warrant a change in policy of this magnitude. MedPAC also noted that the current blended national-regional trend factor reasonably attempts to address high ACO market shares and recommended that, like the existing blend, any changes in policy should attempt to avoid imposing a market share threshold or “cliff.”

Response: We will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies and will propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking.

(3) Unintended Consequences of Removing ACO Assigned Beneficiaries From Regional Calculations, and Identifying Other Needed Modifications

In the CY 2022 PFS proposed rule (86 FR 39293 and 39294), we solicited comment on the following considerations, and other possible unintended consequences that could result from removing an individual ACO's assigned beneficiaries from regional calculations.

• Would this approach create incentives for ACOs to have assigned beneficiaries who are healthier than the remaining comparison population that is the basis for benchmark factors based on regional FFS expenditures (so as to yield a higher benchmark), which could lead ACOs to seek out healthier beneficiaries and avoid at-risk or higher-cost beneficiaries?

++ Would this approach incent the formation of large ACOs within a particular market to obtain the most competitive benchmarks resulting in market consolidation, and discourage participation by relatively smaller ACOs, thus increasing costs for the Medicare Trust Funds if CMS pays larger amounts of shared savings to ACOs that have consolidated to take advantage of the ability to attract more low-cost beneficiaries in their region?

++ Would a change in the regional benchmarking methodology encourage ACOs to avoid at-risk or higher-cost beneficiaries and potentially exacerbate inequities in access to health care?

• We solicited comment on the potential for negative impacts on ACOs that serve larger proportions of medically complex beneficiaries, such as ACOs whose assigned beneficiary populations include larger proportions of beneficiaries who are medically complex and cared for in ambulatory or home-based settings or who reside in long term care facilities, resulting from an approach that removes the ACO's assigned beneficiaries from the assignable beneficiary population used to determine regional FFS expenditures. Would such an approach yield a benchmark so low that such ACOs have little incentive to participate in the Shared Savings Program?
• Would removing an individual ACO's assigned beneficiaries result in regional FFS expenditures based on very small populations, thus introducing significant variability into regional FFS expenditure trends used in benchmark calculations?

Additionally, we solicited comment on whether removal of an ACO's assigned beneficiaries from regional FFS expenditure calculations would bring about a need to remove ACO assigned beneficiaries from other Shared Savings Program financial calculations based on a broader Medicare population, including factors based on national FFS expenditures, which are used in calculating blended national and regional expenditure trend and update factors, truncation points used in calculating benchmark and performance year expenditures, and the 5 percent cap on the regional adjustment.

The following is a summary of the public comments we received and our response.

Comment: Commenters offered differing perspectives on the potential unintended consequences that could result from an approach that would remove ACO assigned beneficiaries from the regional FFS expenditure calculations including the following:

• Several commenters expressed the belief that removing ACO assigned beneficiaries from regional FFS expenditure calculations would penalize ACOs serving medically complex, high cost patients in a region. A commenter noted that this approach could result in such ACOs leaving the Shared Savings Program or could be a deterrent to entry for future ACOs. Another commenter suggested that ACOs would be incentivized to avoid growth and expansion of services into high risk, high cost, high need areas, regardless of whether they are rural or urban, citing evidence for this phenomenon published in Health Affairs.

• Several commenters expressed concern that the policy would create increased incentives for patient selection or “cherry picking”. Another commenter disagreed, stating they did not believe that removing an ACO's assigned beneficiaries would create any of the unintended consequences CMS has contemplated, including cherry-picking healthier beneficiaries. Several other commenters also believed the likelihood of ACOs avoiding high-risk patients if ACO assigned beneficiaries are removed from the regional reference population is quite low and is outweighed by their concerns about the other effects of the existing policy. Commenters noted various safeguards or guardrails, such as provider choice among patients and risk adjustment, are already built into the framework of the Shared Savings Program to help to prevent ACOs from purposefully avoiding certain populations.
• One commenter expressed concerns about potential market consolidation effects, while a few other commenters explained that while there has been increased consolidation in recent years across the healthcare industry, there is not strong evidence showing ACOs are driving this change. A few other commenters also expressed the belief that a change in policy regarding the calculation of regional expenditures would not lead to provider consolidation, but would increase participation in ACOs in rural markets, expanding access to coordinated care and encouraging alternative payment model participation across the country.

• MedPAC expressed concern that the population used to determine regional FFS expenditures would become less comparable with the ACO's assigned population as the ACO's regional market share increases, even after risk adjustment, citing evidence from a 2009 evaluation of the Physician Group Practice (PGP) demonstration (a predecessor to the Shared Savings Program). Several other commenters believed that concerns about small reference populations resulting from removing ACO-assigned beneficiaries is an issue for a minority of ACOs, such as those serving dual eligible Medicare and Medicaid beneficiaries, ESRD beneficiaries, and other high-risk beneficiary groups. The commenters suggested that, in these cases, CMS should consider expanding the regional service area to include assignable beneficiaries in adjoining counties or increasing the number of years included in the calculation of regional expenditures to improve the stability of the regional adjustment. Another commenter acknowledged that there are concerns about extreme differences between the ACO population and non-ACO population that risk adjustment does not handle well, but that these considerations affect only a small fraction of ACOs and can be addressed by expanding the definition of the region to include contiguous counties.

Response: We will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies and will propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking.

(4) Alternative Approaches to Determining Regional FFS Expenditures and Alternative Benchmarking Methodologies

In the CY 2022 PFS proposed rule (86 FR 39294), we solicited comment on using other approaches to calculating benchmarks under the Shared Savings Program. In particular, we solicited comment on alternatives to determining regional FFS expenditures that would reduce the influence of an ACO's assigned beneficiaries on regional expenditure calculations, such as basing these expenditures on a larger geographic area, including using State-level data, Core-Based Statistical Area (CBSA)-level data, or a combination of data for these larger geographic areas and county-level data (such as blended county/State regional expenditures). We also solicited comment on alternative benchmarking methodologies that may incorporate data sources other than Medicare FFS expenditure trends, such as by incorporating factors based on Medicare Advantage rates, or other published trends.

We also solicited comment on considerations related to the potential use of our authority under section 1899(i)(3) of the Act to implement suggested modifications to the benchmarking methodology, in particular alternative approaches to updating the historical benchmark or other alternative benchmarking methodologies that diverge from the requirements of section 1899(d)(1)(B)(ii) of the Act, since to do so we must determine that the alternative payment methodology will improve the quality and efficiency of items and services furnished to Medicare beneficiaries, without resulting in additional program expenditures.

The following is a summary of the public comments we received and our response.

Comment: Commenters suggested a number of alternative approaches for addressing the impact of an ACO's own performance on its benchmark or countering the potentially adverse effects of removing the ACO's assigned beneficiaries from regional expenditure calculations including:

• Several commenters suggested that CMS should expand the definition of regional service area in cases where ACO market penetration is high, with some of those commenters suggesting this would mitigate concerns about the reference population being too small after removing the ACO's assigned beneficiaries. Some commenters specifically called for using a threshold of 50 percent market penetration in such an approach. For example, a commenter recommended expanding the ACO's regional service area to include all contiguous counties when an ACO's assigned beneficiary population in a county exceeds 50 percent, with allowances for alternate thresholds to be used in certain special cases, such as: When the ACO's regional service area includes very small counties to expand the ACO's regional service area to include the contiguous counties; when an ACO represents more than 50 percent of a combined statistical area, to use national inflation in place of regional inflation; or when there are significant risk score differences between assigned and non-assigned beneficiaries, to consider using a lower threshold for expanding the ACO's regional service area to include contiguous counties, such as a threshold of at least 30 percent or higher, instead of 50 percent.

• One commenter, concerned about the potential for “cherry-picking”, suggested using geographic units smaller than counties to define an ACO's regional service area as these geographic units may be more socio-economically homogenous; alternatively, the commenter suggested maintaining a county-level definition of region, but adjusting the benchmarking process to adequately account for beneficiary social, functional, and clinical risk factors and to provide an upward financial adjustment for ACOs serving these higher cost populations. Along a similar vein, several commenters encouraged CMS to explore further ways to stratify benchmarks based on patient risk factors, such as to set separate benchmarks for certain high-cost patients.

• MedPAC suggested modifications to both the national and regional components of the blended national-regional trend factors. MedPAC also suggested that CMS alter the calculation of regional spending in the trend factor by extending the ACO's regional service area to a larger market area (for example, CBSAs, health service areas, or hospital referral regions) in lieu of excluding ACO assigned beneficiaries from regional expenditure calculations. Based on its own analysis, MedPAC concluded that expanding an ACO's regional service area would help to reduce an ACO's influence on its regional benchmark calculation without explicitly favoring certain categories of ACOs (for example, historically low-spending ACOs). MedPAC also suggested that the national portion of the blended national-regional trend factor could be standardized for average wages or adjusted to reflect local wage and geographic practice indices.
• Some commenters suggesting removal of ACO assigned beneficiaries from the regional reference population also suggested that CMS use a regional-only trend rather than a national trend or a blended national-regional trend in establishing and updating the ACO's benchmark. These commenters explained that the use of a blended trend factor often over-emphasizes the national trend component for high market share ACOs and that this is especially problematic during the COVID-19 pandemic because the national trend does not reflect important local market dynamics that vary across the country. Specifically, these commenters noted that in 2020 regional spending decreased by 10 percent or more in some markets, while remaining relatively “flat” in other markets. These commenters concluded that ACOs in COVID-19 “hot spots” likely have higher costs than the overall nation, and therefore, using the national trend as part of the benchmarking methodology is detrimental and unfair to these ACOs as it does not reflect the pandemic's effect on costs in their regions. Another commenter generally suggested that CMS adjust blended national-regional growth rates to account for ACOs in COVID-19 “hot spots”, but did not provide details describing such an approach.
• Several commenters suggested that CMS consider approaches being used in Innovation Center models. Several commenters suggested CMS use an approach under the Shared Savings Program similar to the approach used in the Direct Contracting Model to adjust benchmarks based on regional FFS expenditures. For example, MedPAC specifically suggested that ACOs selecting prospective assignment be offered a trend factor that is set prospectively prior to the start of the performance year and developed utilizing the local and national estimates in the rate book developed for the Direct Contracting model. In its comments, MedPAC underscored that any changes that CMS considers making to the benchmarking methodology should enhance incentives for care improvement and avoid penalizing ACOs with assigned beneficiary populations that are more complex and costly than the ACO's regional average. Several commenters suggested that CMS establish additional benchmark options based on patient population and clinical need, especially for complex patient populations, referring to the approaches used under the Primary Care First Seriously Ill Population model and Direct Contracting model High Needs track.
• One commenter suggested that CMS take the following approach to incentivize participation and retention among ACOs, regardless of their initial efficiency relative to their region: (1) Continue to have ACOs move to increased (50 percent to 100 percent) regional weighting over time; (2) For ACOs more efficient (lower spending) than their region, apply only positive regional adjustments; (3) For ACOs less efficient (higher spending) than their region, allow for purely historical benchmarks until the ACO moves below the regional average.
• Several commenters expressed concerns about use of 2020 and 2021 data in establishing ACO historical benchmarks because of the impact of the COVID-19 PHE on expenditures. One commenter suggested that CMS waive the requirement in § 425.601 that the benchmark is established or reset using data from the three most recent years prior to the start of the agreement period, and instead utilize data from 2017, 2018 and 2019 to establish or reset benchmarks for agreement periods that begin on January 1, 2022. This commenter suggested that CMS could alternatively offer ACOs with agreement periods beginning January 1, 2022, the option to choose use of benchmark year data either from 2019, 2020 and 2021 or from 2017, 2018 and 2019. Another commenter suggested CMS adjust how performance years 2020 and 2021 will be weighted in the calculation of financial benchmarks for future agreement periods.

Response: We will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies and will propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking.

For reference, as noted in the CY 2022 PFS proposed rule (86 FR 39294), for each calendar year, CMS releases two public use files (PUFs): (1) County-level Aggregate Expenditure and Risk Score Data on Assignable Beneficiaries PUF, and (2) Number of ACO Assigned Beneficiaries by County PUF. These files are available online at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/SSPACO/SSP_Benchmark. Stakeholders may find this data helpful to inform their further consideration of these issues.

c. Comments on the Shared Savings Program's Risk Adjustment Methodology

In the CY 2022 PFS proposed rule (86 FR 39294 and 39295), we discussed stakeholders' concerns about the methodology for risk adjusting the ACO's historical benchmark each performance year during its agreement period, and we sought comment on approaches to potentially address these concerns, and some related considerations. The following is a summary of the comment solicitations, the comments we received and our response.

As described in the CY 2022 PFS proposed rule, we take into account changes in severity and case mix of the ACO's assigned beneficiary population when establishing the benchmark and also in adjusting the benchmark each performance year. In accordance with § 425.601(a)(3), in establishing the benchmark, we adjust expenditures for changes in severity and case mix using prospective HCC risk scores. Under § 425.601(a)(10), we further adjust the ACO's historical benchmark at the time of reconciliation for a performance year to account for changes in severity and case mix for the ACO's assigned beneficiary population between BY3 and the performance year (refer to § 425.601(a)(10); § 425.605(a)(1), (a)(2); § 425.610(a)(2), (a)(3)). In making this risk adjustment, we make separate adjustments for the population of assigned beneficiaries in each Medicare enrollment type used in the Shared Savings Program (ESRD, disabled, aged/dual eligible, aged/non-dual eligible). We use CMS-HCC prospective risk scores to adjust the historical benchmark for changes in severity and case mix for all assigned beneficiaries, subject to a cap of positive 3 percent for the agreement period. This cap is the maximum increase in risk scores allowed for each agreement period, such that any positive adjustments between BY3 and any performance year in the agreement period cannot be larger than 3 percent. That is, the risk ratios (ratio of performance year risk score to the BY3 risk score) applied to historical benchmark expenditures to capture changes in health status between BY3 and the performance year will never be higher than 1.030 for any performance year over the course of the agreement period. This cap is applied separately for the population of beneficiaries in each Medicare enrollment type.

ACOs and other stakeholders have expressed concerns that the program's methodology for capping any increase in the risk adjustment to the historical benchmark, such that any positive adjustment between benchmark year 3 and any performance year in the agreement period cannot be larger than 3 percent, does not account for risk score growth in the ACO's regional service area, and thereby penalizes ACOs. In earlier rulemaking, commenters indicated that the 3 percent cap on risk score increases is especially problematic for ACOs whose regional service area includes a population of beneficiaries whose risk scores rise more than the cap. A commenter encouraged CMS to adopt a policy of applying a cap on risk score growth after accounting for regional increase in risk scores (85 FR 84784).

In the CY 2022 PFS proposed rule, we solicited comment on the following issues related to the risk adjustment methodology—

• Approaches, generally, to improving the risk adjustment methodology for the Shared Savings Program, and specifically for ACOs with medically-complex, high-cost beneficiaries.
• Approaches to risk adjustment that would balance the need for accurate and complete coding, while protecting against incentivizing coding intensity initiatives by ACO participants and ACO providers/suppliers (which may be even more problematic for ACOs with high penetration in their region) that increase risk score growth above the existing 3 percent cap.
• Alternate approaches that would increase the cap on an ACO's risk score growth in relation to risk score growth in the ACO's regional service area, such as:

++ Allowing the ACO risk score growth cap to increase by a percentage of the difference between the current 3 percent cap and risk score growth in the ACO's regional service area. In this alternate approach, the percentage applied would be equal to 1 minus the ACO's regional market share. This approach would raise the existing cap while limiting the ability for ACOs with high penetration in their region to increase their cap by engaging in coding intensity initiatives that raise the regional risk score.

++ Setting the ACO risk score growth cap at some level between the existing 3 percent risk score cap and the regional risk score growth, which would account for a portion of the regional risk score growth that exceeds the current cap.

• The potential interactions between policies to remove assigned beneficiaries from the assignable beneficiary population used to calculate regional FFS expenditures and growth rates (as described elsewhere in this section of this final rule), and policies addressing regional risk score growth.

Comment: Several commenters responding to the comment solicitation on the Shared Savings Program's risk adjustment methodology explained that risk adjustment is an important aspect of setting fair ACO benchmarks and evaluating expenditures during the performance year. The commenters noted that accurate risk adjustment should remove or minimize differences in health and other risk factors that impact performance but are outside the ACO's control.

MedPAC indicated that the existing risk adjustment approach may be effective in balancing a number of considerations. MedPAC expects that changes in an ACO's population health status would be accounted for by the CMS-HCC model, and the current 3 percent potential increase to benchmarks—in addition to being susceptible to rewarding ACOs for coding—would likely cover anomalies when ACO populations have deteriorating health status. Another commenter expressed the belief that, while not perfect, the CMS-HCC model used in the Shared Savings Program is known to providers and does a decent job of capturing the risk of Medicare FFS beneficiaries.

Many commenters remain concerned about the existing risk adjustment methodology under which there is a 3 percent cap on positive adjustments resulting from risk score increases over the ACO's 5-year agreement period, and many of these commenters also expressed concern about the absence of a cap (or floor) on negative adjustments to account for risk score decreases. Several commenters believe the current approach is unfair to ACOs and inadequate, indicating that risk adjustment caps may be somewhat reasonable in the early years of a 5-year agreement period, but not in the later years of the agreement period. One commenter noted that freezing risk scores over 5 years could create a constant struggle against a population's outdated risk score (calculated several years earlier) for which ACOs are at financial risk. The commenter also explained that CMS has already recognized the necessity of shorter-term caps on risk and price adjustments, referring to the Bundled Payments for Care Improvement initiative (trend factor variation capped on a quarter-over-quarter basis) and the Next Generation ACO model (risk scores capped at 3 percent over 2 years). Some commenters referred to an analysis by CMS described in earlier rulemaking which indicated that 32 percent of ACOs would have a risk ratio greater than 1.03 for the aged/dual eligible enrollment type over 5 years. According to some of these commenters, this analysis demonstrates that the current 3 percent cap is not appropriately set as it limits risk score growth for more than just outliers. With respect to a cap on risk score decreases, a few commenters noted that CMS had previously been hesitant to introduce such a cap out of concern about creating a gaming opportunity for ACOs. It appears that these commenters may have been referring to the discussion in the December 2018 final rule (83 FR 68010 and 68011), in which CMS explained that it shared the concerns raised by some commenters that capping risk score decreases would encourage favorable risk selection, such that ACOs might seek to attract low-cost beneficiaries or avoid high-cost beneficiaries in order to lower their performance year expenditures without any corresponding adjustment to their benchmark due to the cap on negative risk adjustments. These commenters believed that CMS has other tools for monitoring for potential gaming, such as continuing to monitor voluntary alignment, but they did not explain how such monitoring would address CMS' concerns about capping risk score decreases.

Some commenters raised particular concerns about the current risk adjustment policy in light of the PHE for COVID-19. Several commenters raised concerns regarding the application of a 3 percent cap on risk score increases over the ACO's 5-year agreement period and the lack of a floor for risk score decreases given the widespread and unparalleled effects of the PHE for COVID-19. A few commenters indicated their expectation that most ACOs' risk scores for 2021 will be extremely low as providers were unable to capture many beneficiaries' HCCs due to reduced patient volume in 2020. They explained that if in-person patient volume resumes in 2021, 2022, and beyond, ACOs will likely have a significant increase in risk scores simply because patients are once again receiving care in physicians' offices. One commenter suggested that beneficiaries may also have worse health status due to delayed diagnosis and delay in seeking care, providing the example of hospitals noting significant increases in case mix index (CMI) for hospitalized patients related to these delays. Several commenters suggested that more ACOs will be subject to the existing 3 percent cap under these circumstances. One commenter noted that the current risk adjustment methodology could penalize ACOs for patients' need to stay in the safety of their homes during the pandemic. Another commenter indicated that ACOs could be forced to exit the Shared Savings Program as a result.

Many commenters also remained concerned that the current policy places a cap on the ACO's risk score growth but does not restrict regional risk score growth. Commenters noted that this penalizes ACOs in markets where a region's risk score growth exceeds the cap. To illustrate this, some commenters gave the example of a case where both the ACO's risk score and the regional risk score grow by 6 percent. In this circumstance, the benchmark would be reduced by 3 percent, despite the fact that the ACO's risk score growth matched that of the region. Several commenters provided examples based on 2020 data, noting that the average risk ratio for counties above 1.03 was 1.042 in the aged/non-dual eligible population and was 1.055 in the dual eligible population, indicating a larger negative impact for this more vulnerable population. One commenter suggested that higher risk score growth at the county level is due to underlying population changes and once a county diverges from the national average it will continue in that direction without reversion to the mean. As a result, the commenter suggested that the problem of these negative impacts would continue unless CMS modifies the risk adjustment methodology using the approach described in the CY 2022 PFS proposed rule, which would allow the ACO risk score growth cap to increase by a percentage of the difference between the current 3 percent cap and risk score growth in the ACO's regional service area. Another commenter suggested that by including a cap on the ACO's risk score, but not on risk score growth for the region, CMS is creating new incentives that run counter to the original purpose of CMS-HCC risk adjustment, which the commenter believed is to level the playing field and remove disincentives for treating high cost patients. Several commenters indicated that the increased variation in risk scores introduced by the COVID-19 pandemic has further demonstrated the impact of the 3 percent cap on risk score growth in reducing ACO benchmarks, when risk score growth in the ACO's region exceeds the ACO's risk score growth. MedPAC did not appear to support aligning ACO and regional risk score growth out of concern that this would effectively reward ACOs for greater coding intensity in their region, particularly for those with higher market share.

Several commenters suggested that the existing policy is also driving inequity and may disadvantage ACOs that serve more vulnerable populations or beneficiaries with complex medical needs. Some commenters explained that beneficiaries who are in the disabled and the aged/dual eligible Medicare enrollment types are, in most combinations, more than twice as likely to have risk score growth above the cap as those who are in the aged/non-dual eligible category. Some commenters indicated that due to a variety of factors, such as sample size and volatility, the rates at which Medicare enrollment types are subject to the 3 percent cap on risk score growth are often significantly different. A commenter explained that there can also be significant risk score volatility when the high-risk patient population is small. As a result of these factors, some commenters explained that the current approach may disadvantage ACOs that serve more vulnerable populations (such as ACOs composed of community health centers), or ACOs that serve a disproportionate number of dual eligible patients needing complex services (such as ACOs based around an academic medical center). A commenter stated that there currently exists a disincentive for ACOs to take on certain vulnerable populations, such as beneficiaries with ESRD or who need SNF-level care. However, another commenter noted that the current model has some protections for ACOs that experience a disproportionate increase in the medical complexity of their population, highlighting that the current risk adjustment method makes separate adjustments for assigned beneficiaries in each enrollment type, which allows ACOs to increase the proportion of their ESRD, dual eligible, and disabled populations without being affected by the 3 percent cap.

Commenters seemed to offer differing perspectives on CMS' concerns about creating incentives for coding initiatives including:

• MedPAC expressed support for CMS' considerable caution in this area, noting that population-based models can be highly susceptible to coding incentives and that the Shared Savings Program does not include a retrospective coding adjustment to offset these incentives. MedPAC recommended that CMS should address the underlying incentives for coding intensity and the accuracy of risk adjustment before considering any policy that would increase the risk score growth cap.
• One commenter that was supportive of the approach CMS described in the CY 2022 PFS proposed rule, under which an ACO's risk score growth cap would be allowed to increase by a percentage of the difference between the current 3 percent cap and risk score growth in the ACO's regional service area, believed this approach would continue to insulate CMS from coding intensity.

• One commenter stated that capping positive risk score growth at 3 percent over the 5-year agreement period, while intended to limit incentives for coding intensity, has the effect of harming ACOs that provide care and services to beneficiaries with complex medical needs, and suggested that this approach does not adequately account for changes in beneficiaries' disease burden over time. Another commenter stated that CMS should abolish the policy of capping year-over-year risk-score growth, as CMS does not want ACOs to “cherry pick” patients or avoid providing care to high-risk, high-cost beneficiaries. The commenter explained its belief that by encouraging ACOs to properly code the risk of their beneficiary population, CMS would help to ensure ACOs will have necessary resources to invest in infrastructure and serve higher-risk patients more effectively.

• A few commenters explained that the current methodology of normalizing risk adjustment in a region can penalize ACOs that have been coding accurately and whose beneficiaries maintain the same health status over the course of the ACO's agreement period. Under this scenario, an ACO could see a decrease in its risk score if others in its region increase their coding intensity. The commenters indicated that this issue is further exacerbated for ACOs that include a large number of specialists, since they have fewer opportunities to increase their risk score, but did not explain why they believed this to be the case.

Commenters suggested a variety of alternative approaches to risk adjusting historical benchmarks each performance year during the ACO's agreement period, including the suggestions summarized below.

Response: We will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies and will propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking.

Comment: Commenters also offered suggestions related to the following issues:

Suggestions for capping positive/negative risk score adjustments included the following:

• Many commenters suggested that CMS increase the cap on risk score growth during an ACO's 5-year agreement period to no less than 5 percent and implement a floor of no greater than negative 5 percent for risk score decreases. A commenter requested that CMS consider applying a cap on risk score growth of 10 percent over 5 years.
• Several commenters suggested that CMS should consider temporarily removing or increasing the 3 percent cap following an anomalous year, such as 2020, during which risk scores were impacted by the COVID-19 pandemic.
• A commenter suggested that CMS implement a floor on the risk score, adjust for the effects of COVID-19, and apply a cap on risk score increases, if any, that is the same for all Medicare populations, including Medicare Advantage.
• Some commenters encouraged CMS to cap the aggregate risk ratio across Medicare enrollment types. They indicated that this would be more fair because the rates at which Medicare enrollment types are subject to the 3 percent cap on risk score growth are often significantly different, due to a variety of factors, such as sample size and volatility.
• A commenter recommended that, at a minimum, CMS should increase the cap on risk score growth for high-risk populations (specifically, ESRD, aged/dual eligible and disabled), to ensure vulnerable beneficiaries are better served by Shared Savings Program ACOs.

Suggestions for addressing differences in risk score growth between the ACO and the ACO's regional service area included the following:

• A few commenters noted their support for modifying the risk adjustment methodology to enable the risk score growth cap to increase by a percentage of the difference between the current 3 percent cap and risk score growth in the ACO's regional service area, with a commenter explicitly citing the approach described in the proposed rule in which the percentage applied to the difference would equal 1 minus the ACO's market share. The commenter, who believes this change should be applied retroactively to at least performance year 2021, explained that removing an ACO's assigned beneficiaries from its regional trend would simplify the equation because an ACO could no longer impact its regional risk score.
• Some commenters suggested more generally that CMS align the use of a risk adjustment cap for the ACO and its region by applying a consistent capping policy to both. Some commenters also called for this approach to be applied retroactively beginning with performance year 2021. A number of the commenters who supported aligning ACO and regional risk score growth caps also called for increasing the cap on positive risk score adjustments and applying a cap on negative risk score adjustments.

Other suggestions related to Shared Savings Program risk adjustment included the following:

• MedPAC recommended that CMS use 2 years of diagnostic data for risk adjustment as permitted under the 21st Century Cures Act, which they believe would improve the accuracy of coefficients estimated with FFS data and reduce year-to-year variation in beneficiary risk scores, along with reducing the administrative burden for ACO participants related to HCC documentation. MedPAC further suggested that CMS should only consider changes to the 3 percent cap after making this suggested change and after observing the effect of the phase-in from 2020 to 2022 of the Alternative Payment Condition Count (APCC) CMS-HCC risk adjustment model, which they noted was designed to improve the accuracy of risk adjustment for high-spending beneficiaries.
• Several commenters suggested that CMS adopt a single (standardized) approach for measuring the health status of a population across Medicare Advantage and Medicare ACO initiatives. Some commenters suggested, for example, that CMS recalibrate the risk adjustment methodology across all Medicare programs and models by updating the HCC Model to use ICD-10 codes to improve accuracy, refining HCC diagnoses, and incorporating social determinants of health. Several commenters suggested that, at a minimum, CMS should align the risk adjustment methodology used in the Shared Savings Program's ENHANCED track with Medicare Advantage. Another commenter suggested that CMS examine the risk adjustment methodology in general and analyze how fairly it is applied within both Medicare Advantage and traditional Medicare.
• Several commenters encouraged CMS to consider including social risk factors in the risk adjustment models used for ACO benchmarking. A commenter suggested this could be an incentive for ACOs to improve social risk and demographic data collection. Another commenter suggested that including factors related to a patient's background (for example, sociodemographic status, language, and post-discharge support structure) in the risk-adjustment methodology could reduce barriers to more robust participation by safety net hospitals.

• A few commenters encouraged CMS to examine coding patterns on a local/regional level and to employ a more “veracious” approach to calculating coding intensity adjustment factors that considers the increasing prevalence of chronic disease in a region, noting that the current Shared Savings Program risk adjustment methodology attributes all growth in risk scores beyond demographic risk entirely to coding intensity when populations may instead be increasingly chronically ill or have a different burden of illness between the baseline population and the attributed population.

• A commenter encouraged CMS to explore ways to implement the Innovation Center's concurrent HCC risk adjustment model in the Shared Savings Program, explaining that such models are better able to predict costs for populations with high disease burden or who are otherwise seriously ill, as they can better capture a rapid deterioration in health in the current year, such as through the occurrence of acute episodes that are difficult to predict or prevent (for example, heart attacks).
• Several commenters suggested that CMS avoid establishing a risk adjustment methodology that creates adverse incentives for practices to select or avoid certain beneficiaries based on their health risk status. A commenter detailed a combination of policies to achieve this, including some that related to ACO and regional risk score caps. Specifically, the commenter recommended: Establishing a risk adjustment cap that accounts for the size of the ACO's assigned beneficiary population (in recognition of the fact that a smaller assigned beneficiary population will be more volatile in terms of utilization and costs and may not be comparable risk-wise to other ACOs in the region); considering an ACO's assigned beneficiary population break-down across dual eligible and non-dual eligible beneficiaries when calculating the cap; capping the reference population risk score in the same way that the ACO population risk score is capped prior to normalizing; considering the proportion of vulnerable populations a given ACO serves; and looking to the Innovation Center's risk adjustment methodologies, and applying promising practices as appropriate in the Shared Savings Program.
• A commenter suggested that CMS consider applying a frailty adjustment in the Shared Savings Program risk adjustment methodology such as is used in the PACE program.
• A commenter suggested that CMS consider excluding unforeseeably expensive Part B drugs from Shared Savings Program benchmark and performance year expenditure calculations, or otherwise accommodating these costs. The commenter explained that pharmaceuticals represent an area of rapid technological improvement that has increasingly been accompanied by extremely high acquisition costs. As a result, the commenter believed that these products create cost imbalances between benchmark and performance periods that are not sufficiently addressed through risk adjustment.

Response: We will take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies and will propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking.

K. Medicare Ground Ambulance Data Collection System

1. Background on Ambulance Services

Section 1861(s)(7) of the Act establishes an ambulance service as a Medicare Part B service where the use of other methods of transportation is contraindicated by the individual's condition, but only to the extent provided in regulations. Since April 1, 2002, payment for ambulance services has been made under the ambulance fee schedule (AFS), which the Secretary established under section 1834(l) of the Act. Payment for an ambulance service is made at the lesser of the actual billed amount or the AFS amount, which consists of a base rate for the level of service, a separate payment for mileage to the nearest appropriate facility, a geographic adjustment factor (GAF), and other applicable adjustment factors as set forth at section 1834(l) of the Act and § 414.610 of the regulations. In accordance with section 1834(l)(3) of the Act and § 414.610(f), the AFS rates are adjusted annually based on an inflation factor. The AFS also incorporates two permanent add-on payments and three temporary add-on payments to the base rate and/or mileage rate. The two permanent add-on payments at § 414.610(c)(5)(i) are: (1) A 50 percent increase in the standard mileage rate for ground ambulance transports that originate in rural areas where the travel distance is between 1 and 17 miles; and (2) a 50 percent increase to both the base and mileage rate for rural air ambulance transports. The three temporary add-on payments at sections 1834(l)(12)(A) and (13)(A) of the Act and § 414.610 are: (1) A 3 percent increase to the base and mileage rate for ground ambulance transports that originate in rural areas; (2) a 2 percent increase to the base and mileage rate for ground ambulance transports that originate in urban areas; and (3) a 22.6 percent increase in the base rate for ground ambulance transports that originate in “super rural” areas. Section 50203(a)(1) and (2) of the Bipartisan Budget Act (BBA) of 2018 (Pub. L. 115-123, February 9, 2018) includes an extension of the temporary add-on payments through December 31, 2022.

Our regulations relating to coverage of and payment for ambulance services are set forth at 42 CFR part 410, subpart B, and 42 CFR part 414, subpart H.

2. Statutory Requirements for the Ground Ambulance Providers and Suppliers To Submit Cost and Other Information

Section 50203(b) of the BBA of 2018 added paragraph (17) to section 1834(l) of the Act, which requires ground ambulance providers of services and suppliers to submit cost and other information. Specifically, section 1834(l)(17)(A) of the Act requires the Secretary to develop a data collection system (which may include use of a cost survey) to collect cost, revenue, utilization, and other information determined appropriate by the Secretary for providers and suppliers of ground ambulance services. Section 1834(l)(17)(B)(i) of the Act requires the Secretary to specify the data collection system by December 31, 2019, and to identify the ground ambulance providers and suppliers that would be required to submit information under the data collection system. Section 1834(l)(17)(D) of the Act requires that beginning January 1, 2022, the Secretary apply a 10 percent payment reduction to payments made under section 1834(l) of the Act for the applicable period to a ground ambulance provider or supplier that is required to submit information under the data collection system and does not sufficiently submit such information. The term “applicable period” is defined under section 1834(l)(17)(D)(ii) of the Act to mean, for a ground ambulance provider or supplier, a year specified by the Secretary not more than 2 years after the end of the period for which the Secretary has made a determination that the ground ambulance provider or supplier has failed to sufficiently submit information under the data collection system. Section 1834(l)(17)(F) of the Act requires that no later than March 15, 2023 and as determined necessary by MedPAC, MedPAC must submit a report to Congress on the information submitted by the ground ambulance providers and suppliers through the data collection system on the adequacy of payments for ground ambulance services and geographic variations in the cost of furnishing such services.

In the CY 2020 PFS final rule (84 FR 62864 through 62897), we implemented section 1834(l)(17) of the Act and codified regulations governing data reporting by ground ambulance providers and suppliers (referred collectively as “ground ambulance organizations”) at §§ 414.601, 414.605, 414.610(c)(9), and 414.626. In the CY 2020 PFS final rule (84 FR 62863 through 629897), we finalized a data collection system that collects detailed information on ground ambulance provider and supplier characteristics including service areas, service volume, costs, and revenue through a data collection instrument, commonly referred to as the Medicare Ground Ambulance Data Collection Instrument, via a web-based system. This instrument includes the specific questions that will be asked of ground ambulance organizations about the total service volume, costs, and revenue associated with a provider or supplier's entire ground ambulance organization in such a way that MedPAC could use to calculate an average cost per ground ambulance transport. In the CY 2022 PFS proposed rule (86 FR 39295), we referred the reader to our CY 2020 PFS final rule (84 FR 62863 through 62897) for more specifics on the establishment of the Medicare Ground Ambulance Data Collection System.

3. Revisions to the Medicare Ground Ambulance Data Collection Instrument

As described in the CY 2020 PFS final rule (84 FR 62867), the Medicare Ground Ambulance Data Collection Instrument uses screening questions and skip patterns so that it is applicable to all ground ambulance organizations regardless of their size, scope of operations and services offered, and structure. We stated that we believe this approach is easier to navigate and less time consuming to complete than a cost report template or instrument and that it minimizes respondent burden by directing ground ambulance organizations to only view and respond to questions that apply to their specific type of organization, all while still collecting the information required in sections 1834(l)(17)(A) of the Act.

The CY 2020 PFS final rule provided a detailed overview of the elements of the data collection instrument, including questions to collect information on costs, revenues, utilization (which CMS defines for the purposes of the data collection instrument as service volume and service mix), as well as the characteristics of ground ambulance organizations. Table 38 includes a high-level summary of the 13 sections of the Medicare Ground Ambulance Data Collection Instrument.

We continue to receive ad hoc questions and feedback related to the Medicare Ground Ambulance Data Collection System and the Medicare Ground Ambulance Data Collection Instrument via three primary channels. First, we receive email and other communication from ground ambulance organizations via the CMS Ambulance Data Collection email inbox ( AmbulanceDataCollection@cms.hhs.gov ) and through other channels (for example, inquiries sent by organizations to Medicare Administrative Contractors (MACs) and then forwarded to CMS). These emails and other communications often include questions seeking clarification of instrument questions and their applicability to specific ground ambulance organization scenarios and context. We continue to update a Medicare Ground Ambulance Data Collection System Frequently Asked Questions (FAQ) document with answers to commonly asked questions. This document is available on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html. Through review of questions and feedback, we have identified some instances where a clarification to the instrument language itself will likely be more useful and less burdensome to respondents than having to respond with reference to the FAQ document. Second, our contractor also asked a small number of ground ambulance organizations to complete and provide feedback on a paper version of the Medicare Ground Ambulance Data Collection Instrument. This feedback was helpful to identify some additional opportunities for clarification. Third, we continue to identify opportunities to clarify instructions and correct a small number of typos as we work to develop the web-based, programmed version of the Medicare Ground Ambulance Data Collection Instrument.

Based on information that we received via the three sources described above, in the CY 2022 PFS proposed rule (86 FR 39296), we proposed the following changes and clarifications to the Medicare Ground Ambulance Data Collection Instrument. The changes and clarifications aim to reduce burden on respondents, improve data quality, or both.

We received public comments on our overall changes and clarifications to the Medicare Ground Ambulance Data Collection System. The following is a summary of the comments we received and our responses.

Comment: Some commenters noted their general support for our proposed modifications to the Medicare Ground Ambulance Data Collection System. A commenter stated that its member organizations are appreciative of CMS' previous solicitation of stakeholder feedback in the development of the survey tool. A commenter supported CMS efforts to provide and update the Frequently Asked Questions (FAQ) for the Medicare Ground Ambulance Data Collection document and ongoing efforts to create clarity around this system. However, this commenter stated that the process is still complex and cumbersome and may prevent compliance from ground ambulance organizations. A commenter supported the agency collecting information on ground ambulance cost, revenue, utilization and other information, however, the commenter reminded CMS that this data is for purposes of assessing the adequacy of Medicare payments for ground ambulance services and that any data collected that are not directly for this purpose would be improper and not add value to this purpose and intent.

Response: We appreciate the overall support for the changes and clarifications to the Medicare Ground Ambulance Data Collection System. The data collected through the Medicare Ground Ambulance Data Collection System will provide us with the necessary information needed to determine the adequacy of Medicare payment rates for ground ambulance services and geographic variations in the costs of furnishing such services, as well as the data MedPAC needs to prepare its statutorily-required report to Congress. We have attempted to limit the complexity and administrative burden of the Medicare Ground Ambulance Data Collection System as much as possible while ensuring that the collected data satisfy these statutory requirements.

a. Change to the Shared Services Questions in Section 2 (Organizational Characteristics)

One component of the data collection instrument is ground ambulance organization characteristics, which is information regarding the identity of the organization and respondent(s) service area, ownership, response time, and other characteristics (84 FR 62871 through 62875). One characteristic on which we sought information is organization type, including whether costs are shared with fire or police response or health care delivery operations (84 FR 62871). The instrument contains a number of questions that are relevant to the issue of shared costs.

Section 2, Question 7 asks “Which category best describes your ground ambulance operation?” and allows respondents to select one of the following options:

(a) Fire department-based; (b) Police or other public safety department-based (including all-hazards public safety organizations); (c) Government stand-alone emergency medical services (EMS) agency; (d) Hospital or other Medicare provider of services (such as skilled nursing facility); (e) Independent/proprietary organization primarily providing EMS services; (f) Independent/proprietary organization primarily providing non-emergency services; or (g) Other (please specify).

Section 2, Question 8 subsequently requests respondents answering a, b, or d to Question 7 to “confirm that your ground ambulance operation shares operational costs, such as building space or personnel, with these other operations.” Section 2, Question 9 asks “Does your ground ambulance operation share any operational costs, such as building space or personnel, with one of the following,” offering respondents the following options: (a) A fire department (not presented if the response to Section 2, Question 7 is “a”); (b) A police or other public safety department (not presented if the response to Section 2, Question 7 is “b”); (c) A hospital or other Medicare provider of services (such as a skilled nursing facility) (not presented if the response to Section 2, Question 7 is “d”); (d) Another healthcare organization (excluding hospitals, skilled nursing facilities, or other Medicare provider of services); (e) Another healthcare organization (excluding hospitals, skilled nursing facilities, or other Medicare provider of services); (f) Other (specify).

Collectively, the purpose of these three questions is to collect information on whether a portion of organizations' costs and revenues may be related to services or operations other than providing ground ambulance services. When this occurs, ground ambulance organizations are presented with additional instructions specifying how they should report costs and revenues associated with providing ground ambulance services rather than these other services or operations.

Based on feedback from ground ambulance organizations, we believe the specific wording of Section 2, Question 9 may be confusing. The question asks respondents whether they share operational costs with “one of the following,” implying respondents are limited to a single response, even though in some cases respondents may wish to select multiple responses. Furthermore, ground ambulance organizations may have difficulty interpreting the phrase “share any operational costs.” We received questions from some ground ambulance organizations asking whether renting space from a fire department qualified as a “shared operational cost.” The intent of the question was to ask about shared ownership and accounting, not renting facility space, sharing a physical space with a separate organization, or similar business and logistical arrangements.

In the CY PFS 2022 proposed rule (86 FR 39297), we proposed to revise Section 2, Question 9, to read, “Does your organization provide any of the following services or operations (select all that apply)?” retaining the current response options. This proposed change clarifies that the intent of Section 2, Question 9 is to collect information on services or operations provided by the sampled organization. We solicited comments on our proposal regarding reporting shared services.

We did not receive public comments on this proposal. Therefore, we are finalizing our proposal to revise Section 2, Question 9 to read, “Does your organization provide any of the following services or operations (select all that apply)?” retaining the current response options.

b. Change to Average Trip Time Question

We stated that the area served by ambulance organizations is an important characteristic and finalized a policy to collect information on the geographic area served by each ambulance organization in Section 3 of the data collection instrument (84 FR 62875). We included questions related to average trip time in primary and secondary service areas (questions 3 and 6 of Section 3) that were important to understand how geographic distance between the ground ambulance organization's facilities and patients affects costs (84 FR 62873).

Section 3 (Service Area), Questions 3 and 6 in the instrument ask ground ambulance organizations to report their “average trip time” using a set of categorical time ranges (for example, 30-60 minutes). These questions define average trip time as “the time the ambulance leaves the station to when that ambulance is available to take another call.” Based on feedback from ground ambulance organizations, we believe this definition may be confusing in cases where an ambulance responds to a call from a location other than the station (for example, while en route to another call, from a standby event, or from a hospital). Based on the literal wording of the question, it is not clear whether and if so, how ground ambulance organizations should report trip times for responses not originating at a station when responding to this question, leading to potentially missing or biased data.

In the CY 2022 PFS proposed rule (86 FR 39297), we proposed that this question be revised to ask for “average time on task” defined as “from the time an ambulance begins its response to the time when the ambulance is available to respond to another call (that is, time on task)” to better capture interfacility transfers and situations when an ambulance is already out and responds from a site other than the central station. We believe this change in the wording of the question will be clearer to respondents and will result in higher-quality reported data. We solicited comments on our proposal to change the definition of the average trip time.

We received public comments on our proposal to revise the average trip time question. The following is a summary of the comments we received and our responses.

Comment: A commenter indicated that time on task could be difficult to calculate for many organizations. The commenter provided an example where an ambulance transports a patient to the hospital and while returning to the station, the ambulance crew is assigned to another call. In this example, the crew may not have completed the patient care report for the first call, so accurately documenting time on task will prove to be difficult.

Response: We recognize that not all ground ambulance organization may track time on task as proposed. However, we heard from some ground ambulance organizations that the initial question wording requesting for “average trip time” would be problematic for other reasons. Specifically, our initial definition of “average trip time” only applied to situations where the ambulance left from a station. We believe that this change will provide ground ambulance organizations with greater flexibility to report information regarding the active time for their ambulance crews.

After consideration of public comments, we are finalizing our proposed revision to the average trip time question to request for “average time on task” defined as “from the time an ambulance begins its response to the time when the ambulance is available to respond to another call (that is, time on task)” to better capture interfacility transfers and situations when an ambulance is already out and responds from a site other than the central station.

c. Change to Secondary Service Area Instructions

In Section 3, Question 4 instructions define the secondary service area for an organization as “outside [its] primary service area, but one where [it] regularly provide[s] services through mutual or auto-aid arrangements. The instruction directs organizations to “not include areas where [they] provide services only under exceptional circumstances.” We were notified that some ground ambulance organizations are unsure how to report areas where they (a) did have mutual or auto-aid arrangements in place, which aligns with the definition of secondary service area in the instructions, but where (b) they responded to calls only very rarely, for example once a year, which could be considered an “exceptional circumstance” and ignored for reporting per the instruction.

Although the instructions leave the determination of whether an organization has a secondary service area at the discretion of the sampled ground ambulance organization, we believe that some organizations may benefit from a rule of thumb or example to help assess whether they should or should not report a ZIP code as being part of their secondary service area. In the CY 2022 PFS proposed rule (86 FR 39297), we proposed to add the following text to the Section 3, Question 4 instructions: “Some, but not all, ground ambulance organizations regularly provide service outside of their primary service area, for example through mutual or auto-aid agreements with nearby municipalities. If this applies to your organization, please report areas that are outside your primary service area but where you regularly provide services as part of your secondary service area. You do not need to report areas where you provide services very rarely or only under exceptional circumstances (for example, when participating in coordinated national or State responses to disasters or mass casualty events). Use your judgment as to whether your organization regularly serves a secondary service area. For example, you may choose to consider ZIP codes outside your primary service area but where you had 5 or more responses during the data collection period as part of your secondary service area if you believe these transports have a significant impact on your organization's costs.” Even with this added text, ground ambulance organizations could still determine whether they do or do not have a secondary service area for the purposes of reporting in the Medicare Ground Ambulance Data Collection System. We solicited comments on our proposal to revise the secondary service area instructions.

We received a public comment on our proposal to revise the secondary service area instructions. The following is a summary of the comment we received and our response.

Comment: A commenter supported our proposed change to the instructions in this section of the Medicare Ground Ambulance Data Collection Instrument. This commenter stated that many of their primary service areas do not follow strict county boundary lines or ZIP code designations so the commenter requested that CMS provide additional language to clarify how ambulance organizations designate primary service areas when the service area is based on the needs of the population.

Response: We appreciate the commenter's support for the proposed change. In the instrument, we define primary service area as the set of ZIP codes in which the ground ambulance organization is exclusively or primarily responsible for providing service at one or more levels (that is, Basic Life Support (BLS) or Advanced Life Support (ALS)) and in which it is highly likely that the majority of the organization's transport pickups occur. We appreciate the commenter's point that ground ambulance organizations' approaches to determining their primary service area may differ. While not all primary service areas will align cleanly with ZIP code boundaries, we chose to select a single, uniform, ZIP code-based approach for ground ambulance organizations to report service areas in order to minimize burden and ensure the collected information is useful for analysis as noted in the CY 2020 PFS final rule (84 FR 62874). We will continue to provide education and give opportunities to organizations to ask questions regarding the Medicare Ground Ambulance Data Collection Instrument, including the instructions for reporting service areas.

After consideration of public comments, we are finalizing our change to the secondary service area instructions as proposed.

d. Change to the 90th Percentile Emergency Response Time

Section 4 (Emergency Response Time), Question 3 asks ground ambulance organizations to report the 90th percentile emergency response time, which the question defines as the time separating the quickest 90 percent of responses from the longest 10 percent of responses. The intent of the question was to collect information to help CMS understand the difference between average response times and atypical “outlier” response time. In the CY 2020 PFS proposed rule (84 FR 40688), we proposed to include a question on average response time. As we noted in the CY 2020 PFS final rule (84 FR 62873), several commenters to the CY 2020 PFS proposed rule recommended requesting ground ambulance organizations to provide 90th percentile response time rather than or in addition to the average response time. The commenters believed 90th percentile response time is a more accurate indicator of ambulance services capabilities and quality. The commenters stated that the average time has too wide a range for error, since roughly half of responses are quicker/slower than average. The commenters further stated that using average response time also tends to flatten the data, which means the fastest and slowest organizations did not stand out as much. In response to these comments (84 FR 62874), we finalized an additional question to the instrument requesting ground ambulance organizations responding to emergency calls for service to report their 90th percentile response time.

Based on feedback from ground ambulance organizations that we have received on this question since we finalized the instrument, we believe most ground ambulance organizations will find it challenging to interpret this question and report the requested information. Several ground ambulance organizations have indicated that they would misinterpret this question, describing a shorter 90th percentile emergency response time compared to average response time, which, while mathematically possible, is not the intent as we were interested in characterizing outlier emergency responses with unusually long response times.

Thus, in the CY PFS 2022 proposed rule (86 FR 39298), we proposed to revise the question to state: “what is your best estimate of the share of responses (enter percentage) that take more than twice as long as the average response time as reported in the prior question?” We believe this will be an easier question for ground ambulance organizations to understand. The goal of this question is to help CMS understand whether the organization has some response times that are much longer than its typical response time. Although the question language will be different, the reported information will still help CMS understand the extent to which a small number of emergency responses may be substantially longer than the average response for each organization. We solicited comments on our proposal to revise the question to ask respondents to report the share of responses with more than twice the average response time instead of their 90th percentile emergency response time.

We did not receive public comments on this proposal, and therefore, we are finalizing our proposal to revise the question to state: “what is your best estimate of the share of responses (enter percentage) that take more than twice as long as the average response time as reported in the prior question?”.

e. Change To Reporting Paid Ambulance Transports

In the CY 2020 PFS final rule (84 FR 62876 through 62877), we established a series of questions in the data collection instrument to collect data on the volume and the mix of services, including paid ground ambulance transports, that is, ground ambulance transports where the ambulance provider or supplier was paid for a billed amount in part or in full. The general instructions for Section 5 (Ground Ambulance Service Volume) note: “A paid ground ambulance transport refers to a ground ambulance transport for which your organization has been paid in full or in part by a payer and/or patient only. Depending on how your organization collects data, you may report (a) the number of transports furnished during the data collection period that were also paid during the data collection period, or (b) the number of transports paid during the data collection period even if some transports occurred prior to the data collection period.” Furthermore, Section 5, Question 7 asks respondents, “what was the total number of paid ground ambulance transports in calendar year 202X [or fill fiscal year as appropriate], across all payer types and regardless of the level of service or geography? (Enter number).”

Based on questions and feedback from ground ambulance organizations that we have received since we finalized the instrument, we believe respondents may have different interpretations of this question, which could lead to inconsistent reported data, including the reported total ground ambulance transports during the data collection period (Section 5, Question 6). The intent of this question was to capture the reported number of ground ambulance transports during the data collection period, provided such transports were paid by the time the information was prepared for reporting to CMS. We did not intend for organizations to report the total number of ground ambulance transports for which they received the payment itself during the data collection period.

We recognize that there is a temporal disconnect between when services are provided and when initial and final payment may be received. In order to standardize the information that is reported by all ground ambulance organizations, and to align the reported information on the number of responses and transports during the data collection period with information reported on the number of paid transports, we proposed in the CY 2022 PFS proposed rule (86 FR 39298) to clarify Section 5, Question 7 to ask “Of the ground ambulance transports your organization provided in calendar year 202X [or fill fiscal year as appropriate], how many were paid (either in part or in full) across all payer types and regardless of the level of service or geography by the time you are reporting data to CMS?”

We recognize that the “runout period,” that is, the time from when services are provided to the time when data is being analyzed, will be short and variable across organizations, particularly for transports towards the end of organizations' data collection periods. Despite this limitation, we believe this approach is preferable to alternatives where (a) respondents have variable interpretations of Section 5, Question 7 and (b) where respondents are asked to report the number of transports for which payment was received during the data collection period, even if the transports for which payment was received happened prior to the data collection period. In the latter case, the number of paid ground ambulance transports could not be directly compared to the number of total ground ambulance transports reported in Section 5, Question 6.

We also proposed to revise the general instructions in Section 5 to delete the following text as it will no longer be relevant: “Depending on how your organization collects data, you may report (a) the number of transports furnished during the data collection period that were also paid during the data collection period, or (b) the number of transports paid during the data collection period even if some transports occurred prior to the data collection period”

We solicited comments on our proposal to revise reporting paid ground ambulance transports.

We received a public comment on our proposal to revise reporting paid ground ambulance transports. The following is a summary of the comment we received and our response.

Comment: A commenter supported our proposed change in the instructions for reporting paid ambulance transports but requested clarification on whether the “transports provided” during the period refers to the date of service or another period.

Response: Our proposal specifies that the transports in question must have been furnished (that is, with dates of service) during the data collection period and paid at least through the end of the data collection period and potentially through the date on which the ground ambulance organization reports the required information via the Medicare Ground Ambulance Data Collection System.

After consideration of public comments, we are finalizing our revised instructions in Section 5 of the instrument as proposed.

f. Change to Questions Related to Labor Hours

Section 7 (Labor Costs) of the data collection instrument asks respondents to report compensation and hours worked for ground ambulance staff. The instrument currently requests respondents to report, separately for each staff category: Total compensation, total hours worked inclusive of all responsibilities, and total hours worked unrelated to either ground ambulance or public safety responsibilities. The rationale for requesting total compensation and hours, even if these include compensation and hours for activities other than those related to ground ambulance services, was to preserve the ability to compare compensation between organizations and to external benchmarks such as Bureau of Labor Statistics data. The last item, total hours worked unrelated to either ground ambulance or public safety responsibilities, can be subtracted from overall total hours worked related to ground ambulance and public safety responsibilities combined, and further allocation could separate ground ambulance time and compensation from public safety time and compensation for fire and other public safety-based ground ambulance organizations.

Based on questions received by ground ambulance organizations since we finalized the instrument and feedback through testing on Section 7 questions, we learned that some ground ambulance organizations may misinterpret the Section 7 questions. Specifically, we believe some organizations may assume the question is requesting for hours “related” rather than “unrelated” to ground ambulance or public safety responsibilities given the focus of the data collection effort, despite instructions to the contrary. Relatedly, we were notified that some organizations were confused that the Section 7 questions did not provide an opportunity to report total hours worked related to ground ambulance responsibilities, which they assumed was an unintentional omission from the instrument.

In the CY 2022 PFS proposed rule (86 FR 39299), we proposed to change the instructions in Section 7 to request respondents to report hours worked on different activities in such a way that the sum of hours worked across different activities equals total hours worked annually. We believe this approach will be easier for respondents to understand and estimate, resulting in less burden for respondents and higher quality reported information.

For stand-alone ground ambulance organizations, we proposed to request respondents to report each of the following per staff category: (a.) Total annual compensation; (b.) Total hours worked annually; (c.) Total hours worked annually related to ground ambulance operations; and (d.) Total hours worked annually related to all other responsibilities. With this change, the instructions in Section 7 will note that “total hours worked annually related to ground ambulance operations” plus “total hours worked annually related to all other responsibilities” should equal “total hours worked annually.”

For fire department or other public safety-based ground ambulance organizations, we proposed to request respondents to report each of the following per staff category: (a.) Total annual compensation; (b.) Total hours worked annually; (c.) Total hours worked annually related to ground ambulance operations; (d.) Total hours worked annually related to fire, police, or other public safety operations; and (e.) Total hours worked annually related to all other responsibilities The Section 7 instructions will note that the sum of total hours worked related to ground ambulance operations; fire, police, or other public safety operations; and all other responsibilities should equal total hours worked annually. We solicited comments on our proposal to revise the labor hours.

We did not receive public comments on this proposal, and therefore, we are finalizing the revised questions and instructions in Section 7 of the Medicare Ground Ambulance Data Collection Instrument as proposed.

g. Change to Instructions Related to Facility, Vehicle, and Equipment Certain Expenses

In the CY 2020 PFS final rule (84 FR 62882 through 62886), we finalized policies to collect cost information related to facilities, vehicles, and other equipment, consumables and supplies. The purpose of Sections 8 (Facilities Costs), 9 (Vehicles Costs), and 10 (Equipment, Consumable, and Supply Costs) in the instrument is to collect total expenses during the data collection period related to facilities, vehicles, and equipment and supplies, respectively. Based on feedback from ground ambulance organizations that we have received since we finalized the instrument, we are concerned that some respondents, particularly those that do not currently depreciate facilities, vehicles, and/or equipment for accounting purposes, may not be sure where to report some components of total expenses in these categories. Although we believe most ground ambulance organizations depreciate facilities, vehicles, and capital medical equipment, we were notified that some ground ambulance organizations do not depreciate these items in their regular accounting practices. Upon a review of the instrument, we found that the instructions and opportunities to report costs for organizations using a cash basis for accounting were inconsistent across Sections 8, 9, and 10 of the instrument. In some instances, ground ambulance organizations are requested to report annual depreciation expenses only, without a clear question related to expenses should the organization not regularly depreciate a certain category of asset. In other cases, there are questions requesting respondents to report annual expenses other than annual depreciation expenses, but the instructions provide incomplete guidance on what expenses are in scope.

We considered several factors when developing our proposals to address these inconsistencies. Overall, the purpose of the questions in Sections 8, 9, and 10 is to collect comprehensive information on total expenses related to facilities, vehicles, and equipment and supplies during the organizations' data collection periods. We believe the primary purpose of changes and clarifications to questions in this section should be to ensure all expenses are reported from both organizations that do and do not depreciate facilities, vehicles, and equipment for accounting purposes. We understand that allowing organizations flexibility to report cost information using their current accounting approach will reduce burden. The instructions to the instrument currently state: “In general, you will be able to report information collected under your organization's current accounting practices. We understand that some ground ambulance organizations use accrual-basis accounting while others use cash-basis accounting.” We continue to believe this is the correct approach, and that alternatives will impose considerable additional burden on ground ambulance organizations.

We considered several broad alternatives on how to report facility, vehicle, and equipment expenses in Sections 8, 9, and 10. One option is to require all organizations to calculate and report depreciation for facilities, vehicles, and equipment using a standardized approach. Although this will increase burden for respondents, potentially significantly for organizations that do not currently calculate depreciation, it will result in the most standardized information being submitted to CMS and the fewest changes to the layout of the instrument. Another option will be to retain the current structure of the instrument but provide more detailed instructions on how organizations that do and do not depreciate facilities, vehicles, and equipment should report information. A third option is to add new screening questions to the instrument asking individually whether the organization depreciates facilities, vehicles, and equipment. The responses to these screening questions could be used to tailor the instructions, table headings, and question text later in the instrument to avoid confusion.

After considering these options, in the CY PFS 2022 proposed rule (86 FR 39300), we proposed to add screening questions to the instrument asking individually whether the organization depreciates facilities, vehicles, and equipment. We believe this will not substantively affect response burden for organizations and may in some cases reduce burden by clarifying what and how information on expenses must be reported in Sections 8, 9, and 10.

There are two specific places in Sections 8 and 9 in the instrument where we believe the instructions on how to report annual expenses may not be clear. First, Section 8.2, Question 1 asks respondents to report annual expenses for each facility that they report as being related to their ground ambulance operation in Section 8.1, Question 3. Section 8.2, Question 1 is a table with columns for “annual lease or rental costs,” “annual depreciation expenses,” and “annual mortgage, bond interest, and other costs of ownership.” Although the instructions note “do not report depreciation if your organization does not capitalize facilities for accounting purposes,” it is not immediately clear where organizations that do not capitalize facilities should report expenses if the facility is owned outright (for example, in cases where a facility is acquired during the data collection period).

Second, Section 9.1, Question 5 and Section 9.2, Question 5 are tables where respondents report costs associated with individual vehicles. Both tables currently ask, “What was the annual depreciation expense for this vehicle?” Although the instructions note “for owned vehicles, do not report depreciation if your organization accounts for vehicles on a cash basis,” the instructions do not indicate where expenses for vehicles purchased during the data collection period should be reported by organizations that do not capitalize vehicles for accounting purposes.

We considered several options to clarify the instructions in Sections 8 and 9 specifically. One option is to preserve current table structures and item numbers in both sections while providing additional written instructions. We believe that although this will minimize disruption to the layout of the instrument, it will also do the least to address potential confusion around these questions. Another option is to add new columns in Sections 8 and 9 for facilities and vehicles purchased outright during the data collection period for organizations that do not depreciate these expenses. We proposed to add an additional column for clarity, but noted that if the screening questions are added as described above not all columns will appear for all respondents, particularly given our proposal to add screening questions related to reporting expenses in Sections 8 and 9.

We also believe there are specific instructions in Section 10 that may not be clear. Section 10.1, Question 1 and Section 10.2, Question 1 request respondents to report “annual depreciation expenses” for medical and non-medical capital equipment, respectively. The Section 10 instructions note “do not report depreciation if your organization uses a cash basis for accounting” and that “for capital expenditures, medical and non-medical equipment, most organizations will amortize costs over the life of the good” but do not specify that organizations that do not depreciate medical or non-medical equipment should skip these questions and report expenses for equipment acquired during the data collection period in Section 10.1, Question 3, and Section 10.2, Question 3 instead.

We considered several options to clarify the instructions in Section 10 specifically. One option is to clarify in the instructions that organizations that do not depreciate medical or non-medical equipment should skip Section 10.1, Question 1 and Section 10.2, Question 1 and report expenses for equipment acquired during the data collection period in Section 10.1, Question 3, and Section 10.2, Question 3 instead. Although this will involve the least change to the instrument, we will lose the ability to distinguish between expenses for the kinds of equipment that most ground ambulance organizations depreciate for organizations reporting in this way. Another option is to change the instructions for Section 10.1, Question 1 and Section 10.2, Question 1 to refer to broad types of equipment that are typically considered capital medical and non-medical equipment, and then request respondents to report relevant annual expenses for qualifying equipment in these questions, regardless of whether the expenses are annual depreciation expenses or purchase costs (for organizations not calculating depreciation). We proposed to request organizations that do not depreciate equipment to report expenses associated with purchasing equipment in Section 10.1, Question 1 and Section 10.2, Question 1. This option will preserve our and MedPAC's ability to separately analyze these expenses. We solicited comment on these alternatives to address instructions related to facility, vehicle, and equipment expenses.

We did not receive public comments on our proposed changes to the instructions related to facility, vehicle, and equipment certain expenses in Sections 8, 9, and 10 of the instrument, and therefore, we are finalizing these changes as proposed.

h. Changes to Questions Related to National Provider Identifier's (NPIs) Under Broader Parent Organizations

Some ground ambulance NPIs are part of broader parent organization companies that own and/or operate multiple ground ambulance NPIs. Section 2, Question 2 asks, “Did your organization use more than one NPI to bill Medicare for ground ambulance services during the data collection period?” Based on feedback from ground ambulance organizations that we have received since we finalized the instrument, we were notified that the use of “organization” in this question is potentially confusing because it is not clear whether the term applies to the organization sampled to report information to the Medicare Ground Ambulance Data Collection System (which, by definition, is an individual NPI) or to a broader “parent organization.” In the CY 2022 PFS proposed rule (86 FR 39300), we proposed clarifying the question to ask “Is this NPI part of a larger `parent organization' that owns or operates multiple NPIs billing for ground ambulance services?” We also proposed to clarify the wording of the follow-up instruction for organizations that answer “yes” to this question. The follow-up instruction currently reads, “You are being asked to complete this instrument and enter data only for the following NPI: [pre-populate number].” Because very large parent organizations may have several NPIs sampled and a single or small number of staff collecting and reporting data for multiple NPIs, we proposed to revise the text to read, “You are being asked to complete this instrument and enter data separately for each sampled NPI. The following questions refer only to the following NPI: [pre-populate number].”

The instrument requests these organizations to report an allocated share of parent organization expenses at the end of most sections of the instrument. For example, Question 3 in Section 7.2 on paid administration, facilities, and medical director staff costs asks, “Please report the allocated portion of administrative labor costs incurred at the level of the parent organization/central office of this NPI based on your organization's approach for allocating costs to specific NPIs. (Enter dollar amount.)”

There are four sections in the instrument that lack similar questions: Section 7.1 (Paid EMT/Response Staff Compensation and Hours Worked), Section 7.3 (Volunteer Labor), Section 9.1 (Ground Ambulance Vehicle Costs), and Section 10.1 (Medical Equipment/Supplies). Without these questions, total reported costs may be biased downward for NPIs that are part of broader parent organizations. We proposed to add questions like the one reproduced above to the end of these four sections for completeness. The text will be the same as the above except for replacing “EMT/response staff labor costs,” “costs associated with volunteer labor,” “ground ambulance vehicle costs,” and “medical equipment and supply costs” for “administrative labor costs” in the respective sections.

Relatedly, for completeness, we proposed to clarify in the instructions for Section 12 (Total Cost), Question 1, that organizations part of broader parent organizations should include an allocated portion of parent organization (or “central office”) costs when reporting their total costs in this question. We solicited comments on our proposal to address questions related to NPIs under broader parent organizations.

We did not receive public comments on our proposed changes to questions related to NPIs under broader parent organizations, and therefore, we are finalizing these changes as proposed.

i. Other Clarifications to the Medicare Ground Ambulance Data Collection Instrument

In the CY 2022 PFS proposed rule, (86 FR 39301), we proposed the following 11 additional clarifications and updates to the instrument.

i. Replacing all first-person language (for example, “we”) with third-person language (for example, “CMS”) throughout the instrument for editorial consistency.

ii. Section 2, Question 17: There is a typo where this question referred to itself rather than, as is implied by the ordering and framing of the question, the prior item. The question currently asks, “other than what was reported in item 17 . . . ,” when it should read, “other than what was reported in item 16 . . .”.

iii. Section 3, Question 2: This question currently asks, “are you the primary emergency ambulance provider . . . ,” using “provider” more colloquially than elsewhere in the instrument where the same word is sometimes used to differentiate between Medicare providers of service and Medicare suppliers. We proposed to reword this question to read, “are you the primary emergency ambulance organization . . .”

iv. Section 4, Questions 1 and 2 Clarification: The question currently defines response time as “the time from when the call comes in to when the ambulance or another EMS response vehicle arrives on the scene.” We proposed clarifying this definition to say “the time from when the call comes in to dispatch to when the ambulance or another EMS response vehicle arrives on the scene.” Relatedly, for Section 4, Question 2, we proposed adding a second answer option for this question that reads, “From the time our organization receives a call from dispatch to the time the ambulance or other EMS vehicle is at the scene.” Respondents would still have the option to write-in their own response in Section 4, Question 2, if neither of the pre-programmed options apply to their organization.

v. Section 5, Question 3a. Clarification: This question requests respondents to report the percentage of ground ambulance responses that involve a non-transporting agency and the percentage of ground ambulance transports in which the non-transporting agency continues to provide medical care in the ambulance during a transport. Based on feedback from ground ambulance organizations that we have received since we finalized the instrument, we believe many organizations do not currently track this data and will not easily be able to begin tracking it. We proposed clarifying this question to note that estimated percentages are acceptable, as they are in response to certain other questions in the instrument (where noted). We specifically proposed to edit Section 5 question 3a. to read: “What is your best estimate of the percentage of total ground ambulance responses that involved a non-transporting agency? (Enter percentage)”

vi. Section 7.1 Instruction Clarification: We proposed clarifying “You will report on these staff in a different section” to “You will report on these staff in a later section” to make it clear that the opportunity to report on these staff follows the current instruction.

vii. Sections 7.1 and 7.2 Instruction Clarification: We proposed to add “employer payroll taxes” as an additional example of a component contributing to total compensation, without altering any of the definitions or other instructions in these sections.

viii. Section 7.2, Question 3 Clarification: We proposed adding a clarification warning for respondents not to consider labor that was reported elsewhere when responding to this question.

ix. Section 7.3, Question 4 Clarification: We proposed adding a clarification that medical director volunteer hours do not contribute to this response and a reminder that they are reported separately below (Section 7.3, Question 5).

x. Section 10 Instructions: We proposed to correct a typo in the instructions where the instrument describes “operation expenses” rather than “operating expenses” as intended.

xi. Section 13, Question 3 Clarification: Based on the instructions for this question, organizations may report revenue from specific payers that include patient cost-sharing amounts. To ensure patient cost-sharing is not reported twice, we recommended clarifying the item in the chart that currently reads, “Patient self-pay (amount patients pay for deductibles, coinsurance, etc.) to read, “Patient self-pay (cash payment and the amount patients paid for deductibles, coinsurance, and other cost-sharing only if not reported in a row above.)” We solicited comments on these clarifications and updates to the instrument.

We received public comments on these clarifications and updates to the instrument. The following is a summary of the comments we received and our responses.

Comment: Some commenters supported our proposed clarification to Section 5, Question 3a regarding reporting the percentage of ground ambulance responses that involve a non-transporting agency. A commenter expressed their appreciation for a policy that can promote simplicity and efficiency of data collection and reporting. A commenter supported the clarification and noted that information on joint responses is difficult to track and collect.

Response: We appreciate the commenters' support.

Comment: A commenter supported our proposed clarification for Section 5, Question 3a, but recommended that CMS maintain strict expectations for respondents to provide accurate estimates in this response, noting a common scenario in which a ground ambulance provider or supplier utilizes an ALS provider or supplier from a non-transport agency to continue caring for the patient during transportation. According to the commenter, this common scenario forces the non-transport agency to assume the labor and equipment costs associated with the ALS provider or supplier while an ALS level 1 reimbursement is paid to the ground ambulance provider or supplier that provided the medically necessary ground ambulance transport. The commenter stated that this information is crucial in demonstrating the need for CMS to provide reimbursement to all agencies involved in caring for Medicare beneficiaries. The commenter suggested that CMS make these responses publicly accessible in addition to all other data reported in a timely fashion.

Response: While we appreciate the importance of joint responses in determining expenses for all contributing ground ambulance organizations and other services, the Medicare Ground Ambulance Data Collection Instrument currently does not collect detailed information on the number of services with joint responses of different types. Instead, our approach is to question broadly whether the ground ambulance organization collecting and reporting data participates in joint responses and, if so, which general types of labor and other inputs are involved.

Comment: A commenter supported our proposed clarifications to Section 13, Question 3 on reporting revenue, stating that this is a helpful clarification for reporting organizations to distinguish between patient self-pay types.

Response: We appreciate the commenter's support.

After consideration of public comments, we are finalizing all the clarifications as proposed.

4. Collection and Reporting of Information Under the Data Collection System

In the CY 2020 PFS final rule (84 FR 62893), we finalized our sampling proposals to implement a 25 percent stratified sample in each of the first 4 years of data collection and codified the representative sample approach at § 414.626(c). CMS' sampling approach is designed to result in representative samples of ground ambulance organizations in terms of key characteristics including provider versus supplier status, service area population density, volume of transports, and ownership category. The selected ground ambulance organizations for year 1 and year 2 have already been listed on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html.

In the CY 2020 PFS final rule (84 FR 62894), we finalized the data collection period as a continuous 12-month period of time, which is either the calendar year aligning with the data collection year, or the organization's annual accounting period that begins during the data collection year when an organization has an annual accounting period (such as a fiscal year) that differs from the calendar year and the organization elects to collect and report data over this period rather than the calendar year. We also finalized our proposal to require organizations to report data during a 5-month data reporting period starting immediately following the end of the data collection period. The data collection and reporting requirements for selected ground ambulance organizations were codified at § 414.626(b).

As part of the Medicare Ground Ambulance Data Collection System, sampled ground ambulance organizations will report information to CMS using a web-based version of a data collection instrument that is posted on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html. We are currently developing the Medicare Ground Ambulance Data Collection System and stated in the CY 2020 PFS final rule (84 FR 62867) that the web-based survey would be available before the start of the first data reporting period to allow time for users to register, receive their secure login information, and receive training from CMS on how to use the system.

Due to the COVID-19 public health emergency (PHE), we issued two blanket waivers (May 5, 2020 and November 25, 2020) to delay the data collection and data reporting periods under the Medicare Ground Ambulance Data Collection System. The first waiver delayed the data collection period and data reporting period for selected year 1 ground ambulance organizations and the second waiver delayed the data collection periods and data reporting periods for selected year 1 and year 2 ground ambulance organizations.

This revised modification has been issued on page 32 in the following document: https://www.cms.gov/files/document/summary-covid-19-emergency-declaration-waivers.pdf. Specifically, we modified the data collection period and data reporting period, as defined at § 414.626(a), for ground ambulance organizations (as defined at § 414.605) that were selected by CMS under § 414.626(c) to collect data beginning between January 1, 2020 and December 31, 2020 (year 1) and for ground ambulance organizations that were selected to collect data beginning between January 1, 2021 and December 31, 2021 (year 2) for purposes of complying with the data reporting requirements described at § 414.626.

Under this modification, these ground ambulance organizations will select a new continuous 12-month data collection period (organizations may choose a collection period aligning with the calendar year or the organization's fiscal year) that begins between January 1, 2022 and December 31, 2022, to collect data necessary to complete the Medicare Ground Ambulance Data Collection Instrument during their selected data collection period, and submit a completed Medicare Ground Ambulance Data Collection Instrument during the data reporting period that corresponds to their selected data collection period. We modified this data collection and reporting period to increase flexibilities for ground ambulance organizations that would otherwise be required to collect data in 2020-2021 so that they can focus on their operations and patient care during the COVID-19 PHE. We stated, when the blanket waiver was granted, in the COVID-19 Frequently Asked Questions (FAQs) on Medicare Fee-for-Service (FFS) Billing document (page 63 of this document: https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf ) that CMS will not allow an option to continue with their current data collection period because the data collected in 2020 and 2021 during the PHE may not be reflective of typical costs and revenues associated with providing ground ambulance services.

As a result of the COVID-19 delay, ground ambulance organizations selected in year 1, 2, and 3 will have the same data collection periods beginning between January 1, 2022 and December 31, 2022 and will have the same data reporting periods beginning between January 1, 2023 and December 31, 2023. In the CY 2020 PFS final rule (84 FR 62893), we finalized our sampling proposals to implement a 25 percent stratified sample in each of the 4 years of data collection. Prior to the delay, we anticipated approximately equal shares of ground ambulance organizations will collect and report data in 4 consecutive periods. However, as a result of the delays, there will now be approximately 75 percent of the ground ambulance organizations that will have data collection periods that start in the same year and subsequently will have data reporting periods starting in the same year. Later, a final 25 percent sample of ground ambulance organizations in year 4 will collect and report data.

When finalizing our policies in regard to ground ambulance collection and reporting of data, we did not intend to have approximately 75 percent of ground ambulance organizations collect and report data at the same time. To provide MedPAC with the data needed for analysis, acknowledging that due to the COVID-19 delay there will be a delay in CMS providing that data, we believe that we should revise the data collection period and data reporting period for selected ground ambulance organizations in year 3.

Accordingly, in the CY 2022 PFS proposed rule (86 FR 39302), we proposed to revise the data collection period beginning between January 1, 2022 and December 31, 2022 and data reporting period beginning between January 1, 2023 and December 31, 2023 for selected ground ambulance organizations in year 3. Under this proposal, there will be a new data collection period beginning between January 1, 2023 and December 31, 2023 and a new reporting period beginning between January 1, 2024 and December 31, 2024 for selected ground ambulance organizations in year 3. With this proposal, we plan to do the sample in 2022 for selected ground ambulance organizations in year 3 rather than the current plan in 2021. The main advantage of delaying the year 3 sample is that the selected organizations would be more representative of the organizations actually collecting beginning in 2023 and reporting beginning in 2024. The longer the delay between sampling and the data collection and data reporting, the more changes in the industry (for example, NPIs ceasing ground ambulance or all operations). This timeline will align with the data collection period and data reporting period requirements for selected ground ambulance organizations in year 4. As a result, there will be approximately 50 percent of ground ambulance organizations selected in year 1 and 2 with data reporting periods beginning between January 1, 2023 and December 31, 2023 and approximately 50 percent of ground ambulance organizations selected in year 3 and 4 with data reporting periods beginning between January 1, 2024 and December 31, 2024.

Due to the delay caused by the PHE for COVID-19, we examined the possibility of extending the data reporting to encompass 4 years as planned instead of 2 years. We concluded that it will not be feasible to extend the data reporting period over 4 years. Extending the data reporting to encompass 4 years will further delay MedPAC receiving the data required to analyze for its report to Congress, which is required to be submitted by March 15, 2023. The sampling for year 1 and year 2 selected ground ambulance organizations has already been completed and the lists for the selected ground ambulance organizations in year 1 and year 2 are posted on the CMS website.

With this proposal, more data will be collected in 2023 as there will hopefully be more distance from the peak of the COVID-19 pandemic. Thus, it is our hope that 2023 will be even more reflective of a typical year of costs for ground ambulance organizations than 2022. As the course of the pandemic continues to evolve, we believe that our proposal provides a potential for more even distribution of data over 2 years for comparison by MedPAC. We solicited comments on our proposal to revise the data collection period and data reporting period for ground ambulance organizations selected in year 3.

We received public comments on our proposal to revise the data collection period and data reporting period for ground ambulance organizations selected in year 3. The following is a summary of the comments we received and our responses.

Comment: Several commenters supported our proposed changes to the data collection period and data reporting periods for selected ground ambulance organizations in year 3. A commenter stated that the proposal to align the timeline for selected ground ambulance organizations in Years 1 and 2, and Years 3 and 4 is an appropriate response to the disruption that the pandemic caused with respect to the ground ambulance data collection and recognizes CMS' efforts to prevent further delays. This commenter stated that the proposed adjusted timeframe will provide their organization enough time to build up the appropriate collection tools and processes, and will allow for a smooth transition for submitting the required data.

A commenter supported the data collection timeline as proposed and stated that it is important that assessments of the adequacy of ground ambulance payments not be based on data that reflects anomalous, temporary trends in utilization and costs caused by a global pandemic. The commenter stated that to the extent that these anomalous trends might still be occurring in 2022, the commenter concurs with CMS' caution about using 2022 data because it could bias analyses of the geographic variation in costs and the adequacy of Medicare's ground ambulance payments.

A commenter supported the proposal and stated that while their organization appreciated the need to delay the data collection process due to the PHE for COVID-19, the commenter is concerned that further delays will prevent MedPAC from having the data needed to produce their report to Congress.

A commenter supported the delays to the ground ambulance data collection because their members were on the frontlines of responding to the pandemic, however, the commenter does not support collapsing the Congressionally mandated 4 years of data collection into 2 years. The commenter stated that the proposed timeline is problematic given that CMS did not beta test the Medicare Ground Ambulance Data Collection System and according to the commenter, the first year of the data collection is likely to be fraught with confusion and errors, despite CMS and its contractor's best efforts to address as many questions as possible before the data collection is fielded. This commenter recommended a 4-year timeline: Data collection period in 2022 and data reporting period in 2023 for selected ground ambulance organizations already selected in year 1; data collection period in 2023 and data reporting period in 2024 for selected ground ambulance organizations already selected in year 2, data collection period in 2024 and data reporting period in 2025 for selected ground ambulance organizations in year 3 and data collection period in 2025 and data reporting period in 2026 for selected ground ambulance organizations in year 4. The commenter suggested a 12-month data reporting period rather than a 5-month data reporting period that begins the day after the last day of the ground ambulance organization's data collection period. This commenter noted that MedPAC may not have time to complete their analysis and report on either the proposed timeline or the commenter's recommended timeline. However, the commenter stated that its approach would allow for timing that mirrors what the authorizing statute requires and it also would meet CMS stated goal that the data collected be “more reflective of a typical year of costs for ground ambulance organizations” than data collected during the turbulent of the pandemic, which continues to rage during this fourth surge with the Delta variant.

Response: We appreciate the feedback on our proposed changes to the data collection period and data reporting period for selected ground ambulance organizations in year 3. As several commenters noted, we are keenly aware of the tension between the need to begin collecting data and the challenges and threats to generalizability of collecting data through the ongoing pandemic and PHE. Our proposal attempts to strike a balance between these two considerations. Under our proposal, information will be collected from fewer organizations during data collection periods starting in 2022, and from more organizations during data collection periods starting in 2023. Delaying data collection and reporting for more ground ambulance organizations, or stretching the data collection period and data reporting period over a 4-year period, will result in a longer delay before information is collected from all ground ambulance organizations. We are therefore not accepting the commenter's recommended 4-year timeline. We plan to conduct beta testing on the Medicare Ground Ambulance Data Collection System prior to data reporting in the system.

After consideration of public comments, we are finalizing our proposal for a new data collection period beginning between January 1, 2023 and December 31, 2023 and a new data reporting period beginning between January 1, 2024 and December 31, 2024 for selected ground ambulance organizations in year 3. With this proposal, we plan to do the sample in 2022 for selected ground ambulance organizations in year 3 rather than the current plan in 2021.

5. Change to the Notification Process for Selected Ground Ambulance Organizations Required to Report

In the CY 2020 PFS final rule, we codified our notification process at § 414.626(c)(3) and (b)(1). We stated at § 414.626(c)(3) that CMS will notify an eligible ground ambulance organization that it has been selected to report data for a year at least 30 days prior to the beginning of the calendar year in which the ground ambulance organization must begin to collect data by posting a list of selected organizations on the CMS web page and providing written notification to each selected ground ambulance organization via email or U.S. mail.

The Medicare Administrative Contractor (MAC) is responsible for providing written notifications to the selected ground ambulance organizations in their service area. We codified their role at § 414.626(b)(1) which states that within 30 days of the date we notify a ground ambulance organization that it has been selected to report data under this section, the ground ambulance must select a data collection period that corresponds with its annual accounting period and provide the start date of that data collection period to the ground ambulance organization's Medicare Administrative Contractor.

In the CY 2022 PFS proposed rule (86 FR 39303), we proposed to make a technical revision to § 414.626(b)(1) to state that the selected ground ambulance organization provide the start date of the data collection period to CMS or its contractor instead of the Medicare Administrator Contractor. This change will provide CMS with flexibility to have the MACs or other contracted entities provide written notifications and collect information from the selected ground ambulance organizations. If we find the response rate is low, having the flexibility to contract with other entities that could employ additional outreach resources may be useful. This revision will not preclude CMS from including the MACs in the notification process. We also proposed to correct a typographical error at § 414.626(b)(1), which currently states “a ground ambulance must select a data collection period” to read “a ground ambulance organization must select a data collection period.” We solicited comments on our technical revisions to the citation at § 414.626(b)(1).

We did not receive public comments on this proposal, and therefore, we are finalizing it as proposed.

6. Payment Reduction for Failure to Report

Section 1834(l)(17)(D)(i) of the Act requires that beginning January 1, 2022, subject to clause (ii), the Secretary reduce the payments made to a ground ambulance organizations under section 1834(l)(17) of the Act for the applicable period by 10 percent if the ground ambulance organization is required to submit data under the data collection system with respect to a data collection period under the data collection period and does not sufficiently submit such data.

We stated in the CY 2020 PFS final rule (84 FR 62895) that we would make a determination that the ground ambulance organization is subject to the 10 percent payment reduction no later than the date that is 3 months following the date that the ground ambulance organization's data reporting period ends. In this final rule, we provided examples of when the determination will be made based on calendar year and fiscal year data collection period beginning in 2020. Due to the delay caused by the PHE for COVID-19, we did not receive data collected in 2020. We will begin to follow this timeline to make a determination that the ground ambulance organization is subject to the 10 percent payment reduction when data collected in 2022 is required to be reported in 2023 for selected ground ambulance organizations in year 1 and year 2.

For example, if a selected ground ambulance organization's data collection period is based on a calendar year, that is, January 1, 2022 through December 31, 2022, we will allow a ground ambulance organization 5 months to report the data collected during the data collection period. For this example, the data reporting period for this organization is January 1, 2023 to May 31, 2023. We will make a determination that the ground ambulance organization is subject to the 10 percent payment reduction no later than August 31, 2023. With this timeframe, we will apply the 10 percent reduction in payments, if applicable (no hardship exemption or informal review is granted), for ambulance services provided between January 1, 2024 and December 31, 2024.

As another example, if a selected ground ambulance organization's data collection period is based on a fiscal year, that is, October 1, 2022 through September 30, 2023, we will allow a ground ambulance organization 5 months to report the data collected during the data collection period. For this example, the data reporting period for this organization is October 1, 2023 to February 28, 2024, we will make a determination that the ground ambulance organization is subject to the 10 percent payment reduction no later than June 1, 2024. With this timeframe, we will apply the 10 percent reduction in payments, if applicable (no hardship exemption or informal review is granted), for ambulance services provided between January 1, 2025 and December 31, 2025.

Comment: A commenter supported aligning the timelines for the application of penalties for not reporting data with our new timelines for data collection and reporting.

Response: We appreciate the commenter's support.

7. Public Availability of Data

We stated in the CY 2020 PFS final rule (84 FR 62897), the data will be made available to the public through posting on our website at least every 2 years and we will post the summary results by the last quarter of 2022. We codified the public availability at § 414.626(f), which states: (f) Public availability of data. Beginning in 2022, and at least once every 2 years thereafter, we will post on its website data that it collected under this section, including but not limited to summary statistics and ground ambulance organization characteristics.

Due to the COVID-19 delay, in the CY 2022 PFS proposed rule (86 FR 39303), we proposed to revise § 414.626(f) to state that we will make the data collected under § 414.626 publicly available beginning in 2024. We solicited comments on our proposal to revise the timeline when the public availability of data will begin.

We received a public comment on our proposal to revise the timeline when the public availability of data will begin. The following is a summary of the comment we received and our response.

Comment: A commenter stated that it would provide greater transparency if CMS were to release data annually rather than waiting until 2024 for the first release. The commenter stated that this would be similar to cost reporting data or other data files released for other healthcare entities that are also released annually and that it would be important for the public to have access to the data that will be used by MedPAC for their analysis.

Response: In the CY 2020 PFS final rule (84 FR 62897), we finalized our proposals for public availability of the data including to post on our website a report that includes summary statistics, respondent characteristics, and other relevant results in the aggregate so that individual ground ambulance organizations are not identifiable. The data above will be made available to the public through posting on our website at least every 2 years. We do not plan on releasing information collected via the Medicare Ground Ambulance Data Collection Instrument in precisely the same way that cost reporting data is released but intend to post as much data as possible, including summary statistics describing the data reported by subgroups of respondents, while protecting the confidentiality of the respondents.

After consideration of public comments, we are finalizing the proposal as proposed.

L. Medicare Diabetes Prevention Program (MDPP)

The Medicare Diabetes Prevention Program (MDPP) expanded model is a structured intervention that aims to prevent or delay onset of type 2 diabetes among eligible Medicare beneficiaries diagnosed with pre-diabetes. The MDPP expanded model is an expansion of duration and scope of the Diabetes Prevention Program (DPP) model test, which was initially tested through a Round One Health Care Innovation Award. MDPP services are furnished in community and health care settings by organizations that enroll in Medicare as MDPP suppliers, a new supplier type, even if they have an existing Medicare enrollment as another supplier type. MDPP services furnished under the MDPP expanded model are covered as an additional preventive service with no cost-sharing under Medicare. Eligible organizations seeking to furnish MDPP services began enrolling in Medicare as MDPP suppliers on January 1, 2018, and began furnishing MDPP services on April 1, 2018.

We proposed to amend our regulation at § 410.79 to preclude the provision of ongoing maintenance sessions unless the MDPP beneficiary has started his or her first core session on or before December 31, 2021. In addition, we proposed to amend § 414.84(b) and (c) to update the amount of the performance payments for the core sessions and core maintenance sessions and ongoing maintenance sessions (where applicable) to be consistent with our proposal. We proposed that this change apply to all MDPP beneficiaries starting the MDPP set of services on or after January 1, 2022. Additionally, we proposed to amend § 424.205(b) to add a provision to waive the provider enrollment Medicare application fee for all organizations enrolling in Medicare as MDPP suppliers that submit an application on or after January 1, 2022. Finally, we proposed to make a conforming amendment to § 424.502 to remove a reference to the CMS-20134 from the definition of “institutional provider.” (In accordance with § 424.514, institutional providers generally must pay the enrollment application fee.)

We do not anticipate that the changes will impact our ability to complete an evaluation of the MDPP expanded model, but the evaluation will consider the changes we finalize. The evaluation will continue to use beneficiary-level Diabetes Prevention Recognition Program (DPRP) encounter data and program data furnished by the Centers for Disease Control and Prevention (CDC) in combination with Medicare claims data to analyze the long-term utilization of services by beneficiaries who have received the MDPP set of services. We will use these data as planned to assess whether the MDPP expanded model is expected to improve the quality of care without increasing spending, reduce spending without reducing the quality of care, or improve the quality of care and reduce spending.

While we acknowledge that additional changes will likely be needed in the future to improve access to MDPP, we anticipate that the programmatic adjustments finalized in this rule are likely to result in more MDPP suppliers, increased beneficiary access to MDPP services, and an ongoing reduction of the incidence of diabetes in eligible Medicare beneficiaries, in both urban and rural communities. We believe that the three changes that we are finalizing in this rule will make MDPP more attractive to potential suppliers by addressing consistent stakeholder comments about MDPP underpayment and the length of the MDPP service period, as well as more manageable for MDPP beneficiaries by reducing their commitment to MDPP to 1 year. We anticipate that removing the Medicare enrollment fee for suppliers, providing larger payments up front to suppliers, and paying more for attendance-only achievements will result in more organizations enrolling as MDPP suppliers and MDPP suppliers will be able to more consistently implement sustainable programs which will increase the availability of the MDPP set of services to more beneficiaries. Stakeholders have suggested that a payment structure that provides higher payments later in the set of services and places too much emphasis on weight-loss requirements disincentivizes MDPP suppliers from providing services to underserved populations who may be less successful at achieving the weight-loss goals. We believe that by providing larger payments up front and paying more for attendance-only achievements we will remove the potential disincentives and improve accessibility to underserved populations who may face barriers to weight-loss. We anticipate that these changes will increase beneficiary access to MDPP services in rural areas and it may have a positive impact on more equitable access to the service.

1. Changes to § 410.79(b), (c), and (e)

We proposed to amend certain MDPP expanded model policies previously finalized in the CY 2017 PFS final rule (81 FR 80459 through 80475 and 80552 through 80558), the CY 2018 PFS final rule (82 FR 34157 through 34158), and the CY 2021 PFS final rule 85 FR 50074). Previous rules established policies related to the set of MDPP services, beneficiary eligibility criteria, reimbursement structure, and supplier enrollment requirements and compliance standards.

MDPP has experienced challenges recruiting suppliers to participate in the expanded model, which has limited beneficiary access to the preventive services offered under the expanded model. Existing and prospective suppliers have reported that the length of the set of MDPP services and the payment timing and amounts have made implementation and operation of MDPP burdensome and has hindered participation. Currently, MDPP suppliers are required to offer up to 2 years of MDPP services to eligible MDPP beneficiaries. The MDPP set of services, as defined in § 410.79(b), consists of at least 16 sessions offered during the core sessions phase (Months 1-6), monthly maintenance sessions offered during the core maintenance sessions phase (Months 7-12) (collectively the “core sessions phase”), and additional monthly sessions offered during the ongoing maintenance sessions phase (Months 13-24) for eligible beneficiaries. To be eligible for the ongoing maintenance sessions phase, a beneficiary must meet the minimum weight-loss requirement (5 percent weight loss from baseline), as defined in § 410.79(b), and maintain the minimum weight-loss requirement on a quarterly basis to continue to receive MDPP services in subsequent quarters. The ongoing maintenance sessions delivered in year 2 are a unique feature of MDPP. Both the CMS-funded Health Care Innovation Award (HCIA) to the Young Men's Christians Association (YMCA) of the USA (Y-USA), referred to as the DPP model test hereafter, and the CDC's National Diabetes Prevention Program (National DPP) was/are 12 months in length.

We included the ongoing maintenance sessions phase in the MDPP set of services to support participants in solidifying the behavioral changes that resulted in weight loss during the first 12 months. In the CY 2017 PFS proposed rule, we proposed adding the ongoing maintenance sessions phase to follow the completion of the 12-month core sessions phase if the beneficiary achieved and maintained the required minimum weight loss of 5 percent from the baseline weight. That proposed rule did not place a limit on the number of ongoing maintenance session phases an eligible beneficiary could attend. In response to stakeholder comments, we modified the proposed policy to limit access to up to 2 years of ongoing maintenance sessions after the 12-month core sessions phase. In the CY 2018 PFS, we again modified the policy to limit access to ongoing maintenance sessions to 1 year after the 12-month core sessions phase as long as MDPP beneficiaries maintained the 5 percent weight loss.

Despite limiting the ongoing maintenance sessions phase to 1 year, we have heard that the MDPP suppliers find the implementation, operation, and costs of the ongoing maintenance sessions phase burdensome. We anticipate that the changes we proposed will improve the uptake of organizations enrolling in Medicare to become MDPP suppliers, thus enabling more beneficiaries to access the MDPP set of services. Collectively, this will improve CMS ability to evaluate the MDPP expanded model as more suppliers and beneficiaries participate in the expanded model test. Currently, more than 1,000 organizations nationally are eligible to become MDPP suppliers based on their preliminary or full CDC DPRP status. However, only 27 percent of eligible organizations are participating in MDPP. Based on an analysis of National Health and Nutrition Examination Survey (NHANES) data, an estimated 16.4 million people are eligible for MDPP; to date, over 3,600 beneficiaries are participating in the MDPP set of services. We anticipate that the removal of the second year of the MDPP set of services on a prospective basis will make MDPP attractive to more MDPP eligible organizations and beneficiaries.

The requirement to offer a second year of the MDPP set of services has also caused confusion among MDPP suppliers because it is inconsistent with the CDC National DPP requirements and curriculum. Because there is no defined curriculum for the ongoing maintenance sessions phase, MDPP suppliers repeat parts of the curriculum they previously used during the core sessions phase per CDC guidance and their updated 2021 DPRP Standards . We have heard anecdotally, through written inquiries and questions asked by MDPP suppliers during MDPP educational events, that MDPP suppliers struggle with discerning the appropriate timing of determining whether a beneficiary has met and/or maintained the 5 percent minimum weight-loss requirement necessary for continued eligibility for and during the ongoing maintenance sessions phase. To be eligible to continue to the ongoing maintenance phase of MDPP, beneficiaries must lose and/or maintain a 5 percent weight loss from baseline. MDPP suppliers are responsible for determining if a MDPP beneficiary has met and/or maintained the 5 percent weight loss from baseline during the applicable session and phase. A supplier must submit a claim to the Medicare Administrative Contractor (MAC) for the 5 percent weight loss achievement for each beneficiary, otherwise, all subsequent ongoing maintenance session claims may be rejected by the MAC. Suppliers have 12 months from the date of service to submit claims, if they delay the claim submission for the 5 percent weight loss performance goal, this may impact a supplier's ability to get paid for the ongoing maintenance sessions. For example, if a beneficiary achieves the 5 percent weight loss goal during the first 6 months of MDPP, or during the core services period, and they do not submit the claim for the 5 percent weight loss goal until after the ongoing maintenance interval has started, the supplier risks having their claim for the ongoing maintenance interval rejected. Furthermore, in this scenario, the supplier will need to submit a claim for the second core maintenance session interval with a 5 percent weight loss for the beneficiary to continue with ongoing maintenance sessions. MDPP monitoring data suggest that 82 percent of MDPP beneficiaries for whom we have claims for the 5 percent weight loss goal achievement reach that goal in the first 6 months of the expanded model. However, our monitoring data show claims for MDPP ongoing maintenance sessions for only 10 percent of MDPP beneficiaries and that beneficiary attendance sharply drops after the first quarter of the initial core session. Collectively, these data suggest that suppliers may not be incentivized to retain MDPP beneficiaries after they attend the 9th core session in the set of MDPP services, which MDPP beneficiaries likely reach during the first quarter of the expanded model, or after the MDPP beneficiary has achieved the 5 percent weight loss milestone.

Existing MDPP suppliers report frustration with the requirements associated with the ongoing maintenance phase and we believe that the additional burden and cost of providing the ongoing maintenance sessions is a deterrent to prospective MDPP suppliers. Organizations have communicated to CMS their difficulties in keeping MDPP beneficiaries engaged in the expanded model. For an example, suppliers are reimbursed after they successfully submit claims for beneficiary attendance, after the 1st, 4th, and 9th core sessions during the first 6 months of the MDPP set of services, and then if beneficiaries attend 2 monthly sessions per quarter thereafter. MDPP eligible organizations have cited beneficiary acquisition and retention as a leading barrier to their MDPP supplier enrollment. Stakeholders and suppliers have commented that the payment levels for a second year are inadequate to cover supplier costs given the low volume of beneficiaries who participate in the ongoing maintenance phase and drive up the per-beneficiary costs for the supplier. Stakeholders comment that sessions have the same fixed costs, yet there are a diminishing number of MDPP beneficiaries eligible to participate. As previously noted, our FFS claims-based monitoring data show that only approximately 10 percent of MDPP beneficiaries continue with the ongoing maintenance sessions phase and the majority of MDPP beneficiaries achieve the 5 percent weight loss milestone within the first 6 months of the MDPP set of services. Given our data, stakeholder comments, the lack of the ongoing maintenance year alignment with the CDC's National DPP and the DPP model test, the ongoing maintenance phase is not sufficiently beneficial to continue requiring and may be causing harm to the expanded model's overall goals.

As such, we proposed to amend our regulations to preclude coverage of ongoing maintenance sessions unless the MDPP beneficiary has started his or her first core session on or before December 31, 2021. Specifically, we proposed to amend § 410.79(c)(1)(ii) to provide that an MDPP beneficiary is eligible for the first ongoing maintenance session interval only if the beneficiary started his or her first core session on or before December 31, 2021. As finalized, this change will effectively make the MDPP timeframe consistent with the National DPP for MDPP service periods that begin on or after January 1, 2022. In addition, as finalized, we believe that this policy will reduce the administrative burden and costs associated with the ongoing maintenance sessions phase to MDPP suppliers with minimal impact to beneficiaries given their historically low participation rate in the second year of MDPP. This proposed change is consistent with the authority in section 1115A(c) of the Act, and we anticipate this change will improve our ability to evaluate the expanded model test due to an anticipated increase in supplier enrollment, which will increase beneficiary access to the expanded model.

In conjunction with the proposed change to remove the ongoing maintenance sessions phase from the MDPP services period, we proposed to redistribute a portion of the ongoing maintenance sessions phase performance payments to certain core and core maintenance session performance payments to address stakeholder concerns that the current MDPP payment structure does not cover reasonable costs of MDPP suppliers to deliver the MDPP set of services. For example, the proposed attendance-based performance payments are based on a standardized per-session rate, paid after the 1st, 4th, and 9th sessions attended during the core sessions intervals, and after attending the two (2) sessions during each of the core maintenance intervals. Based on the comments we received, we are modifying this proposal to redistribute all the ongoing maintenance sessions phase performance payments to certain core and core maintenance session performance payments in the final rule consistent with Table 39. We proposed to increase performance payments for MDPP beneficiary achievement of the 5 percent weight loss goal, as well as continued attendance during each core maintenance interval. Based on comments we received, we will maintain the current 2021 performance payment amount for achievement of the 5 percent weight loss goal, increase the payment amounts to the attendance only goals to incentivize attendance, and increase the total maximum payment to $705.

Our Office of the Actuary estimated that the average payment for an MDPP supplier will increase by $100 with the elimination of the second year of MDPP. While the maximum payment available to an MDPP supplier will decrease when compared to the maximum payment under the original 2-year payment structure, the second year of the MDPP set of services have historically been far less utilized than first year set of services. Therefore, it is anticipated that eliminating the second year of payments will have minimal negative impact on the expanded model's costs. Table 39 shows the current 2021 non-cumulative performance payments, the proposed performance payments, and the finalized performance payment amounts for those MDPP beneficiaries who will start their first core service on or after January 1, 2022. We did not propose to change the payment rates for ongoing maintenance sessions in cases where a beneficiary remains eligible for them (that is, because they started receiving the MDPP set of services on or before December 31, 2021 and achieved the minimum required weight loss); rather, we proposed to maintain those payment rates until such time as ongoing maintenance sessions are phased out.

Our data from the DPP model test showed beneficiaries who finished at least nine (9) sessions of the model were considered “completers” and had better weight loss and lower Medicare spending than non-completers (those who attended fewer than 9 sessions). The DPP model test showed that beneficiaries who attend nine or more sessions will, on average, experience a 6.24 percentage point increase in weight loss compared to beneficiaries attending fewer than nine sessions. Currently, our payment structure does not pay for per session attendance, and stakeholders have commented that the expanded model, in its current state, is creating inequities in access to MDPP among eligible beneficiaries because suppliers cannot invest in the costs to retain beneficiaries who may have access barriers related to transportation or distance of the MDPP location from their home. We anticipate the changes to the payment structure, which will pay a total of $81 more per beneficiary who attends at least 9 sessions and $55 more per core maintenance interval than what is currently paid, will encourage existing suppliers to retain MDPP beneficiaries given the one-year commitment versus two for the MDPP set of services. Continuous beneficiary attendance is critical to reaching key outcomes such as 5 percent weight loss and reduced Medicare spending. Additionally, we expect more eligible organizations will enroll as MDPP suppliers due to our eliminating the ongoing maintenance period, thereby increasing the number of locations beneficiaries may access the MDPP set of services. We expect the changes to the MDPP payment structure will not affect MDPP's qualification for expansion. We will use the CDC DPRP and MDPP claims data as planned to assess whether the MDPP expanded model is expected to improve the quality of care without increasing spending, reduce spending without reducing the quality of care, or improve the quality of care and reduce spending. We anticipate that these programmatic adjustments are likely to result in more MDPP suppliers, increased beneficiary access to MDPP services and an ongoing reduction of the incidence of diabetes in eligible Medicare beneficiaries, in both urban and rural communities.

In our regulatory impact analysis, the CMS Office of the Actuary updated its estimates that these changes will reduce Medicare spending over 10 years, with potential savings starting in 2027. There is no evidence that eliminating the second-year maintenance sessions, shortening the MDPP services period to 1 year, will have any negative effects on performance of the MDPP expanded model.

Increasing the first-year payment amounts to suppliers and waiving the Medicare enrollment fee (as discussed below) should increase access to MDPP, resulting in more utilization of the MDPP set of services.

We proposed a change to our emergency policy at § 410.79(e)(3)(v)(C) to account for the elimination of ongoing maintenance sessions for MDPP beneficiaries who start the set of MDPP services on or after January 1, 2022. Under this proposal, only beneficiaries who start the MDPP set of services between January 1, 2021, and December 31, 2021 and who are in the second year of the set of MDPP services as of the start of an applicable 1135 waiver event may either resume or restart the ongoing maintenance session interval in which they were participating at the start of the applicable 1135 waiver event if they elect not to continue with MDPP services virtually during the applicable 1135 waiver event. MDPP beneficiaries who are eligible to participate in MDPP ongoing maintenance phase sessions between January 1, 2021 and December 31, 2021 and who elected not to participate virtually during the COVID-19 PHE, will have the option to resume or restart the ongoing maintenance session interval in accordance with § 410.79(c)(3).

As noted above, we proposed to remove the ongoing maintenance sessions phase for all MDPP beneficiaries who start MDPP set of services on or after January 1, 2022. MDPP beneficiaries who start the MDPP set of services on or before December 31, 2021 will be able to continue with the ongoing maintenance phase if they meet the eligibility requirements described in § 410.79(c)(3). Table 40 summarizes our proposal for the MDPP services period based on beneficiary start date.

Additionally, we proposed to remove the second duplicate paragraph (c)(3)(ii) given that the electronic CFR contains two paragraphs (c)(3)(ii), both containing the exact same language.

We proposed to amend our regulation at § 410.79(b), (c), and (e). We solicited comments on these proposals and ways to simplify the policies.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Overall, commenters were very supportive of the proposed changes, including the removal of the second year. Most commenters agreed that this change aligns with the CDC 2021 Standards and Operating Procedures for the National DPP and increases the ability of eligible organizations to offer the MDPP set of services to and retain participants. Commenters generally supported the removal of the second year as it allows eligible organizations to phase out Ongoing Maintenance sessions and align with the current CDC Recognition Program Standards and Operating Procedures. Other commenters indicated that participants are more likely to complete the MDPP set of services if it is only 1 year vs 2 years.

We received several comments requesting that we keep the option of a second year given that some Medicaid and commercial plans offer a second year and may not require a 5 percent weight loss.

Response: We appreciate the interest in keeping the second year as optional; however, we believe that it would be overly burdensome and confusing to suppliers, beneficiaries, and the Medicare Administrative Contractors (MACs) to have some beneficiaries enrolled in MDPP on or after January 1, 2022 continue with a second year. Permitting beneficiaries to participate in a second year would create additional confusion regarding beneficiary eligibility and the claims process. Although Medicaid and some commercial plans might offer a second year, the current utilization rate of the second year of MDPP set of services reveals that it is no longer necessary to the efficacy of the expanded model. We are finalizing this policy as proposed.

Comment: Commenters stated that their understanding of this proposed change is that participants who are eligible to participate in MDPP ongoing maintenance (Months 13-24) between January 1, 2021 and December 31, 2021, but who elect not to participate virtually during the PHE, will have the option to resume or restart the ongoing maintenance session interval, even with the removal of this phase for beneficiaries beginning on or after January 1, 2022. The commenters requested clarifying language be added to the final rule if this understanding is correct, including whether there is a timeframe for these beneficiaries to re-start MDPP following the PHE.

Response: We appreciated comments and support of the proposed rule provisions. Yes, beneficiaries who are eligible to participate in MDPP ongoing maintenance phase sessions between January 1, 2021 and December 31, 2021 but who elect not to participate virtually during the PHE, will have the option to resume or restart the ongoing maintenance session interval in accordance with § 410.79(e)(3)(v)(C). We added clarifying language to this final rule. We are not imposing a requirement for MDPP beneficiaries to restart the MDPP set of services following the end of the current PHE, nor are we establishing a deadline for when such beneficiaries must restart at this time because we do not believe that it is necessary due to the uncertainty of the PHE end date.

Comment: Commenters encouraged CMS to go further and allow all current MDPP suppliers to stop offering ongoing maintenance sessions on January 1, 2022. For a period, MDPP suppliers may be delivering three interventions simultaneously: MDPP based on the 2022 changes, MDPP based on the prior iteration of the expanded model, and the National DPP, which would impose a substantial operational burden to program teams. As further rationale for this request, several MDPP suppliers have shared that participants indicate they do not believe they need the second year.

Response: We recognize that offering ongoing maintenance sessions to certain MDPP beneficiaries after January 1, 2022 may be temporarily burdensome. However, we believe that it is important to permit all eligible beneficiaries who have attended their first core session prior to January 1, 2022 the opportunity to participate in the full MDPP set of services as they existed at the time in which the beneficiary initiated the service. Otherwise, the scope of the set of services would change, perhaps abruptly, while the MDPP beneficiary is already receiving the set of services. Keep in mind that while MDPP suppliers are required to offer ongoing maintenance sessions after January 1, 2022 to eligible MDPP beneficiaries who elect to continue with those services in accordance with the provisions of this final rule, MDPP beneficiaries are not required to participate in ongoing maintenance sessions. We are finalizing this policy as proposed.

Comment: Many commenters requested that flexibilities to provide a virtual option continue after the current PHE. Commenters noted that permitting a virtual option outside the PHE may address harder to reach populations, thereby increasing access to the expanded model (especially for rural and lower income beneficiaries with transportation needs) and ensuring a more equitable approach to accessing the expanded model. One commenter suggested that CMS change the payment structure to adopt new technologies for one-on-one virtual fitness coaching.

Several commenters suggested CMS make additional adjustments to align with CDC's DPRP standards. In particular, commenters recommended that CMS update the MDPP beneficiary eligibility requirements related to gestational diabetes and A1c levels. Commenters noted that the narrower eligibility criteria for MDPP may limit participation in the expanded model and cause confusion. In addition, we received many comments recommending that CMS consider removing or modifying the once per lifetime limitation. The commenters requested that CMS waive the once per lifetime requirement to allow for multiple attempts at weight loss. Also, several commenters expressed concern over the high-risk designation requirements for organizations enrolling in Medicare as MDPP suppliers. Commenters suggested that the designation is overly burdensome on businesses that do not have the capacity, profit, or bandwidth to address the extra requirements. One commenter requested that certified health providers such as Registered Dieticians and Registered Nutrition and Dietetics Technicians be the sole providers or provide the service with lay coaches to ensure correct nutrition information is relayed to beneficiaries. One commenter requested that CMS streamline the requirements for information collection for MDPP coaches. Several commenters expressed concern regarding the burden to become a supplier, particularly for those entities that serve historically underserved populations such as American Indians/Alaskan Natives (AI/AN). Commenters noted that the time it takes to become a CDC-recognized supplier can take 3 years, and then it can take another year to become an MDPP supplier after that. Finally, one commenter requested that CMS waive the requirement for tribes to become recognized by CDC before they can become MDPP suppliers.

Response: We appreciate the commenters' support and interest in MDPP. These suggested changes are outside the scope of this final rule. The provisions we are finalizing in this rule are only to waive the Medicare enrollment fee for MDPP suppliers as of January 1, 2021, prospectively remove the ongoing maintenance phase of the MDPP set of services, and update the MDPP payment amounts.

After consideration of public comments, we are finalizing § 410.79 (c) and (e) as proposed.

2. Changes to § 414.84(b) and (c)

We proposed to amend § 414.84(b) and (c) to update the amount of the performance payments for the core sessions, core maintenance sessions and ongoing maintenance sessions (where applicable) to be consistent with our proposal. We proposed that this change apply to all MDPP beneficiaries starting the MDPP set of services on or after January 1, 2022.

For those MDPP beneficiaries who started the first core session on or before December 31, 2021, we proposed that MDPP suppliers continue to submit claims for the ongoing maintenance sessions attended using the existing ongoing maintenance HCPCS G-codes, G9891, G9892, G9893, G9894, and G9895 when submitting claims for those MDPP beneficiaries who attended ongoing maintenance sessions.

We proposed to amend our regulation at § 414.84(b) and (c). We solicited comments on these proposals.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Overall, commenters were supportive of our proposal to redistribute some of the ongoing maintenance performance payment to the core and core maintenance session performance payments. However, many commenters recommended CMS to make further changes to the proposed payment structure and amounts. Many commenters recommended that CMS redistribute all, not just a portion, of the ongoing maintenance sessions phase performance payments to certain core and core maintenance session performance payments. The commenters noted that redistributing all the ongoing maintenance sessions phase performance payments would address ongoing concerns of MDPP suppliers of underpayment due to the current payment structure and help support long term sustainability of MDPP services. Several commenters stated that the proposed payment structure remains insufficient to cover the costs of MDPP and there is a large gap between costs and payment, especially when serving beneficiaries from diverse and low-income populations. These commenters suggested CMS to consider increasing the proposed payment rates to fully cover costs, including for serving diverse and low-income participants. One commenter expressed concern that the proposed total maximum payment amount in the restructured 1-year set of services is less than that available under the 2-year set of services. This commenter suggested that CMS ensure the finalized maximum payment is equal to the current 2021 payment amounts.

Response: We agree with the commenters that redistributing all the ongoing maintenance session phase performance payments to certain core and core maintenance sessions will address some concerns of MDPP supplier underpayment and help support long term sustainability of MDPP services. After reviewing all of the comments received regarding the redistribution of the ongoing maintenance session phase performance payment amounts and the concerns about the inadequacy of the proposed payment amounts, we have determined that distributing the current total maximum payment amount will make MDPP more attractive to suppliers and increase beneficiary participation. We acknowledge that the final payment structure may remain insufficient to cover the costs of MDPP for some suppliers, but hope that increasing the maximum per beneficiary attendance-based payments by $253 may help address some of costs associated with serving diverse and low-income participants. Stakeholders have told CMS that diverse and low-income beneficiaries have more barriers to weight loss, are less likely to achieve the 5 percent weight loss achieved performance goal, and require more effort from the MDPP suppliers. As such, by establishing payments with a heavy reliance on weight loss achieved, CMS is disincentivizing MDPP suppliers who serve diverse and low-income populations because the MDPP suppliers are receiving lower overall average per-beneficiary payments. We believe that shifting some of the payment amounts to the attendance only performance goals will increase the overall average per-beneficiary payment, thereby addressing some of the costs associated with serving diverse and low-income populations.

We are modifying the proposed § 414.84(b) and (c) to redistribute all the ongoing maintenance sessions phase performance payments to certain core and core maintenance session performance payments in the final rule. Based on this modification, the total maximum payment will increase from the proposed $661 to $705. The $705 payment amount is $1 more than the current maximum payment of $704 under the original 2-year payment structure. Table 39 illustrates the updates to the payment amount redistribution and total maximum payment. We believe that this modification, along with the removal of Year 2 from the MDPP set of services and the removal of the Medicare enrollment fee we are finalizing will help address some of the payment inadequacy comments we have received since MDPP was originally implemented.

Comment: In addition to recommending that CMS redistribute all the ongoing maintenance performance payments, many commenters suggested that CMS make further changes to the proposed payment structure. Specifically, commenters recommended that we increase the amount of the performance payments available at the beginning of the MDPP set of services. Commenters stressed that staff time and programming expenses are highest during recruitment and enrollment (before core session 1) and during the first few weeks of the services (between core sessions 1 and 4). One commenter, commented that the reimbursement structure needs to recognize the upfront costs to delivering the MDPP set of services. The commenter stated that payment levels should adequately cover the costs of core and maintenance sessions. The commenter stated that most organizations still see average cost of MDPP delivery in the $450—$600 range per participant. The commenter calculated that, while the commenter received $462.78 per beneficiary during the Y-USA model test, MDPP suppliers receive currently receive an average of $262.40 per MDPP participant based on 2020 fee schedule and would receive $342.56 per participant based on proposed 2022 fee schedule. Several commenters requested that CMS align the total payment amount with the original model.

The commenter encouraged CMS to further adjust the performance payment structure to pay more in the first 6 months of service delivery to ensure suppliers' up-front costs of serving a Medicare population (especially for organizations unused to health care administration costs) are covered sufficiently. This commenter stated that the current fee schedule does not account for any opportunity loss from recruitment efforts that do not convert to participation. Lastly, the commenter noted that the model's success relied on the power of community-based organizations delivering a low-cost program effectively, but these organizations are not in a position with capital on hand to wait for their first outcomes-based payments. Other commenters suggested that the payment structure should also reflect the services required by MDPP suppliers and their coaches to engage and build relationships with MDPP participants. Commenters stated that CMS should redistribute a portion of the payments, at least $100.00, to core session 1 to compensate organizations for successful recruitment and enrollment efforts and redistribute a portion of the payments, at least $100.00 each, to core sessions 4 and 9 to compensate organizations for successful retention efforts.

Response: We agree that the current MDPP payment structure may not match the upfront costs to MDPP suppliers to deliver the MDPP set of services. In response to these comments, we are modifying proposed § 414.84(b) and (c) to adjust the MDPP payment structure to increase the performance payments available at the beginning of the MDPP set of services. These changes to the payment structure will pay a total of $81 more per MDPP beneficiary who attends at least 9 sessions during the core sessions phase than proposed ($315 as finalized versus $234 as proposed) and $142 more per beneficiary who attends at least 9 sessions during the core sessions phase than the current 2021 payment rates ($315 as finalized versus $173 current 2021 payment rates).

As finalized, MDPP suppliers will receive a subtotal maximum payment for attendance only of $455. The proposed subtotal maximum payment for attendance only was $338 as proposed and $203 currently, the final payment structure will result in an increase of the subtotal maximum payment for attendance only of $117 and $252 respectively. As finalized, MDPP suppliers will receive a total maximum payment of $705. The proposed total maximum payment was $661 as proposed and $704 currently, the final payment structure will result in an increase of the total maximum payment of $41 and $1 respectively. We believe these adjustments will increase the average payment to MDPP suppliers within the estimated average cost of MDPP delivery in the $450—$600 range per beneficiary provided by a commenter and will align the average per beneficiary payment with the estimated per beneficiary payment amount associated with the original model.

As finalized, both core sessions 4 and 9 are over $100 ($105 and $175 respectively). While we increased the payment amount for the first core session from $26 to $35, we do not agree that CMS should increase the payment amount for the first core session further. First, continuous beneficiary attendance is critical to reaching key outcomes such as 5 percent weight loss and reduced Medicare spending. Our data from the DPP model test showed beneficiaries who finished at least nine (9) sessions of the model were considered “completers” and had better weight loss and lower Medicare spending than non-completers (those who attended fewer than 9 sessions). The DPP model test showed that beneficiaries who attend nine or more sessions will, on average, experience a 6.24 percentage point increase in weight loss compared to beneficiaries attending fewer than nine sessions. Second, increasing the payment amount for the first core session substantially may place the agency at a higher risk of fraud and abuse. A higher first core session payment may entice bad actors to enroll beneficiaries for the sole purpose of collecting the payment for the first core session with no intention of providing the remaining MDPP set of services. Not only does this create a risk to the agency, but it may create a risk for beneficiaries who may not be able to access the full MDPP set of services once they have attended the first session and no other services are offered. As such, we are finalizing the rule with the payment amounts listed in Table 39.

Comment: Commenters encouraged CMS to reduce the emphasis on performance payments for weight-loss achievement and increase the performance payments for attendance-only achievements so that the payment methodology provides a stronger financial incentive for attendance. One commenter recommended that CMS refrain from increasing the payment for the 5 percent weight loss achievement to $179.00; rather, CMS should maintain the current (2021) payment for the achievement of 5 percent weight loss ($169.00) and increase the payments for attendance of the core maintenance sessions from $52.00 to $62.00. Several commenters stated that the proposed increase of the payment to $179.00 for 5 percent weight loss could have the unintended consequence of encouraging organizations to pursue ongoing participation by those who have already achieved 5 percent weight loss over those that have not yet achieved the 5 percent weight loss during the 9 core maintenance sessions. Commenters stressed that there should be an adequate financial incentive for suppliers to promote attendance amongst individuals who do not achieve 5 percent weight loss in the first 6 months. One commenter opined that session attendance payments at a level that covers operating costs only when a participant achieves 5 percent weight loss, even for early sessions, establishes incentives for unrealistic, quick, weight loss that is not aligned with the design of DPP, or evidence-based diabetes prevention. The commenter suggested that reimbursement for session attendance should be increased, and set to encourage organizations to achieve consistent session attendance from participants.

Response: We agree with the commenters recommendations that we should reduce the emphasis on performance payments for weight-loss achievement and increase the performance payments for attendance-only achievements so that the payment methodology provides a stronger financial incentive for attendance. As several commenters pointed out, placing too much emphasis on the weight-loss achieved goal could incentivize MDPP suppliers to seek out beneficiaries who are more likely to lose weight instead of focusing on the attendance of all eligible participants. While MDPP is a performance-based expanded model, we want to emphasize the importance of attending MDPP sessions along with the 5 percent weight loss goal. We are modifying the proposed § 414.84(b) and (c) to adjust the MDPP payment structure to place more emphasis on beneficiary attendance consistent with Table 39. We agree that we should not increase the payment for the 5 percent weight loss achievement from $169 to $179.00. As we stated before, MDPP is a performance-based expanded model. The goal of the expanded model is for beneficiaries to lose 5 percent of their weight from baseline during their participation. As such, achievement of this goal will still result in a higher reimbursement amount. However, we want to also emphasize the importance of attending MDPP sessions, therefore, we are shifting a larger portion of the Year 2 reimbursement amount to the attendance-goals to place additional emphasis on the importance of session attendance during the MDPP set of services. As finalized, we will maintain the current 2021 payment for the achievement of 5 percent weight loss of $169.00 and increase the payments for attendance of the core maintenance sessions to from $52.00 to $75.00. As finalized, MDPP suppliers will receive a subtotal maximum payment for attendance Only of $455. The proposed subtotal maximum payment for attendance only was $338 as proposed and $203 currently, the final payment structure will result in an increase of the subtotal maximum payment for attendance only of $117 and $252 respectively. We believe that these changes will provide more financial incentive for suppliers to promote consistent attendance from participants regardless of weight loss achievement. We are finalizing the rule with the payment amounts listed in Table 39.

Comment: Other commenters suggested that CMS remove performance-based payments entirely and simply pay MDPP suppliers for delivering MDPP services. One commenter stated that continuing payments to MDPP suppliers contingent on the beneficiary achieving a weight loss goal, attending a specific number of sessions, or any other performance goal is not consistent with the DPP model test or other preventive health programs, such as smoking cessation and obesity interventions, which do not base payments on the beneficiary achieving an outcome. One commenter opined that they would like to see MDPP suppliers receive payments for their efforts put into the long journey to preventing diabetes, not just for the attainment of the goal. One commenter encouraged CMS to provide organizations with an adequate revenue stream for MDPP delivery when beneficiaries attend sessions, even if beneficiaries do not achieve 5 percent weight loss during the first nine sessions. This commenter noted that the complex payment methodology runs counter to CMS' goal of Burden Reduction, Patients Over Paperwork, and increases the operating costs of both Medicare suppliers and the MACs.

Response: While we agree with commenters that the MDPP payment structure does not align with preventive service benefits that are paid on a fee-for-for service basis, we disagree with the recommendations to align MDPP payments with that of other FFS prevention programs such as smoking cessation and obesity counseling. During the DPP model test, the Y-USA included attendance and weight loss as performance-based milestones. For an example, they tracked the number of participants who attended the 1st, 4th, and 9th core sessions and the number of participants who achieved the 5 percent and 9 percent weight loss goals. When OACT certified the DPP Model test in 2016, they based their payment structure assumptions on that of the DPP model test, and included performance-based payments for beneficiary achievement of attendance and weight loss milestones. MDPP is an expanded model, and it is different from the DPP model test in that it established a performance-based payment structure that is designed to incentivize MDPP suppliers to deliver a service that will result in weight loss and ultimately savings to CMS.

In addition, while we do not agree that the payment structure runs counter to the CMS goals of Burden Reduction and Patients Over Paperwork, or that it increases the operating costs of both Medicare suppliers and the MACs, we recognize that the current level of complexity may cause barriers in enrollment and payments. We believe that the changes we are finalizing in this rule will simplify the payment structure and increase the overall payments received by MDPP suppliers. We are finalizing the rule with the payment amounts listed in Table 39.

Comment: One commenter noted that the total proposed performance payment per beneficiary without the 5 percent weight loss is $338 compared to $661 for those that achieve and maintain weight loss. This commenter stated that the reduced reimbursement for beneficiaries who do not meet the 5 percent weight loss is unacceptable and is not cost beneficial for Tribal Health Programs to participate. This commenter stated that American Indians/Alaskan Natives (AI/AN) have the highest risk of Type II diabetes and face challenges on lack of quality medical care, lack of access to healthy food, and lack of access to safe or adequate places for physical activity. They included data by the University of Kansas Medical Center on the success rate of AI/AN in diabetes weight loss programs that found that only 36 percent of AI/AN lost weight and among those who lost weight, 76 percent lost an average of 2.98 percent body weight and only 6 participants, out of 72, lost 7 percent or more of their body weight. If this sample study reflects AI/AN communities, the success rate for a Tribal member to achieve and maintain 5 percent weight loss is less than 10 percent. The commenter recommended that CMS use other health outcome measures such as reductions in blood sugar levels and hypertension risk, lower BMI levels, increased intake of healthy foods, increased rate of physical activity, or risk reduction factors for performance payments instead of weight loss.

Response: We acknowledge the evidence presented by the commenter that certain populations show improvements in health outcomes with participation in weight loss programs even though they do not achieve the 5 percent weight loss milestone. However, we did not propose to use other health outcome measures such as reductions in blood sugar levels, hypertension risk, or lower BMI levels instead of the 5 percent weight loss performance-based milestone, and we decline to adopt such changes at this time. As finalized, MDPP suppliers will receive a subtotal maximum payment for attendance only of $455, compared to the subtotal maximum payment for attendance only of $338 as proposed and $203 currently. The final payment structure will result in an increase of the subtotal maximum payment for attendance only of $117 and $252 respectively. We believe that these changes will provide more financial incentive for suppliers to promote consistent attendance from participants regardless of weight loss achievement.

The changes we proposed to the rule and the modifications we are finalizing in this rule are in direct response to those concerns. By reducing the emphasis on the weight-loss achievement goals and increasing the attendance-payment amounts, we believe that we will adequately incentivize MDPP suppliers to deliver MDPP services even when weight-loss has not occurred.

Comment: One commenter suggested that MDPP's lack of flexibility, such as risk-adjusted payments to serve patient populations that may face transportation and other barriers to attendance and/or who the evidence has shown may be less likely to achieve the 5 percent weight loss threshold contributes to increased health inequities and lack of opportunities for Medicare beneficiaries to participate.

Response: We agree that many eligible beneficiaries face challenges that impact their ability to lose weight and achieve the 5 percent weight-loss goal. However, we believe that risk-adjusted payments would be too complicated to add to the expanded model at this time. In addition, we do not currently have a sufficiently large cohort nor enough data to accurately risk adjust the payments.

Finally, we believe that reducing the MDPP set of services to 1 year, shifting all of the Year 2 reimbursement amounts, and placing more emphasis on the attendance only goal payments will provide more financial incentive for suppliers to promote consistent attendance from participants regardless of weight loss achievement and increase access to beneficiaries who are less likely to achieve the 5 percent weight loss threshold and with the potential to increase health equity for Medicare beneficiaries.

We will consider this recommendation for future rulemaking.

Comment: One commenter recommended that CMS increase payment for session attendance regardless of weight loss outcomes with a bonus when an attendee attends 4 sessions within 6 weeks and 9 sessions within 12 weeks.

Response: We are modifying the proposed regulation text at § 414.84(b) and (c) to adjust the MDPP payment structure to place more emphasis on beneficiary attendance consistent with Table 39. We are not considering adding any bonus payments at this time because we believe that these changes will provide more financial incentive for suppliers to promote consistent attendance from participants regardless of weight loss achievement. We are finalizing the rule with the payment amounts listed in Table 39.

Comment: One commenter recommended that CMS establish incremental weight loss outcome payments, paying for achievement of 4 percent weight loss and 5 percent weight loss. The commenter noted that adding the 4 percent weight loss outcome payment would align MDPP with the current National DPP standards which include a 4 percent outcome, based on evidence of diabetes prevention.

Response: We appreciate the commenters' support and interest in MDPP. We did not propose to adjust the 5 percent weight loss achievement goal and we decline to do so now because incremental weight loss measurements would overly complicate the payment structure and make it more difficult to evaluate for the MDPP expanded model. We will continue to evaluate MDPP's alignment with the CDC's DPRP and make updates as necessary and feasible.

Comment: One commenter recommended that CMS eliminate the 9 percent weight loss outcome payment.

Response: We appreciate the commenters' interest in MDPP. We did not propose to eliminate the 9 percent weight loss achievement goal and we decline to do so now. The 9 percent weight loss goal was an outcome measure in the original DPP model test, and we believe it is important to retain the 9 percent weight loss goal as an outcome of the MDPP expanded model test.

Comment: One commenter recommended that CMS establish an additional performance payment for each beneficiary who achieved the 5 percent weight-loss goal and then maintained the 5 percent weight-loss at the twelfth month of attendance.

Response: We did not propose to add any new performance payments to the performance structure and we decline to do so now because adding additional payments would create more confusion for MDPP suppliers regarding claims submission. In addition, we believe that the finalized payment amounts already provides a higher payment amount for MDPP beneficiaries who maintain weight loss throughout the end of the twelfth month. The payment amount for the final performance goal “Attend 2 Core Maintenance Sessions” during months 10-12 provides a higher payment amount $70 versus $93 for beneficiaries who have maintained the 5 percent weight-loss.

Comment: One commenter recommended that CMS consider prospective bundled payments for a certain number of initial core sessions.

Response: We will consider this recommendation for future rulemaking.

After consideration of the comments received, we are finalizing our proposals with the following modifications:

• Redistribute all the ongoing maintenance sessions phase performance payments to certain core and core maintenance session performance payments consistent with Table 39, and

• Maintain the current 2021 performance payment amount for achievement of the 5 percent weight loss goal, increase the payment amounts to the attendance only goals to incentivize attendance, and increase the total maximum payment to $705.

3. Changes to § 424.205(b)

Medicare requires all organizations that deliver MDPP services to enroll separately in Medicare as a MDPP supplier and pay an enrollment application fee. This places a unique burden on MDPP suppliers. Approximately 39 percent of these entities are non-traditional suppliers that serve their local communities to increase diversity, equity, and inclusion of their services, including but not limited to YMCAs, county health departments, community health centers, and non-profit organizations that focus on health education that otherwise would neither enroll nor be able to enroll as a Medicare supplier. Indeed, they are often very different from most other Medicare providers and suppliers in terms of business model and financial wherewithal, and they frequently furnish non-health care services to the community. In this vein, they cannot be considered in the same light as, for example, hospitals, SNFs, ambulance suppliers, or other organizations specifically and exclusively designed for the provision of health care services.

The provider/supplier enrollment fee for CY 2021 is $599. Although MDPP suppliers may submit a written request to CMS for a hardship exception to the application fee in accordance with § 424.514, many will not qualify. We have heard from stakeholders that the enrollment application fee factors into an organization's decision to participate in MDPP. Organizations must submit the provider enrollment fee during the initial start-up phase of their expanded model implementation. This is when costs are likely the highest for organizations and the timing of the first CMS reimbursement is farthest away. MDPP suppliers would need to provide a first core session to at least 24 beneficiaries to simply recoup the Medicare provider enrollment fee. For many potential MDPP suppliers, the provider enrollment application fee, when combined with the additional MDPP requirements, such as the claims processing requirements, result in an organization declining to invest in enrolling as an MDPP supplier.

On April 9, 2020, CMS, through the COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers, waived all provider enrollment application fees. We saw an immediate increase in MDPP supplier enrollment in Q2 2020, the quarter the blanket waivers were announced, but MDPP supplier enrollment slowed thereafter, likely due to the impact of the pandemic and many CDC National DPP organizations pausing their delivery of DPP. We believe that granting a waiver of the fee for MDPP suppliers to extend beyond the COVID-19 Emergency Declaration Blanket Waiver may increase MDPP supplier enrollment, which will ultimately improve beneficiary access to the expanded model and our ability to evaluate the outcome of the MDPP because increasing the number of MDPP suppliers may provide for a more robust evaluation of the expanded model. Given our prior discussion of the unique character of MDPP suppliers in comparison to more traditional provider and supplier types, we believe this policy change is warranted.

In an effort to minimize the impact of this potential barrier and allow for a more robust expanded model evaluation, we proposed to utilize CMS' waiver authority under section 1115A(d)(1) of the Act to waive the provider enrollment Medicare application fee (described in sections 1866(j)(2)(C)(i) and (ii) of the Act) for all organizations that submit an application to enroll in Medicare as an MDPP supplier on or after January 1, 2022. We proposed to amend our regulation at § 424.205 (b) to reflect this waiver.

We solicited comments on these proposals.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Commenters were unanimous in their support of CMS' proposal to waive the Medicare enrollment fee for MDPP suppliers as of January 1, 2021 indicating the fee is cost prohibitive for many potential suppliers. Several commenters suggested that this change will advance CMS' health equity agenda and increase access to MDPP services for beneficiaries. Several commenters pointed to the idea that this change may be helpful to local community-based suppliers and will encourage more organizations to apply as MDPP suppliers. Other commenters highlighted that this change will increase access to tribal health programs, improve the program's ability to reach diverse and underserved communities, and entice community-based organizations (CBOs) and FQHCs to enroll as MDPP suppliers. One commenter indicated that removing the fee, along with the proposal to also modify the performance payment structure CMS, could demonstrate significant strides to making the delivery of the MDPP set of services financially viable for organizations.

One commenter expressed concern that there are other hurdles a MDPP supplier faces when enrolling to be a supplier but did not provide details on these concerns. Another commenter indicated that additional changes to supplier enrollment, qualifying criteria, performance outcomes, and payment structure are necessary to incentivize more eligible organizations to enroll.

Response: We appreciate the comments and support of the proposed rule provisions. We agree that this change has the potential to improve access to MDPP and increase MDPP supplier enrollment. We acknowledged that there are additional hurdles faced by organizations enrolling as MDPP suppliers. Within this final rule, we have addressed changes to other areas of concern. In addition to waiving the provider enrollment Medicare application fee, we modified the proposed policy to preclude the provision of ongoing maintenance sessions unless the MDPP beneficiary has started his or her first core session on or before December 31, 2021. We will continue to explore ways to reduce other hurdles in the future.

Comment: One commenter expressed concern related to requirements and timeline for MDPP suppliers to submit data in order to obtain recognition by the CDC. The commenter indicated the collection of data is not applicable to their communities when there is no support for funding for their already under-served health care community.

Response: The CDC DPRP recognition requirements are outside of the scope of this rule. The provisions we are finalizing in this rule are only to waive the Medicare enrollment fee for MDPP suppliers as of January 1, 2021 and update the MDPP payment structure and payment amounts.

After consideration of public comments, we are finalizing as proposed.

4. Changes to § 424.502

We proposed to make a conforming amendment to § 424.502 to remove the reference to the CMS-20134 from the definition of “institutional provider.” The CY 2018 PFS final rule, which established the application fee for MDPP suppliers, amended the definition of “institutional provider” in section § 424.502 to state that MDPP suppliers that complete the CMS-20134 enrollment application are “institutional provider[s]”. Thus, the application fee described in section § 424.514 applies to organizations enrolling in Medicare as MDPP suppliers. We proposed to reverse this policy by amending § 424.502 to remove the reference to the CMS-20134 thereby removing MDPP suppliers from the list of institutional providers required to pay the Medicare enrollment fee under § 424.514. As proposed, § 424.514 will no longer be applicable to organizations enrolling in Medicare as an MDPP supplier.

We solicited comments on this proposal.

We did not receive public comments on this provision, and we are finalizing as proposed.

M. Clinical Laboratory Fee Schedule: Laboratory Specimen Collection Fee and Travel Allowance for Clinical Diagnostic Laboratory Tests and Use of Electronic Travel Logs

1. Background on Laboratory Specimen Collection Fees for COVID-19

In the CY 2022 PFS proposed rule (86 FR 39309), we stated that we continue to believe that the laboratory specimen collection fees for COVID-19 CDLTs established in the context of and for the duration of the PHE for the COVID-19 pandemic should conclude at the termination of the PHE, as originally announced in the March 2020 COVID-19 IFC (85 FR 19258). Specifically, we stated that we believe that these increased payments for specimen collection specifically for COVID-19 tests would no longer be warranted beyond the end of the PHE. The two new level II HCPCS codes established to identify specimen collection for COVID-19 testing specifically are: Code G2023 ( specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), any specimen source ); and code G2024 ( specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-Cov-2) (Coronavirus disease [COVID19]), from an individual in a SNF or by a laboratory on behalf of a HHA, any specimen source ), for independent laboratories to use when billing Medicare for the nominal specimen collection fee for COVID-19 testing for the duration of the PHE for COVID-19.

As discussed in the CY 2022 PFS proposed rule, the increased fees were intended to address additional resources needed specifically during the PHE for the COVID-19 pandemic, particularly for the collecting of specimens using nasopharyngeal and oropharyngeal swabs or collection of sputum, which required a trained laboratory professional and additional precautions to minimize exposure risks in handling specimens that are suspected or confirmed for COVID-19. We stated that we expect that the termination of the PHE will occur when there is a reduced risk of COVID-19, which will mean the increase of supplies, personal protective equipment (PPE), and heightened sterilization and safety protocols for laboratory specimen collection and handling will be at a more manageable level. Likewise, we stated that we expect the potential ongoing spread of COVID-19 likely will diminish after the PHE ends, which will mean that advanced safety precautions, extensive PPE, and specialized training for laboratory specimen collection likely will no longer be required to the same extent as during the PHE. Because we anticipated that the PHE will end when there is a reduced risk of COVID-19 and not before such circumstances exist, we maintained that the laboratory specimen collection fees for COVID-19 CDLTs established in the context of and for the duration of the PHE for the COVID-19 pandemic should conclude at the termination of the PHE (86 FR 39310).

2. Specimen Collection Fee and Travel Allowance for Clinical Diagnostic Laboratory Tests

In the CY 2022 PFS proposed rule (86 FR 39310), we requested broad comments on our policies for specimen collection fees and the travel allowance for consideration for possible updates to policies in the future through notice and comment rulemaking. We requested comments regarding the nominal specimen collection fees for trained personnel to collect specimens from homebound patients and inpatients (not in a hospital), how specimen collection practices may have changed as a result of, or from insight gained during, the PHE for COVID-19, what additional resources might be needed for specimen collection for COVID-19 CDLTs and other tests after the PHE ends, as well as comments related to the calculation of costs for transportation and personnel expenses for trained personnel to collect specimens from such patients.

The following is a summary of the public comments we received related to the specimen collection fee and changes in practice associated with the PHE for COVID-19 and our responses.

Comment: Several commenters expressed appreciation that CMS recognized the need for additional resources required for specimen collection during the PHE and also for the expansion of access to laboratory testing in the home for Medicare beneficiaries. One commenter expressed support for CMS' decision to end the increased payment amounts for specimen collection at the termination of the PHE, stating that many laboratories realized financial profits during the PHE and suggested that those profits will continue to provide incentive to perform COVID-19 testing even after the termination of the PHE.

Conversely, several commenters stated that instead of ending increased payments for specimen collection, CMS should instead expand and permanently authorize the specimen collection payment under HCPCS codes G2023 and G2024 and allow the usage of these codes for all CDLTs in order to compensate for the supplies, equipment, and sterilization protocols required for safe and uncontaminated specimen collection and handling in the suspected presence of SARS-CoV-2. Commenters stated that an increased payment for the specimen collection of all CDLTs is necessary to compensate for the supplies, equipment, and sterilization protocols required for safe specimen collection and handling, not just in cases with suspected presence of SARS-CoV-2. Several commenters requested that CMS permanently allow the usage of G2023 to report specimen collection for all sites of service where specimens are collected by clinical laboratories and not exclusively for homebound patients, suggesting that extending the payment of specimen to additional settings would improve patient access to laboratory testing. One commenter suggested that any site where clinical laboratory personnel collect specimens should be permitted to bill Medicare for G2023, including on-site collection at clinical laboratories, pharmacies billing as clinical laboratories, drive through testing locations, and urgent care clinics.

Several commenters stated that the COVID-19 pandemic has permanently altered the public health paradigm, which the commenters stated necessitates permanent and resource-intensive infection control measures that merit higher specimen collection fees to account for such costs as heightened safety precautions, the need for PPE, and special training for specimen collection beyond the immediate PHE. The commenters stated that the novel coronavirus is transmitted through the air, widely circulating variants (for example, beta, delta) will continue to spread, more variants are likely to continue to emerge, and the duration of the vaccine protective immunity is unknown. For these reasons, the commenters stated that additional PPE and safety procedures and training necessary for safe specimen collection will be necessary indefinitely. Several commenters also stated that herd immunity has not yet been achieved and may still be years away; therefore, ongoing special training and protective measures, including PPE, which require additional costs and supplies, will remain necessary. One commenter also stated that even if the overall testing volume for the novel coronavirus decreases, additional resources on a per test basis will remain the same. One commenter stated that laboratory tests that provide self-collection kits still require professionals for processing of the specimens, who in turn need appropriate infection control resources for that activity.

Several commenters described the types of costs incurred and supplies needed for specimen collection, specifically:

• PPE including N-95 or higher respiratory or masks; face shields; goggles; gloves; isolation gowns;
• Specimen collection supplies including swabs; collection kits;
• Disinfecting and sterilization equipment including cleaning supplies; sanitizers; sterile gauze and bandages; biohazardous material disposal receptacles and bags;
• Laboratory training and expertise for staff, including employee time used for existing and new clinical laboratory technicians or health care professionals to train on proper specimen collection and handling techniques; and
• Additional staffing costs, including employee time for existing and additional new clinical laboratory technicians or health care professionals required to follow safe and accurate specimen collection procedures, enforce safe distancing requirements and fulfill administrative requirements such as logging information into infection control tracking databases at the institutional, local, State and/or Federal level.

Several commenters stated that other Federal agencies have both recommended and mandated enhanced protective measures, including the Centers for Disease Control and Prevention (CDC) and Occupational Safety and Health Administration (OSHA), respectively, in suspected COVID-19 cases. Commenters also suggested that the laboratory specimen collection fee should be updated annually to reflect inflation and the growth in costs.

Response: We appreciate the comments regarding the nominal specimen collection fees for the collection of specimens for COVID-19 clinical diagnostic laboratory testing. We acknowledge that the types of resources utilized and supplies needed for specimen collection have been influenced by the PHE for COVID-19. We plan to take this feedback into consideration for possible future rulemaking or guidance.

The following is a summary of the public comments we received related to the methodology for calculating the travel allowance for laboratory specimen collection and our responses.

Comment: Several commenters described their concerns with the current travel allowance policy, stating that the current system requires the individual tracking of miles and paperwork documenting those miles, and the calculation of billable charges. Commenters stated that this system creates inconsistencies across facilities providing specimen collection services and creates confusion and burden for health care providers and Medicare Administrative Contractors (MACs).

Several commenters requested that CMS simplify the travel allowance by creating a single per-encounter flat-rate payment for travel to be updated annually by the Consumer Price Index for All Urban Consumers (CPI-U), which the commenters stated would eliminate the need for the current system which they describe as cumbersome and inefficient since it requires tracking individual miles traveled in paper or electronic logs. Commenters suggested that the single per-encounter flat-rate payment rate be calculated using total aggregate payments made for the travel allowance in 2018, divided by the number of patient encounters, and then reduced by a percentage in support of a separate rural add-on payment and updated annually to reflect inflation and the growth in costs.

Commenters also stated that a single per-encounter flat-rate payment to reimburse the travel allowance would simplify personnel and transportation expenses, eliminating the individual tracking of miles and paper documenting those miles, as well as the calculation of billable charges. The commenters stated that the flat-rate approach would also provide greater consistency across facilities served and reduce the burden on health care providers and MACs, and therefore, further support continued patient access to these laboratory services. Several commenters also stated that the travel allowance is prone to billing inconsistencies, so simplifying the calculation of the travel allowance would increase the overall understanding of the policy among stakeholders, decrease the instances of health care providers inadvertently overbilling for mileage, and reduce program integrity concerns, creating clarity for all parties involved.

Several commenters also requested that CMS create a rural add-on payment to supplement the single per-encounter flat-rate payment for travel, which the commenters stated would account for additional resources required to provide specimen collection in distant and remote areas and ensure that beneficiaries residing in rural areas can continue receiving specimen collection services.

Several commenters also suggested that if CMS does not adopt a flat rate approach, CMS should consider modifying the existing travel allowance payment structure. Commenters recommended that salary and travel costs used to determine the travel allowance be updated to account for increased labor and fuel costs and adequately cover the costs associated with transportation and personnel expenses for trained personnel to travel to the location to collect the sample. Commenters also suggested that mileage calculations begin at an eligible laboratory or patient locations and end when the trained personnel no longer have the specimen in their possession. Several commenters also recommended that business requirements outlined in the annual Medicare travel allowance change request be updated to require the contractor to search their files to adjust claims already paid at the prior year travel allowance rather than require action by health care providers, instructing contractors to review claims and reprocess at the updated rates.

Response: We appreciate the comments regarding the travel allowance for CDLTs. We plan to take this feedback into consideration for possible future rulemaking or guidance.

3. Medicare Clinical Laboratory Fee Schedule: Electronic Travel Logs

In the CY 2022 PFS proposed rule (86 FR 39310 through 39311), we stated that we are making permanent the option for laboratories to maintain electronic logs of miles traveled for the purposes of covering the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect a specimen sample. This option for laboratories to maintain electronic logs is not limited to COVID-19 specimen collection and applies to specimen collection for any CDLT. We will provide guidance in future instructions via forthcoming Change Requests and other materials such as MLN Matters® Articles. Laboratories will need to be able to produce electronic logs in a form and manner that can be shared with MACs, and should continue to consult with their local MACs regarding the format and process for ongoing submission of this information.

N. Medicare Provider and Supplier Enrollment

1. Enrollment Process

a. General Discussion

Section 1866(j)(1)(A) of the Act requires the Secretary to establish a process for the enrollment of providers and suppliers in the Medicare program. The overarching purpose of the enrollment process is to help confirm that providers and suppliers seeking to bill Medicare for services and items furnished to Medicare beneficiaries meet all Federal and State requirements to do so. The process is, to an extent, a “gatekeeper” that prevents unqualified and potentially fraudulent individuals and entities from being able to enter and inappropriately bill Medicare. Since 2006, we have taken steps via rulemaking to outline our enrollment procedures. These regulations are generally incorporated in 42 CFR part 424, subpart P (currently §§ 424.500 through 424.570 and hereafter occasionally referenced as subpart P). They address, among other things, requirements that providers and suppliers must meet to obtain and maintain Medicare billing privileges.

As outlined in § 424.510, one such requirement is that the provider or supplier must complete, sign, and submit to its assigned Medicare Administrative Contractor (MAC) the appropriate enrollment form, typically the Form CMS-855 (OMB Control No. 0938-0685). The Form CMS-855, which can be submitted via paper or electronically through the Internet-based Provider Enrollment, Chain, and Ownership System (PECOS) process (SORN: 09-70-0532, PECOS), collects important information about the provider or supplier. Such data includes, but is not limited to, general identifying information (for example, legal business name), licensure and/or certification data, and practice locations. After receiving the provider's or supplier's initial enrollment application, CMS or the MAC reviews and confirms the information thereon and determines whether the provider or supplier meets all applicable Medicare requirements.

We believe the Medicare provider enrollment screening process has greatly assisted CMS in executing its responsibility to prevent Medicare fraud, waste, and abuse. As previously mentioned, over the years we have issued various final rules pertaining to provider enrollment. These rules were intended not only to clarify or strengthen certain components of the enrollment process but also to enable us to take further action against providers and suppliers: (1) Engaging (or potentially engaging) in fraudulent or abusive behavior; (2) presenting a risk of harm to Medicare beneficiaries or the Medicare Trust Funds; or (3) that are otherwise unqualified to furnish Medicare services or items. Consistent with this, and as discussed further in this section III.N. of this final rule, we proposed several changes to our existing provider enrollment regulations.

b. Legal Authorities

There are two principal categories of legal authorities for our provider enrollment provisions. First, section 1866(j) of the Act furnishes specific authority regarding the enrollment process for providers and suppliers. Second, sections 1102 and 1871 of the Act provide general authority for the Secretary to prescribe regulations for the efficient administration of the Medicare program.

2. Provisions

a. Expansion of Authority To Deny or Revoke Based on Office of Inspector General (OIG) Exclusion

Under §§ 424.530(a)(2) and 424.535(a)(2), respectively, CMS denies or revokes a provider's or supplier's enrollment if the provider or supplier, or any owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel of the provider or supplier is excluded by the OIG. We proposed several changes related to these authorities.

First, we proposed to expand the categories of parties within the purview of these denial and revocation provisions to include excluded administrative or management services personnel who furnish services payable by a Federal health care program, such as a billing specialist, accountant, or human resources specialist. This change would align with existing OIG guidance stating that providers and suppliers may not employ excluded persons to provide management or administrative services that are payable by a Federal health care program.

Second, existing § 424.530(a)(2) references “other health care personnel furnishing Medicare reimbursable services who is required to be reported on the enrollment application.” To conform to our change described in the previous paragraph, we proposed to replace this language with “other health care or administrative or management services personnel furnishing services payable by a Federal health care program.” We also proposed to include this language within § 424.535(a)(2) so that the latter aligns with § 424.530(a)(2).

Third, § 424.535(e) states that if the revocation was due to adverse activity (sanction, exclusion, or felony) against an owner, managing employee, authorized or delegated official, medical director, supervising physician, or other personnel of the provider or supplier furnishing Medicare reimbursable services, the revocation may be reversed if the provider or supplier terminates (and submits proof that it has terminated) its business relationship with that individual within 30 days of the revocation notification. For the reasons already outlined, we proposed to replace the language in § 424.535(e) concerning other personnel furnishing Medicare reimbursable services with “other health care or administrative or management services personnel furnishing services payable by a Federal health care program.”

We received several public comments on these proposals. The following is a summary of them and our responses.

Comment: Several commenters expressed concern that providers and suppliers (in their efforts to follow OIG compliance guidelines) may miss instances where a person they are reviewing against the OIG exclusion list has a name that does not exactly match that indicated on the OIG list as an excluded party, yet the two parties are in fact the same; this could mean that such person might avoid detection. The commenters suggested an exception to the application of expanded §§ 424.530(a)(2) and 424.535(a)(2) if the provider or supplier demonstrated a good-faith effort to identify potentially excluded parties among their employees or other personnel.

Response: We respectfully disagree with the commenters' recommended good-faith exception. It is ultimately the provider's or supplier's responsibility to ensure that the parties addressed in §§ 424.530(a)(2) and 424.535(a)(2) are not excluded by the OIG. While we recognize that this task may take more time with respect to a particular party if, for instance, the name-match issue to which the commenter refers arises, this does not and should not negate the provider's or supplier's responsibilities in this regard. The central principle associated with §§ 424.530(a)(2) and 424.535(a)(2) involves the provider's or supplier's need to avoid relationships with OIG-excluded parties, not the level of effort the provider or supplier undertook to confirm that no such relationships exist.

Comment: One commenter maintained that our proposal could increase provider burden, particularly for smaller practices. The commenter stated that some providers and suppliers hire third-party organizations to submit claims and perform other functions on their behalf; as part of these contracts, the third-party performs OIG exclusion searches on the persons who will be undertaking these activities. The commenter stated that our proposal would require providers and suppliers to update such contracts to ensure that the provider or supplier is held harmless should the third-party fail to adequately conduct these searches. The commenter recommended that CMS mitigate the administrative burden and other impacts of this proposal.

Response: Consistent with our response to the previous commenters, we believe that the provider or supplier bears primary responsibility for ensuring adherence to Federal regulations irrespective of whether it delegates any compliance verification activities to a third-party. As for impact reduction, we emphasize that the only parties to which our expansion of §§ 424.530(a)(2) and 424.535(a)(2) would apply are those engaged in administrative or managerial services that are payable by a Federal health care program; if the service does not fall within this latter category concerning Federal reimbursement, the expansion is inapplicable. Moreover, we believe that: (i) Many providers and suppliers already review such parties against the OIG exclusion list; and (ii) many of these parties also fall within one of the other categories addressed in §§ 424.530(a)(2) and 424.535(a)(2) (for example, managing employees), meaning that they are already covered under these two regulatory provisions. Given the foregoing, we do not foresee an increase in the overall administrative effect of §§ 424.530(a)(2) and 424.535(a)(2) on the provider community.

After consideration of these public comments, we are finalizing our revisions to §§ 424.530(a)(2) and 424.535(a)(2) as proposed.

b. Deny or Revoke Enrollment for Surrender of Drug Enforcement Administration (DEA) Certificate of Registration in Response to Show Cause Order

We have existing authority under § 424.530(a)(11)(i) to deny a physician's or other eligible professional's enrollment if his or her DEA certificate of registration to dispense a controlled substance is currently suspended or revoked; a concomitant authority to revoke enrollment in this circumstance is outlined in § 424.535(a)(13)(i). We proposed to expand these authorities to include situations where the physician or other eligible professional surrenders his or her DEA certificate in response to an order to show cause.

We have encountered situations where a physician or other eligible professional who has engaged in improper prescribing or other DEA-monitored activities relinquishes his or her DEA certificate pending a DEA show cause order so as to avoid a likely suspension or revocation of his or her DEA certificate or other similar circumstance. We believe these scenarios are no less serious from the standpoints of program integrity and beneficiary safety than a DEA certificate suspension or revocation. Hence, we believe this change is warranted.

We received several public comments on these proposals. The following is a summary of them and our responses.

Comment: Several commenters supported our proposal to expand §§ 424.530(a)(11)(i) and 424.535(a)(13)(i). However, they urged that: (1) CMS carefully consider the facts of each situation before taking action; and (2) appeals processes be available for individuals denied or revoked under these provisions. One commenter stated that there could be reasons a physician surrendered his or her DEA certificate prior to a show cause order that may not merit denial or revocation. The commenter wanted CMS to ensure that innocent physicians are not revoked, since this could affect patient care.

Response: We appreciate the commenters' support. We would closely examine the facts of cases involving expanded §§ 424.530(a)(11)(i) and 424.535(a)(13)(i) to determine whether a denial or revocation is warranted; should either of these latter actions ensue, the provider or supplier could appeal the matter under 42 CFR part 498.

After consideration of these public comments, we are finalizing our revisions to §§ 424.530(a)(11)(i) and 424.535(a)(13)(i) as proposed.

c. Creation of Specific Rebuttal Rights for Deactivations

As outlined in § 424.540, deactivation means that the provider's or supplier's billing privileges are stopped (but not revoked or terminated). Deactivation is intended to protect the provider or supplier from the misuse of its billing number and to safeguard the Trust Funds from unnecessary overpayments. Under existing regulations, a provider's or supplier's billing privileges may be deactivated if the provider or supplier: (1) Does not submit any Medicare claims for 12 consecutive calendar months; (2) fails to report certain changes in its enrollment information within required timeframes; or (3) fails to fully and accurately comply with a CMS revalidation request within 90 days.

Since a deactivated provider's or supplier's billing privileges are stopped, § 424.545(b) permits the affected provider or supplier to file a rebuttal in accordance with 42 CFR 405.374 (which allows rebuttals for Medicare payment suspensions). While we have outlined deactivation rebuttal procedures in subregulatory guidance, these procedures are not reflected in regulation. Consequently, we proposed to revise 42 CFR part 424, subpart P to describe the deactivation rebuttal process in detail, a process that would generally mirror our existing subregulatory procedures on the topic.

The specific changes we proposed were as follows:

• At § 424.545(b), we proposed to change the language that reads “in accordance with § 405.374 of this chapter” to “in accordance with § 424.546.” Instead of continuing to reference § 405.374, we proposed to create a new § 424.546 to address the deactivation rebuttal process.
• At new § 424.546(a)(1), we proposed that if a provider or supplier receives written notice from CMS or its contractor that the provider's or supplier's billing privileges are to be or have been deactivated under § 424.540, the provider or supplier has 15 calendar days from the date of the written notice to submit a rebuttal to CMS.
• At new § 424.546(a)(2), we proposed that CMS may, at its discretion, extend the 15-day time-period referenced in § 424.546(a)(1).

• At new § 424.546(b)(1) through (4), we proposed that any rebuttal must: (1) Be in writing; (2) specify the facts or issues about which the provider or supplier disagrees with the deactivation's imposition and/or effective date, as well as the reasons for disagreement; (3) submit all documentation the provider or supplier wants CMS to consider in its review of the deactivation; and (4) be submitted in the form of a letter that is signed and dated by the individual supplier (if the latter is enrolled as an individual physician or NPP), the authorized official or delegated official (as those terms are defined in § 424.502), or a legal representative (as defined in 42 CFR 498.10). Concerning paragraph (b)(4), if the legal representative is an attorney, the attorney must include a statement that he or she has the authority to represent the provider or supplier; this statement will be sufficient to constitute notice of such authority. If the legal representative is not an attorney, the provider or supplier must file with CMS written notice of the appointment of a representative; this notice of appointment must be signed and dated by, as applicable, the individual supplier, the authorized official or delegated official, or a legal representative.

• At new § 424.546(c), we proposed that the provider's or supplier's failure to submit a rebuttal that is both timely under paragraph (a) and fully compliant with all of the requirements of paragraph (b) constitutes a waiver of all rebuttal rights under this section and § 424.545(b).
• At new § 424.546(d), we proposed that upon receipt of a timely and compliant deactivation rebuttal, CMS reviews the latter to determine whether the imposition of the deactivation and/or the designated effective date are correct.
• At new § 424.546(e), we proposed that nothing in § 424.546 or § 424.545(b) will require CMS to delay the imposition of a deactivation pending the completion of the CMS review described in paragraph (d).
• At new § 424.546(f), and consistent with both current subregulatory policy concerning deactivation rebuttals, as well as payment suspension rebuttal regulations at § 405.375(c), a determination made under § 424.546 will not be an initial determination under § 498.3(b) and, therefore, will not be appealable.

We received several public comments on these proposals. The following is a summary of them and our responses.

Comment: Although supporting our proposal to address deactivation rebuttal rights in regulation, several commenters suggested modifications. First, some commenters recommended that a deactivated provider or supplier have 30 days from its receipt of the deactivation notice to submit its rebuttal. One commenter stated that this would account for situations where mail is delayed or the deactivation notice was sent to the wrong location. Second, a good cause exception should exist for untimely or less-than-fully compliant rebuttals; an example would be when the provider or supplier could not access all the documentation it needed to support its rebuttal. Third, CMS should have to make its determination regarding the rebuttal submission within 15 days of receiving it. Disagreeing that CMS' decision is not an initial determination (as proposed § 424.546(f) states), the commenter believed that a 15-day response time for CMS was warranted or, in lieu of this, CMS should afford formal appeal rights; otherwise, CMS would have no incentive to quickly review a rebuttal submission.

Response: We respectfully disagree with these recommendations and assertions for several reasons. First, we believe our proposed 15-day timeframe is sufficient for the provider or supplier to prepare and submit a detailed rebuttal. Indeed, this has been our experience with payment suspensions under § 405.372, for which the affected provider or supplier has 15 days from the date of the payment suspension notice to submit a rebuttal under § 405.374. Second, it is the deactivated provider's or supplier's responsibility to ensure that its rebuttal is timely and complete. Requiring CMS to grant good cause exceptions (above and beyond the discretionary timeliness extension that CMS may provide under proposed § 424.546(a)(2)) could lead providers and suppliers to conclude that a fully compliant rebuttal is unnecessary because an exemption will typically be furnished. Third, we believe that deactivated providers and suppliers would want CMS to give the most thorough and detailed consideration of their rebuttal submission; this is our desire as well. To afford us this ability, therefore, we do not believe our timeframe for review should be so restricted. Fourth, we maintain our long-held position that a deactivation should neither constitute an initial determination nor entail appeal rights under 42 CFR part 498. This is because, unlike with a revocation, a deactivated provider or supplier remains enrolled in Medicare and does not lose their billing privileges. Therefore, we believe that a rebuttal (as opposed to 42 CFR part 489 appeal rights) is a proper and proportionate mechanism for the deactivated provider or supplier to contest the action.

Comment: A commenter suggested that CMS give a deactivated provider or supplier 20 days (rather than 15) from the date it received the deactivation notice to submit its rebuttal. In a similar context, another commenter suggested that the timeframe be 15 days from the date of receipt of the deactivation notice instead of 15 days from the date of the notice itself; this presumes a 5-day timeframe for the notice to reach the provider or supplier via mail.

Response: For reasons already stated, we believe that 15 days from the date of the notice is an adequate rebuttal timeframe.

Comment: A commenter encouraged CMS to implement a system for correspondence (such as deactivation notices) to be sent and received electronically. The commenter stated that they believe this would lead to cost savings and more efficient communication.

Response: We appreciate and will consider this suggestion with respect to provider enrollment correspondence, for we constantly seek to improve the enrollment process and alleviate burden for all stakeholders.

After consideration of these public comments, we are finalizing our aforementioned deactivation rebuttal provisions as proposed.

d. Modernizing Enrollment Policies for Emerging Technologies in Independent Diagnostic Testing Facilities

Section 410.33(a) states that CMS pays for diagnostic procedures under the PFS only when performed by the suppliers listed in that section. Among these supplier types are independent diagnostic testing facilities (IDTFs). An IDTF may be a fixed location, a mobile entity, or an individual NPP. It is independent of a physician's office or hospital, although the IDTF regulations outlined in § 410.33(a) also apply when an IDTF furnishes diagnostic procedures in a physician's office.

Section 410.33 as a whole contains provisions with which IDTFs must comply in order to enroll in (and maintain enrollment in) Medicare, such as requirements for nonphysician personnel (§ 410.33(c)). In addition, § 410.33(g) contains various compliance standards that IDTFs must meet. We established these standards to help ensure the quality and safety of IDTF diagnostic testing and to strengthen our ability to verify the IDTF's adherence to enrollment requirements.

IDTFs generally perform diagnostic tests on beneficiaries in, for instance, a health care facility, physician's office, or mobile setting. The IDTF standards at § 410.33(g) (as well as other provisions at § 410.33) were, in fact, designed for traditional IDTF suppliers that engage in direct or in-person beneficiary interaction, treatment, and/or testing. Yet some health care entities have developed or utilize diagnostic tests that do not require such interaction. That is, certain IDTFs perform diagnostic services via computer modeling and analytics, or other forms of testing not involving direct beneficiary interaction. The service is often conducted by a technician who undertakes a computer analysis offsite or at another location at which the patient is not present. The physician then reviews the image to determine the appropriate course of action. In short, these entities generally, though not exclusively, have two overriding characteristics. First, the tests they perform do not involve direct patient interaction, meaning that the test is conducted away from the patient's physical presence and is non-invasive. Second, the test involves off-site computer modeling and analytics.

Despite the comparatively new and innovative forms of testing these entities undertake, they can still qualify as IDTFs (notwithstanding the offsite and indirect nature of the test) so long as they meet the applicable requirements of § 410.33. The dilemma is that these entities often cannot meet certain IDTF requirements, and thus cannot enroll in Medicare, strictly because of the test's indirect nature. In other words, the types of tests at issue do not fall within the category of those to which several of our standards in § 410.33 were intended to apply (specifically, to in-person procedures). To account for such technological advances in diagnostic testing, we believe that revisions to § 410.33 are necessary. To this end, we proposed that IDTFs that have no beneficiary interaction, treatment, or testing whatsoever at their practice location will be either partially or wholly exempt from the following requirements in § 410.33 (hereafter occasionally referenced as “exempted” IDTFs).

Section 410.33(c) requires all nonphysician personnel the IDTF uses to perform diagnostic tests to demonstrate the basic qualifications to perform these tests as evidenced by State licensure or State certification; the IDTF must maintain documentation available for review that these requirements are met. In the absence of a State licensing board, the technician must be certified by an appropriate national credentialing body. However, the aforementioned indirect tests and the performing personnel frequently do not require State licensure or State/national credentialing, meaning that § 410.33(c) becomes a difficult requirement for such IDTFs to meet. Indeed, § 410.33(c) has typically been applied to the qualifications needed to perform in-person tests in traditional IDTF settings; that is, the staff at exempted IDTFs often will instead be primarily trained in the test's particular software and computer analytics (or other non-beneficiary-based services)). Extending § 410.33(c)'s purview to indirect tests reduces the number of personnel who can perform them, thus hindering beneficiary access to such services and potentially preventing the enrollment of otherwise qualified IDTFs.

Accordingly, we proposed to divide current § 410.33(c) into two paragraphs. New paragraph (c)(1) would contain the existing requirements of § 410.33(c), with an exception for exempted IDTF personnel in new paragraph (c)(2). We proposed in the latter paragraph that, for services that do not require direct or in-person beneficiary interaction, treatment, or testing, any nonphysician personnel performing the test must meet all applicable State licensure requirements for doing so; if such State licensure requirements exist, the IDTF must maintain documentation available for review that these requirements have been met.

While we believed that personnel performing the tests described in paragraph (c)(2) should meet whatever State requirements exist for those services, paragraph (c)(2) did not include any reference to national credentialing bodies. Further, we recognized that, in some instances, States may have no requirements for technicians involved in the particular type of computer analytics involved in the Medicare-covered service.

We also proposed that the following IDTF certification standards in § 410.33(g) would not apply to exempted IDTFs:

• The IDTF must have a comprehensive liability insurance policy of at least $300,000 per location that covers both the place of business and all customers and employees of the IDTF (§ 410.33(g)(6)).
• The IDTF must answer, document, and maintain documentation of a beneficiary's written clinical complaint at the physical site of the IDTF (§ 410.33(g)(8)).
• The IDTF must openly post the standards outlined in § 410.33(g) for review by patients and the public (§ 410.33(g)(9)).

Concerning § 410.33(g)(8), exempted IDTFs would not be furnishing direct services to beneficiaries that could result in a beneficiary's written clinical complaint. Thus, we believe this standard should be inapplicable to exempted IDTFs, and we proposed to revise paragraph (g)(8) in this vein. We proposed a similar approach with § 410.33(g)(9); neither beneficiaries whose tests are sent to the exempted IDTF nor the public in general would visit its physical location, therefore negating the need for a posting of standards. As for § 410.33(g)(6), the liability policy addressed therein was designed for IDTFs that provide services to beneficiaries in a facility or mobile unit and, thus, could have issues concerning medical negligence and/or malpractice. We recognized, however, that the performance of a particular test by an exempted IDTF could raise questions of possible liability. Therefore, we solicited public comment on the types of situations where this could arise, as well as on the following issues: (1) Whether exempted IDTFs should indeed be required to maintain a $300,000 liability policy; (2) whether a liability amount of less than $300,000 is warranted for these IDTFs and, if so, what that amount should be (for example, $50,000 or $100,000 or $200,000); and (3) whether no liability policy should be required for exempted IDTFs. (We also solicited comment on whether we should still apply the IDTF standards in § 410.33(g)(6) and (8) to exempted IDTFs.)

We received several public comments on these proposals. The following is a summary of them and our responses thereto:

Comment: Several commenters supported our proposed IDTF supplier standard exemptions.

Response: We appreciate the commenters' support.

Comment: Several commenters asked CMS to clarify that the proposed exemptions apply when there is no direct or in-person beneficiary interaction, treatment, or testing at the place of the delivery of the service—that is, at the IDTF. One commenter explained that when an IDTF performs or administers an entire diagnostic test at, for example, the beneficiary's location, the beneficiary's location is the place of service; however, when one or more aspects of the test are performed at the IDTF, the IDTF is the place of service. To avoid any confusion as to the exemptions' applicability, the commenter suggested regulatory text stating that our exemptions would apply to IDTFs that only perform services that do not require direct or in-person beneficiary interaction, treatment, or testing at the place of service as defined in § 410.33(e)(2).

Response: We do not believe the recommended change is necessary. The current standards in § 410.33(g) have always applied to the IDTF itself irrespective of the place of service under § 410.33(e)(2). Indeed, § 410.33(e)(2) deals mostly with claim submission requirements and is largely immaterial to the question of whether the IDTF meets the § 410.33(g) standards. We believe that the regulatory wording of our exemptions is clear as to the scope of the latter's applicability and that no need exists for a reference therein to § 410.33(e)(2).

Comment: Several commenters suggested that CMS retain the liability insurance requirement for exempted IDTFs. One commenter stated that malpractice liability could occur with these IDTFs as it does with IDTFs that perform in-person testing; if the exempted IDTF's malpractice risk is low, the insurance should not be expensive.

Response: We maintain our position that liability insurance would be largely inapplicable to IDTFs performing indirect, non-in-person testing. Nevertheless, we intend to closely monitor the implementation of our § 410.33 exemptions, including that pertaining to § 410.33(g)(6). Should we determine that modifications to our exemptions are necessary based on, for instance, program integrity or quality assurance concerns, future rulemaking will be considered.

Comment: Several commenters recommended that CMS not finalize its proposed IDTF nonphysician personnel exemption regarding national credentialing and instead outline credentialing requirements (State and/or Federal) for these individuals. The commenters stated that they do not believe that, in the absence of applicable State licensure requirements, such personnel should be permitted to operate without meeting any qualifications; they maintained that staff performing any test (with or without direct beneficiary interaction) should be qualified to do so. The commenters also stated that they believe these persons should have national certification from a national accrediting body if no State licensure requirements exist. Some commenters suggested that if CMS does not establish formal national credentialing requirements for such personnel, the exempted IDTFs could at least be required to submit evidence that their nonphysician staff have some type of national certification.

Response: We believe that our proposed exemption language in § 410.33(c)(2) is appropriate. Our understanding is that there are very few, if any, national health care certifications applicable to the technicians who will be performing indirect tests with no beneficiary interaction; many of these individuals are instead trained in non-health care related computer analytical fields. To require them to be nationally credentialed by a national health care accrediting body would, in many cases, prohibit them from performing IDTF tests. This result would be inconsistent with the general aim of our exemptions, which is to prevent unnecessary and insurmountable barriers to the enrollment of these types of IDTFs. As with the aforementioned liability insurance exemption, however, we will maintain oversight of the enforcement of § 410.33(g)(2) and, if necessary, consider modifications in future rulemaking.

Comment: Though supportive of our IDTF proposals, a commenter urged CMS to continually examine how Medicare enrollment and other applicable regulations can be modified to allow for greater use of innovative technologies.

Response: We agree with this comment and will consistently review our enrollment regulations and policies to, as warranted, account for emerging health care innovations.

Comment: Several commenters recommended that CMS not finalize its exemption regarding the posting of IDTF standards at the IDTF's place of business; at a minimum, exempted IDTFs should have to post the standards online for review by IDTF personnel and beneficiaries. One commenter explained that even if patients are not on-site at the IDTF, they should have access to, and understand, the standards required of exempted IDTFs and their technicians.

Response: We respectfully disagree that the above-referenced exemption should not be finalized. As previously indicated, the IDTF standards in § 410.33(g) were originally intended for traditional IDTFs engaging in direct or in-person beneficiary interaction, treatment, and/or testing at the IDTF site. This was especially true concerning § 410.33(g)(9), the core aim of which is to ensure that beneficiaries visiting the facility can actually view the standards while on site. Given that exempted IDTFs neither test nor treat patients at its location, such entities simply do not fall within the scope of facilities to which § 410.33(g)(9) was always meant to apply. However, should we later determine that modifications to this exemption are warranted, we will consider future rulemaking.

Comment: Several commenters stated that CMS should, for several reasons, create an additional exemption concerning § 410.33(g)(15)(i), which prohibits a fixed-based IDTF (excluding hospital-based IDTFs) from sharing its practice location with another Medicare provider or supplier. First, the commenters stated that the space-sharing prohibition (like other IDTF standards) is primarily directed towards IDTFs that treat patients on-site and is largely immaterial to indirect testing situations. Commenters also maintained that the prohibition is designed to prevent improper referral arrangements and kickbacks but that IDTFs with no on-site beneficiary interaction often simply seek to share administrative resources, which does not fall within the scope of the aforementioned inappropriate activities; the risk these IDTFs therefore pose in a space-sharing situation is comparatively small. In addition, the space-sharing prohibition currently does not apply to IDTFs that are mobile, a scenario the commenters believed is somewhat akin to off-site, indirect testing. Finally, the commenters stated that enforcing the space-sharing prohibition against exempted IDTFs could limit beneficiary access to care.

If a complete exception from this standard is unfeasible, the commenters requested that CMS at least elucidate the scope of the standard's application to exempted IDTFs that seek to share administrative and non-clinical operations with another remote provider or supplier, where neither entity provides on-site patient services.

Response: We believe the space-sharing prohibition should still apply to exempted IDTFs. The overall concept behind this prohibition is that each IDTF must independently meet all IDTF requirements on its own merits, rather than in unison with another IDTF or Medicare provider or supplier. Even with the beneficiary off-site, having two exempted IDTFs at the same location could lead to confusion as to which IDTF performed the test, which personnel were used, etc. Given the program integrity concerns (which remain) that led to the establishment of our IDTF standards many years ago, we believe that the potential intermingling of IDTF resources via space-sharing should be avoided, regardless of whether beneficiaries are actually seen at the IDTF site. Moreover, and at least for purposes of the space-sharing exemption, mobile IDTFs are not analogous to exempted IDTFs. This is because it is, by and large, physically impossible for two mobile IDTF units to share the same space.

Any clarification regarding the scope of the space-sharing exemption's applicability to the sharing of exempted IDTF resources would, as needed, be addressed in future rulemaking or guidance.

Comment: Several commenters recommended that CMS limit and modify its proposed exemption from § 410.33(g)(8). First, they maintained that complaints could be maintained at a single location (which need not be on-site), though they must be made available to CMS upon request. In addition, the exempted IDTF should be able to require beneficiaries to submit clinical complaints in writing via a specified submission form or process (such as a comment “box”), provided the IDTF informs beneficiaries of this requirement. The commenters stated that these two revisions would reduce the administrative burden on exempted IDTFs while ensuring that they can still properly address beneficiary complaints.

Response: For reasons similar to those stated previously in this section not to finalize our proposed exemption to § 410.33(g)(9), we do not believe modifications to our proposed § 410.33(g)(8) exemption are needed. The original and continued purpose of § 410.33(g)(8) is to make certain that beneficiaries receiving direct, in-person tests can register clinical complaints. It was never intended to apply to situations where testing is distant and indirect, and we believe our § 410.33(g)(8) exemption falls within the original intent of § 410.33(g)(8). However, should we determine in the future that revisions to this exemption might be required, rulemaking will be contemplated.

Comment: One commenter requested that CMS clarify the use of the language “licensure or certification by the appropriate State health or education department” currently in § 410.33(c), a paragraph we proposed to redesignate as § 410.33(c)(1) though without any change in its content or meaning. Specifically, the commenter stated this provision should clarify that a technician who receives certification (related to services furnished in the IDTF) from an educational program at a school overseen by the State's education department satisfies the requirements of existing § 410.33(c), irrespective of any national certifications. The commenter maintained that such an interpretation is consistent with CMS' general policy concerning IDTF technician requirements and would better explain the types of State requirements that must be met. The commenter also urged CMS to confirm that an IDTF can use the aforementioned State certification in lieu of national credentialing to demonstrate § 410.33(c) compliance.

Response: We believe that the commenter is seeking clarification of the policies in existing § 410.33(c) rather than our proposed exemption in § 410.33(c)(2). Since, aside from the aforementioned redesignation, we did not propose any change to current § 410.33(c) or the policy therein, we believe this comment is outside the scope of this final rule.

Comment: A commenter stated that proposed § 410.33(c)(2) does not include the language in current § 410.33(c) concerning certifications from an educational program at a school overseen by the State's education department. The commenter asked CMS to explain this omission and/or more thoroughly identify the types of State qualifications (for example, certifications) by which exempted IDTF nonphysician personnel can demonstrate compliance with Federal and State requirements.

Response: Existing § 410.33(c)'s reference to State education program certifications was not included in proposed § 410.33(c)(2) because we do not believe such certifications, which frequently focus on direct patient testing, would generally apply to the off-site, computer analytics-oriented testing that exempted IDTFs perform. As stated in proposed § 410.33(c)(2), IDTF personnel must meet State licensure requirements for the tests being performed, assuming such requirements exist; nothing in proposed § 410.33(c)(2) permits education to be used in lieu of licensure.

Comment: One commenter requested that CMS clarify the applicable State licensure laws for nonphysician personnel at exempted IDTFs; specifically, the commenter asked whether the laws of the State in which the beneficiary is located or the State of the IDTF's practice location are governing.

Response: The applicable State law in the commenter's scenario is the State in which the IDTF's practice location (as reported on the Form CMS-855) is located.

After consideration of these public comments, we are finalizing our aforementioned IDTF provisions as proposed.

e. Revisions at § 424.535(a)(8)

Under § 424.535(a)(8)(ii), CMS may revoke a provider's or supplier's enrollment if CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements. In determining whether a revocation is appropriate under § 424.535(a)(8)(ii), CMS considers, as appropriate and applicable, the factors outlined in § 424.535(a)(8)(ii)(A) through (F); respectively, these are:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) Whether the provider or supplier has any history of final adverse actions and the nature of any such actions.

(D) The length of time over which the pattern has continued.

(E) How long the provider or supplier has been enrolled in Medicare.

(F) Any other information regarding the provider or supplier's specific circumstances that CMS deems relevant to its determination.

We have recently encountered situations where providers and suppliers have engaged in periods of non-compliant billing that, though comparatively brief, have or could have harmed the Medicare program. While we have attempted revocation action per § 424.535(a)(8)(ii) against such providers and suppliers, the current wording of some of the factors in paragraphs (a)(8)(ii)(A) through (F) have hampered our ability to do so. To increase our flexibility to address periods of abusive billing irrespective of their duration, we proposed to revise § 424.535(a)(8)(ii)(A) through (F) as follows:

• In paragraph (a)(8)(ii)(A), we proposed revisions to focus on the percentage of denials within subsets of the provider's or supplier's claim submissions rather than across the entire universe of their claim submissions. Specifically, we would consider the percentage of submitted claims that were denied during the timeframe under consideration. We believe existing paragraph (a)(8)(ii)(A) inhibits our capacity to target brief periods involving a significant percentage of denied claims; this is because this factor has been interpreted to require said percentage to be weighed against claim denials over the entire period of the provider's or supplier's enrollment. Proposed revised paragraph (a)(8)(ii)(A) would better enable CMS to address these non-compliant periods by restricting the scope of denial percentages to a shorter duration.

• For reasons similar to our revision of § 424.535(a)(8)(ii)(A), we proposed to remove § 424.535(a)(8)(ii)(D) altogether. As already indicated, short but very intense periods of improper billing can endanger the Medicare program no less than a longer pattern of non-compliant yet merely moderate-volume billing. Yet the “length of time” standard in paragraph (a)(8)(ii)(D) often deters us from taking action under paragraph (a)(8)(ii) to address these shorter timeframes. Given this, we believed that eliminating paragraph (a)(8)(ii)(D) would strengthen our program integrity efforts.

• We also proposed to remove § 424.535(a)(8)(ii)(E), which addresses the length of the provider's or supplier's enrollment. We believed the enrollment length should have no bearing on whether paragraph (a)(8)(ii) can be applied, for the main issue is the behavior itself and not the period of enrollment.
• We proposed to remove § 424.535(a)(8)(ii)(B) as well. Notwithstanding our original inclusion of this factor in paragraph (a)(8)(ii), the overall purpose of paragraph (a)(8)(ii) has always been to deter non-compliant billing, regardless of the reason for it. Even if a period of erroneous claim submissions reflected no nefarious intent by the provider, the latter still failed to comply with Medicare billing requirements and thus presented a risk to the Medicare program. For this reason, we do not view the claim denial reason as particularly germane to the question of whether paragraph (a)(8)(ii) should apply in a particular case.
• In addition, we proposed to add new paragraph (a)(8)(ii)(C) by which we would consider the type of billing non-compliance and the precise facts surrounding said non-compliance (to the extent this can be determined). We believed this paragraph would provide slightly more specificity than the broader, catch-all factor at § 424.535(a)(8)(ii)(F) (which we will nonetheless retain). It would also allow us to more narrowly tailor our review to the unique facts of the case, thus also strengthening our ability to consider any aggravating or mitigating circumstances.

In summary, we proposed that paragraph (a)(8)(ii) would include the following factors, respectively designated as paragraphs (A) through (D):

• The percentage of submitted claims that were denied during the period under consideration.
• Whether the provider or supplier has any history of final adverse actions and the nature of any such actions.
• The type of billing non-compliance and the specific facts surrounding said non-compliance (to the extent this can be determined).
• Any other information regarding the provider or supplier's specific circumstances that CMS deems relevant to its determination.

We received several public comments on this proposal. The following is a summary of them and our responses thereto:

Comment: Several commenters expressed concern about our proposal. They stated that the proposed revision and/or removal of factors in § 424.535(a)(8)(ii) gives CMS unfettered discretion to target any short period of non-compliant billing without having to consider the provider's/supplier's behavior during its period of enrollment. The commenters stressed that brief periods of erroneous claims can occur for many reasons (for example, technological, system, or inadvertent mistakes, or changes in CMS or MAC procedures) without any ill intent by the provider or supplier; in some cases, the provider or supplier may be unaware that such errors even occurred. Revocation in such situations, the commenters stated, is far too severe a penalty, and our proposal in general could impose significant burdens on providers and suppliers.

Response: While we appreciate the commenters' concerns, we must emphasize several things. First, our revocation authority under § 424.535(a)(8)(ii) is strictly discretionary and not mandatory. In every potential § 424.535(a)(8)(ii) revocation case, we carefully weigh the facts and circumstances of the situation, conscientiously consider the regulatory factors (as appropriate and applicable), and only take revocation action when it is genuinely warranted. We have never applied § 424.535(a)(8)(ii) as a matter of course, and this will not change under our revisions thereto. Second, and on the other hand, providers and suppliers have a responsibility to always submit correct claims. Simply because a period of repeated non-compliant billing was comparatively short does not remove this responsibility; even such brief periods involve the provider or supplier having failed to comply with Medicare billing requirements. Third, we have an obligation to protect the Medicare program and the Trust Funds. As we explained in section III.N of the proposed rule, we have encountered instances where short timeframes of non-compliant billing have led to significant Trust Fund dollars being improperly paid. We must have the authority to address such situations, and we believe our proposal helps facilitate this.

Comment: One commenter stated that in potential § 424.535(a)(8)(ii) revocation cases, CMS should consider the provider's or supplier's overall history of billing compliance during its entire period of enrollment, rather than its billing compliance over a very short period.

Response: We respectfully disagree. Requiring an analysis of the provider's or supplier's complete Medicare billing history (which could extend for many years) could hamper our attempts to address shorter but significant periods of non-compliant billing within that larger period. In several potential § 424.535(a)(8)(ii) situations, we could not undertake action because, in effect, the provider's or supplier's length of enrollment (a criterion not altogether different from the entire period of billing during enrollment) overrode any shorter billing aberrations. We believe this problem must be remedied via revised § 424.535(a)(8)(ii).

Comment: One commenter supported our new factor under which CMS would consider the type of billing non-compliance and the specific facts of non-compliance. However, the commenter stated that this factor appears inconsistent with our proposed removal of § 424.535(a)(8)(ii)(B), which addresses the reason(s) for the claim denials. The commenter recommended that both the current version of § 424.535(a)(8)(ii)(B) and the aforementioned new factor be included in § 424.535(a)(8)(ii), stating that the claim denial reason is extremely relevant to whether any abusive conduct was involved. Several other commenters also urged the retention of § 424.535(a)(8)(ii)(B) for this same reason.

Response: We do not believe this new factor contradicts our removal of § 424.535(a)(8)(ii)(B). The former is merely intended to give CMS additional ability to consider all of the surrounding circumstances of the case, which may, but only at CMS' discretion, include the bases for the claim denials. By the same token, the core consideration is the incorrect claim submission itself rather than the reason it occurred. Even if a series of non-compliant claims did not involve any deceit by the provider or supplier, the fact remains that the latter did not adhere to Medicare claim submission requirements. To require us to consider the reason(s) for the claim denial would, in our view, at least partially alleviate the provider or supplier of its responsibility to always remain compliant with our billing policies. We believe such a result is inconsistent with the need to protect the Trust Funds.

Comment: One commenter noted that the billing pattern's length should remain a factor in § 424.535(a)(8)(ii) determinations.

Response: We respectfully disagree. Similar to our aforementioned position concerning the provider's or supplier's overall billing history, we believe that retaining § 424.535(a)(8)(ii)(D) would continue to hinder us from effectively dealing with the very periods of brief but significant billing non-compliance to which our proposal was aimed. Again, even brief timeframes of aberrant billing can result in sizable improper payments. We note further that our removal of some of § 424.535(a)(8)(ii)'s more specific factors (such as claim denial reasons and the period of enrollment) is designed to give us greater flexibility to address the wide variety of factual scenarios that can arise (and have arisen) in § 424.535(a)(8)(ii) cases. We have found in some instances that the greater the specificity of a particular factor, the more can it constrain our ability to act. It was with this in mind that we proposed the more wide-ranging factor in revised § 424.535(a)(8)(ii)(C).

Comment: Consistent with other comments concerning this proposal, several commenters urged CMS not to finalize our changes to § 424.535(a)(8)(ii). At a minimum, some commenters recommended that before revoking a provider or supplier under revised § 424.535(a)(8)(ii), CMS should: (1) Give the provider or supplier an opportunity to correct such errors; or (2) otherwise provide advanced notice of CMS' concerns. Failure to do so, they stated, could negatively affect patient care if a revocation is prematurely issued.

Response: We appreciate all of the concerns the commenters have expressed regarding our proposed revisions to § 424.535(a)(8)(ii). Nonetheless, and for the reasons already identified, we intend to finalize them as proposed and without the commenters' suggested corrective or waiting period. If the provider or supplier is submitting non-compliant claims, it is the provider's or supplier's responsibility to remedy the matter on its own initiative; respectfully, it is not CMS' obligation to delay a crucial program integrity measure, such as a revocation, to enable the provider or supplier to execute steps that should have been taken previously.

Should the provider or supplier disagree with its § 424.535(a)(8)(ii) revocation, it may exercise its appeal rights under 42 CFR part 498.

After consideration of these public comments, we are finalizing our revisions to § 424.535(a)(8)(ii) as proposed.

f. Miscellaneous Comments

We also received the following comments that did not directly pertain to our proposed regulatory revisions.

Comment: We received several comments regarding the Medicare Diabetes Prevention Program (MDPP) enrollment process. Some commenters recommended that MDPP suppliers be subject to limited-risk level screening under § 424.518 instead of the high-risk level screening currently applicable to MDPP suppliers. Another commenter urged CMS to make the provider enrollment application process less lengthy and arduous for MDPP suppliers. One commenter recommended that CMS either eliminate or modify the requirement that MDPP suppliers report the social security numbers of their board members in section 6 of the Form CMS-20134 enrollment application. Still another commenter suggested that CMS streamline the collection of MDPP enrollment information so that it need only be reported once. These commenters noted that the foregoing initiatives could reduce MDPP supplier cost and burden while spurring MDPP enrollment.

Response: We appreciate these suggestions but believe they are outside the scope of this rule.

Comment: One commenter stated that they supported the policy in § 424.535(e) that permits reversal of a provider's or supplier's revocation if the provider or supplier terminates within 30 days its business relationship with the party that engaged in the adverse activity that led to the revocation. However, the commenter asked CMS to clarify how this impacts the provider's or supplier's claims during the 30-day period.

Response: We appreciate this comment but stress that we did not propose to alter § 424.535(e) other than to expand the parties to which it could apply (that is, to the additional parties addressed in proposed §§ 424.530(a)(2) and 424.535(a)(2)). That is, the general “30-day revocation reversal” policy, which has existed for many years, is not changing with this rule. Accordingly, we believe that the stakeholder's comment concerning the claim aspects of said policy is outside the scope of this rule.

Comment: A commenter stated that opioid treatment programs (OTPs) should not have to undergo high-risk level screening under § 424.518(a). The commenter maintained that such intense screening (1) is unwarranted given that OTPs are already subject to strict Federal and State oversight requirements and (2) has proven overly burdensome for OTPs.

Response: We appreciate this comment but believe it is outside the scope of this rule.

Comment: Concerning the reference to the PECOS system of records notice (SORN) in section III.N of the proposed rule, a commenter stated that this SORN includes identifiers/systems that CMS no longer uses (such as the Unique Provider Identification Number). The commenter stated that CMS should accordingly update the PECOS SORN.

Response: This comment is outside the scope of this rule.

Comment: A commenter stated that the OMB Control Number reference for the Form CMS-855 in section III.N of the proposed rule (specifically, OMB No. 0938-0635) should have included every control number associated with the form.

Response: The reference to the Form CMS-855 in the proposed rule was a brief and generic one. We elected to simply include the OMB Control Number associated with most of the Form CMS-855 variations rather than exhaustively list them all.

2. Provider/Supplier Medical Review Requirements

a. Background

CMS identifies improper payments in the Medicare FFS program through a variety of program integrity-related activities, and we use a network of contractors to carry out program integrity initiatives, including Recovery Audit contractors (RACs), the Supplemental Medical Review Contractor (SMRC), Unified Program Integrity Contractors (UPICs), Medicare Administrative Contractors (MACs), and the Comprehensive Error Rate Testing (CERT) contractor. We are purposely excluding Quality Improvement Organizations (QIOs) from this discussion and the following proposals since QIOs are governed by separate and distinct statutory and regulatory requirements. For information about the QIOs, see sections 1151-1163 of the Act and 42 CFR parts 475-480.

Both UPICs and MACs perform prepayment medical review, while the RACs, SMRC, UPICs, MACs, and CERT all perform post-payment medical reviews. Both prepayment medical reviews and post-payment medical reviews are used by our contractors to determine, among other things, whether items or services are reasonable and necessary under section 1862(a)(1) of the Act. In carrying out these reviews, each contractor requests additional documentation from providers and suppliers, which the contractors then assess to either support the payment of claims or conversely, deny (in full or in part) claims thereby protecting the Medicare Trust Funds against improper payments. Our contractors may also carry out follow-up prepayment or post-payment reviews on the same providers or suppliers to ensure improper payments are not continuing.

Our contractors are authorized to request additional documentation through multiple statutory authorities, including sections 1815(a), 1833(e) and 1862(a)(1)(A) of the Act. Sections 1815(a) and 1833(e) of the Act provide that no payments shall be made to any provider or supplier unless it has furnished such information as the Secretary may request in order to determine the amounts due such provider for the period with respect to which the amounts are being paid or any prior period. Under section 1862(a)(1)(A) of the Act, payment must generally be limited to those items and services that are reasonable and necessary.

b. Regulations Governing Prepayment and Post-Payment Medical Review

Despite the statutory authority authorizing our contractors' activities, we do not have regulatory provisions governing certain medical review activities, specifically prepayment and post-payment medical reviews. In this final rule, we are codifying key terms and definitions associated with these two review types; finalizing contractors' authority to request additional documentation within established timeframes; and finalizing provisions detailing a provider's or supplier's responsibility to comply with requests for additional documentation, including the impact should a provider or supplier fail to comply with a request. These provisions are based on existing operational practices used by our contractors. Adding these provisions in regulation will enhance provider and supplier understanding of our review processes, as well as, improve consistency among our contractors.

c. Key Terms and Definitions

To ensure consistency across prepayment and post-payment reviews and establish clear requirements, we proposed the following key terms and their definitions to § 405.902: “Additional documentation” means any information requested by a contractor when conducting a prepayment review or post-payment review; “Additional Documentation Request (ADR)” means a contractor's initial documentation request in reviewing claims selected for prepayment review or post-payment review; “Post-payment medical review (or post-payment review)” means a review that occurs after payment is made on the selected claim to determine whether the initial determination for payment was appropriate; and “Prepayment medical review (or prepayment review)” means a review that occurs before an initial determination for payment is made on the selected claim to determine whether payment should be made. These definitions are consistent with longstanding manual language and common use of these terms by our contractors.

We did not receive any public comments on this specific section and have decided to finalize as proposed.

d. Prepayment and Post-Payment Medical Review

We proposed to add new § 405.903 that outlines the prepayment medical review provisions.

• At paragraph (a), we proposed to codify our contractors' authority to conduct prepayment medical review on selected claims in order to determine whether and how much payment should be made.
• At paragraph (b), we proposed language detailing our contractors' authority to request additional documentation while conducting a prepayment review.
• At paragraph (b)(1), we proposed language stating that a provider or supplier will be provided 45 calendar days to submit additional documentation in response to a contractor's request except as stated in paragraphs (b)(2) and (c).
• At paragraph (b)(2), we proposed language stating that a contractor may accept documentation received after 45 calendar days for good cause. Good cause means situations such as natural disasters, interruptions in business practices, or other extenuating circumstances that the contractor deems good cause in accepting the documentation.
• At paragraph (c), we proposed language detailing a UPIC's authority to provide 30 calendar days to a provider or supplier submitting additional documentation and that a UPIC may accept documentation received after 30 calendar days for good cause. Good cause means situations such as natural disasters, interruptions in business practices, or other extenuating circumstances that the UPIC deems good cause in accepting the documentation.

These provisions reflect longstanding requirements MACs and UPICs have used in conducting prepayment reviews. The different time-periods within which additional documentation must be received is based on unique processing requirements for each contractor. Although both conduct prepayment reviews, the UPICs work directly with law enforcement and focus on potentially fraudulent providers or suppliers. Thus, the different timeframes for receiving additional documentation is necessary to account for the distinction and enables each type of contractor to appropriately balance their need for documentation in completing reviews with the potential burden on providers and suppliers should reviews take longer than is warranted. Efforts to limit the burden placed on providers and suppliers as much as possible is also warranted so that patient care is not unnecessarily impacted.

Additionally, both MACs and UPICs historically have had the authority to accept documentation received after the initial timeframe has expired based on good cause, such as natural disasters, interruptions in business practices, or other extenuating circumstances. These circumstances are best determined on a case-by-case basis by the MAC or UPIC, and the language at paragraphs (b)(2) and (c), respectively, convey the MAC and UPIC authority to determine that good cause exists to warrant accepting documentation received after the initial timeframe given.

• At paragraph (d), we proposed that a contractor's prepayment review will result in an initial determination under § 405.920. Again, this has been the longstanding approach to the results of prepayment reviews.

We also proposed similar provisions at new § 405.929 regarding post-payment medical reviews.

• At paragraph (a), we proposed language outlining our contractors' authority to select claims and conduct post-payment medical reviews.
• At paragraph (b), we proposed language that specifies our contractors' authority to request additional documentation.
• At paragraph (b)(1), we proposed that a contractor will give a provider or supplier 45 calendar days to submit additional documentation in response to a request, except as stated in paragraphs (b)(2) and (c).
• At paragraphs (b)(2) and (c), we proposed that a contractor may accept documentation received after 30 days for good cause. Good cause means situations such as natural disasters, interruptions in business practices, or other extenuating circumstances that the contractor deems good cause in accepting the documentation.

• At paragraph (c), we proposed language that specifies the UPIC's authority to provide 30 calendar days when requesting additional documentation and that a UPIC may accept documentation received after 30 calendar days for good cause. Good cause means situations such as natural disasters, interruptions in business practices, or other extenuating circumstances that the UPIC deems good cause in accepting the documentation.

• At paragraph (d), we proposed that when conducting a post-payment review, a contractor's review will result in either no change or a revised determination under § 405.984.

As with prepayment reviews, these provisions reflect longstanding requirements UPICs and MACs, RACs, the CERT contractor, and SMRC have used in conducting post-payment reviews. While the MACs, RACs, CERT contractor, and SMRC have relatively comparable medical review processes, the UPICs are somewhat different given their close working relationship with law enforcement and focus on potentially fraudulent providers or suppliers. Thus, the different timeframes for receiving additional documentation is necessary to account for the distinction and enables each contractor to appropriately balance their need for documentation in completing reviews with the potential burden on providers and suppliers should reviews take longer than may be expected. Efforts to limit the burden placed on providers and suppliers as much as possible is also warranted so that patient care is not unnecessarily impacted.

Given that for post-payment reviews the claims have already been paid, all the contractors have historically had the authority to accept documentation received after the initial timeframe has expired based on good cause. As with prepayment reviews, this may include situations such as natural disasters, interruptions in business practices, or other extenuating circumstances that the specific contractor deems good cause in accepting the document after 30 or 45 calendar days. These circumstances are best determined on a case-by-case basis, and the language at paragraphs (b)(2) and (c) convey the authority to determine that good cause exists to warrant accepting documentation received after 30 or 45 calendar days.

We also proposed to add new § 405.930 to clearly outline our contractors' authority to deny a claim should a provider or supplier fail to convey the additional documentation in response to a request. The language clarifies that the contractor must give the provider or supplier notice and time to respond to the additional documentation request. Contractors have authority to require additional documentation through multiple statutory provisions, including sections 1815(a), 1833(e) and 1862(a)(1)(A) of the Act. While our contractors maintain discretion to provide additional time to a provider or supplier in responding to an additional documentation request, our contractors also have the authority to deny additional time and the associated claim(s) when the additional documentation is not received within the requested timeframe.

We also proposed to revise the section heading of § 405.986(a) to read, “Establishing good cause for reopening.” This revision clarifies the distinction made between the process for establishing good cause to reopen an initial determination made on a claim, and the good cause factors that may be applied in accepting documentation submitted after the applicable timeframes in §§ 405.903 and 405.929. In establishing criteria to determine whether to accept late documentation in response to an ADR, we adopted the criteria set forth in §§ 405.903 and 405.929, and we did not utilize the good cause criteria for reopening an initial determination on a claim in § 405.986. We believe this change will add further clarification to the substantive text to reflect that the section only applies to reopenings of initial determinations on a claim.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: All commenters supported our proposals, acknowledging our need to conduct oversight activities to protect the Medicare program.

Response: We thank the commenters for their support.

Comment: One commenter suggested that CMS provide additional flexibility to providers who cannot meet ADR deadlines due to the challenges of collecting the necessary information from other providers.

Response: We appreciate the commenter's suggestion; however, the timeframes reflect longstanding practices, providing what we believe to be adequate time for providers and suppliers to respond. Further, we have provided exceptions where there is good cause to accept documentation after applicable timeframes.

Comment: Several commenters suggested that CMS attempt to minimize the burden of these reviews, including contractors coordinating with referring and treating clinicians to gather orders, images, and other documentation.

Response: We thank the commenters for their suggestion and seek to reduce burden on providers when we can. However, these comments are outside the scope of this rule and we may consider these suggestions in future rulemaking.

After consideration of the public comments, we are finalizing our proposal without modification.

O. Modifications Related to Medicare Coverage for Opioid Use Disorder (OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)

1. Background

Section 2005 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act established a new Medicare Part B benefit category for OUD treatment services furnished by OTPs during an episode of care beginning on or after January 1, 2020. In the CY 2020 PFS final rule (84 FR 62630 through 62677 and 84 FR 62919 through 62926), we implemented Medicare coverage and provider enrollment requirements and established a methodology for determining the bundled payments for episodes of care for the treatment of OUD furnished by OTPs. We established new codes for and finalized bundled payments for weekly episodes of care that include methadone, oral buprenorphine, implantable buprenorphine, injectable buprenorphine or naltrexone, and non-drug episodes of care, as well as add-on codes for intake and periodic assessments, take-home dosages for methadone and oral buprenorphine, and additional counseling. In the CY 2021 PFS final rule (85 FR 84683 through 84688), we adopted new add-on codes for take home supplies of nasal naloxone and injectable naloxone. We are continuing to monitor Medicare enrollment by OTPs and utilization of the new benefit to ensure that Medicare beneficiaries have appropriate access to care, as well as monitoring for fraud, waste, and abuse. For CY 2022, we proposed several refinements to the regulations governing Medicare coverage and payment for OUD treatment services furnished by OTPs.

2. Annual Updates

In the CY 2020 PFS final rule (84 FR 62667), we finalized a policy under which the payment for the drug component of episodes of care will be updated annually using the most recent data available from the applicable pricing mechanism at the time of ratesetting for the applicable calendar year. The payment for the non-drug component of the bundled payment for OUD treatment services will be updated annually based upon the Medicare Economic Index (MEI) (84 FR 62668 and 62669). The CY 2022 MEI update is 2.1 percent based on data through the 2nd quarter of 2021 and reflects published historical Bureau of Labor Statistics estimates of multifactor productivity (MFP) data through 2020. The current payment rates, as finalized in the CY 2021 PFS final rule, both with and without locality adjustments, can be found on the CMS OTP website under Billing and Payment at https://www.cms.gov/files/document/otp-billing-and-payment-fact-sheet.pdf. The list of the payment rates for OUD treatment services furnished by OTPs, with the annual update applied for CY 2022, will be made available at the time of publication of this final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Opioid-Treatment-Program. Additionally, please see the “Opioid Treatment Programs: CY 2022 Methadone Payment Exception” interim final rule with comment period published elsewhere in this Federal Register related to the CY 2022 payment rate for methadone under the Medicare OTP benefit.

3. Refinements to Regulations Governing Medicare Payment to OTPs

In the CY 2021 PFS final rule (85 FR 84684 through 84685), we extended the definition of OUD treatment services to include short acting opioid antagonist medications for the emergency treatment of known or suspected opioid overdose, such as naloxone, and overdose education furnished in conjunction with opioid antagonist medication. We also established an adjustment to the weekly bundled payments when the OTP furnishes take-home supplies of these medications at § 410.67(d)(4)(i)(E). This adjustment includes both a drug component and a non-drug component for overdose education. The payment for the drug component of the adjustment will be determined using the methodology in § 410.67(d)(2)(i), and will be updated annually using the most recent data available at the time of ratesetting. The amount of the non-drug component of the adjustment, which includes overdose education, will be determined based on the CY 2020 Medicare payment rate for CPT code 96161; however, we did not explicitly address either geographic adjustments or annual updates to this payment rate.

In the CY 2020 PFS final rule (84 FR 62666 through 62667), we finalized the application of a geographic adjustment to the non-drug component of the OTP bundled payments, as well as the add-on payment adjustments for non-drug services, using the Geographic Adjustment Factor (GAF). We explained that unlike the national pricing of drugs, the costs for the services included in the non-drug component of the OTP bundled payments for OUD treatment services are not constant across all geographic localities. For example, OTPs' costs for rent or employee wages could vary significantly across different localities and could potentially result in disparate costs for the services included in the non-drug component of OUD treatment services; therefore, we stated we believed it would be appropriate to apply a geographic locality adjustment to the non-drug component of the bundled payments. We also specifically stated our belief that the same logic regarding the differential costs for the non-drug services included in the bundled payments would apply and should be recognized for add-on payment adjustments for non-drug services. This geographic adjustment is codified in the regulations at § 410.67(d)(4)(ii).

Additionally, in the CY 2020 PFS final rule we finalized an annual update to the non-drug component of the bundled payment for an episode of care based upon the MEI (84 FR 62668 through 62669). We noted that we believed the same logic regarding the potential for changes in the costs of the services included in the non-drug component of the bundled payment rates also applied to the add-on payment adjustments for non-drug services. This annual update is codified in the regulations at § 410.67(d)(4)(iii).

In the CY 2022 PFS proposed rule (86 FR 39317 through 39318), we explained that when we adopted the adjustment to the weekly bundled payments for take-home supplies of opioid antagonist medications in the CY 2021 PFS final rule, we did not specifically address either geographic adjustments or annual updates to the non-drug component of this adjustment and did not update the provisions governing the geographic adjustment and annual update in order to reference the new adjustment. Because the adjustment for take-home supplies of opioid antagonist medications includes a non-drug component, we stated that we believe the same considerations regarding varying costs based on geographic locality and the need for annual updates apply. Accordingly, we proposed to revise the regulation at § 410.67(d)(4)(ii) to include the adjustment for take-home supplies of opioid antagonist medications in the list of items for which the non-drug component will be geographically adjusted using the GAF. We also proposed to revise the regulation at § 410.67(d)(4)(iii) to include the adjustment for take-home supplies of opioid antagonist medications in the list of items that will be updated annually using the MEI.

In addition, we stated that in the CY 2021 PFS final rule (85 FR 84688) we had explained that, consistent with § 410.67(d)(5), any payment to an OTP for naloxone would be duplicative if a claim for the same medication is separately paid under Medicare Part B or Part D for the same beneficiary on the same date of service, and that we would recoup any duplicative payment made to an OTP for naloxone. However, the regulation on duplicative payments at § 410.67(d)(5) does not specifically reference payments for medications that are furnished as part of an adjustment to the bundled payment. Accordingly, we also proposed to revise § 410.67(d)(5) to state explicitly that payments for medications that are delivered, administered or dispensed to a beneficiary as part of an adjustment to the bundled payment are considered a duplicative payment if a claim for delivery, administration or dispensing of the same medication(s) for the same beneficiary on the same date of service was also separately paid under Medicare Part B or Part D. We stated that consistent with the policies finalized in the CY 2020 PFS final rule (84 FR 62663 through 62664) regarding duplicative payments for medications dispensed as part of the weekly bundle, we believe that it is appropriate to also ensure that Medicare payments for drugs provided as an add-on to the bundled payment rate are not duplicative. We noted that this proposed revision would apply not only to duplicative payments for take-home supplies of naloxone, but also to duplicative payments for additional take-home supplies of other medications that are made under § 410.67(d)(4)(i)(D).

We solicited public comments on these proposed changes.

The following is a summary of the comments we received and our responses.

Comment: Commenters supported making these proposed changes to the OTP regulations. A few commenters noted that applying the geographic adjustment to the non-drug component of the add-on payments for take-home supplies of opioid antagonist medications will help OTPs to maintain financial viability, and therefore, ensure continued access to OUD treatment services for beneficiaries.

Response: We appreciate commenters' support for these changes.

After consideration of the public comments, we are finalizing our proposal to revise the regulation text at § 410.67(d)(4)(ii) and (iii) as proposed to codify the application of the annual updates and locality adjustments to the non-drug component of the codes describing add-on payments for opioid antagonist medications (naloxone) that were new for CY 2021. In addition, we are finalizing our proposal to revise the regulation text at § 410.67(d)(5) as proposed to make clear that the prohibition on duplicative payments applies to drugs provided as part of an add-on payment, as well as the bundled payment.

4. OTP Coding and Payment for New Nasal Naloxone Product

In the CY 2022 PFS proposed rule (86 FR 39318), we discussed that FDA had recently announced the approval of a new, higher dose naloxone hydrochloride nasal spray product used to treat opioid overdose and that the newly approved product delivers 8mg of naloxone. We stated that in the CY 2021 PFS final rule (85 FR 84683 through 84685), we finalized payment for HCPCS code G2215 ( Take-home supply of nasal naloxone (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure ). HCPCS code G2215 was priced based on an assumption of a typical case in which the beneficiary would be provided with a box of two 4mg nasal spray products. We explained that at the time of drafting the proposed rule, we did not yet have any available pricing information for this newly approved product. However, in order to be able to make payment to OTPs under Medicare for this product, we proposed to create a new G-code describing a take-home supply of this higher dose naloxone hydrochloride nasal spray product.

We stated that under this proposal, we would price this new add-on code based on the established methodology under the OTP benefit for determining the adjustment for take-home supplies of opioid antagonist medications at § 410.67(d)(4)(i)(E). This adjustment includes both a drug component and a non-drug component. The amount of the drug component of the adjustment would be determined using the methodology for pricing the drug component of an episode of care at § 410.67(d)(2)(i). Accordingly, consistent with the approach used to price the drug component of HCPCS code G2215, we would apply the payment methodology set forth in section 1847A of the Act to determine the payment for the new naloxone hydrochloride nasal spray product, except that payment amounts that are determined based on ASP or wholesale acquisition cost (WAC) would not include any add-on percentages (85 FR 84685). As stated in the CY 2021 PFS final rule (85 FR 84685), we believe using ASP provides a transparent and public benchmark for manufacturers' actual pricing as it reflects the manufacturers' actual sales prices to all purchasers (with limited exceptions as noted in section 1847A(c)(2) of the Act) and is the only pricing methodology that includes off-invoice rebates and discounts as described in section 1847A(c)(3) of the Act. Therefore, we believe ASP to be the most market-based approach to set drug prices. Additionally, we proposed to price the drug component of the code based on an assumption of a typical dosage for a take-home supply of this new product to be a box of two 8mg nasal sprays. Consistent with the methodology established in § 410.67(d)(4)(i)(E), the amount of the non-drug component of the code would be determined based on the CY 2020 Medicare payment rate for CPT code 96161. In addition, payment for the add-on code would be limited to once every 30 days except when a further take-home supply of the medication is medically reasonable and necessary.

We solicited public comments on this proposal. The following is a summary of the comments we received and our responses.

Comment: Several commenters supported our proposal to create a new G-code describing a take-home supply of the new higher dose naloxone hydrochloride nasal spray product and recommended we finalize this proposal. One commenter noted that while they believe there is a potential for up-coding or overutilization of the higher strength naloxone, they believe that the benefits of adopting the proposed new add-on code for this new product outweigh the risks since the widespread availability of naloxone and other medications that can rapidly reverse an opioid overdose, along with education on its proper use, will save lives. Some commenters noted that drug overdose death rates reached an all-time high in 2020. These commenters stated that because many patients are experiencing overdoses from illicitly manufactured fentanyl, it is important that patients with OUD have access to the new, more potent overdose reversal drug. A few commenters expressed concern about the proposal to price the higher dose naloxone product using the ASP without the 6 percent add-on, noting that the payment for Part B drugs outside of the OTP benefit includes a 6 percent add-on to account for overhead costs, administrative expenses, or additional mark-ups accrued in traditional drug distribution channels and recommended CMS include a factor for overhead/administrative costs in its drug pricing methodology for take-home supplies of naloxone furnished by OTPs.

Response: After considering the comments received, we are finalizing our proposal to establish a new code for a higher dose of naloxone hydrochloride nasal spray. We acknowledge the commenter's concern about potential for upcoding, but we agree that the benefits of adopting the new add-on code outweigh the risks because naloxone is a life-saving drug. In light of the comments regarding the increase in overdoses from illicitly manufactured fentanyl, which can require a more potent overdose reversal drug, we believe it is especially important to ensure that this new, higher-dose naloxone nasal spray is available to beneficiaries receiving OUD treatment services from OTPs. The new code is G1028 ( Take-home supply of nasal naloxone; 2-pack of 8mg per 0.1 mL nasal spray (provision of the services by a Medicare-enrolled Opioid Treatment Program)); List separately in addition to code for primary procedure. ) Additionally, we are updating the code descriptor for existing HCPCS code G2215 to reflect the dosage included in that code in order to distinguish it from the higher dosage in this new nasal naloxone code. The new code descriptor for HCPCS code G2215 will be Take-home supply of nasal naloxone; 2-pack of 4mg per 0.1 mL nasal spray (provision of the services by a Medicare-enrolled Opioid Treatment Program)); List separately in addition to code for primary procedure.)

With regard to the commenters' concerns about the proposal to price the higher dose naloxone product using the ASP or WAC without any add-on percentages, as we discussed in the CY 2021 PFS final rule (85 FR 84685), we believe this approach is most consistent with the approach we adopted in the CY 2020 PFS final rule for pricing the drug component of an episode of care that includes implantable or injectable medications. In addition, for the reasons discussed in the CY 2020 PFS final rule (84 FR 62652 and 62653), we continue to believe that limiting the payment amount to 100 percent of the volume-weighted ASP for a HCPCS code, when ASP is available, instead of 106 percent of the volume-weighted ASP for a HCPCS code will incentivize the use of the most clinically appropriate drug for a given patient. Similarly, as discussed in in the CY 2021 PFS final rule (85 FR 84685), we continue to believe that 100 percent of WAC is a closer estimate of the actual acquisition cost for OTPs compared to WAC with an add-on percentage because, as defined in section 1847A(c)(6)(B) of the Act, WAC does not include prompt pay discounts, rebates or reductions in price.

Accordingly, we will price HCPCS code G1028 as proposed; the payment rate for the drug component of the code will be based on the methodology at § 410.67(d)(2)(i) and the amount of the non-drug component of the code will be determined based on the CY 2020 Medicare payment rate for CPT code 96161 as provided in § 410.67(d)(4)(i)(E). We note that we have WAC pricing information available for this higher-dose naloxone nasal spray. For CY 2022, consistent with § 410.67(d)(2)(i)(A), the drug component of the new code will be priced at $125 for a 2-pack of the 8mg spray, which is 100 percent of the WAC.

Comment: One commenter expressed support for our proposal to geographically adjust the payment for the non-drug component of the codes for take-home supplies of naloxone, but stated that this payment should be updated by the hospital market basket update, not the MEI.

Response: We thank the commenter for this feedback. We believe we should be consistent in applying the same geographic adjustment to the codes describing take-home supplies of naloxone that is applied to adjust the non-drug component of other codes under the OTP benefit. Therefore, we are finalizing our proposal that the non-drug component of the new naloxone code will be updated annually based on the MEI.

5. Out of Scope Comments

Comment: We received one comment that stated that as of July 28, 2021, the Drug Enforcement Administration (DEA) had published a final rule allowing OTPs to add mobile methadone units to their existing registration. The commenter requested that CMS specify that Medicare coverage for opioid use disorder by OTPs extend to services that are provided through mobile units.

Response: We thank the commenter for this comment and note that this comment is outside of the scope of this final rule, as we did not make any proposals involving mobile vans for CY 2022. We may consider addressing this issue in the future rulemaking.

Comment: One commenter stated that CMS should create a 17 percent rural add-on payment to be applied to the non-drug component of the codes for OTP services when services are furnished in low-population density areas where it is difficult to find doctors, nurses, and counselors to treat patients with OUD. The commenter noted that CMS could encourage expansion of access to OUD treatment services by providing add-on payments in areas that do not currently have an OTP provider.

Response: We note that this comment is outside of the scope of this final rule, as we did not make any proposals related to a rural add-on code. We may consider addressing this issue in future rulemaking.

4. Counseling and Therapy Furnished Via Audio-Only Telephone

In the CY 2020 PFS final rule (84 FR 62645 and 62646), we finalized allowing the use of two-way interactive audio/video communication technology, as clinically appropriate, to furnish the counseling and therapy portions of the weekly bundle of services and additional counseling or therapy services furnished by OTPs. Due to the PHE for COVID-19, in the interim final rule with comment period (IFC) entitled “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency,” which appeared in the April 6, 2020 Federal Register (85 FR 19230) (hereinafter referred to as the “March 31, 2020 COVID-19 IFC”), we revised § 410.67(b)(3) and (4) to allow the therapy and counseling portions of the weekly bundles, and any additional counseling or therapy, to be furnished using audio-only telephone calls rather than via two-way interactive audio/video communication technology for the duration of the PHE for COVID-19. Under the policy adopted in the March 31, 2020 COVID-19 IFC, counseling and therapy can be furnished using audio-only telephone calls only where two-way audio/video communications technology is not available to the beneficiary, and provided all other applicable requirements are met. In the March 31, 2020 COVID-19 IFC, we stated that we believed this change was necessary to ensure that beneficiaries with opioid use disorders would be able to continue to receive these important services during the PHE during which the public has been instructed to practice self-isolation or social distancing, and because interactive audio/video communication technology may not be available to all beneficiaries.

As we discussed in the CY 2022 PFS proposed rule (86 FR 39318 through 39319), we have continued to evaluate whether this flexibility will be needed after the end of the PHE. According to MedPAC's March 2021 Report to the Congress, allowing audio-only interaction for certain telehealth services can improve beneficiary choice and equity in access to care for beneficiaries who do not have access to the technology for a video telehealth visit. Additionally, OTPs and organizations representing OTPs have encouraged us to reconsider our position on coverage of audio-only services following the conclusion of the PHE for COVID-19 and have suggested that CMS consider permanently allowing OTPs to furnish certain OUD treatment services using audio-only telephone calls. Stakeholders have commented that allowing OTPs to furnish services via audio-only interactions facilitates broader access to services, particularly for vulnerable populations, and ensures providers have flexibility to deliver care to beneficiaries as efficiently and seamlessly as possible. Given the sensitivity of OUD treatment services, they noted that this is an area in which more flexibility will promote not only access but also effective and sustained treatment for beneficiaries in need of care. Some stakeholders have noted that the use of communication technology has reduced stress and stigma for those who require OUD treatment services and the allowance of audio-only services has greatly expanded access for beneficiaries who may not be able to use interactive video. One stakeholder stated that allowing use of audio-only communication to continue after the PHE for COVID-19 would be essential in addressing disparities in healthcare, especially for dually eligible beneficiaries who do not have access to audio-visual communication technology.

In the CY 2022 PFS proposed rule (86 FR 39319) we stated that after further consideration of the public comments and other stakeholder feedback, we were persuaded that using audio-only telephone calls to furnish therapy and counseling in cases where two-way audio/video communication technology is not available to the beneficiary after the end of the PHE for the COVID-19 pandemic would facilitate broader access to services. Therefore, we proposed to allow OTPs to continue to furnish the therapy and counseling portions of the weekly bundles, as well as any additional counseling or therapy that is billed under the add-on code, using audio-only telephone calls rather than via two-way interactive audio/video communication technology following the end of the PHE for COVID-19 in cases where audio/video communication technology is not available to the beneficiary, provided all other applicable requirements are met. Accordingly, we proposed to revise the regulations at § 410.67(b)(3) and (4) to allow OTPs to furnish therapy and counseling using audio-only telephone calls rather than via two-way interactive audio/video communication technology after the conclusion of the PHE for COVID-19 in cases where audio/video communication is not available to the beneficiary, provided all other applicable requirements are met. We noted that we interpret the requirement that audio/video technology is “not available to the beneficiary” to include circumstances in which the beneficiary is not capable of or has not consented to the use of devices that permit a two-way, audio/video interaction because in each of these instances audio/video communication technology is not able to be used in furnishing services to the beneficiary.

We received public comments on this proposal. The following is a summary of the comments we received and our responses.

Comment: We received many public comments that expressed support for our proposal to allow OTPs to furnish therapy and counseling using audio-only telephone calls rather than via two-way interactive audio/video communication technology after the conclusion of the PHE for COVID-19, noting that this change would ensure continued access to care for beneficiaries receiving treatment at OTPs. Some commenters stated that audio-only services have helped to advance health equity and have been a vital linkage to care for many patients during the PHE and that these services have been especially beneficial for patients in rural areas who may not have access to reliable internet service, which limits their ability to access two-way, audio-video communications technology. One commenter agreed that CMS should permanently extend the ability to provide counseling via audio-only telehealth, but only for patients who are compliant with their treatment plan.

Response: After consideration of the public comments, we are finalizing our proposal to revise the regulations at § 410.67(b)(3) and (4) to allow OTPs to furnish individual and group therapy and substance use counseling using audio-only telephone calls rather than two-way interactive audio/video communication technology after the conclusion of the PHE for COVID-19 in cases where audio/video communication is not available to the beneficiary, provided all other applicable requirements are met. As we explained in the proposed rule, we interpret the requirement that audio/video technology is “not available to the beneficiary” to include circumstances in which the beneficiary is not capable of or has not consented to the use of devices that permit a two-way, audio/video interaction because in each of these instances audio/video communication technology is not able to be used in furnishing services to the beneficiary.

Regarding the suggestion that CMS should only permanently extend the ability to provide counseling via audio-only telehealth for patients who are compliant with their treatment plan, we defer to the judgment of treating clinicians to determine when audio-only or audio/video counseling or therapy are appropriate and whether there are certain circumstances, such as when patients are considered to be high risk, when in-person services are needed.

Additionally, in the CY 2022 PFS proposed rule (86 FR 39319), we proposed that after the conclusion of the PHE for COVID-19, when two-way interactive audio/video communication technology is used to furnish additional counseling and therapy services billed under the add-on code, OTPs would be required to append modifier 95 (Synchronous Telemedicine Service Rendered via Real-Time Interactive Audio and Video Telecommunications System) to the claim. We did not propose to require the use of this modifier when counseling and therapy services included in the weekly bundle are furnished using two-way interactive audio/video communication technology. We recognized that it may be difficult to determine which modifier to use in cases where multiple services within the bundle are furnished using different modalities; therefore, we limited our proposal regarding the use of modifier 95 to claim lines for the counseling and therapy add-on code (HCPCS code G2080).

We also proposed that, following the conclusion of the PHE for COVID-19, when counseling or therapy services are furnished using audio-only telephone calls, either as part of a weekly bundle or billed using the counseling and therapy add-on code (HCPCS code G2080), OTPs would be required to document in the beneficiary's medical record that the counseling or therapy was furnished via audio-only telephone call and the rationale for doing so. In addition, we proposed the use of a new service-level modifier to be appended to claims submitted for the counseling and therapy add-on code (HCPCS code G2080) when services are furnished via an audio-only interaction, which would serve to certify that the practitioner had the capacity to furnish the services using two-way, audio/video communication technology, but instead, used audio-only technology because audio/video communication technology was not available to the beneficiary. We explained that the use of this modifier would allow CMS to track utilization of this flexibility in the claims data and evaluate that data as we consider ongoing refinements to the OTP benefit in the future. To avoid placing additional burden on OTPs during the PHE for COVID-19, we proposed that these new requirements would take effect on January 1, 2022, but would apply only for services furnished after the conclusion of the PHE for COVID-19. Accordingly, if the PHE for COVID-19 extends into 2022, OTPs that furnish counseling and therapy services using either two-way audio/video technology or audio-only telephone calls would not be required to use the applicable modifier or to comply with the new documentation requirements until after the end of the PHE.

Accordingly, we proposed to revise § 410.67(d) to add a new paragraph (6) to state that when substance use counseling under paragraph (b)(3) of this section or therapy services under paragraph (b)(4) of this section are furnished using audio-only telephone calls after the end of the PHE, as defined in 42 CFR 400.200, the practitioner must document in the beneficiary's medical record that the services were furnished using audio-only technology and the rationale for doing so. For purposes of the add-on code for additional counseling and therapy services, the practitioner would also be required to certify, in a form and manner specified by CMS, that they had the capacity to furnish the services using two-way, audio/video communication technology, but used audio-only technology because the beneficiary did not have access to two-way audio/video communication technology. We explained that under these proposals we would defer to clinician judgment in determining whether in-person counseling or therapy, rather than the use of audio-only telephone calls, would be most appropriate in certain circumstances, such as for patients who are considered to be high risk. Additionally, we solicited comment on whether we should put any additional or alternative conditions in place to promote program integrity, minimize patient safety concerns, and ensure that beneficiaries have access to the most appropriate form of care.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Several commenters recommended that the agency not require additional documentation in the medical record to support the use of audio-only services, especially if this is the only way the patient can receive care, stating that additional documentation is duplicative and unnecessary. A few commenters supported the use of an audio-only claims coding modifier that could be used to track utilization and conduct effectiveness research for audio-visual vs. audio-only services, noting that evaluation of audio-only services would also be beneficial to demonstrate quality and efficacy for SUD treatment programs.

Response: After consideration of the public comments, we are finalizing our proposal that a new service-level modifier be appended to claims submitted for the counseling and therapy add-on code (HCPCS code G2080) when services are furnished via an audio-only interaction. Consistent with policies finalized for other audio-only services furnished by physicians and certain NPPs in section II.D of this final rule, the use of this modifier will serve to certify that the practitioner had the capacity to furnish the services using two-way, audio/video communication technology, but instead, used audio-only technology because audio/video communication technology was not available to the beneficiary. Additionally, we are finalizing our proposal that after the conclusion of the PHE for COVID-19, when two-way interactive audio/video communication technology is used to furnish additional counseling and therapy services billed under the counseling and therapy add-on code (HCPCS code G2080), OTPs will be required to append modifier 95 (Synchronous Telemedicine Service Rendered via Real-Time Interactive Audio and Video Telecommunications System) to the claim. The use of these modifiers will allow us to track utilization of these flexibilities in the claims data and to evaluate that data as we consider future refinements to the OTP benefit.

However, we are persuaded by the comments stating that the proposed requirement that OTPs document the use of audio-only services in the beneficiary's medical record would be duplicative because the new service-level modifier for services furnished via an audio-only interaction will also identify when a service was furnished via audio-only communication. Therefore, we are not finalizing the proposal to require additional documentation in the medical record to support the use of audio-only services.

Accordingly, we are finalizing our proposal to revise § 410.67 to add a new paragraph (d)(6) with modifications. As revised, the new paragraph (d)(6) will require that for purposes of the adjustment to the bundled payment for additional counseling or therapy services under § 410.67(d)(4)(i)(A), after the end of the PHE for COVID-19, as defined in § 400.200, when services are furnished using audio-only technology the practitioner must certify, in a form and manner specified by CMS, that they had the capacity to furnish the services using two-way, audio/video communication technology but used audio-only technology because audio/video communication technology was not available to the beneficiary.

P. Physician Self-Referral Updates

1. The Physician Self-Referral Statute and Regulations

Section 1877 of the Act, also known as the physician self-referral law: (1) Prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, unless an exception applies; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those referred services. A financial relationship is an ownership or investment interest in the entity or a compensation arrangement with the entity. The statute establishes a number of specific exceptions and grants the Secretary of the Department of Health and Human Services (the Secretary) the authority to create regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse. Section 1903(s) of the Act extends aspects of the physician self-referral prohibitions to Medicaid. For additional information about section 1903(s) of the Act; see 66 FR 857 through 858.

The following discussion provides a chronology of our more significant and comprehensive rulemakings; it is not an exhaustive list of all rulemakings related to the physician self-referral law. After the passage of section 1877 of the Act, we proposed rulemakings in 1992 (related only to referrals for clinical laboratory services) (57 FR 8588) (the 1992 proposed rule) and 1998 (addressing referrals for all designated health services) (63 FR 1659) (the 1998 proposed rule). We finalized the proposals from the 1992 proposed rule in 1995 (60 FR 41914) (the 1995 final rule), and issued final rules following the 1998 proposed rule in three stages. The first final rulemaking (Phase I) was a final rule with comment period published in the January 4, 2001 Federal Register (66 FR 856). The second final rulemaking (Phase II) was an interim final rule with comment period (69 FR 16054) published in the March 26, 2004 Federal Register . Due to a printing error, a portion of the Phase II preamble was omitted from the March 26, 2004 Federal Register publication. That portion of the preamble, which addressed reporting requirements and sanctions, was published in the April 6, 2004 Federal Register (69 FR 17933). The third final rulemaking (Phase III) was a final rule published in the September 5, 2007 Federal Register (72 FR 51012).

In addition to Phase I, Phase II, and Phase III, we issued final regulations on August 19, 2008 in the Fiscal Year (FY) 2009 Inpatient Prospective Payment System final rule with comment period (73 FR 48434) (the FY 2009 IPPS final rule). That rulemaking made various revisions to the physician self-referral regulations, including: (1) Revisions to the “stand in the shoes” provisions; (2) establishment of provisions regarding the period of disallowance and temporary noncompliance with signature requirements; (3) prohibitions on per unit of service (often referred to as “per-click”) and percentage-based compensation formulas for determining the rental charges for office space and equipment lease arrangements; and (4) expansion of the definition of “entity.”

After passage of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148) (Affordable Care Act), we issued final regulations on November 29, 2010 in the CY 2011 PFS final rule with comment period that codified a disclosure requirement established by the Affordable Care Act for the in-office ancillary services exception (75 FR 73443). We also issued final regulations on November 24, 2010 in the CY 2011 OPPS final rule with comment period (75 FR 71800), on November 30, 2011 in the CY 2012 OPPS final rule with comment period (76 FR 74122), and on November 10, 2014 in the CY 2015 OPPS final rule with comment period (79 FR 66987) that established or revised certain regulatory provisions concerning physician-owned hospitals to codify and interpret the Affordable Care Act's revisions to section 1877 of the Act.

On November 16, 2015, in the CY 2016 PFS final rule, we issued regulations to reduce burden and facilitate compliance (80 FR 71300 through 71341). In that rulemaking, we established two new exceptions, clarified certain provisions of the physician self-referral regulations, updated regulations to reflect changes in terminology, and revised definitions related to physician-owned hospitals. The new exception at § 411.357(y) for timeshare arrangements included a limitation on certain per unit of service and percentage-based compensation formulas. On November 15, 2016, in the CY 2017 PFS final rule, we again finalized requirements that the rental charges for the lease of office space or equipment are not determined using a formula based on per unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee (81 FR 80534). The requirements are identical to those in effect since October 1, 2009, and are included in the exceptions for the rental of office space at § 411.357(a)(5)(ii)(B), the rental of equipment at § 411.357(b)(4)(ii)(B), fair market value compensation at § 411.357(l)(3)(ii), and indirect compensation arrangements at § 411.357(p)(1)(ii)(B). The terms “rental” and “lease” both refer to an arrangement under which dominion and control of the rented or leases property is transferred from the lessor to the lessee. In this final rule, we generally use the term “lease” for consistency.

In the December 2, 2020 Federal Register , we published a final rule entitled “Modernizing and Clarifying the Physician Self-Referral Regulations” (the “MCR final rule”) (85 FR 77492) that established three new exceptions to the physician self-referral law applicable to compensation arrangements that qualify as “value-based arrangements,” established exceptions for limited remuneration to a physician and the donation of cybersecurity technology and services, and revised or clarified several existing exceptions. The MCR final rule also provided guidance and updated or established regulations related to the fundamental terminology used in many provisions of the physician self-referral law. Most notably, we defined the term “commercially reasonable” in regulation, established an objective test for evaluating whether compensation varies with the volume or value of referrals or other business generated between the parties, and revised the definitions of “fair market value” and “general market value.” The MCR final rule also revised the definition of “indirect compensation arrangement.”

2. Indirect Compensation Arrangements (§ 411.354(c)(2))

a. Summary of Proposals

We proposed to revise and renumber the regulation at § 411.354(c)(2) that sets forth the conditions for the existence of an indirect compensation arrangement. First, we proposed to revise and renumber § 411.354(c)(2)(ii), which identifies when aggregate compensation to a physician results in an indirect compensation arrangement (if the other conditions of § 411.354(c)(2) are met), to more precisely address the concerns and effectuate the policies that we articulated in the MCR final rule. Specifically, we proposed to revise the regulation to include as a potential indirect compensation arrangement any unbroken chain of financial relationships in which the compensation arrangement closest to the physician (or immediate family member of the physician) involves compensation for anything other than services that he or she personally performs. This would have included arrangements for the lease of office space or equipment that meet the other conditions of the regulation at § 411.354(c)(2), which would be subject to, among other requirements, the prohibition on percentage-based and unit-based (often referred to as “per-click”) compensation formulas at § 411.357(p)(1)(ii) in the exception for indirect compensation arrangements (or subject to the requirements of another applicable exception). Second, after receiving inquiries from stakeholders requesting clarification on the term “unit” in § 411.354(c)(2)(ii)(A) following the publication of the MCR final rule, we proposed to define the term “unit” for purposes of applying the regulation. We also proposed to define “services that are personally performed” for purposes of applying proposed § 411.354(c)(2)(ii)(A)(4).

b. Definition of “Indirect Compensation Arrangement”

Although section 1877(h)(1) of the Act defines the term “compensation arrangement” as including both direct and indirect compensation, the statute does not define the term “indirect compensation arrangement.” In Phase I, relying on the Secretary's authority under section 1877(b)(4) of the Act, we set forth in regulation the conditions under which an indirect compensation arrangement exists and a corresponding exception for such arrangements (66 FR 684 through 687). In Phase II, we revised the regulation at § 411.354(c)(2)(ii) to distinguish the language identifying when an indirect compensation arrangement exists from the language of the exception for indirect compensation arrangements at § 411.357(p) (69 FR 16069). Most recently, in the MCR final rule, we further revised the regulation at § 411.354(c)(2) that identifies when an indirect compensation arrangement exists (85 FR 77544 through 77546).

Prior to the MCR final rule, an unbroken chain of financial relationships between a referring physician (or a member of his or her immediate family) and the entity furnishing designated health services established an “indirect compensation arrangement” if all the elements of § 411.354(c)(2), as then in effect, existed. The indirect compensation arrangement must satisfy the requirements of an applicable exception in order to avoid the referral and billing prohibitions of the physician self-referral law. (In the alternative, the parties could use an exception at § 411.355 to except the physician's referrals on a service-by-service basis.) This two-step process, which first identified the universe of unbroken chains of financial relationships that might be of concern and then excepted from the physician self-referral law's prohibitions those unbroken chains of financial relationships that did not pose a risk of program or patient abuse, was developed to closely correspond to the statutory treatment of compensation arrangements directly between an entity and a referring physician (or an immediate family member of the referring physician) (69 FR 16059). When analyzing compliance with the requirement that compensation does not take into account the volume or value of a physician's referrals or the other business generated by the physician for the entity, which is included in the exception for indirect compensation arrangements at § 411.357(p) and certain exceptions for direct compensation arrangements, special rules on unit-based compensation at § 411.354(d)(2) and (3) that deemed certain compensation not to take into account the volume or value of the physician's referrals or the other business generated by the physician could be applied.

As noted above, in the MCR final rule, we established an objective test for evaluating whether compensation varies with the volume or value of referrals or other business generated between the parties and responded to commenters that questioned whether compensation to a physician would run afoul of the objective tests under specified circumstances (85 FR 77539 through 77547). Inquiring about proposed modifications to § 411.354(c)(2)(ii) that we did not ultimately finalize, one commenter presented the example of a physician who performs surgeries at a hospital and receives a fixed amount per personally-performed RVU that is consistent with the fair market value of the physician's services (85 FR 77544). In developing our response to the commenter (and other commenters), we revisited the regulatory construct for determining which unbroken chains of financial relationships between entities and physicians (or immediate family members of physicians) establish indirect compensation arrangements and how to determine if they pose a risk of program or patient abuse (85 FR 77545).

With the underlying goal of reducing unnecessary burden on providers and suppliers, we stated that we do not see a need to treat compensation arrangements that may qualify as “indirect compensation arrangements” in the exact same way that the statute treats direct compensation arrangements when that construct creates unnecessary burden on the regulated industry (85 FR 77545 through 77546). We stated that it is possible to simplify the analysis of whether an unbroken chain of financial relationships presents a risk of patient or program abuse or poses program integrity concerns (85 FR 77546), and finalized revisions to § 411.354(c)(2) intended to achieve the same result as the two-step Phase I regulatory construct in protecting against program or patient abuse while reducing unnecessary burden on the regulated industry (85 FR 77546). The revised (now current) regulation at § 411.354(c)(2)(ii) effectively incorporates and applies the conditions of the special rules on unit-based compensation at § 411.354(d)(2) and (3) at the definitional level when determining whether there exists an indirect compensation arrangement that implicates the physician self-referral law.

Under the regulation finalized in the MCR final rule, an unbroken chain of financial relationships between an entity and a physician is considered an indirect compensation arrangement if the physician (or immediate family member of the physician) receives aggregate compensation from the person or entity in the chain with which the physician (or immediate family member) has a direct financial relationship that varies with the volume or value of referrals or other business generated by the physician for the entity furnishing the designated health services, and any of the following are true: (1) The individual unit of compensation received by the physician (or immediate family member) is not fair market value for items or services actually provided; (2) the individual unit of compensation received by the physician (or immediate family member) is calculated using a formula that includes the physician's referrals to the entity furnishing designated health services as a variable, resulting in an increase or decrease in the physician's (or immediate family member's) compensation that positively correlates with the number or value of the physician's referrals to the entity; or (3) the individual unit of compensation received by the physician (or immediate family member) is calculated using a formula that includes other business generated by the physician for the entity furnishing designated health services as a variable, resulting in an increase or decrease in the physician's (or immediate family member's) compensation that positively correlates with the physician's generation of other business for the entity. In addition, the entity must have actual knowledge of, or act in reckless disregard or deliberate ignorance of, the fact that the referring physician (or immediate family member) receives aggregate compensation that varies with the volume or value of referrals or other business generated by the referring physician for the entity. Under the regulation, unless all the elements of § 411.354(c)(2)(i), (ii), and (iii) exist, an unbroken chain of financial relationships between an entity furnishing designated health services and a physician (or immediate family member of a physician) is not considered an indirect compensation arrangement.

As explained previously, the changes to the regulations that identify indirect compensation arrangements of concern under the physician self-referral law occurred in response to comments and inquiries primarily in the context of compensation paid to physicians for their personally performed services (85 FR 77539 through 77547). The revisions to § 411.354(c)(2)(i) through (iii) were intended to more precisely identify arrangements that pose a risk of overutilization, patient steering, and other abusive conduct at an earlier stage of the analysis (85 FR 77546). However, in streamlining the former two-step process for analyzing unbroken chains of financial relationships, we inadvertently omitted a longstanding and important program integrity requirement that previously always applied when determining satisfaction of the requirements of the exception at § 411.357(p) for indirect compensation arrangements. Specifically, we inadvertently excluded from the definition of “indirect compensation arrangement” a subset of unbroken chains including compensation arrangements that we have long identified as presenting significant program integrity concerns: Certain arrangements involving unit of service-based payment for the rental or lease of office space or equipment. (See 73 FR 48713 through 48721; 81 FR 80524 through 80534; and 85 FR 77605 through 77608).)

We have repeatedly stated our view that unit of service-based compensation formulas in arrangements for the lease of space and equipment are inherently susceptible to abuse because the physician lessor has an incentive to profit from referring a higher volume of patients to the lessee. Beginning with the 1998 proposed rule, we stated that unit of service-based payments for patients who are referred for the service by the lessor physician were not consistent with the requirement that compensation not reflect the volume or value of a physician's referrals or other business generated (63 FR 1714). In Phase I, we revisited the issue, reviewed the legislative history, and concluded that, as long as the per-unit payment reflected fair market value in arms' length bargaining and did not vary over the course of the arrangement, unit of service-based payments could qualify for the protection of an exception, provided that the other requirements of the applicable exception are met. (66 FR 876). We noted that such arrangements might run afoul of the anti-kickback statute and stated our intent to continue to monitor such arrangements for potential abuse (66 FR 878).

Subsequently, in the 2009 IPPS final rule, based on our observations of program integrity concerns and comments in support of prohibiting unit of service-based compensation formulas in office space and equipment leases, we finalized revisions to the exceptions for the rental of office space at § 411.357(a), the rental of equipment at § 411.357(b), fair market value compensation at § 411.357(l), and indirect compensation arrangements at § 411.357(p). The revised exceptions required that, to the extent that such arrangements related to the lease of office space or equipment, the rental charges may not be determined using a formula based on: (1) A percentage of the revenue raised, earned, billed, collected, or otherwise attributable to the service performed or business generated in the office space; or (2) unit of service-based rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee (73 FR 48713 through 48714). Commenters largely supported the change. A significant number of commenters reported their own experiences of situations in which unit of service-based compensation arrangements resulted in patients being referred for medically unnecessary treatment. Some hospitals reported being effectively compelled to lease equipment from physician groups (73 FR 48715). In the 2016 PFS final rule, we included similar restrictions on percentage-based and unit of service-based compensation formulas in the new exception at § 411.357(y) for timeshare arrangements. In support of that limitation, we again cited concerns that unit of service-based compensation formulas in arrangements involving the use of premises or equipment could lead to overutilization and patient steering (80 FR 71331 through 71332).

We most recently addressed the issue of unit of service-based compensation formulas in depth in the 2017 PFS proposed and final rules. In those rules, at the direction of the D.C. Circuit Court in Council for Urological Interests v. Burwell, 790 F.3d 212 (DC Cir. 2015), we explained our rationale for the restrictions as they apply to arrangements for the lease of office space or equipment or for the use of premises or equipment, again identifying overutilization and patient steering as the primary program integrity concerns supporting our conclusion that such compensation provisions present a significant program risk (81 FR 46452 through 46453 and 80528 through 80534). We reiterated that unit of service-based compensation formulas, in particular in arrangements for the lease of equipment:

• Create an incentive for overutilization of imaging services (as described by MedPAC in its comments to our proposal in the CY 2008 PFS proposed rule), as well as other services, including therapeutic services;
• Create an incentive for physicians to narrow their choice of treatment options to those for which they will realize a profit, even where the best course of action may be no treatment;
• Influence physicians to refer to the lessee instead of referring to another entity that utilizes the same or different (and perhaps more efficacious) technology to treat the patient's condition;
• Result in physicians steering patients to equipment they own, even if it means having the patient travel to a non-convenient site for services using the leased equipment; and
• Increase costs to the Medicare program when referring physicians pressure hospitals to use their leasing company despite not being the low cost provider.

We also identified two advisory opinions issued by OIG in which OIG voiced concerns about unit of service-based compensation arrangements and indicated that such arrangements are disfavored under the anti-kickback statute (81 FR 80528). Commenters again were largely supportive of the proposal, which merely re-proposed the then-existing prohibitions on such compensation formulas in arrangements for the lease or use of office space or equipment (81 FR 80528 through 80529).

As discussed in prior rulemakings, our policies regarding unit of service-based compensation formulas relate to both the lease of office space or equipment—where dominion and control over the office space (the subject of the statutory exception at section 1877(e)(1)(A) of the Act and the regulatory exception at § 411.357(a)) or equipment is transferred from the lessor to the lessee—and to arrangements for the use of premises (which may or may not be office space) or equipment—where the grantee is granted a right to use the premises or equipment but dominion and control over the premises or equipment is not transferred from the grantor to the grantee. Our position on the inherent risks presented by unit of service-based compensation formulas in the context of the lease of office space or equipment and the use of premises or equipment has not changed since the CY 2016 and 2017 PFS final rules. This fact is evident elsewhere in the MCR final rule. For example, the rule finalized changes to the exception for fair market value items and services at § 411.357(l), making it applicable to the lease of office space (85 FR 77606). With this change, we also revised the exception to state that the previously-established restrictions at § 411.357(l)(3)(i) and (ii) applicable to fair market value equipment leases also apply to leases of office space. We reiterated our longstanding concerns with unit of service-based compensation formulas for leases of office space and equipment, described the history of such concerns, and stated, in response to a comment supporting the inclusion of the restriction, that it was “a necessary safeguard” for the reasons articulated in our prior rulemakings (85 FR 77607). We included similar restrictions on compensation for the lease of office space or equipment and the use of premises or equipment in the newly-finalized exception for limited remuneration to a physician at § 411.357(z), citing the same concerns (85 FR 77624).

We continue to believe that arrangements involving unit of service-based compensation for the lease of office space or equipment or for the use of premises or equipment, whether direct or indirect, may pose a significant risk of program abuse, and proposed revisions to § 411.354(c)(2)(ii) to ensure that prohibitions on certain unit of service-based compensation formulas for the lease of office space or equipment or for the use of premises or equipment applies to all compensation arrangements that include them. Under proposed § 411.354(c)(2)(ii), an unbroken chain of financial relationships in which the compensation arrangement closest to the physician (or immediate family member) is an arrangement for the lease of office space or equipment or an arrangement for the use of premises or equipment would be an indirect compensation arrangement if all other conditions of § 411.354(c)(2)(i) through (iii) are met. If the parties to the compensation arrangement elect to use the exception at § 411.357(p) instead of another applicable exception, if any, the compensation for the lease of office space or equipment may not be determined using a formula based on per-unit of service rental charges to the extent that such charges reflect services provided to patients referred by the lessee to the lessor. Moreover, § 411.357(p)(1)(i) requires that compensation received by a physician (or immediate family member)—including compensation for the lease of office space or equipment or for the use of premises or equipment—is not determined in any manner that takes into account the volume or value of referrals or other business generated by the physician for the entity furnishing designated health services.

As we stated in the proposed rule and continue to believe, arrangements involving compensation to a physician for items or the services of others where the physician's referral of designated health services to an entity or other business generated by the physician for an entity may contribute to the compensation received by the physician are distinguishable from arrangements that solely involve compensation for a physician's personally performed services. Program integrity concerns arise when payment for items or services provided as the result of a physician's referrals or the other business the physician generates, rather than the physician's own labor, is included in the calculation of compensation. As discussed previously, the MCR final rule policy that identifies indirect compensation arrangements of concern under the physician self-referral law in a single-step process was focused on reducing unnecessary burden related to the analysis of unbroken chains of financial relationships that do not pose a risk of program or patient abuse, and was developed in the context of compensation paid to physicians for their personally performed services. However, the current regulations, as finalized in the MCR final rule, are not limited to indirect compensation arrangements under which a physician (or immediate family member) is paid solely for services that he or she personally performs, which, as a general matter, do not raise significant program integrity concerns, provided that the compensation is consistent with fair market value for the personally performed services.

If finalized, proposed § 411.354(c)(2)(ii) would have required a two-step analysis of any unbroken chain of financial relationships in which the compensation paid under the arrangement closest to the physician (or immediate family member) is for anything other than services personally performed by the physician (or immediate family member), including arrangements for the lease of office space or equipment or for the use of premises or equipment. Specifically, we proposed to revise the condition at § 411.354(c)(2)(ii)(A) to consider an unbroken chain of financial relationships between a physician and an entity that meets the other conditions of § 411.354(c)(2)(i) through (iii) to be an indirect compensation arrangement for purposes of the physician self-referral law if the unit of compensation received by the physician (or immediate family member) is payment for anything other than services personally performed by the physician (or immediate family member). We stated that the application of the proposed revision to all unbroken chains of financial relationships in which the compensation paid under the arrangement closest to the physician (or immediate family member) is for anything other than services personally performed by the physician (or immediate family member) was intended to better align with our view regarding the reduced risk of program or patient abuse where compensation is for personally performed services.

We also proposed slight revisions to the language of § 411.354(c)(2)(ii)(A)(2) and (3) to clarify that these conditions relate to the formula for calculating the amount of compensation per unit. The condition at proposed § 411.354(c)(ii)(A) stated that the referring physician (or immediate family member) receives aggregate compensation from the person or entity in the chain with which the physician (or immediate family member) has a direct financial relationship that varies with the volume or value of referrals or other business generated by the referring physician for the entity furnishing the designated health services and the individual unit of compensation received by the physician (or immediate family member): (1) Is not fair market value for items or services actually provided; (2) Is calculated using a formula that includes the physician's referrals to the entity furnishing designated health services as a variable, resulting in an increase or decrease in the amount of compensation that positively correlates with the number or value of the physician's referrals to the entity; (3) Is calculated using a formula that includes other business generated by the physician for the entity furnishing designated health services as a variable, resulting in an increase or decrease in the amount of compensation per unit that positively correlates with the physician's generation of other business for the entity; or (4) Is payment for anything other than services personally performed by the physician (or immediate family member). For purposes of proposed § 411.354(c)(2)(ii)(A)( 4 ), services that are performed by any person other than the physician (or immediate family member), including, but not limited to, the referring physician's (or immediate family member's) employees, independent contractors, group practice members, or persons supervised by the physician (or the immediate family member) would not be personally performed by the physician. We proposed to codify this policy at § 411.354(c)(2)(ii)(B)( 3 ). We are finalizing our proposal to ensure that the prohibition on certain unit of service-based compensation formulas for the lease of office space or equipment or for the use of premises or equipment applies to all compensation arrangements that include them. We are not finalizing our proposal regarding payment for anything other than services personally performed by the physician (or immediate family member) or our proposal to codify our interpretation of services that are personally performed by a physician (or immediate family member).

c. Definition of “unit” for Purposes of Applying § 411.354(c)(ii)(A)

As explained above, under current § 411.354(c)(2)—which was finalized in the MCR final rule—the determination of whether an indirect compensation arrangement exists requires the evaluation of the individual unit of compensation that the physician (or immediate family member) receives. If the individual unit of compensation does not meet any of the conditions at current § 411.354(c)(2)(ii)(A)( 1 ) through ( 3 ), the unbroken chain of financial relationships does not constitute an indirect compensation arrangement. Following the publication of the MCR final rule, we received inquiries from stakeholders regarding how the provisions of § 411.354(c)(2)(ii)(A) should be applied in situations where compensation does not appear to be unit-based or is calculated using two or more different units or types of units. We proposed revisions to § 411.354(c)(2)(ii)(B) to clarify how to identify the unit to analyze against the conditions of current § 411.354(c)(2)(ii)(A)( 1 ) through ( 3 ), as well as proposed § 411.354(c)(2)(ii)(A)(4).

As a preliminary matter, it is our position that all compensation essentially is unit-based compensation. The underlying unit may be a discrete item, a unit of service, a unit of time, or a unit that results from combining different types of units into a single unit used to calculate the compensation. The identification of purely time-based or service-based units is straightforward. With respect to compensation that is entirely paid per hour, per day, per month, per year, or per similar period of time, the individual unit of compensation is the smallest unit of time for which the compensation is paid. For example, where a physician is paid $150 per hour for his or her medical director services, the unit is an hour. Similarly, where a physician is paid $350,000 per year for his or her full-time professional services, the unit is a year. With respect to compensation that is entirely paid per service, such as a work relative value unit (wRVU) or the provision of a training seminar, the unit is the individual service. For example, where a physician is paid $30 per wRVU that he or she personally performs, the unit is a wRVU. Similarly, where a physician is paid $1000 to provide a training session on infection control measures for an organization's employees, the unit is a training session. Compensation formulas that incorporate a percentage of a variable are also unit-based. For example, if a physician is paid 50 percent of the amount collected for the professional services that he or she performs in a calendar year, the unit is a calendar year. If a physician is paid 95 percent of the Medicare PFS amount for a particular service that he or she personally performs, the unit is the service.

We are aware that compensation arrangements may include different units of compensation paid to a physician. According to stakeholders inquiring about the application of § 411.354(c)(2)(ii)(A), a physician employed by a physician organization may receive an annual salary for his or her full-time professional services furnished to patients of the physician organization plus a productivity bonus for each wRVU that he or she personally performs. The stakeholders inquired how to identify the unit that results from combining different types of units into a single unit used to calculate the physician's compensation. In such instances, we consider the unit of compensation to be time-based and reflect the aggregate compensation paid to the physician during the period of time applicable to the payment; that is, the period of time during which compensation is paid (for example, per month or per year) or over the entire term of the arrangement. It is our understanding that fair market valuations generally follow this construct, determining the fair market value of various types of compensation for a physician's personally performed services, such as fixed salary payments and productivity or bonus compensation, by assessing the physician's compensation in the aggregate over a period of time. Further, a service-based unit of compensation is easily converted to a time-based unit by incorporating the period of time applicable to the payment for the services (for example, $30 per wRVU per month), while the reverse is not true. It is for these reasons that we believe that “hybrid” compensation—that is, compensation that has both a time-based unit component and a service-based unit component—is appropriately analyzed by converting it to compensation for a unit of time for purposes of applying § 411.354(c)(2)(ii).

To illustrate, assume that an employment arrangement between a physician and a physician organization specifies compensation of $200,000 per calendar year for the physician's full-time professional services plus a productivity bonus of $10 for each wRVU that he or she personally performs, and that the physician is paid on a monthly basis. The unit of compensation is a month, and the formula for determining the compensation per month is ($200,000 ÷ 12 months) + ($10 x the number of wRVUs personally performed during the month). (In the alternative, the parties could analyze the arrangement under § 411.354(c)(2)(ii)(A) using a calendar year as the unit of compensation.) However, if the employment arrangement specified productivity bonus compensation of $10 per wRVU only for those personally performed wRVUs above a predetermined target, the unit is the period of time for which the target is applicable. To illustrate, instead of $10 for each wRVU that the physician personally performs, assume that the physician receives $10 for the wRVUs that he or she personally performs in excess of 4,000 wRVUs per calendar year. The unit of compensation is a calendar year, and the formula for determining the compensation per year is $200,000 + $10 x (actual number of wRVUs personally performed during the calendar year—4,000).

We note that a compensation arrangement may also involve multiple units of the same type. For example, a physician employed by a physician organization may receive a salary of $200,000 per year for his or her full-time professional services plus $150 per hour for his or her personally performed medical director services or $500 per month for each of the physician organization's NPPs that he or she supervises. Or, a physician may receive compensation for services based on a fee schedule; for example, $50 for service A, $75 for service B, and $100 for service C. In circumstances where more than one unit of the same type is used to calculate the physician's compensation, each unit must be analyzed under § 411.354(c)(2)(ii)(A)( 1 ) through ( 4 ) to determine whether the conditions for an indirect compensation arrangement exist.

To facilitate compliance with the physician self-referral law as it applies to indirect compensation arrangements, we proposed a new regulation at § 411.354(c)(2)(ii)(B)( 2 ) that expressly identifies the unit to consider for purposes of applying the regulation at § 411.354(c)(2)(ii)(A) and determining the existence of an indirect compensation arrangement that must satisfy the requirements of an applicable exception. Under proposed § 411.354(c)(2)(ii)(B)( 2 ), for purposes of applying § 411.354(c)(2)(ii)(A), the individual unit was specified as: (1) Time, where the compensation paid to the physician (or immediate family member) is based solely on the period of time during which the services are provided; (2) service, where the compensation paid to the physician (or immediate family member) is based solely on the service provided; and (3) time, where the compensation paid to the physician (or immediate family member) is not based solely on the period of time during which a service is provided or based solely on the service provided. We are finalizing our proposal to clarify the unit for purposes of determining the existence of an indirect compensation arrangement with the modifications as described in our response to comments below.

We solicited comment on the proposals discussed above and whether additional guidance is needed with respect to the determination of whether an indirect compensation arrangement exists. We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Many commenters acknowledged the longstanding CMS policy that compensation for the lease of office space or equipment or for the use of premises or equipment may not be determined using a formula based on per-unit of service (or “per-click”) rental charges or “use” fees to the extent that such charges reflect services provided to patients referred by the lessor to the lessee or by the party granting permission to use the premises or equipment (often referred to as the “licensor”) to the party to which the permission is granted (often referred to as the “licensee”), respectively. These commenters supported finalizing our proposal to retain the policy with respect to indirect compensation arrangements, with several noting that our failure to revise the regulations at § 411.354(c)(2) in the MCR final rule to include the prohibition on per-click payments for the lease of office space or equipment must surely have been an oversight given that the agency: (1) Made no express statement that it was abandoning its policy with respect to unbroken chains of financial relationships where the compensation arrangement closest to a physician (or immediate family member of a physician) is for the lease of office space or equipment; and (2) retained the policy with respect to arrangements for the lease of office space or equipment that are directly (or are deemed to be directly) between an entity and a physician (or immediate family member of a physician). Several commenters asserted that the policy is necessary to protect against the program integrity concerns that underly the policy, but others asserted that per-click payments for the lease of equipment do not pose a risk to the Medicare program or its beneficiaries and, therefore, the policy is unnecessary. A few commenters expressed concern with the burden of learning how to apply new regulations, some of whom supported a prohibition on per-click payments for the lease of office space and equipment, and some of whom opposed such a prohibition.

Response: As we stated in the proposed rule, in the MCR final rule, we inadvertently omitted the important program integrity requirement related to per-click payments for the lease of office space and equipment or for the use of premises or equipment when revising our regulations at § 411.354(c)(2) in order to identify arrangements that pose a risk of overutilization, patient steering, and other abusive conduct at an earlier state of the analysis (86 FR 29322). As the commenters correctly noted, this was in no way an abandonment of our longstanding policy with respect to unbroken chains of financial relationships where the compensation arrangement closest to a physician (or immediate family member of a physician) is for the lease of office space or equipment, nor was it an express indication that unbroken chains of financial relationships where the compensation arrangement closest to a physician (or immediate family member of a physician) is for the use of premises or equipment pose no risk of program or patient abuse. We are finalizing our proposal to address the inadvertent omission of arrangements involving unit of service-based payment for the lease of office space or equipment or for the use of premises or equipment from those unbroken chains of financial relationships that constitute indirect compensation arrangements under § 411.354(c)(2). However, as explained in the responses to comments below, we are finalizing revisions to address this omission in a more precise and targeted manner.

With respect to commenters' concerns about the potential burden of learning how to apply new regulations, we note that, for all unbroken chains of financial relationships where the compensation arrangement closest to a physician (or immediate family member of a physician) is for the lease of office space or equipment or for the use of premises or equipment, the analysis under the physician self-referral law will revert to the two-step analysis in place since our Phase I regulations were finalized in 2004. Once a determination is made that an indirect compensation arrangement exists, the requirements of an applicable exception must be satisfied. If the parties to the indirect compensation arrangement rely on the exception for indirect compensation arrangements at § 411.357(p), the compensation for each unit of office space, equipment, or premises may not be determined in any manner that takes into account the volume or value of the physician's referrals to or other business generated for the entity. The special rules at § 411.354(d)(5) and (6) regarding when compensation takes into account the volume or value of a physician's referrals to or other business generated for an entity were finalized in the MCR final rule (85 FR 77535 through 77547). A compensation formula under which a physician (or immediate family member) receives a lease payment or a “use” fee—either as the direct lessor or licensor or through an ownership interest in a lessor or licensor—each time the office space, equipment, or premises is used to provide a service to a patient referred by the physician to the lessee or licensee would not satisfy this requirement, because the formula used to determine the compensation would include the physician's referrals to and other business generated for the entity as a variable, resulting in an increase in the physician's (or immediate family member's) compensation that positively correlates with the number or value of the physician's referrals to and other business generated for the entity. In addition, the exception for indirect compensation arrangements expressly requires that the compensation for the lease of office space or equipment may not be determined using a formula based on: (1) A percentage of the revenue raised, earned, billed, collected, or otherwise attributable to the services performed or business generated in the office space or to the services performed on or business generated through the use of the equipment; or (2) per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. This requirement has been in place since October 1, 2009, and therefore, it is not a “new” policy or analysis that will result in burden to parties designing or reviewing their indirect compensation arrangements for compliance with the physician self-referral law.

Comment: Although the vast majority of commenters that addressed our proposal to revise the conditions under which an indirect compensation arrangement exists supported a prohibition on per-click payments for the lease of office space or equipment and the use of premises or equipment, many of these commenters asserted that our proposed revisions to § 411.354(c)(2), if finalized, would be overbroad in application. Specifically, commenters objected to proposed § 411.354(c)(2)(ii)(A)( 4 ), which would have treated any unbroken chain of financial relationships in which the physician (or immediate family member) receives aggregate compensation that varies with the volume or value of referrals or other business generated by the physician for the entity as an indirect compensation arrangement that must satisfy the requirements of an applicable exception if the individual unit of compensation is payment for anything other than services personally performed by the physician (or immediate family member). All of these commenters urged CMS to take a more targeted approach to its policy concerns in this final rule.

Some commenters noted that, if finalized, the regulations would prohibit all arrangements for services furnished “under arrangement” to a hospital or other entity—which are typically purchased on a per-service basis—where the entire service is not performed personally by the physician who receives the unit-based compensation, including service arrangements that historically did not constitute indirect compensation arrangements or, if they did, satisfied the requirements of the exception for indirect compensation arrangements at § 411.357(p). Commenters explained that, as generally structured, in an arrangement involving services furnished “under arrangement” to a hospital (or other entity), a physician (or immediate family member) receives per-unit compensation for a complete service when the physician generated the referral of designated health services or generated other business billed by the entity (and when he or she did not). One of the commenters further explained that, under the current regulations at § 411.354(c)(2), such arrangements would not constitute indirect compensation arrangements, provided that the amount of compensation that the physician (or immediate family member) receives per individual unit of service is fair market value and does not positively correlate with the number or value of the physician's referrals to or other business generated for the entity. Further, according to this commenter, under the regulations as they existed prior to the MCR final rule, although such unbroken chains of financial relationships constituted indirect compensation arrangements, the special rules at § 411.354(d)(2) and (3) could be applied, and properly structured per-service payments were not considered to take into account the volume or value of the physician's referrals or other business generated by the physician in violation of § 411.357(p)(1)(i). The commenter asserted that, if CMS finalizes this proposal, because § 411.354(d)(2) and (3) are no longer applicable to an analysis of whether compensation takes into account the volume or value of referrals or other business generated (the “volume or value standards”), compensation under the typical “under arrangements” service arrangement would violate the volume or value standards at § 411.357(p)(1)(i).

Other commenters highlighted that the application of the proposal to certain lithotripsy services would conflict with longstanding CMS policy related to unit-based compensation for such services when furnished as a full package of services (as opposed to a lease of equipment and a technician). One commenter posited that, given that CMS focused on ensuring the continuation of the prohibition on per-click payments for the lease of office space or equipment and the use of premises or equipment as support for the proposal, the broad application of the regulations, if finalized, must be an inadvertent oversight or mistake.

Response: Our proposal to revise § 411.354(c)(2) was intended to support policies finalized in the MCR final rule that were made in the context of assessing the risk of program and patient abuse associated with services personally performed by a physician. However, we agree that the regulation at proposed § 411.354(c)(2)(ii)(A)( 4 ) would have resulted in unintended limitations on unbroken chains of financial relationships that historically constituted indirect compensation arrangements but satisfied all requirements of an applicable exception and, therefore, were not considered to pose a risk of program or patient abuse. The commenters are correct that, under the MCR final rule, certain unbroken chains of financial relationships no longer constitute indirect compensation arrangements and, thus, are outside the reach of the physician self-referral law. Our proposal to revise § 411.354(c)(2) was not based on a new review of these unbroken chains and a determination that they now pose a risk of program or patient abuse that had not historically existed. As noted in this section III.P., our proposal was intended to reinstate the prohibition on certain per-click compensation formulas in arrangements for the lease of office space or equipment that was inadvertently omitted in the MCR final rule changes and to ensure the application of this policy to arrangements for the use of premises and equipment. Accordingly, we are persuaded that a narrow, more targeted approach is appropriate. Under final § 411.354(c)(2)(ii)(A)( 2 )( iv ), an indirect compensation arrangement exists if the amount of compensation that the physician (or immediate family member) receives per individual unit is payment for the lease of office space or equipment or for the use of premises or equipment, and all other conditions at § 411.354(c)(2) exist. As explained in the CY 2016 PFS final rule, an arrangement is for the lease of office space or equipment where dominion and control over the office space or equipment is transferred from the lessor to the lessee (80 FR 71325). In addition, an arrangement that grants a party permission to use the grantor's premises and equipment is a “use” or “license” arrangement. In contrast, an arrangement for the provision and purchase of a complete service (or a package of services) that includes all the personnel, supplies, office (or other) space, and equipment necessary to provide the service (or the package of services) but does not transfer dominion and control over the office space or equipment from the provider of the service—for example, a service provided “under arrangements” to a hospital that is performed entirely by a physician's practice or a joint venture in which the physician is a partner—is not an arrangement for the lease of office space or equipment, nor is it a “use” arrangement where the licensee uses the premises and equipment to perform services. This is true even though office space or equipment are necessary components of the complete service (or package of services) (see 81 FR 80534).

Comment: Several commenters requested clarification regarding when a service is considered to be personally performed by a physician (or immediate family member) as described at proposed § 411.354(c)(2)(ii)(B)( 3 ), which states that services that are personally performed by a physician (or immediate family member) do not include services that are performed by any person other than the physician (or immediate family member), including, but not limited to, the physician's (or immediate family member's) employees, independent contractors, group practice members, or persons supervised by the physician (or the immediate family member). One commenter expressed appreciation for the proposed codification of CMS' policy, noting that the guidance would be helpful in properly allocating productivity credit to physicians in certain settings. Some commenters, in virtually identical statements, suggested that we should consider services to be personally performed by a physician, regardless of who actually furnishes them, as long as they are billed using a billing number assigned to the physician, including services furnished by another individual but billed as services “incident to” the physician's service. Many of these commenters urged CMS not to confirm its interpretation of when services are personally performed by a physician (or immediate family member) for purposes of the physician self-referral law, arguing that proposed § 411.354(c)(2)(ii)(B)( 3 ) is inconsistent with Medicare claim submission rules that allow a physician to bill for the services of employees or contractors that are furnished incident to the physician's professional services. Another commenter suggested that, if CMS finalizes a narrower approach to the analysis of unbroken chains of financial relationships involving the lease or use of office space, equipment, or premises, there would be no need to clarify what it means to personally perform a service for purposes of the physician self-referral law.

Response: As discussed in the response to other comments, we are not finalizing the policy at § 411.354(c)(2)(ii)(A)( 4 ). Therefore, we need not and are not finalizing the regulation at proposed § 411.354(c)(2)(ii)(B)( 3 ). However, it appears that commenters discussing incident to billing may be conflating Medicare billing conventions with physician self-referral policy, and we believe that clarification is warranted. For purposes of the physician self-referral law, as stated in the definition of “referral” at § 411.351, a designated health service is not personally performed by the referring physician if it is performed or provided by any other person, including, but not limited to, the referring physician's employees, independent contractors, or group practice members. This includes designated health services furnished incident to the referring physician's professional services. ( See 66 FR 871 through 872 and 69 FR 16063.) To be clear, it is our longstanding policy that, for purposes of the physician self-referral law, an item or service is not personally performed by a physician if it is performed or provided by any other person, including, but not limited to, the referring physician's employees, independent contractors, or group practice members.

Comment: One commenter requested confirmation whether compensation under certain arrangements would impermissibly take into account the volume or value of referrals or other business generated if the arrangements qualify as “indirect compensation arrangements” under our proposal to treat any unbroken chain of financial relationships in which the physician (or immediate family member) receives aggregate compensation that varies with the volume or value of referrals or other business generated by the physician for the entity as an indirect compensation arrangement that must satisfy the requirements of an applicable exception if the individual unit of compensation is payment for anything other than services personally performed by the physician (or immediate family member). The commenter presented three distinct, but similar, scenarios. In all three scenarios, a hospital has an arrangement with a physician organization for the provision of the personal services of the physicians in the physician organization. There are no employed or independent contractor physicians in the physician organization. The commenter stated that the compensation under the arrangement is a fair market value, fixed dollar amount per wRVU personally performed by the physicians or NPPs.

In the first scenario presented by the commenter, the arrangement with the physician organization also covers the provision of the personal services of the NPPs in the physician organization. The hospital pays the physician organization directly for each wRVU performed by the NPPs (as well as the physicians) in the physician organization. The commenter stated that the NPPs only perform services that they order in the exercise of their independent clinical judgment. Patients are not referred to the NPPs by the physicians in the physician organization. The commenter asserted that the services of the NPPs in this scenario do not result from “referrals” by the physicians in the physician organization and are not “other business generated” by such physicians.

In the second and third scenarios presented by the commenter, the hospital also enters into an arrangement directly with each of the NPPs for their personally performed services, some of which are provided to patients referred to the NPPs by the physicians in the physician organization. The commenter stated that the compensation under each of these arrangements is a fair market value, fixed dollar amount per wRVU personally performed by the NPP. The hospital accepts reassignment of each physician's and NPP's right to bill and receive payment from Medicare and other payors. In the first of these scenarios, the physicians in the physician organization refer to the NPPs all the services that the NPPs then personally perform. The physician organization enters into a payment-to-bank arrangement with each NPP under which the hospital's direct payment to the NPP is deposited into a bank account belonging to the NPP and then, under a revocable agreement between the NPP and the bank, is swept into a bank account belonging to the physician organization. In the second of these scenarios, the physicians in the physician organization refer to the NPPs all the services that the NPPs then personally perform. However, the hospital makes payment directly to the physician organization as “agent” for the NPPs. According to the commenter, the physician organization receives payment from the hospital on behalf of the NPPs, but not in its own right, for the services personally performed by the NPPs.

Response: In all the scenarios presented by the commenter, the physicians would stand in the shoes of the physician organization under the regulations at § 411.354(c)(1)(ii); therefore, the physicians would be deemed to have the same compensation arrangements with the hospital (and on the same terms) as the physician organization. In the scenarios presented by the commenter, each physician would be deemed to directly receive payment from the hospital for services that the physician personally performs, as well as for services that are performed by someone other than that physician (either another physician in the physician organization or an NPP in the physician organization). Such compensation arrangements would implicate the physician self-referral law; however, there would not be an unbroken chain of two or more financial relationships between the hospital and each physician, and the condition set forth at § 411.354(c)(2)(i) would not be met. As a result, there would not be an indirect compensation arrangement between the hospital and any of the physicians in the physician organization. Even if the physicians did not stand in the shoes of the physician organization, as described previously, we are not finalizing our proposal to treat all unbroken chains of financial relationships in which the physician (or immediate family member) receives aggregate compensation that varies with the volume or value of referrals or other business generated by the physician for the entity as an indirect compensation if the individual unit of compensation is payment for anything other than services personally performed by the physician (or immediate family member). We note that the commenter's inquiry relates to and is within the scope of our proposal to include as indirect compensation arrangements certain unbroken chains of financial relationships where the individual unit of compensation is payment for anything other than services personally performed by the physician (or immediate family member). However, because we are not finalizing that proposal, the commenter's inquiry, on its face, is moot. An analysis of the application of the regulations at § 411.354(d)(5) to the scenarios presented by the commenter is outside the scope of this rulemaking.

Comment: A few commenters stated that, following the MCR final rule, some stakeholders have been uncertain how to identify the individual unit of compensation to which the provisions of current § 411.354(c)(2)(ii)(A)( 1 ) through ( 3 ) apply. These and other commenters generally supported finalizing the regulation at proposed § 411.354(c)(2)(ii)(B)( 2 ), which specifies the individual units of compensation to which to apply the regulations that determine when an indirect compensation arrangement exists.

Response: As we explained in the proposed rule, it is our position that all compensation essentially is unit-based compensation. The underlying unit may be a discrete item, a unit of service, a unit of time, or a unit that results from combining different types of units into a single unit used to calculate the compensation. At final § 411.354(c)(2)(ii)(B), we are finalizing with revisions our proposal to specify the individual units of compensation to which to apply the regulations that determine when an indirect compensation arrangement exists. The revisions are intended to further clarify and simplify the application of the regulations at § 411.354(c)(2) that establish the conditions under which an indirect compensation arrangement exists. Specifically, under final § 411.354(c)(2)(ii)(B), the individual unit of compensation is the item, where the physician (or immediate family member) is compensated solely per item provided; the service, where the physician (or immediate family member) is compensated solely per service provided, including arrangements where the “service” provided by the physician (or immediate family member) includes both items and services, such as “under arrangement” service arrangements where both items and services are included in the complete service (or package of services) provided to the purchaser; and time, in all other circumstances, including arrangements where the physician (or immediate family member) receives compensation for each item provided or unit of service performed (or both) in addition to compensation for each unit of time worked. The final regulations effectuate our policy, as stated in the proposed rule, that “hybrid” compensation—that is compensation that is comprised of payments for both time-based units and service-based or item-based units (or both)—is appropriately analyzed by converting it to compensation for a unit of time. In other words, the compensation paid to the physician (or immediate family member) must be totaled over a period of time, which period would be considered the individual “unit” of compensation for purposes of applying § 411.354(c)(2)(ii). ( See 86 FR 39323 through 39324.)

Comment: One commenter claimed that there is confusion in the industry regarding the interpretation and application of the provisions at § 411.354(c)(2)(ii)(A)( 2 ) and ( 3 ), as finalized in the MCR final rule and as proposed for modification in the CY 2022 PFS proposed rule. The commenter interpreted § 411.354(c)(2)(ii)(A)( 2 ) and ( 3 ) to be a test of whether the amount of compensation per individual unit increases or decreases in a manner that positively correlates with referrals or other business generated by a physician. To illustrate, the commenter offered the example of a tiered compensation structure for physician compensation. In the commenter's example, the physician is paid a rate of $15 for the first 100 units of service provided and $20 per unit of service thereafter. The commenter concluded that this compensation structure would meet the conditions for the existence of an indirect compensation arrangement under § 411.354(c)(2)(ii)(A)( 2 ) and ( 3 ), because the amount of compensation per individual unit of service could increase from $15 to $20 as the number of referrals or amount of other business generated increases. The commenter asserted that, in contrast, many stakeholders incorrectly believe that the conditions at § 411.354(c)(2)(ii)(A)(2) and (3) are met if the physician's (or immediate family member's) aggregate compensation increases or decreases in a manner that positively correlates with referrals or other business generated by the physician, even if the amount of compensation per individual unit remains constant. The commenter requested that CMS confirm that § 411.354(c)(2)(ii)(A)( 2 ) and ( 3 ) address variations in the unit of compensation itself, not variation in the aggregate compensation received by the physician (or immediate family member).

Response: The commenter is correct that the focus of § 411.354(c)(2)(ii)(A)( 2 ) and ( 3 ), as finalized in the MCR final rule and proposed for modification in the CY 2022 PFS proposed rule, is variation in the amount of compensation per individual unit itself, not the aggregate compensation received by the physician (or immediate family member). To avoid possible stakeholder confusion, in this final rule we are revising and renumbering the provisions in § 411.354(c)(2)(ii)(A) to explicitly distinguish between the conditions that must be met for aggregate compensation, on the one hand, and the conditions that must be met for the individual unit of compensation, on the other, in order for an indirect compensation arrangement to exist. We are making corresponding clarifying changes to § 411.354(c)(2)( ii )(C).

Under final § 411.354(c)(2)(ii)(A)( 1 ), for an indirect compensation arrangement to exist, the referring physician (or immediate family member) must receive aggregate compensation from the person or entity in the chain with which the physician (or immediate family member) has a direct financial relationship that varies with the volume or value of referrals or other business generated by the referring physician for the entity furnishing the designated health services. When a physician is paid on a per unit of service or time basis, the physician's aggregate compensation will increase as the physician performs more services or completes more units of time. And, where the services performed by the physician correlate to designated health services referred or other business generated by the physician for the entity, the aggregate compensation received by the physician varies with the volume or value of referrals or other business generated by the physician for the entity. Under these circumstances, the condition at final § 411.354(c)(2)(ii)(A)( 1 ) is met.

In addition to the test for aggregate compensation, one of the conditions in § 411.354(c)(2)(ii)(A)( 2 ) for the individual unit of compensation received by the physician (or immediate family member) must also be met for an indirect compensation arrangement to exist. Final § 411.354(c)(2)(ii)(A)(2)(ii) and ( iii ) pertain to variability in the amount of compensation per individual unit relating to the volume or value of a physician's referrals or other business generated, respectively. In response to the comment requesting clarification of the application of these provisions, we are revising and renumbering the conditions that relate to the individual unit of compensation in § 411.354(c)(2)(ii)(A)( 2 ) to clarify the application of these conditions generally and to illustrate how the regulations will apply in the case of tiered compensation as described by the commenter.

To illustrate, assume that the conditions for an indirect compensation arrangement between a physician and a hospital at §§ 411.354(c)(2)(i), 411.354(c)(2)(ii)(A)( 1 ), and 411.354(c)(2)(iii) are met. In order for an indirect compensation arrangement to exist, one of the conditions for the individual unit of compensation in § 411.354(c)(2)(ii)(A)( 2 ) must also be met. In the commenter's example of tiered compensation, the individual unit of compensation received by the physician could increase from $15 to $20 per unit if the physician provides over 100 units of service to the entity. We assume for purposes of this example that the physician's services are typically correlated with designated health services or other business generated for the hospital, and further that both $15 and $20 per unit of service are within the range of fair market value for the services actually provided. Because the amount of compensation per individual unit of service could increase from $15 to $20 as the number or value of the physician's referrals to the entity increase or the amount or value of the other business generated by the physician for the entity increases, the conditions for an indirect compensation arrangement at final § 411.354(c)(2)(ii)(A)(2)( ii ) and ( iii ) are met. Therefore, the unbroken chain of financial relationships between the physician and the hospital would constitute an indirect compensation arrangement under § 411.354(c)(2). Importantly, at this step in the analysis, it does not matter if the physician is being paid for his or her personally performed services or if the tiered compensation formula does not include designated health services or other business generated as a variable. Although these are important factors in determining compliance with certain exceptions, including the exception for indirect compensation arrangements at § 411.357(p), the analysis under final § 411.354(c)(2)(ii)(A)(2)( ii ) and ( iii ) focuses solely on whether the individual unit of compensation could increase as referrals or other business generated increase (or could decrease as referrals or other business generated decrease). Lastly, even if the physician never performed the required number of services to trigger the increase from $15 to $20 per service, because the amount of compensation per individual unit of service could increase under the tiered compensation formula, the conditions for an indirect compensation arrangement at final § 411.354(c)(2)(ii)(A)(2)( ii ) and ( iii ) are met in this illustration.

In general, we believe that tiered compensation models warrant additional scrutiny under the physician self-referral law when structured in a way that the amount of compensation per individual unit could increase as the number or value of the physician's referrals or the amount or value of other business generated by the physician increases. We are equally concerned with tiered compensation models where the amount of compensation per individual unit could decrease as the number or value of the physician's referrals decreases or the amount or value of other business generated by the physician decreases (for example, an arrangement under which a physician is paid $35 per wRVU if the physician furnishes 500 wRVUs during the month, but only $30 per wRVU if the physician does not reach the targeted 500 wRVUs). We have modified the conditions for the existence of an indirect compensation arrangement at § 411.354(c)(2) to ensure that an unbroken chain of financial relationships involving a tiered compensation structure under the compensation arrangement closest to the physician (or immediate family member) is considered an indirect compensation arrangement. When these conditions are met, the compensation arrangement or the individual referrals of designated health services must satisfy the requirements of an applicable exception to the physician self-referral law. If the compensation arrangement to which the physician is a direct (or deemed direct) party is not a value-based arrangement and the entity is not an MCO or IPO, the only available exception in § 411.357 is the exception for indirect compensation arrangements at § 411.357(p). Among other things, the exception at § 411.357(p) requires that the arrangement is set out in writing, thus ensuring greater transparency, and that the aggregate compensation received by the physician (or immediate family member) is fair market value for items and services actually provided. In addition, the exception requires that the compensation received by the physician (or immediate family member) is not determined in any manner that takes into account the volume or value of referrals or other business generated by the physician. The special rules at § 411.354(d)(5) and (6) are applied for purposes of determining satisfaction of this requirement. In applying the special rules at § 411.354(d)(5) and (6) to tiered compensation under an indirect compensation arrangement, the focus of the analysis is the formula used in determining the amount of compensation that the physician (or immediate family member) receives per individual unit—that is, per item, per service, or per unit of time. Provided that the formula used to calculate the amount of compensation to the physician (or immediate family member) per individual unit (that is, the amount of compensation per item, per service, or per unit of time) does not include as a variable the physician's referrals to or other business generated for the entity with which the physician (or immediate family member) has the indirect compensation arrangement, the compensation received by the physician (or immediately family member) would not be determined in a manner that takes into account the volume or value of referrals or other business generated by the physician for the entity. We note that the application of § 411.354(d)(5) and (6) with respect tiered compensation arrangements is the same for both direct compensation arrangements and indirect compensation arrangements.

Comment: A few commenters urged CMS to delay the effective date of any revisions to the regulations addressing when an indirect compensation arrangement exists. These commenters asserted that affected parties would need time to identify and revise existing arrangements that would again implicate the physician self-referral law, but would not satisfy the requirements of an applicable exception to the law. Other commenters urged CMS not to delay the effective date of any final regulations that correct the inadvertent omission of the prohibition on per-click payments for the lease of office space or equipment and the use of premises or equipment in indirect compensation arrangements due to the important program integrity concerns at issue. These commenters also urged CMS not to “grandfather” any arrangements that were entered into after the effective date of the MCR final rule, noting that parties that entered into arrangements involving per-click payments for the lease of office space or equipment (or for the use of premises or equipment) after the effective date of the MCR final rule did so with full knowledge of CMS' longstanding concerns regarding such arrangements.

Response: We decline to delay the effective date of the regulations we are finalizing in this final rule, nor are we “grandfathering” arrangements involving per-click payments for the lease of office space or equipment or for the use of premises or equipment that were entered into after the effective date of the MCR final rule. We expect that the number of affected lease arrangements that will again implicate the physician self-referral law is limited, and parties to such arrangements have over a decade of experience in applying the requirement at § 411.357(p)(1)(ii) that prohibits compensation for the lease of office space or equipment that is determined using a formula based on per-unit of service rental charges, to the extent such charges reflect services provided to patients referred by the lessor to the lessee. We remind stakeholders that this requirement applies to all services, whether or not they are designated health services, that are provided to patients referred by the lessor to the lessee. The term “referral” has its general meaning and not the meaning set forth at § 411.351. For a more detailed explanation of this requirement, we refer readers to the FY 2009 IPPS final rule (73 FR 48713 through 48721) and the CY 2017 PFS final rule (81 FR 80524 through 80534). We also expect that the number of affected unbroken chains of financial relationships that involve arrangements for the use of premises or equipment that will again implicate the physician self-referral law is similarly limited.

3. Exception for Preventive Screening Tests, Immunizations, and Vaccines (§ 411.355(h))

As a general matter, vaccines fall within the definition of “outpatient prescription drugs” at § 411.351, and therefore, are considered designated health services for purposes of the physician self-referral law. Because the Federal Government purchased the initial supply of COVID-19 vaccines, Medicare does not make payment for COVID-19 vaccines at this time, and COVID-19 vaccines do not fall within the definition of “designated health services” at § 411.351. However, should COVID-19 vaccines become payable by Medicare, unless the requirements of an applicable exception to the physician self-referral law are satisfied, the physician self-referral law's prohibitions under section 1877(a)(1) of the Act and § 411.353(a) and (b) will apply to the referral and billing of COVID-19 vaccines.

In Phase I, using the Secretary's authority at section 1877(b)(4) of the Act to create additional exceptions that do not pose a risk of program or patient abuse, we finalized an exception at § 411.355(h) that excludes from the physician self-referral law's referral and billing prohibitions certain preventive screening tests, immunizations, and vaccines covered under Medicare (66 FR 939). As finalized in Phase I, in addition to requirements related to compliance with the Federal anti-kickback statute and Federal and State laws and regulations related to billing and claims submission, the exception at § 411.355(h) required that the preventive screening test, immunization, or vaccine is subject to CMS-mandated frequency limits, reimbursed by Medicare based on a fee schedule, and listed on the CMS website and in annual PFS Updates. In Phase II, in recognition that some of the vaccines eligible for the exception may be paid by Medicare using different reimbursement methods, we removed the requirement that the preventive screening test, immunization, or vaccine is reimbursed based on a fee schedule (69 FR 16116). In the MCR final rule, as part of a broader effort to decouple the physician self-referral law from the Federal anti-kickback statute and Federal and State laws or regulations governing billing or claims submission, we removed the requirement at former § 411.355(h)(2) that the arrangement does not violate the Federal anti-kickback statute, as well as the requirement at former § 411.355(h)(3) that the arrangement does not violate any Federal or State law or regulation governing billing or claims submission (85 FR 77567).

Services to which the exception at § 411.355(h) is applicable remain designated health services for purposes of the physician self-referral law; however, referrals may be made and claims submitted for such services if all requirements of the exception are satisfied (69 FR 16100). In the CY 2021 PFS final rule, we added COVID-19 vaccines to the list of immunization and vaccine codes to which the exception at § 411.355(h) is applicable (85 FR 84954 through 85955). We did so to ensure that the physician self-referral law will not impede the availability of COVID-19 vaccines for Medicare and other patients if they become payable by Medicare (85 FR 84955).

Under current § 411.355(h)(1), a preventive screening test, immunization, or vaccine must be subject to CMS-mandated frequency limits, among other requirements. Frequency limits determine the maximum number of times that Medicare will pay for a service for a particular beneficiary during an established period, often a calendar year or 12-month period. CMS-mandated frequency limits also serve to minimize the risk of program or patient abuse due to a physician's financial self-interest, because Medicare will not pay for additional services referred and furnished in excess of the frequency limitation. In Phase I, we stated our belief that, under the terms of the exception at § 411.355(h) as finalized in Phase I—which included the requirement that the service is subject to CMS-mandated frequency limits—the risk of abuse is extremely low. We also stated that the exclusion of certain preventive screening tests, immunizations, and vaccines from the reach of the physician self-referral law is consistent with the statutory language and structure and the expressed Congressional intent to provide preventive care to Medicare beneficiaries (66 FR 939).

The United States continues to respond to the outbreak of COVID-19 caused by the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). At this time, we have not mandated frequency limits for the COVID-19 vaccines identified on the List of CPT/HCPCS Codes (Code List) to which the exception at § 411.355(h) is applicable and we are uncertain whether or, if so, when CMS may mandate frequency limits for COVID-19 vaccines. Thus, although COVID-19 vaccines are identified on the Code List as codes to which the exception at § 411.355(h) is applicable, they could not satisfy the requirement at current § 411.355(h)(1) that the preventive screening test, immunization, or vaccine is subject to CMS-mandated frequency limits. We are concerned that the current absence of CMS-mandated frequency limits on the available COVID-19 vaccines could impede the availability of critically important COVID-19 vaccines for Medicare and other patients, as physician referrals for COVID-19 vaccines would be prohibited unless another exception to the physician self-referral law is applicable and all its requirements are satisfied. Therefore, we proposed to permit the use of the exception at § 411.355(h) for COVID-19 vaccines even when they are not subject to CMS-mandated frequency limits, provided that all other requirements of the exception are satisfied. Specifically, we proposed to revise and renumber the regulation at § 411.355(h). We are finalizing the regulation as proposed. Revised § 411.355(h)(1) includes the conditions that must be met to avoid the physician self-referral law's referral and billing prohibitions. The requirement at current § 411.355(h)(4) that the preventive screening test or vaccine is listed on the Code List as a code to which the exception at § 411.355(h) is available will be renumbered as § 411.355(h)(1)(i); the requirement at current § 411.355(h)(4) that the preventive screening test or vaccine is covered by Medicare will be renumbered as § 411.355(h)(1)(ii); and the requirement at current § 411.355(h)(1) that the preventive screening test or vaccine is subject to a CMS-mandated frequency limit will be renumbered as § 411.355(h)(1)(iii). As finalized, § 411.355(h)(2) states that the requirement at § 411.355(h)(1)(iii) does not apply to a COVID-19 vaccine code during such period that the vaccine is not subject to a CMS-mandated frequency limit. In light of the impact of the COVID-19 pandemic on the United States and the vital need to protect beneficiaries (and others) from the SARS-CoV-2 virus, we do not believe that making the exception at § 411.355(h) available for COVID-19 vaccines to which no CMS-mandated frequency limits apply poses a risk of program or patient abuse.

We solicited comment on our approach to this exception and its applicability to COVID-19 vaccines, including whether we should limit relief from the requirement at § 411.355(h)(1)(iii) to the period during which the current PHE is in effect, until such time as CMS-mandated frequency limits apply for COVID-19 vaccines, or some other period of time. Based on the comments, we are finalizing our proposal to permit the use of the exception at § 411.355(h) for COVID-19 vaccines during such period as the vaccines are not subject to CMS-mandated frequency limits, provided that all other requirements of the exception are satisfied. As finalized, the availability of § 411.355(h)(1)(iii) for COVID-19 vaccines is not limited to the period during which the current PHE is in effect.

We note that, as explained in section II.J. of this final rule, monoclonal antibody products used to treat COVID-19 are currently covered and paid for under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act. Thus, under final § 411.355(h)(2), the requirement pertaining to CMS-mandated frequency limits at final § 411.355(h)(1)(iii) does not apply to monoclonal antibody products used to treat COVID-19 during such period as the products are paid for under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act and are not subject to a CMS-mandated frequency limit.

We also alternatively proposed to remove the CMS-mandated frequency limit requirement for all vaccines. We solicited comment on whether it would then be necessary to include alternative program integrity requirements in the exception at § 411.355(h) if we were to do so. We stated that we were interested in comments regarding whether physicians are likely to order vaccines more frequently than recommended by the Department and any other organization the Department identifies as an authority on this matter. Based on our review of the comments related to this alternative proposal, we are not finalizing the alternative proposal.

Finally, for clarity and consistency, we proposed to revise the terminology used in the exception at § 411.355(h). Specifically, we proposed to remove the terms “immunization” and “immunizations” throughout § 411.355(h) and the headers used in the Code List. In the proposed rule, we noted that the Centers for Disease Control and Prevention (CDC) defines immunization as a process by which a person becomes protected against a disease through vaccination. The term “immunization” is often used interchangeably with vaccination or inoculation. The CDC defines the term “vaccine” as a product that stimulates a person's immune system to produce immunity to a specific disease, protecting the person from that disease. All the codes currently on the Code List to which the exception at § 411.355(h) is applicable have a descriptor containing “vaccine” or a derivative of “vaccine.”

Vaccines fall within the definition of “outpatient prescription drugs” at § 411.351, and therefore, are considered designated health services for purposes of the physician self-referral law. As defined by the CDC, an immunization is not an item or service that is a “designated health service” (as defined at § 411.351) to which the physician self-referral law applies. We believe that “vaccine” is the appropriate term to use in § 411.355(h) and in the headers in the Code List. Although we are not aware that including both terms in § 411.355(h) and the Code List has caused stakeholder confusion to date, we proposed to improve the accuracy of the terminology at this time to prevent any possible confusion in the future. We are finalizing our proposal to remove the terms “immunization” and “immunizations” throughout § 411.355(h) and the headers used in the Code List. The revisions to the title and text of § 411.355(h) that we are finalizing in this final rule do not affect whether a code is a designated health service for purposes of the physician self-referral law.

We received the following public comments regarding our proposals, and our responses follow.

Comment: Several commenters supported our proposal to permit the use of the exception at § 411.355(h) for COVID-19 vaccines during such period as the vaccines are not subject to CMS-mandated frequency limits, provided that all other requirements of the exception are satisfied. No commenters opposed the proposal. Commenters noted that removing the CMS-mandated frequency requirement for COVID-19 vaccines would reduce barriers to vaccine delivery and ensure that the physician self-referral law will not impede vaccine availability for beneficiaries. According to one commenter, if finalized, the proposal would allow physicians to make referrals for vaccines without fear of violating the physician self-referral law and would likely increase access to vaccines. Another commenter highlighted the continuing impact of the COVID-19 PHE on practices, physicians, and patients. The commenter noted that ensuring life-saving vaccines are available to Medicare beneficiaries is critical, particularly as new virus variants emerge and booster vaccinations are potentially required for many patients. Several commenters opposed limiting the suspension of the requirement for a frequency mandate to the period of the PHE. Commenters generally agreed with CMS that the proposal, if finalized, would not pose a risk of program or patient abuse.

Response: In light of the impact of the COVID-19 pandemic on the United States and the vital need to protect Medicare beneficiaries (and others) from the SARS-CoV-2 virus, we remain concerned that the current absence of CMS-mandated frequency limits on COVID-19 vaccines could inadvertently impede the availability of the vaccines due to the application of the physician self-referral law's referral and billing prohibitions. Therefore, we are finalizing our proposal to permit the use of the exception at § 411.355(h) for COVID-19 vaccines during such period as the vaccines are not subject to CMS-mandated frequency limits, provided that all other requirements of the exception are satisfied. We agree with the commenters that finalizing this proposal does not pose a risk of program or patient abuse. We also agree that we should permit the use of the exception at § 411.355(h) for COVID-19 vaccines until such time as CMS-mandated frequency limits apply for COVID-19 vaccines, without regard to the PHE timeframe, to ensure that we do not impede the continuing availability of COVID-19 vaccines.

Comment: Several commenters supported our alternative proposal to remove the CMS-mandated frequency limit requirement for all vaccines. One commenter maintained that this proposal, if finalized, would reduce barriers to vaccine delivery. Several commenters contended that finalizing this proposal would not necessitate including alternative program integrity requirements in the exception at § 411.355(h). Several commenters asserted that physicians are unlikely to order vaccines more frequently than recommended by the CDC's Advisory Committee on Immunization Practices (ACIP), especially given Medicare's current payment rates for non-COVID-19 vaccines and their administration. Another commenter explained that, because vaccines are generally administered at discrete intervals, based on age or medical indications, vaccines do not present the same program integrity concerns as other outpatient drugs and can even reduce health care costs by preventing more serious diseases.

Response: We are not persuaded to remove the CMS-mandated frequency limit requirement for all vaccines at this time. In particular, we are concerned about potential harm to patients from receiving unnecessary or duplicative vaccinations. There are only a limited number of requirements under the exception at § 411.355(h), and we are concerned that, in the absence of alternative requirements, an open-ended exception permitting the furnishing of all vaccines, even if the vaccines are not subject to CMS-mandated frequency limits, may pose a risk of program or patient abuse.

Comment: Several commenters supported our proposal to remove the terms “immunization” and “immunizations” throughout § 411.355(h) and the headers used in the Code List. No commenters opposed the proposal.

Response: After consideration of the comments, we continue to believe that “vaccine” is the appropriate term to use in § 411.355(h) and in the headers in the Code List. Therefore, we are finalizing our proposal to remove the terms “immunization” and “immunizations” throughout § 411.355(h) and the headers used in the Code List. We reiterate that the final revisions to § 411.355(h) do not affect whether a code is a designated health service for purposes of the physician self-referral law.

4. List of CPT/HCPCS Codes (§ 411.351)

As described in section III.P.1. of this final rule, unless an exception applies and all its requirements are satisfied, the physician self-referral law prohibits a physician from making a referral for the furnishing of certain designated health services if the physician has a financial relationship with the entity to which the referral is made. Recognizing that providing precise definitions of which designated health services implicate the physician self-referral law would facilitate compliance with the law, in the Phase I final rule, we determined to define certain designated health services by publishing specific lists of CPT and HCPCS codes that physicians and providers most commonly associate with a given designated health service (66 FR 922). This list of CPT and HCPCS codes defines the entire scope of the designated health services category for purposes of the physician self-referral law and is controlling vis-à-vis the definition of the category at § 411.351, which contains a general explanation of the principles used to select the codes.

In Phase I, we stated that, because HCPCS Level I and II codes change and can quickly become out-of-date, we would not include the list of CPT and HCPCS codes that are designated health services in the text of our regulations (66 FR 923). We also stated that the definitions of specific services in our regulations would cross-refer to a comprehensive table that would appear initially in the Federal Register along with Phase I and thereafter in an addendum to the annual final rule concerning payment policies under the PFS rule. We defined at § 411.351 the term “List of CPT/HCPCS Codes Used to Describe Certain Designated Health Services Under the Physician Referral Provisions (Section 1877 of the Social Security Act)” to mean the list of certain designated health services under section 1877 of the Act initially posted on the CMS website and updated annually thereafter in an addendum to the PFS final rule and on the CMS website. In the Phase II interim final rule, we revised the term to “List of CPT/HCPCS Codes” and its definition to “the list of CPT and HCPCS codes that identifies those items and services that are designated health services under section 1877 of the Act or that may qualify for certain exceptions under section 1877 of the Act.” The Phase II definition also stated that the list is updated annually, as published in the Federal Register , and is posted on the CMS website at http://www.cms.gov/medlearn/refphys.asp. Other than including an updated URL for the location of the list on the CMS website, the current definition of “List of CPT/HCPCS Codes” is identical to the Phase II definition. The CMS website currently identifies this list as the Code List for Certain Designated Health Services (the Code List).

As we discussed in the proposed rule, coding changes have become more frequent since we initially began publishing the Code List. In an effort to more closely align with the frequency of the coding changes, we proposed to update the Code List more frequently than annually. Specifically, we proposed to update the Code List each calendar quarter, and provide public notification in advance of Code List updates. We stated that, if finalized, advance notification would be posted on the CMS website on March 1, June 1, September 1, and December 1 of each year, with corresponding Code List updates effective on April 1, July 1, October 1, and January 1, respectively. We also proposed a 30-day public comment period following the posting of each advance notification of the upcoming quarterly Code List update. We stated in the proposed rule that we would provide information on our website regarding the process for submitting public comments through www.regulations.gov and address all public comments on the Code List on the CMS website. We stated that we anticipate that most comments would be addressed within 90 calendar days of the effective date of the Code List update to which they pertain; however, we indicated that a longer timeframe might be necessary to address complex comments or those that require coordination with external parties. We also stated that this new process and schedule would begin with the update effective April 1, 2022. Based on the comments, we are not finalizing our proposal to update the Code List more frequently. The Code List that is effective January 1, 2022 is included in this final rule and will continue to be updated on an annual basis as described below.

In addition, we proposed to publish the Code List solely on the CMS website (commencing after the publication of the January 1, 2022 Code List in this final rule). In the proposed rule, we stated that we believe that publication via the CMS website would facilitate compliance with the physician self-referral law and allow ready access to the most up-to-date Code List. We proposed corresponding revisions to the definition of “List of CPT/HCPCS Codes” at § 411.351 and to update the URL that indicates where the Code List is published on the CMS website. We are finalizing our proposal to publish the Code List solely on the CMS website (commencing after the publication of the January 1, 2022 Code List in this final rule). We are finalizing the definition of “List of CPT/HCPCS Codes” at § 411.351 to mean the list of CPT and HCPCS codes that identifies those items and services that are designated health services under section 1877 of the Act or that may qualify for certain exceptions under section 1877 of the Act. It is updated annually and posted on the CMS website at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.

We received the following comments regarding our proposals and our responses follow:

Comment: Some commenters, including a representative of a large number of stakeholders, expressed concern that more frequent Code List updates would impose a significant burden on the industry and increase its risk of noncompliance with the physician self-referral law. These commenters urged CMS to continue to update the Code List on an annual basis only. By way of example, one commenter stated that quarterly adjustments to the Code List would create confusion and add another level of administrative burden to physician self-referral law compliance efforts. This commenter was concerned that certain compensation arrangements with physicians could inadvertently fall out of compliance with the physician self-referral law with more frequent changes to the Code List. Another commenter stated that more frequent Code List updates would require more frequent review and modification of arrangements with physicians in order to ensure compliance with the physician self-referral law. The commenter further stated that publishing more frequent Code List updates would require more resources to review and comply with the physician self-referral law. In contrast, several commenters generally supported our proposal to update the Code List more frequently, but did not articulate the rationale for their support.

Response: Our proposal to update the Code List quarterly was intended to benefit stakeholders by providing updates to the Code List at intervals that align more closely with the current coding cycles. We are persuaded by the commenters that the increased administrative and compliance burden outweighs the benefit of more frequent updates and are not finalizing our proposal to update the Code List quarterly. We will continue to update the Code List on an annual basis.

Comment: All the commenters that addressed our proposal to publish the Code List solely on the CMS website supported website-only publishing.

Response: After consideration of the comments, we are finalizing our proposal to publish the Code List solely on the CMS website. We continue to believe that publishing the Code List on the CMS website will facilitate compliance with the physician self-referral law and provide easier access to the most up-to-date Code List. Commencing after the publication of the January 1, 2022 Code List in this final rule, the Code List will be updated annually and published on the CMS website at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.

Comment: Several commenters stated that a 30-day advance notice and comment period for Code List updates is sufficient.

Response: We agree that 30 days advance notice is sufficient prior to the publication of the annual Code List updates. Beginning with the Code List that is effective January 1, 2023, no less than 30 consecutive calendar days prior to the effective date of a Code List update, we will provide advance notice of the updated Code List on the CMS website. We will also provide for a 30-day public comment period for each update using www.regulations.gov,, and publish instructions for submitting comments on the CMS website. We will address all public comments that we receive through this process on the CMS website. We anticipate that most comments will be addressed within 90 calendar days of the effective date of the Code List update to which they pertain; however, a longer timeframe may be necessary to address complex comments or those that require coordination with external parties.

5. Annual Update to the List of CPT/HCPCS Codes

a. General

As described in section III.P.1. of this final rule, unless an exception applies and its requirements are satisfied, the physician self-referral law prohibits a physician from making a referral for the furnishing of certain designated health services if the physician has a financial relationship with the entity to which the referral is made. Section 1877(h)(6) of the Act and § 411.351 of our regulations specify that the following items and services are designated health services:

• Clinical laboratory services.
• Physical therapy, occupational therapy, and outpatient speech-language pathology services.
• Radiology and certain other imaging services.
• Radiation therapy services and supplies.
• Durable medical equipment and supplies.
• Parenteral and enteral nutrients, equipment, and supplies.
• Prosthetics, orthotics, and prosthetic devices and supplies.
• Home health services.
• Outpatient prescription drugs.
• Inpatient and outpatient hospital services.

b. Annual Update to the Code List

i. Background

In § 411.351, we specify that the entire scope of four categories of designated health services is defined in a list of CPT/HCPCS codes (the Code List), which is updated annually to account for changes in the most recent CPT and HCPCS Level II publications. The categories defined and updated in this manner are:

• Clinical laboratory services.
• Physical therapy, occupational therapy, and outpatient speech-language pathology services.
• Radiology and certain other imaging services.
• Radiation therapy services and supplies.

The Code List also identifies those items and services that may qualify for either of the following two exceptions to the physician self-referral prohibitions:

• EPO and other dialysis-related drugs (§ 411.355(g)).
• Preventive screening tests, immunizations, and vaccines (§ 411.355(h)).

The definition of “designated health services” at § 411.351 excludes services for which payment is made by Medicare as part of a composite rate (unless the services are specifically included in the statutory or regulatory lists of items and services that are designated health services and are themselves payable through a composite rate, such as home health and inpatient and outpatient hospital services). Effective January 1, 2011, EPO and dialysis-related drugs furnished in or by an ESRD facility (except drugs for which there are no injectable equivalents or other forms of administration), have been reimbursed under a composite rate known as the ESRD prospective payment system (ESRD PPS) (75 FR 49030). Accordingly, EPO and any dialysis-related drugs that are paid for under ESRD PPS are not designated health services and are not listed among the drugs that could qualify for the exception at § 411.355(g) for EPO and other dialysis-related drugs furnished by an ESRD facility.

ESRD-related oral-only drugs, which are drugs or biologicals with no injectable equivalents or other forms of administration other than an oral form, were scheduled to be paid under ESRD PPS beginning January 1, 2014 (75 FR 49044). However, there have been several delays of the implementation of payment of these drugs under ESRD PPS. On December 19, 2014, section 204 of the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113-295) was enacted and delayed the inclusion of these oral-only drugs under the ESRD PPS until 2025. Until that time, such drugs furnished in or by an ESRD facility are not paid as part of a composite rate and, thus, are designated health services.

As previously stated, because the Federal Government purchased the initial supply of COVID-19 vaccines, Medicare does not make payment for COVID-19 vaccines at this time, and COVID-19 vaccines do not fall within the definition of “designated health service” at § 411.351. However, should COVID-19 vaccines become payable by Medicare, unless the requirements of an applicable exception to the physician self-referral law are satisfied, the physician self-referral law's prohibitions under section 1877(a)(1) of the Act and § 411.353(a) and (b) will apply to the referral and billing of COVID-19 vaccines.

In the CY 2021 PFS final rule, we added COVID-19 vaccines to the list of immunization and vaccine codes to which the exception at § 411.355(h) is applicable (85 FR 84954 through 85955). We did so to ensure that the physician self-referral law will not impede the availability of COVID-19 vaccines for Medicare and other patients if they become payable by Medicare (85 FR 84955). We also included language in the CY 2021 Code List to ensure that any COVID-19 vaccine to which a CPT or HCPCS code applied prior to the publication of the CY 2022 Code List would qualify for the exception at § 411.355(h). Specifically, we stated that the physician self-referral prohibitions do not apply to CPT code 90749 (unlisted vaccine/toxoid) when it is used to identify a COVID-19 vaccine or to any future CPT or HCPCS code designated for a COVID-19 vaccine. We continue to include this language in the CY 2022 Code List. The inclusion of CPT code 90749 on the Code List is not intended and should not be considered to direct or approve the use of CPT code 90749 for the identification and billing of any COVID-19 vaccine.

As stated in section II.J. of this final rule, monoclonal antibody products used to treat COVID-19 are currently covered and paid for under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act. We make a separate payment for the products (when not given to the provider or supplier for free by the government) and for the service to administer them. As “vaccines,” the products are designated health services for purposes of the physician self-referral law. Monoclonal antibody products covered and paid under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act are included in the January 1, 2021 list of codes that are eligible for the exception at § 411.355(h) as “any future CPT or HCPCS code designated for a COVID-19 vaccine.” Accordingly, the physician self-referral prohibitions do not apply to them, provided that all requirements of the exception at § 411.355(h) are satisfied. Effective January 1, 2022, we are including in the list of codes that are eligible for the exception at § 411.355(h) the existing specific HCPCS codes for monoclonal antibody products that are covered and paid under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act. The general descriptor on the Code List will apply to any future CPT or HCPCS codes for monoclonal antibody products that are covered and paid for under the COVID-19 vaccine benefit in section 1861(s)(10) of the Act. For more information regarding monoclonal antibodies, please refer to our website at https://www.cms.gov/medicare/covid-19/monoclonal-antibody-covid-19-infusion.

Since the PHE for COVID-19 is still ongoing, we remind readers that tests for COVID-19 identified in the Code List fall within the “clinical laboratory services” category of designated health services.

The Code List was last updated in Tables 58 and 59 of the CY 2021 PFS final rule (85 FR 84956 through 84957).

ii. Response to Comments

We received no comments relating to the Code List that became effective January 1, 2021.

iii. Revisions Effective for CY 2022

The updated, comprehensive Code List effective January 1, 2022, is available on our website at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.

Additions and deletions to the Code List conform it to the most recent publications of CPT and HCPCS Level II and to changes in Medicare coverage policy and payment status.

Tables 41 and 42 identify the additions and deletions, respectively, to the comprehensive Code List that become effective January 1, 2022. Tables 41 and 42 also identify the additions and deletions to the list of codes used to identify the items and services that may qualify for the exception in § 411.355(g) (regarding dialysis-related outpatient prescription drugs furnished in or by an ESRD facility) and in § 411.355(h) (regarding preventive screening tests, immunizations, and vaccines).

Q. Requirement for Electronic Prescribing for Controlled Substances for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD Plan

1. SUPPORT Act Requirements

Section 2003 of the SUPPORT Act generally mandates that the prescribing of a Schedule II, III, IV, or V controlled substance under Medicare Part D be done electronically in accordance with an electronic prescription drug program beginning January 1, 2021, subject to exceptions, which the Secretary may specify. Section 2003 of the SUPPORT Act requires that the Secretary use rulemaking to specify circumstances and processes by which the Secretary may waive the Electronic Prescribing for Controlled Substances (EPCS) requirement, and provides the Secretary with authority to enforce and specify appropriate penalties for non-compliance with EPCS. The SUPPORT Act specifies some circumstances under which the Secretary may waive the electronic prescribing requirement with respect to controlled substances that are covered Part D drugs and permits HHS to develop other appropriate exceptions. Since the statute states that the Secretary shall, through rulemaking, specify circumstances and processes by which the Secretary “may waive” the EPCS requirement, we consider the list of circumstances to be illustrative. The circumstances that are listed in the statute under which the Secretary may waive the EPCS requirement are at section 1860D-4(e)(7) of the Act, as added by section 2003 of the SUPPORT Act, and include:

• A prescription issued when the practitioner and dispensing pharmacy are the same entity;
• A prescription issued that cannot be transmitted electronically under the most recently implemented version of the National Council for Prescription Drug Programs (NCPDP) SCRIPT standard, which is the SCRIPT 2017071 standard;
• A prescription issued by a practitioner who received a waiver or a renewal thereof for a period of time as determined by the Secretary, not to exceed 1 year, from the requirement to use electronic prescribing due to demonstrated economic hardship, technological limitations that are not reasonably within the control of the practitioner, or other exceptional circumstance demonstrated by the practitioner;
• A prescription issued by a practitioner under circumstances in which, notwithstanding the practitioner's ability to submit a prescription electronically as required by this subsection, such practitioner reasonably determines that it would be impractical for the individual involved to obtain substances prescribed by electronic prescription in a timely manner, and such delay would adversely impact the individual's medical condition involved;
• A prescription issued by a practitioner prescribing a drug under a research protocol;
• A prescription issued by a practitioner for a drug for which the FDA requires a prescription to contain elements that are not able to be included in electronic prescribing, such as a drug with risk evaluation and mitigation strategies that include elements to assure safe use;
• A prescription issued by a practitioner—

++ For an individual who receives hospice care under title XVIII of the Act; and

++ That is not covered under the hospice benefit under title XVIII of the Act; and

• A prescription issued by a practitioner for an individual who is—

++ A resident of a nursing facility (as defined in section 1919(a) of the Act); and

++ Dually eligible for benefits under title XVIII and title XIX of the Act.

2. Previous Regulatory Action

To begin the process of implementing section 2003 of the SUPPORT Act, in August 2020, we released a Request for Information entitled “Medicare Program: Electronic Prescribing of Controlled Substances; Request for Information (RFI)” (85 FR 47151) (hereinafter referred to as the August 2020 RFI). In August 2020, we released the CY 2021 PFS proposed rule (85 FR 50074) (hereinafter referred to as the CY 2021 PFS proposed rule), which proposed that Part D prescribers be required to use the NCPDP SCRIPT 2017071 standard for EPCS prescription transmissions. We proposed that this mandate would not become effective until January 1, 2022.

We received a combined total of 155 timely comments in response to the August 2020 RFI and the CY 2021 PFS proposed rule. Most commenters supported implementing EPCS and use of the NCPDP SCRIPT 2017071 standard. Comments were mixed as to when compliance actions for EPCS should begin. Some commenters requested that CMS adhere to the January 1, 2021 date specified in the SUPPORT Act because of the many safety benefits associated with EPCS articulated in the proposed rule. Some prescriber groups supported the proposed January 1, 2022 date, while others requested even more time for implementation. To balance the needs of prescribers who wanted more time to implement EPCS and commenters who wanted adherence to the January 1, 2021 date, we finalized this provision with an effective date of January 1, 2021 and a compliance date of January 1, 2022 in the CY 2021 Physician Fee Schedule final rule (85 FR 84472) (hereinafter referred to as the CY 2021 PFS final rule). Due to the consensus among commenters that the NCPDP SCRIPT 2017071 standard was the best choice for EPCS, we required in the CY 2021 PFS final rule that Part D prescribers use this standard.

3. Current EPCS Environment

A variety of Part D medications are classified as controlled substances by the Drug Enforcement Administration (DEA). Among these are medications used for the treatment of acute and chronic pain, (for example, hydrocodone, fentanyl, codeine, methadone), and stimulant medications (for example, Adderall®, Ritalin®). Buprenorphine (for example, Suboxone®) is one of only three drugs approved by the FDA to treat opioid use disorders (OUD) including in outpatient settings, and is a Schedule III drug. Benzodiazepines and sedative-hypnotics (including Xanax®, Valium®, Ativan®, Restoril®, Midazolim®, and Halcion®) are used for sleep, agitation, and seizure disorders. Anabolic steroids (for example, Depo-testosterone®) are used to treat impotence, delayed puberty, hormonal imbalance, and inoperable breast cancers.

As discussed in the CY 2021 PFS proposed and final rules, we noted that electronic prescribing of controlled substances provides multiple advantages over the traditional processing of paper prescriptions. These advantages include, but are not limited to, improved workflow efficiencies; deterring and detecting prescription fraud and irregularities by requiring an extra layer of identity proofing, two-factor authentication and digital signature processes; enhanced patient safety through patient identity checks, safety alerts, medication menus, electronic history files, and medication recommendations that lower the risk of errors and potentially harmful interactions; and providing more timely and accurate data than paper prescriptions by avoiding data entry errors and pharmacy calls to a prescriber to clarify written instructions. By allowing for the direct transmission of prescriptions for controlled substances between prescribers and pharmacies or facilities, EPCS may also reduce the burden on prescribers who need to coordinate and manage paper prescriptions among staff, patients, facilities, other care sites, and pharmacies. EPCS can also assure prescribers' identity more easily and may permit a single workflow for prescribing both controlled and non-controlled drugs, improving the overall prescribing process.

From the patient standpoint, EPCS may reduce the logistical burden on patients and caregivers who may otherwise be required to make multiple trips between prescribers and pharmacies to transport paper prescriptions when filling time-sensitive prescriptions, while in pain, or otherwise in need of medical treatment with controlled substances. EPCS can lessen the time needed to obtain prescriptions by minimizing trips to the prescriber to pick up paper prescriptions for refills and minimize transportation costs to and from the prescriber's office. EPCS's identity and security requirements assure prescribers, patients, and pharmacies that prescriptions are processed as intended. In addition to helping with the reduction in fraud previously described, EPCS minimizes the likelihood that prescriptions have been tampered with, since electronic prescriptions are securely transmitted directly to the pharmacy from health information technology, which minimizes the likelihood of exposure to patients or other third parties. During the PHE for COVID-19, EPCS also helps parties maintain social distancing.

It is due to these advantages, coupled with the SUPPORT Act's EPCS mandate, that we encourage all prescribers to conduct EPCS as soon as is feasible for them. We believe that although EPCS is ultimately more efficient, implementing EPCS does take additional time and resources. Prescribers must follow DEA guidance for EPCS, which is summarized at https://deadiversion.usdoj.gov/ecomm/e_rx/. Prescribers must first ensure that their current e-prescribing software can support EPCS and meet DEA requirements pursuant to 21 CFR part 1311. Further, DEA also requires prescribers to have their identities verified prior to being issued the authentication credentials needed to sign and issue electronic controlled substance prescriptions. For individual prescribers, identity proofing (that is, verification that the prescriber is who he or she claims to be) is conducted by a credential service provider (CSP) or certification authority (CA). Institutional practitioners, as defined under 21 CFR 1300.01, have the option of conducting in-house identity proofing of the practitioners authorized to use the institution's e-prescribing software. Alternatively, institutional practitioners may require their practitioners to undergo identity proofing by a CSP or CA. Once their identities have been confirmed, prescribers may be issued their authentication credentials. The authentication credentials must be two-factor, meaning that prescribers must be required to supply two factors to confirm both their identity and their authorization to access the e-prescribing software. The factors may be something the prescriber knows (such as a password or PIN), something the prescriber has (such as a smartcard or token), or a biometric (such as a fingerprint). For institutional practitioners, the authentication credentials may be issued by an entity within the institution that is separate from the entity that conducted identity proofing, if identity proofing was conducted in-house. Otherwise, authentication credentials are issued by a CSP or CA. Once a prescriber has received his or her two-factor authentication credentials, the prescriber must be granted access to sign and issue electronic controlled substance prescriptions using the e-prescribing software. This step is completed by certain individuals specifically designated to manage the e-prescribing software's logical access controls. Prior to granting a prescriber access, the individuals managing logical access controls must verify that the prescriber's State authorization to practice and, where applicable, State authorization to prescribe controlled substances, are valid. Additionally, for individual prescribers (those prescribers not prescribing under an institutional practitioner's DEA registration), the individuals managing logical access controls must verify that the prescriber's DEA registration is valid. This step is required even if the prescriber is already prescribing controlled substances on paper. After being granted access, prescribers may sign and issue electronic prescriptions for controlled substances using their two-factor authentication credentials. The EPCS application must require two-factor authentication for each transaction. Software and workflow training are available for each step of the process. When writing prescriptions, the prescriber may wish to talk with the patients and/or caregivers about electronic prescribing, so there is awareness of the general mechanics of how the prescription(s) will be conveyed to the pharmacy.

We recognize that section 2003(c) of the SUPPORT Act tasked the Department of Justice (DOJ) with updating the requirements for the biometric component of multifactor authentication. As shown on the Spring 2021 Unified Agenda, rulemaking to address this mandate is currently in progress. After reviewing comments on the August 2020 RFI and CY 2021 PFS proposed rule and talking with industry stakeholders, we recognize that commenters believe that an update to the DOJ requirements should allow prescribers to start conducting EPCS with greater ease.

The comments also stated that prescribers have felt strained by the COVID-19 pandemic. Prescribers reported feeling financially strained, worried about their own health and the health of their employees, and concerned about having to make rapid changes during a time when they are continuing to cope with the effects of the COVID-19 pandemic on their practices and their patients. Despite the strain that has been experienced by prescribers, we have noted an increase in EPCS during this PHE. Based on data from the first quarter of CY 2021, EPCS increased to 70 percent of all prescription drug events (PDEs) for controlled substances as compared to 38 percent in CY 2019. We believe that social distancing is likely to be at least partly responsible for the increase in EPCS during this PHE for COVID-19. With the use of electronic prescribing, one potential prescriber-patient interaction in which COVID-19 could be transmitted is eliminated, and any necessary prescriptions can be electronically transmitted to the pharmacy without the prescriber and patient having to see each other in-person and risk transmitting COVID-19. Some insurers, including Part D plans, have been permitting medication refills, including for controlled substances, earlier than usual or for a more extended period of time than is allowed. Pharmacies that were not doing so before the pandemic have been delivering medications, or delivering them at no charge, and communities and individuals have worked together to design ways for beneficiaries to continue to receive access to prescribed medications in tandem with government and private sector flexibilities during the PHE. We believe that these additional flexibilities may have encouraged prescribers to more broadly use EPCS, since it prevented them from having their prescription transmissions automatically denied. The reason for this is that EPCS transaction sets can pull certain pieces of required information for use in their transactions, which prevent the transactions from hitting system edits that would have previously prevented these practices.

4. Timeframe for EPCS Adoption

Section 2003 of the SUPPORT Act mandates that EPCS for Part D controlled substances begin on January 1, 2021. Due to this statutory mandate coupled with the aforementioned advantages provided by EPCS, we encourage all prescribers to adopt EPCS as soon as is feasible for them. However, as stated in our CY 2021 PFS final rule, we recognize that although EPCS is ultimately more efficient, implementing EPCS takes additional time and resources. It is for this reason that, in our CY 2021 PFS final rule, we finalized a policy stating that CMS would not take compliance actions before January 1, 2022.

In developing this policy, we considered responses from commenters encouraging earlier adoption of EPCS, due to its benefits for social distancing, improved patient safety and workflow efficiencies, fraud deterrence, adherence management, and reduced burdens. We agreed with commenters that EPCS has many benefits, which is why we specified an effective date of January 1, 2021 in our regulations, and a compliance date of January 1, 2022.

Since finalizing the CY 2021 PFS final rule, we have received additional prescriber feedback indicating concern with having to implement EPCS rapidly. We have also learned more about the degree to which prescribers have been adversely affected by the COVID-19 pandemic, and that the PHE and the widespread effects of the pandemic may last longer than we had anticipated last year. We want to ensure that our actions do not have unintended consequences, such as the abrupt discontinuation of prescribers' ability to prescribe Part D controlled substances to vulnerable populations, including Part D beneficiaries who need pain treatment or who have substance use disorders (SUDs). In addition, once DOJ has had the opportunity to implement updates to EPCS requirements, such updates will allow prescribers to start conducting EPCS more rapidly and easily. It is for these reasons that in the CY 2022 PFS proposed rule (86 FR 39104) (hereinafter referred to as the CY 2022 PFS proposed rule), we proposed to revise § 423.160(a)(5) to change the date of initial EPCS compliance actions from January 1, 2022 to January 1, 2023. We welcomed comments on this proposal, including whether commenters believe that we should maintain the January 1, 2022 date of initial EPCS compliance actions, given the benefits of EPCS, and the feasibility for prescribers to adopt EPCS for Part D prescriptions by January 1, 2023.

The following is a summary of the comments we received and our responses.

Comment: The majority of commenters supported our proposal to delay the start of compliance actions to no earlier than January 1, 2023, rather than January 1, 2022, which is the date that we had finalized in the CY 2021 PFS final rule. In supporting this recommendation, commenters cited the devastating impact that the PHE has had on their practices, stating that the influx of patients, departure of staff, and depletion of financial resources would make it difficult for providers to implement EPCS by January 1, 2022. A few commenters that process or receive electronic prescriptions opposed our proposal to delay the start of compliance actions until January 1, 2023, citing the aforementioned benefits that EPCS has on social distancing and the workflow efficiencies gained from EPCS.

Response: We thank commenters for supporting our proposal to change the earliest date of compliance actions to January 1, 2023. In addition, we appreciate the commenters for confirming our understanding of the benefits of EPCS. We recognize the benefits of EPCS, and it is for this reason that we encourage prescribers to conduct EPCS as soon as possible. In our CY 2021 PFS final rule, we named the standard for prescribers to use when conducting EPCS for Part D controlled substances in order to facilitate adoption of EPCS. However, for the reasons stated in the CY 2022 PFS proposed rule, we continue to believe that delaying the start of compliance actions until on or after January 1, 2023 is appropriate.

After consideration of the comments received, we are finalizing our proposal to extend the date of compliance actions to no earlier than January 1, 2023.

For Part D controlled substance prescriptions written for beneficiaries in long-term care (LTC) facilities, we proposed to extend the date on or after which we will pursue compliance actions from January 1, 2022 to January 1, 2025. The intent of this proposed extension was to strike a balance between being responsive to stakeholder concerns surrounding the increased implementation barriers faced by LTC facilities, due to the unique challenges faced by LTC facilities, while at the same time helping ensure that these facilities eventually implement EPCS, due to its aforementioned benefits.

We acknowledged that, in addition to the current challenge of having to manage care for vulnerable residents during the current COVID-19 pandemic, prescribers who work in LTC facilities or who provide care to residents in LTC facilities face technological barriers that other prescribers do not face. One such barrier is that the NCPDP SCRIPT 2017071 standard lacks appropriate guidance for LTC facilities. We understand that this is because early versions of the NCPDP SCRIPT Standard, such as NCPDP SCRIPT Standard versions 5.0 and 8.1, did not support the workflows in the LTC setting that require prescribers to issue a prescription for a patient to a non-prescriber (such as a nursing facility) that in turn forwards the prescription to a dispenser (LTC pharmacy). We nevertheless adopted the NCPDP SCRIPT 2017071 standard in the CY 2021 PFS final rule [85 FR 84807] because it is the most commonly used standard for Part D e-prescribing, and we sought to minimize disruption and provider burden when implementing this statutory mandate. However, we understand that NCPDP is in the process of creating a new version of the SCRIPT standard that would be better suited for use by prescribers serving LTC facilities, which will allow willing partners to enable three-way communication between the prescriber, LTC facility, and pharmacy to bridge any outstanding gaps that impede adoption of the NCPDP SCRIPT 2017071 standard in the LTC setting.

We understand that some LTC settings/services in rural communities do not have sufficient capabilities to support the NCPDP SCRIPT 2017071 standard. This concern is exacerbated by the fact that based on stakeholder feedback and information in several reports, we believe LTC settings often include practitioners and staff serving large numbers of residents across multiple nursing homes. This unique set of circumstances means that some practitioners who primarily practice in suburban or urban areas may have to travel to see residents in rural facilities where there is limited broadband, making EPCS transmission set-ups difficult across LTC facilities. However, we believe that as broadband access increases and the impact of the PHE decreases, prescribers serving beneficiaries in LTCs should be able to more easily conduct EPCS.

As a result, we proposed to revise § 423.160(a)(5) to clarify that the earliest date of compliance actions against prescribers writing prescriptions for Part D beneficiaries in an LTC facility will be January 1, 2025. We did not propose a specific LTC waiver or exception to the EPCS requirement, and we did not anticipate extending the earliest date of compliance actions beyond January 1, 2025. We solicited comments on the benefits, burdens, and challenges of this approach.

We received public comments on the benefits, burdens, and challenges of this approach. The following is a summary of the comments we received and our responses.

Comment: Several commenters suggested that we exempt prescribers writing Part D controlled substance prescriptions for beneficiaries in LTCs from having to conduct EPCS until after version 2022011 of the NCPDP SCRIPT standard has been named, since this standard will contain the necessary three-way communication to facilitate the needs of the LTC community, whereas the current standard lacks such guidance.

Response: We thank commenters for their insights into upcoming versions of the NCPDP SCRIPT standard. However, we are finalizing as proposed that the earliest date of compliance actions against prescribers writing Part D controlled substance prescriptions for beneficiaries in LTCs to be no earlier than January 1, 2025 to allow adequate time for EPCS to be adopted across the industry. We note that this extension of the earliest date for compliance actions is only applicable to the prescriptions written by prescribers for beneficiaries in LTC facilities, since the additional challenges for LTC do not apply when these prescribers are prescribing for beneficiaries who are not in LTC. As we stated in the proposed rule and earlier in this final rule, the intent of extending the date of compliance actions for prescriptions written for beneficiaries in LTC is to strike a balance between being responsive to stakeholder concerns surrounding the increased implementation barriers faced by LTC facilities, while at the same time helping ensure that these facilities eventually implement EPCS, due to its aforementioned benefits. The increased implementation barriers only present themselves when prescribers are writing prescriptions for beneficiaries in LTC, which is why we had only intended for the LTC extension to apply when prescribers are writing prescriptions for beneficiaries in LTC. In this final rule, we have clarified and refined the language at § 423.160(a)(5) to reflect our intent.

As previously stated, EPCS has numerous advantages over manual prescribing, including deterring and detecting prescription fraud and irregularities by requiring an extra layer of identity proofing, two-factor authentication and digital signature processes; and enhanced patient safety through patient identity checks, safety alerts, medication menus, electronic history files, and medication recommendations that lower the risk of errors and potentially harmful interactions. Given the benefits of EPCS, we decline to further delay taking compliance actions to enforce the EPCS requirements for Part D controlled substance prescriptions written for beneficiaries in LTCs beyond the date by which we believe prescribers in this setting can meet the requirement. Furthermore, we are not persuaded that we should further delay commencing compliance actions to await publication of the NCPDP SCRIPT 2022011 standard. Although we acknowledge that three-way communication is not as seamless in the 2017071 version of the standard as it may be in upcoming versions, it is still possible with some modifications to EPCS, and therefore, we do not believe it would be appropriate to adopt a further delay on this basis. However, we have decided to finalize the extension of compliance actions for prescribers writing prescriptions for beneficiaries in LTC to allow those prescribers the additional time necessary to make the additional changes necessary to conduct EPCS using the NCPDP SCRIPT 2017071 standard. We also note that CMS does not intend to begin compliance actions for these prescriptions until on or after January 1, 2025. This protracted timeline for commencing compliance actions allows CMS additional time to examine how the industry adopts the new standard for beneficiaries in LTC, and determine the type of compliance actions that would be most appropriate.

Comment: One commenter sought clarification as to whether medication transactions covered under the Part A benefit would be subject to compliance actions starting January 1, 2023 or 2025.

Response: As stated in the CY 2022 PFS proposed rule, this EPCS mandate is only for transactions covered under Part D of the benefit. This mandate implements section 2003 of the SUPPORT Act, which is limited to Part D transactions. It is for this reason that we have not extended this mandate to other parts of the Medicare benefit, such as the Part A benefit.

After consideration of public comments, we are finalizing our proposal at § 423.160(b)(5) to extend the date that we will begin compliance actions based on prescriptions written for a beneficiary in a long-term care facility until January 1, 2025. In order to implement this provision, we will be excluding long term care prescriptions from our counting of compliance actions to help ensure that prescribers writing prescriptions for beneficiaries in these facilities do not have these prescriptions counted against them for purposes of the compliance threshold and the number of prescriptions written per prescriber for purposes of determining who is classified as a small prescriber under § 423.165(a)(5)(ii).

5. Compliance Threshold

The EPCS requirement applies to all controlled substance prescriptions for Part D drugs under a Part D plan, unless an exception to the requirement applies. In order to implement this mandate effectively, we seek to implement it in a manner that balances the mandate with helping ensure that prescribers are not overly burdened, and are able to issue prescriptions for their patients during the rare occurrences when EPCS is not feasible, such as:

• When it would be impractical for the patient to obtain medication(s) prescribed by electronic prescription in a timely manner and such delay would adversely impact the patient's medical condition,
• When the NCPDP standard does not support transmitting the prescription,
• When the prescriber is unable to meet DEA requirements for identity proofing for reasons beyond their control;
• Where EPCS is not available due to temporary technological failure.

Based on our review of PDE data, the NCPDP standard, and our conversations with Part D stakeholders, we believe that there are very few scenarios under which a prescription could not be transmitted using the NCPDP standard.

We note that section 1860D-4(e)(7)(B)(vi) of the Act provides that the Secretary may grant an exception for a prescription issued for a drug for which the FDA requires a prescription to contain elements that cannot be included in electronic prescribing. However, after reviewing the NCPDP standard implementation guide, we do not believe that there are any such prescriptions under the current standard. The statute gives as an example a drug with risk evaluation and mitigation strategies that include elements to assure safe use (ETASU). Based on our review of the current NCPDP standard, all opioid analgesics intended for outpatient use have a risk evaluation and mitigation strategy with ETASU, and as a result, would fall into the exception if there were one, which would frustrate the purpose of this statute. As a result, we declined to propose to adopt this suggested exception. However, we solicited comment on this decision.

We also stated that there were other reasons that could make EPCS not feasible for prescribers who currently conduct EPCS, such as the aforementioned cases of temporary technological failures or cases where it would be impractical for the patient to obtain medication(s) prescribed by electronic prescription in a timely manner and such delay would adversely impact the patient's medical condition. However, we did not propose a specific exception for these cases, since based on our stakeholder feedback and review of PDE data, we believe that EPCS is not feasible in no more than an estimated 30 percent of instances due to circumstances such as the ones described previously. We believe that Part D prescribers should be able to conduct EPCS on 70 percent of their Part D controlled-substance prescriptions without being overly burdened or burdening patients. Under section 1860D-4(e)(7)(D) of the Act, we have authority to specify appropriate penalties for non-compliance with the EPCS requirement. It follows, then, that we similarly have the authority to specify a threshold for when we would penalize non-compliance. For this reason, we proposed that in order for prescribers to be considered compliant with the EPCS mandate, they must prescribe at least 70 percent of their Part D controlled substance prescriptions electronically.

Specifically, we proposed to revise § 423.160(a)(5) to specify that 70 percent of all prescribing under Part D for Schedule II, III, IV, and V controlled substances be done electronically per calendar year, excluding from that calculation any prescriptions issued while a prescriber falls within an exception or a waiver. We intend to conduct this calculation by examining PDE data at the end of the calendar year and dividing the number of Part D controlled substances that the prescriber e-prescribed by the total number of Part D controlled substance prescriptions that the prescriber prescribed. We solicited comment on this method and the proposal to make 70 percent the compliance threshold for adherence to the EPCS mandate, and what circumstances would make EPCS not feasible.

We received public comments on this method and the proposal to make 70 percent the compliance threshold for adherence to the EPCS mandate, and what circumstances will make EPCS not feasible. The following is a summary of the comments we received and our responses.

Comment: Most commenters supported our proposal to make 70 percent the compliance threshold for adherence to the EPCS mandate stating that it strikes the appropriate balance between implementing the statute and helping ensure that such implementation does not overwhelm prescribers. Two commenters suggested that we lower our compliance threshold to 50 percent for the first year to avoid overwhelming prescribers.

Response: We agree with the commenters that a compliance threshold of 70 percent is a suitable balance to help ensure that this mandate is implemented while not overwhelming prescribers. Although we understand that a compliance threshold of 50 percent would place less of a burden on prescribers, we believe a compliance threshold in which only a simple majority of a prescriber's prescriptions must be transmitted electronically would not be sufficient to fulfill the statutory mandate.

After reviewing the PDE data, we did not find a substantial number of prescribers that transmitted between 50 to 70 percent of their Part D controlled substance prescriptions electronically, which leads us to believe that lowering the compliance threshold would not alleviate much of a burden for prescribers. After consideration of public comments, we are finalizing this provision as proposed, which would require prescribers to prescribe at least 70 percent of their Schedule II, III, IV, and V controlled substances that are Part D drugs electronically, except in cases where an exception or waiver applies. We note that, as previously stated, prescriptions for beneficiaries in LTC would be excluded from the calculation of the compliance threshold until the January 1, 2025 compliance threshold calculation is made, which would be using data beginning in January 1, 2024. As we explained in the CY 2022 PFS proposed rule, we will determine compliance with the EPCS requirement by examining PDE data at the end of the calendar year (86 FR 39330), which is why we will begin considering data for Part D prescriptions written for beneficiaries in LTC on January 1, 2024 and continuing through December 31, 2024 for compliance actions that we take on or after January 1, 2025.

6. Classes of Exceptions

a. Prescriptions Issued When the Prescriber and Dispensing Pharmacy are Same Entity

Section 2003 of the SUPPORT Act requires that we specify circumstances by which we may waive the EPCS requirement, and the statute lists several possible circumstances to consider. We listed and sought comment on these circumstances in the August 2020 RFI. The first of these circumstances, which is listed at section 1860D-4(e)(7)(B)(i) of the Act, is when the practitioner issuing the prescription and dispensing pharmacy are the same entity.

All August 2020 RFI commenters who commented on this exception supported it, stating that such an exception would promote patient safety, workflow efficiency, and health IT performance. Several commenters noted that requiring EPCS in this circumstance may create an unwarranted artificial workflow structure. We believe that this may be because the EPCS transactions conducted within an organization are commonly handled by a single database that exists within the organization, and should we not grant this exemption, these entities would be required to reconfigure their own processes, rather than leverage their own integrated databases. Were we to implement a requirement to use the NCPDP SCRIPT 2017071 standard within this closed system, this requirement could increase costs and the rate of performance errors, such as data corruption and patient matching errors, which we understand often happens when an entity is forced to split a unified database into a transaction system that relays information to and from the same entity. We solicited comment on this assumption. However, we did not receive any comments on the assumption.

Therefore, we proposed to adopt at § 423.160(a)(5)(i) the EPCS exception listed in section 1860D-4(e)(7)(B)(i) of the Act, for prescriptions issued where the prescriber and dispensing pharmacy are the same entity. We solicited comment on this proposal.

Comment: All commenters who commented on this proposal supported it.

Response: We thank the commenters for their support. We are finalizing this proposal as proposed.

b. Cases Where Prescribers Issue Only a Small Number of Part D Prescriptions

As we develop regulations to implement section 2003 of the SUPPORT Act, we seek to help ensure that Part D prescribers, including small prescribers, are not overly burdened by our regulation. Based on the comments received from the August 2020 RFI and the stakeholder feedback that we received about EPCS in general, we believe it is appropriate to specify an exception to the EPCS requirement in cases where a prescriber issues a very low volume of controlled substance prescriptions for Part D drugs. For prescribers of very few Part D controlled substance prescriptions, the cost of installing EPCS equipment and software may be unduly burdensome relative to its benefit in terms of improving the security of prescriptions for controlled substances. As noted above, we do not want to disincentivize prescribers from prescribing controlled substances to Part D beneficiaries altogether, especially those who have few beneficiaries who need them.

After reviewing the current PDE data and the costs associated with implementing EPCS, we proposed to exempt prescribers who prescribe 100 or fewer Part D controlled substance prescriptions per year. Based on our stakeholder feedback, we understand that EHR companies provide the initial electronic prescribing set-up free of charge, provided the prescribers transmit a minimum number of transactions per year. We estimate that this amount is, on average, 100 Part D controlled substance transactions. In order to do EPCS, prescribers will have to have the capability to e-prescribe more broadly. It is for this reason that we weighed the cost of e-prescribing set-up in general, even though we do not intend to include non-part D prescriptions of controlled or non-controlled substances in our calculation of whether or not prescribers meet the threshold of 100 Part D controlled substance prescriptions per year. Since, based on our conversations with stakeholders, the cost of EPCS transactions is less than the cost of transmitting certain transactions manually, we believe that the initial investment to install EPCS equipment and software is likely justified once prescribers transmit more than 100 Part D controlled substance prescriptions per year. We solicited comment on this assumption and the cost of third-party applications required to conduct EPCS. However, we did not receive any comments on these assumptions.

In order to implement this exception using the data that we have available, we proposed that this exception be given to individual prescribers, regardless of the size of the group practice that they belong to. We also believe that this exception will protect these small prescribers, should they change their place of employment or if their place of employment does not offer support for implementing EPCS.

Based on our examination of PDE data and conversations with stakeholders, we believe that prescribers working under most research protocols will fall under the proposed exception for small prescribers. However, we solicited comment on this assumption. We did not receive any comments on it.

Although we did not propose to adopt the suggested exception listed in section 1860D-4(e)(7)(B)(v) of the Act, which describes an exception for prescribers working under a research protocol, we believe that in most cases prescribers who will fall within this category will be included in the exception for small prescribers or in the exception for cases where the prescriber and dispenser are the same entity. We did not propose to specifically create an exception for prescribers working under a research protocol in the regulations, since we believe that so few prescribers will fall outside of these other exceptions. We believe an exception for prescribers working under a research protocol who do not otherwise meet these exceptions is unnecessary because we believe that EHR companies will set up the appropriate EHR equipment, provided around 100 Part D controlled substance prescriptions are transmitted per year.

We proposed to implement this proposal by examining PDE claims as of December 31 of the prior year to determine which prescribers fall within this exception. Prescribers can ascertain whether they meet this exception by looking at how many prescriptions for Part D controlled substances they conducted the prior year or by contacting the CMS contractor responsible for administering the compliance portion of this mandate. CMS and its contractor will be using PDE data from the prior year to determine whether the prescriber qualifies for the exception based on the number of Part D controlled substance claims the prescriber had issued the previous year. CMS will use the previous year's data to determine whether or not the prescriber falls under this exception for the year-in-question. We do not see a compelling reason to exempt prescribers conducting a research protocol on that basis alone.

Based on our conversations with Prescription Drug Plans (PDPs), MA-PD plans, and other organizations with which prescribers are affiliated, we are aware that some are willing to donate the technology and services necessary for prescribers to adopt EPCS. Based on those conversations, we believe that they are more willing to donate these technology and services to prescribers who are working under a research protocol, than to prescribers not working under such a protocol. However, we solicited comment on such an assumption, but we did not receive any comments. We did receive one comment on our decision to not propose an exception for those working under a research protocol. The following is a summary of the comment we received and our response.

Comment: A commenter urged CMS to consider an exception for those working under a research protocol to allow for cases where a research protocol may transmit more than 100 Part D controlled substance prescriptions per year.

Response: We have considered granting an exception to those working under a research protocol. However, we were unable to find a compelling reason to grant such an exception. Further, we reviewed PDE data to determine how many transactions would fall outside of our class of exceptions for cases involving a research protocol, and were unable to find any. For the reasons stated above and in the proposed rule, we decline to adopt a specific exception for those engaging in a research protocol.

We proposed to amend § 423.160(a)(5) by adding § 423.160(a)(5)(ii), which creates an exception for prescribers who issue 100 or fewer controlled substance prescriptions for Part D drugs per calendar year as determined using PDE claims data as of December 31st of the preceding year, so that these prescribers will not be required to meet the EPCS requirement. We solicited comment on this proposal, including regarding the maximum number of Part D controlled substance prescriptions a prescriber can issue to be still considered a small prescriber and, so, to fall within this exception.

The following is a summary of the comments we received and our responses.

Comment: All commenters who commented on our proposal to grant an exception for prescribers who issue 100 or fewer Part D controlled substance prescriptions supported the proposal.

Response: We thank commenters for their support of this proposal. After consideration of public comments, we are finalizing this proposal as proposed.

c. Cases of Recognized Emergencies and Extraordinary Circumstances

Section 1860D-4(e)(7)(B)(iii) of the Act, as added by section 2003 of the SUPPORT Act, lists an exception for consideration by the Secretary for cases of exceptional circumstance demonstrated by the prescriber. As stated in our proposal regarding the EPCS compliance threshold, we seek to help ensure that prescribers are able to issue prescriptions for their patients during the rare occurrences when EPCS is not feasible. We believe that the exception listed in the statute, which includes economic hardship, technological limitations that are not reasonably within the control of the prescriber, and other exceptional circumstances, includes prescribers who are overwhelmed due to having to treat patients during a pandemic or a natural disaster such as a hurricane, flood, or earthquake. It is our goal not to penalize prescribers for such circumstances, and we do not want to unduly increase their burden during difficult situations that impact them, and their patients. We solicited comment on what other extraordinary circumstances may prevent prescribers from being able to conduct EPCS.

In order to help ensure that these extraordinary circumstances are accounted for, we proposed two exceptions to the EPCS requirement. The first proposed exception, at § 423.160(a)(5)(iii), is for prescribers who are prescribing during a recognized emergency, such as a natural disaster, a pandemic, or a similar situation where there is an environmental hazard. We want to help ensure that the EPCS mandate does not interfere with necessary care for patients, especially during natural disasters or pandemics. As a result, we proposed to exempt prescribers who are issuing prescriptions in areas that are affected by such circumstances. To qualify for this exception, this circumstance will have to arise from an emergency or disaster declared by a Federal, State, or local government entity. We proposed to determine whether a prescriber qualifies for this exception based on whether the prescriber's NCPDP database address is located in the geographic area of an emergency or disaster declared by a Federal, State or local government entity. Since, as stated in the CY 2022 PFS proposed rule, we had intended this exception to avoid unduly burdening prescribers during difficult situations, CMS would like to clarify that this exception would be applicable only if the dispensing date of the medication occurs during the time period that the declared disaster is occurring.

The second proposed exception, at § 423.160(a)(5)(iv), is for prescribers who request and receive from CMS a waiver, which we proposed to grant to prescribers who are facing extraordinary circumstances that prevent them from electronically prescribing a controlled substance to a Part D beneficiary, but who are not in an emergency or disaster area. We would define “extraordinary circumstance” for purposes of this exception to mean a situation, other than an emergency or disaster, outside of the control of a prescriber that prevents the prescriber from electronically prescribing a controlled substance to a Part D beneficiary. An example of such a circumstance would be if a prescriber was in a service area that lacks broadband access or EPCS providers refuse to install systems for the prescriber. The prescriber would have to be able to submit evidence of such an extraordinary circumstance to CMS.

For purposes of the exception at § 423.160(a)(5)(iii), prior to imposing any compliance actions on a prescriber, we proposed to ascertain whether there is an emergency or disaster declared by a Federal, State, or local government entity for the geographic area associated with the prescriber's address in the NCPDP database.

For purposes of the exception at § 423.160(a)(5)(iv), we proposed that prescribers would be excepted from the EPCS requirements if they request and receive a waiver from CMS. We intend that prescribers will be able to submit a request for a waiver to inform CMS of any extraordinary circumstances that they may be facing and that will prevent the prescriber from conducting EPCS. This waiver could be for any circumstance outside of the prescriber's control and would not require an official declaration by a Federal, State, or local government. To meet the standard for a waiver, prescribers must provide documentation showing the existence of a circumstance beyond their control and that such a circumstance prevents them from conducting EPCS. Section 1860D-4(e)(7)(B)(iii) of the Act, as added by section 2003 of the SUPPORT Act, refers to a waiver or a renewal thereof for a period of time as determined by the Secretary, not to exceed one year, which suggests a timeframe not to exceed one year, but to be determined by the Secretary.

To implement our proposals for exceptions for exceptional circumstances or disasters, we proposed to amend § 423.160(a)(5) by adding paragraphs (a)(5)(iii) and (iv). Section 423.160(a)(5)(iii) would specify an exception for prescribers in the geographic service area of an emergency or disaster declared by a Federal, State or local government entity. We proposed at section 423.160(a)(5)(iv) that prescribers would be exempt from the EPCS requirements if they have received a CMS-approved waiver certifying that the prescriber is unable to conduct EPCS due to circumstances beyond the prescriber's control. We proposed that in order to receive a CMS-approved waiver, the prescriber will have to submit an attestation using a form, which will be made available on a CMS-supported website, so that prescribers will be able to request a waiver via an online portal.

The following minimum set of information will be required on the attestation:

• Prescriber's first and last name;
• Prescriber's National Provider Identification (NPI);
• Prescriber's taxpayer identification number (TIN) or TIN associated with his or medical practice, when applicable;
• Prescriber's contact information, email address, telephone number, and mailing address; and
• A description of the extraordinary circumstance necessitating a waiver and how it affects the prescriber.

Following receipt of the attestation, we will: (1) Provide a written acknowledgement of receipt of the request using the contact information submitted via the portal; and (2) provide a decision formally granting or denying the waiver using the contact information submitted via the portal. Under the policy, the prescriber will submit their attestation about the circumstance and receive a waiver, if warranted, based on such an attestation. After consideration of public comments, we are finalizing the waiver process as proposed.

The following is a summary of the comments we received on the waiver process and our responses.

Comment: One commenter suggested that we allow a process for waiver requests to be submitted via fax or over the phone, in case a prescriber does not have access to a computer, due to the extraordinary circumstance necessitating such a waiver.

Response: We agree that prescribers should have the ability to submit an attestation using a medium other than a computer. We will make available on the CMS-supported website information to permit prescribers to request a waiver via phone, in addition to via the portal.

Comment: Several commenters mentioned circumstances, such as cybersecurity attacks and technological failures, which may prevent prescribers from conducting EPCS. They stated that these circumstances should be eligible for a CMS waiver.

Response: We agree that these events could be considered circumstances that would prevent prescribers from being able to conduct EPCS. We believe that in most cases, these events should not preclude a prescriber from meeting the 70 percent compliance threshold required by the regulation, and in some cases, prescribers may fall under an exception. However, should prescribers experience these events, we urge prescribers to submit an attestation detailing such an event. As described in subsequent paragraphs, should prescribers be unable to prescribe electronically, prescribers are able to submit an attestation of such. Should a waiver be granted, it would be for a term of up to one year.

Comment: One commenter suggested that we include a waiver for any time certain doctors prescribe buprenorphine, since there are certain pharmacies that do not have much buprenorphine available to them. The commenter noted that this makes conducting EPCS difficult, since physicians are then required to re-route their electronic prescriptions when the pharmacy runs out of the prescription, which creates an administrative burden for prescribers.

Response: Although CMS understands that this could create an additional burden for prescribers, CMS is not aware of, nor does the commenter explain, why this would not be an issue in cases where prescriptions are not transmitted electronically. However, CMS did seek to more fully examine this concern and reviewed PDE data to determine how often buprenorphine is prescribed in Part D. After reviewing this information, we discovered that buprenorphine prescriptions make up less than 2 percent of all Part D Schedule II, III, IV, and V prescriptions. It is for this reason that prescribers who experience difficulties electronically prescribing buprenorphine should still be able to meet the compliance threshold that allows prescribers to be considered fully compliant with EPCS if they electronically prescribe 70 percent or more of their Part D prescriptions. As a result, we do not believe that an exception for this purpose is necessary. However, should a prescriber find that buprenorphine unavailability prevents the prescriber from utilizing EPCS, we encourage the prescriber to submit an attestation form about such events to request a waiver due to circumstances beyond the prescriber's control, which we will consider. In addition, we will continue to monitor PDE data for trends, including whether certain prescriptions are more frequently prescribed using paper prescriptions. If CMS finds that this is the case, we can take action, such as granting exceptions, to help ensure that EPCS is not becoming overly burdensome for these prescriptions.

d. Individuals in Hospice and Nursing Facilities

Section 2003 of the SUPPORT Act, in adding section 1860D-4(e)(7)(B)(vii) to the Act, tasked the Secretary to consider whether prescriptions for individuals under the Part D benefit for an individual enrolled in the Medicare Part A hospice benefit should be exempt from the EPCS requirement. After considering this issue, we believe that an exception for a prescription made for an individual enrolled in hospice would be inappropriate for several reasons. First, when electing hospice, patients have chosen to move from a curative model of care to a holistic palliative model of care. Regulations at 42 CFR 418.202(f) stipulate that the Medicare hospice benefit covers only drugs and biologicals used primarily for the relief of pain and symptom control for the terminal illness and related conditions. Under section 1860D-2(e)(2)(B) of the Act, a drug is excluded from Part D coverage if payment for such drug, as prescribed and dispensed for the beneficiary, is available under Medicare Part A or Part B. Thus, in cases where, with respect to a beneficiary, the hospice benefit covers a drug or biological used primarily for the relief of pain or symptom control for the terminal illness or related conditions, such drug is excluded from Part D coverage under section 1860D-2(e)(2)(B) of the Act. The HHS OIG worked with CMS and the National Hospice and Palliative Care Organization (NHPCO) to identify four common categories of prescription drugs that are typically used to treat symptoms often experienced during the end of life, regardless of an individual's terminal diagnosis. The OIG has found that these categories of drugs should generally be paid under the hospice benefit. Thus, there may be very few instances in which a controlled substance prescribed for a Part D enrollee who has elected hospice could be covered under Part D. We believe an exception that will apply only in these rare instances could be confusing and burdensome for prescribers who furnish care to some Part D beneficiaries who are enrolled in hospice and for some who are not because to qualify for the exception they will have to determine when a particular enrollee has elected hospice. Further, a beneficiary is free to elect the hospice benefit and cancel that election as they choose, which will make it difficult for a prescriber to be sure at any point in time whether a beneficiary is, or is not, currently enrolled in hospice, and therefore, whether a paper prescription is permitted. We note that we did not propose for the EPCS requirement to apply to any prescriptions for Part A or Part B controlled substances in any event.

Further, were CMS to provide an exception for prescriptions for Part D-covered controlled substances for hospice enrollees, it would pose an operational challenge to accurately match prescription data records with hospice enrollment data where the patient's hospice status can be fluid. It would be operationally challenging to ensure that paper prescriptions were only issued for beneficiaries enrolled in hospice (which would be permitted), and not for patients not enrolled in hospice (where EPCS will be required). We believed the cost of this potentially confusing and laborious analysis for the small number of prescriptions dispensed for beneficiaries enrolled in hospice but covered under Part D exceeds the benefit creating the exception would provide to prescribers.

Therefore, we did not propose an exemption for prescribers issuing prescriptions for individuals enrolled in hospice. However, we solicited comment on this decision. We did not receive public comments on this provision. As proposed, we are not creating an exemption for prescribers issuing prescriptions for individuals enrolled in hospice.

Section 1860D-4(e)(7)(B)(viii) of the Act suggests an exemption for prescribers issuing prescriptions for individuals who are residents of a nursing facility and eligible for Medicare and Medicaid benefits. We sought stakeholder feedback on this exemption in our August 2020 RFI and discussed it with our Federal partners at the DEA, and have been informed that there are situations where nursing facilities experience or are at risk of drug diversion. This stakeholder feedback did not inform us of any compelling reasons to include an exemption for prescribers issuing prescriptions for individuals who are residents of a nursing facility and eligible for Medicare and Medicaid benefits. We have also seen the severe impact that the COVID-19 pandemic has had on nursing facility residents, who are at high risk for infection, serious illness, and death from COVID-19, as well as other infectious diseases including clostridium difficile and the seasonal flu. It is for these reasons that we did not propose an exemption for prescribers issuing prescriptions for individuals who are residents of a nursing facility and eligible for Medicare and Medicaid benefits. We solicited comment on this issue, but we did not receive public comments on this provision. As proposed, we are not creating an exemption for prescribers issuing prescriptions for individuals who are residents of a nursing facility and eligible for Medicare and Medicaid benefits.

7. Fraud and Abuse Laws

We are aware that PDPs, MA-PD plans, or other organizations with which prescribers are affiliated may wish to assist prescribers with satisfying the mandate for electronic prescribing of controlled substances for a covered Part D drug by providing technology and services necessary to effectuate the electronic prescribing of such drugs. Such assistance may implicate the payment and fraud and abuse laws that govern the financial relationships in the health care industry. Specifically, the donation of free or below-fair market value electronic prescribing technology or services to a practitioner (or any other person) may implicate the physician self-referral law and the Federal anti-kickback statute. However, there is an exception to the physician self-referral law's prohibition and a corresponding safe harbor under the Federal anti-kickback statute that will permit certain donations in the form of items or services (not including cash or cash equivalents) necessary and used solely to receive and transmit electronic prescription information if all requirements of the applicable exception or safe harbor are satisfied. In addition, other exceptions to the physician self-referral law and safe harbors under the Federal anti-kickback statute may apply.

Section III.P.1. of this final rule provides a general discussion of the application of, prohibitions of, and exceptions to the physician self-referral law. For information specific to the exception for donations of electronic prescribing items and services, we refer readers to our August 8, 2006 final rule entitled “Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships; Exceptions for Certain Electronic Prescribing and Electronic Health Records Arrangements” (71 FR 45140) and found at https://www.govinfo.gov/content/pkg/FR-2006-08-08/pdf/06-6667.pdf,, and the regulations interpreting the physician self-referral law, including additional exceptions to its prohibitions, which are found in 42 CFR part 411, subpart J. Information regarding the Federal anti-kickback statute and its applicable safe harbors can be found at www.oig.hhs.gov.

We received several comments regarding the fraud and abuse laws, which we have summarized below.

Comment: Some commenters asked CMS to examine the regulations that set forth exceptions to the physician self-referral law and safe harbors under the Federal anti-kickback statute to determine whether revisions are necessary to permit PDPs, MA-PD plans, and other organizations to donate technology and services necessary for prescribers to adopt EPCS.

Response: We did not propose to revise the existing physician self-referral law exception for electronic prescribing items and services at 42 CFR 411.357(v) or any other exceptions to the physician self-referral law that may apply to donations of technology and services that parties may believe are necessary for prescribers to adopt EPCS. Any revisions to our regulations would occur only through notice and comment rulemaking. Stakeholders requesting revision of regulations issued by the HHS Office of Inspector General (OIG) should contact OIG.

8. Penalties

Section 1860D-4(e)(7)(D) of the Act gives the Secretary the authority to enforce and specify appropriate penalties for non-compliance with the EPCS requirement. We sought stakeholder feedback on whether CMS should impose penalties and if so, what those penalties should be. We have also examined State EPCS requirements and their accompanying penalties. However, because these requirements have only been recently implemented and most States do not have penalties for failing to adopt EPCS, we have not been able to evaluate what type of penalties have been effective for State mandates.

In implementing the EPCS requirement, we seek to help ensure that we do not place too much of a burden on prescribers, as we do not want this requirement to have an unintended consequence of incentivizing prescribers to stop prescribing controlled substances to Part D beneficiaries, as appropriate, should they not have EPCS set-up. We also need sufficient time to gather more stakeholder feedback on the most effective and most appropriate type of penalties.

Therefore, we proposed that with respect to compliance from January 1, 2023 through December 31, 2023, CMS compliance actions will consist of sending letters to prescribers that we believe are violating the EPCS requirement during that period of time. These letters will consist of a notification to prescribers that they are violating the EPCS requirement, information about how they can come into compliance, the benefits of EPCS, an information solicitation as to why they are not conducting EPCS, and a link to the CMS portal to request a waiver. We will re-evaluate whether further compliance actions will be necessary and what those compliance actions will be in future rulemaking. We solicited comment on this proposal, including what type of compliance action may be appropriate after the initial period described above, including whether any penalties should be phased in over time.

We received public comments on this proposal, which we have summarized below, along with our responses to them.

Comment: Most commenters supported our proposal to limit compliance actions in the first year to sending letters to prescribers, rather than imposing a penalty on the prescribers. These commenters encouraged the use of these letters in order to avoid overly burdening prescribers during the PHE. However, some commenters suggested that we impose penalties on prescribers who do not conduct EPCS, since these commenters stated that it will hasten EPCS implementation.

Response: We agree that sending letters to prescribers, rather than imposing penalties, may avoid overly burdening prescribers who cannot meet the EPCS mandate in 2023. We will consider adopting penalties in future rulemaking. As previously noted, our intent is to avoid overly burdening prescribers, especially during this critical time during the PHE. In addition, we would like to further examine other EPCS programs and the effects that these penalties have had on EPCS in their States before imposing penalties on prescribers.

After consideration of public comments, we will finalize our proposal to limit the 2023 compliance actions to a compliance letter.

R. Open Payments

1. Background

a. Open Payments Policies

The Open Payments program is a statutorily-mandated program that promotes transparency by providing information to the public about the financial relationships between the pharmaceutical and medical device industry, and certain types of health care providers. Section 1128G of the Act requires manufacturers of covered drugs, devices, biologicals, or medical supplies (referred to as “applicable manufacturers”), as well as applicable group purchasing organizations (GPOs), to annually submit information for the preceding calendar year about certain payments or other transfers of value made to “covered recipients,” currently defined as physicians, teaching hospitals, PAs, NP, CNSs, certified registered nurse anesthetists (CRNAs), anesthesiologist assistants (AAs), and certified nurse-midwives (CNMs).

Payments or other transfers of value that must be reported include, but are not limited to, such things as research-related payments, honoraria, gifts, travel expenses, meals, grants, and other compensation. The type of information required to be reported includes, but is not limited to, the date and amount of the payment or other transfer of value, identifying information about the covered recipient, and details about products associated with the transaction. When a payment or other transfer of value is related to marketing, education, or research specific to a covered drug, device, biological or medical supply, the name of that covered drug, device, biological or medical supply also must be reported. The estimated burden of these reporting requirements, as outlined under OMB control number 0938-1237, is approximately 1.9 million hours over the course of 1 year.

Section 1128G of the Act establishes certain minimum dollar thresholds for required reporting of individual and aggregate payments or transfers of value. To determine if multiple small individual payments or other transfers of value made to a covered recipient exceed the de minimis reporting threshold, applicable manufacturers and applicable GPOs must aggregate all individual payments made across all payment categories within a given reporting year. The statutory threshold established in 2013 was $10 for individual payments and $100 for aggregated payments, and this amount has increased with the consumer price index each year. For CY 2021, the annual reporting thresholds for individual payments or other transfers of value is $11.04 and the aggregate amount is $110.40.

The Open Payments program yields information for the general public about providers, as well as information that researchers may use to look into potential correlations between financial relationships and provider behaviors. Between August 2013 and the June 2020 publication, more than 76 million records have been disclosed under the Open Payments program, enabling significant transparency into applicable exchanges of value. We have been committed to stakeholder engagement in an effort to limit the burden in the Open Payments program reporting processes and improve clarity for the public. Additional background about the program and guidance, including frequently asked questions, regarding how the program works and what type of information is required to be reported is available at www.cms.gov/OpenPayments.

In the February 8, 2013 Federal Register (78 FR 9458), we published regulations implementing section 1128G of the Act and establishing the Open Payments program. Section 1128G of the Act requires applicable manufacturers and applicable GPOs to submit information annually about certain payments or other transfers of value made to covered recipients during the course of the preceding calendar year. Additionally, section 1128G of the Act defines covered drugs, devices, biologicals, or medical supplies as those covered under Medicare, a State plan under Medicaid, or the Children's Health Insurance Program (CHIP) (or a waiver of either such State plan), and requires applicable manufacturers and applicable GPOs to disclose any ownership or investment interests in such entities held by physicians or physicians' immediate family members, as well as information on any payments or other transfers of value provided to such physician owners or investors. Under section 1128G(e)(10)(A) of the Act, the term “payment or other transfer of value” refers to a transfer of anything of value, though some exclusions apply.

In the CY 2015 PFS final rule with comment period (79 FR 67548), we amended the regulations by standardizing reporting in the Open Payments program. Specifically, we: (1) Deleted the definition of “covered device”; (2) removed the special rules for payments or other transfers of value related to continuing education programs; (3) clarified the marketed name reporting requirements for devices and medical supplies; and (4) required stock, stock options, and any other ownership interests to be reported as distinct forms of payment.

In the CY 2017 PFS proposed rule (81 FR 46395), we solicited information from the public on a wide variety of topics regarding the Open Payments program. Since the implementation of the program and changes made in the CY 2015 PFS final rule with comment period, various commenters have provided us feedback. Consequently, we identified areas in the rule that might benefit from revision and solicited public comments to inform future rulemaking. We sought comment on whether the payment categories listed at 42 CFR 403.904(e)(2) are adequately inclusive to facilitate reporting of all payments or transfers of value, as well as ways to streamline or make the reporting process more efficient while facilitating our role in oversight, compliance, and enforcement, along with posing other program-specific questions. A summary of the comments we received was published in the CY 2017 PFS final rule (81 FR 80428 through 80429).

On October 24, 2018, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271) was signed into law. Section 6111 of the SUPPORT Act amended the definition of “covered recipient” under section 1128G(e)(6) of the Act with respect to information required to be submitted on or after January 1, 2022, to include PAs, NPs, CNSs, CRNAs, and CNMs, in addition to the previously listed covered recipients of physicians and teaching hospitals. In the CY 2020 PFS final rule, we codified the Open Payments provisions of the SUPPORT Act and addressed public comments received from the CY 2017 PFS proposed rule by simplifying the process for reporting data by adjusting the Nature of Payment categories, and standardized data on reported covered drugs, devices, biologicals, or medical supplies.

In the CY 2022 PFS proposed rule, we proposed to clarify existing Open Payments requirements, as well as add provisions that program stakeholders have requested and that we agree would improve the quality of the data. We proposed the following revisions effective for data collection beginning in CY 2023 and reporting in CY 2024: (1) Adding a mandatory payment context field for records to teaching hospitals; (2) adding the option to recertify annually even when no records are being reported; (3) disallowing record deletions without a substantiated reason; (4) updating the definition of ownership and investment interest; (5) adding a definition for a physician-owned distributorship as a subset of applicable manufacturers and group purchasing organizations, for the purposes of Open Payments program reporting only, which definition would not apply for purposes of any other laws or regulations, including, but not limited to, section 1128B of the Act (the Federal anti-kickback statute), the regulations at 42 CFR 1001.952, and materials interpreting the anti-kickback statute, such as Special Fraud Alerts; and section 1877 of the Act and the regulations at 42 CFR part 411, subpart J (collectively, the physician self-referral law); (6) requiring reporting entities to update their contact information; (7) disallowing publications delays for general payment records; (8) clarifying the exception for short-term loans applies for 90 total days in a calendar year, regardless of whether the 90 days were consecutive; and (9) removing the option to submit and attest to general payment records with an “Ownership” Nature of Payment category. We noted that we believed these changes would increase the usability of the data, address concerns we have heard from stakeholders, and we believe our proposed implementation timeline allows reporting entities adequate time to prepare for changes to their data collection and reporting procedures.

We received public comments on our proposals that would be effective for data collection beginning in CY 2023 and reporting in CY 2024. We received 11 comments on the Open Payments proposals. Commenters generally submitted neutral or supportive comments with a few suggestions, which are individually outlined in section c below. We thank the commenters and after consideration of public comments, we are finalizing as proposed.

b. Legal Authority

Four legal authorities from the statute ground our provisions:

• Sections 1102 and 1871 of the Act, which provide general authority for the Secretary to prescribe regulations for the efficient administration of the Medicare program.
• Section 1861 of the Act, which defines providers and suppliers.
• Section 1128G of the Act, as amended by section 6111 of the SUPPORT Act, which requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare or a State plan under Medicaid or CHIP to report annually to the Secretary certain payments or other transfers of value to physicians and teaching hospitals, and to PAs, NPs, CNSs, CRNAs, and CNMs for information required to be submitted under section 1128G of the Act on or after January 1, 2022.

c. Provisions of the Regulations

(1) Payment Context Field for Teaching Hospitals

We have received feedback from teaching hospitals during informal interviews that Open Payments submissions do not contain sufficient information to identify reported payments or transfers of value in their own records. This means that teaching hospitals are unable to verify records during the review and dispute process and must dispute the record in order to obtain additional information, which causes additional and unnecessary work for both teaching hospitals and reporting entities.

To reduce the burden created by disputes for both reporting entities and teaching hospitals, we proposed a mandatory context field for payments or transfers of value attributed to teaching hospitals, which would contain information to better identify the payment as deemed appropriate by the applicable manufacturer or GPO. Examples of data that the reporting entity may choose to include are: the check number or electronic wire number for the payment; related department of the hospital; or other pieces of relevant information.

We received public comments on our proposal for a teaching hospital context field. The following is a summary of the comments we received and our responses.

Comment: We received several comments on this proposal, which were evenly split in support and opposition. Commenters who agreed expressed support for our belief that the proposal would enhance communication between reporting entities and teaching hospitals in a proactive way, thereby reducing the need for disputes. One commenter suggested that additional inputs may include whether education was involved and which services were provided, and that CMS should expand the list of suggestions to avoid limiting reporting entities' inputs. Commenters who disagreed with the proposal stated that the field would increase burden without decreasing disputes, and the lack of standardization would be problematic since reporting entities would not have direction on what to input and teaching hospitals might not understand the additional context.

Response: We believe that the additional field will be a minimal burden on reporting entities, but that the new field will give needed context to the payments based on feedback from both reporting entities and teaching hospitals. The integrity of the data is our highest priority, and this additional information will help ensure accuracy. We also believe that the flexibility regarding the field's contents will be much easier for reporting entities than specifying a mandatory piece of information. We hope to continue to minimize dispute-related issues, and we consider this new field to be a positive step to address both reporting entities' and covered recipients' communication concerns. Therefore, we are finalizing this provision as proposed.

(2) Optional Annual Recertification

Over the course of the program, several entities have provided feedback that they would like the ability to attest that they have no reportable records for a particular year. At this time, an entity that does not have reportable payments or transfers of value does not need to recertify in Open Payments, but it also does not have a way to communicate to CMS that it believes it is still compliant even though it has not reported.

We proposed to make it optional for an entity that does not have reportable payments or transfers of value for the program year to recertify its registration in Open Payments and attest that it does not have any records to submit, which would give peace of mind to reporting entities that are appropriately not reporting records. We believe this optional recertification for entities without reportable transactions will be a low burden to reporting entities, but will be invaluable to ensuring the integrity of the data. We proposed adding the following language to an option for entities that are recertifying without submitting records:

“1. I attest that I am a Chief Executive Officer, Chief Financial Officer, Chief Compliance Officer, or other Officer equivalent authorized representative for the reporting applicable manufacturer or applicable group purchasing organization with the authority to attest to the information submitted in the Open Payments system.

2. I attest that, to the best of my knowledge, belief, and ability, my organization does not have any reportable payments or transfers of value or ownership and investment interest to report for the current program year.

3. If I become aware of any information that my entity is required to report, I will submit this information to CMS as required per 42 CFR 403.908(h)(1), which states that “if an applicable manufacturer or applicable group purchasing organization discovers an error or omission in its annual report, it must submit corrected information to CMS immediately upon confirmation of the error or omission.”

We received public comments on optional recertification for entities without reporting requirements. The following is a summary of the comments we received and our responses.

Comment: We received two comments on this proposal, both of which were generally supportive although one included questions on how the new attestation would function. The commenter expressed concerns that the attestation would lead to additional consequences if later reportable records were discovered, and inquired as to whether CMS would add a notification functionality so that when the Submitter enters that the entity did not have any reportable records, the Attester would be notified.

Response: We clarify that this optional activity is for the purpose of communication to the Open Payments program for the benefit of reporting entities, and is not intended as a method of penalization. We will continue to carefully evaluate instances of potential non-compliance, including weighing mitigating and aggravating factors, as our regulations currently require. Furthermore, this attestation will not prevent reporting entities from submitting later-discovered records. We will further consider the system's functionality specific to the various roles, such as Submitter and Attester, but do not believe the detail of this functionality is relevant to rulemaking. Therefore, we are finalizing as proposed.

(3) Defining a Physician-Owned Distributorship

The preamble to the 2013 Open Payments final rule (78 FR 9458) discusses physician-owned distributorships (PODs), as a subset of group purchasing organizations (GPOs), but does not provide a specific definition for this type of entity. Reporting entities currently have the ability to self-identify as a POD when registering with Open Payments, but due to the lack of a definition of the term “physician-owned distributorship” or “POD,” this designation is not required. We believe that the disclosure of an entity's status as a POD is essential to the transparency that is central to the program, and will also help clear up confusion about whether PODs are required to report. Accordingly, we proposed to include the definition of a POD as set out at § 403.902 as a subset of either an applicable manufacturer or applicable GPO.

We also proposed to include language at § 403.908(c)(4) to require PODs to self-identify when registering or recertifying.

Furthermore, to better align the Open Payments program with the updated definition of ownership and investment interest at § 411.354(b)(3) (see 85 FR 77587), we included the exceptions for titular ownership and employee stock ownership programs (ESOPs) that are qualified under IRS regulations for consistency in application.

In addition, we emphasized that:

• The proposed definition of a physician-owned distributorship does not apply for purposes of any other laws or regulations, including, but not limited to, section 1877 of the Act, the regulations at 42 CFR part 411, subpart J, section 1128B of the Act, or the regulations at 42 CFR 1001.952.
• “Ownership or investment interest” is defined at § 403.902 of the Open Payments regulations and would not include publicly traded securities or mutual funds.

• To be considered a physician owner(s), the owner would have to hold at least one active professional license to practice as a physician issued by a U.S. State or territory.

• If a company with common ownership reports in a consolidated report with the POD, the reporting company would only be required to register as a POD if it meets the 5 percent ownership requirement when ownership of all entities in the report is calculated.
• The POD would be required to report ownership and investment interest as required by existing Open Payments requirements. Ownership or investment interest is defined at § 403.902 to include, but is not limited to: stocks, stock option(s) (other than those received as compensation, until they are exercised); partnership shares, both limited and non-limited; limited liability company memberships; loans, bonds, or other financial instruments that are secured with an entity's property or revenue or a portion of that property or revenue. This definition explicitly excepts titular ownership and ESOPs that are qualified under IRS regulations.
• The POD would be required to identify as a POD whether or not the physician has a controlling interest in the reporting entity (for example, a silent partner whose only role is to provide capital and is not involved in the company's operations would still meet requirements for reporting).
• Five percent interest would be calculated as 5 percent of the total dollar value in USD of all ownership in the POD as of December 31, or the latest date that the ownership was held, as of the calendar year proceeding the Program Year. For example, if reporting ownership in a POD for Program Year 2022, the ownership will be calculated as of December 31, 2022, or the latest date in the calendar year that the physician held the ownership or investment interest.
• Indirect ownership interest would also have to be reported as required by § 403.902. Indirect ownership is often the result of the use of holding companies and parent/subsidiary relationships.
• Any entity meeting this definition would be required to identify itself as a POD when submitting and attesting to its records. For example, if an applicable manufacturer meets the definition of a POD, it may not choose to identify itself simply as an “Applicable Manufacturer” but will have to choose its business type as “Applicable Manufacturer—Physician Owned Distributorship.”
• We believed that this proposed definition should not increase industry burden because it is a subset of existing definitions, but should clarify confusion about PODs being outside of reporting requirements.

We received public comments on the requirement that physician-owned distributorships (PODs) self-identify when registering or recertifying.

The following is a summary of the comments we received and our responses.

Comment: We received several comments on this proposal, all of which expressed general support for the creation of a POD definition, although some provided suggestions on additional details to include. Two commenters noted that they believed that the proposed definition was not narrow enough to address concerns around PODs. One commenter suggested that CMS update the language to clarify that a POD may sell to a single entity, such as a hospital.

Response: Many commenters' suggestions fell outside CMS' bounds of rulemaking authority, as statutory language limits the changes we may make to the program definitions. We do not believe we need to specify that the definition may include PODs that have a single customer as long as the definition does not exclude these entities. We therefore finalize the definition as proposed.

(4) Disallowing Record Deletion Without Reason

While we have not seen evidence of the following conduct, we believe that our existing regulations might allow entities to be compliant by reporting and attesting to records, then deleting those records so that they are never publicly available. We proposed to prevent reporting followed by deletion by adding language at § 403.904(a)(3) that will state that an entity that has reported payments or transfers of value under the scope of this rule may not remove, delete, or alter the records in the Open Payments system unless it discovers an error in the information furnished, or the record is otherwise believed to meet existing exceptions for reporting that were previously unknown.

An example of a properly deleted record would be the deletion of ownership records that were reported for a publicly traded company, since publicly traded companies are not required to report ownership and investment interest. We will add a dialogue box in the system for reporting entities to provide a reason for record deletion. We noted that deletions will continue to undergo additional scrutiny to ensure the integrity of the data.

We received public comments on the requirement that a reporting entity provide a reason when deleting a record. The following is a summary of the comments we received and our responses.

Comment: Some commenters were supportive of our proposal, while others were skeptical. These commenters mostly submitted system suggestions that would reduce burden, including: creating pre-filled options for deletion reasons instead of a free form text box; creating a threshold at which the reason for deletion would be required; and having the reason automatically populate as “dispute” if the deletion was on a disputed record.

Response: We clarify that while we have not seen evidence of reporting entities reporting and deleting records to avoid publication, we believe our proposed language is nonetheless important to ensure such conduct is proscribed. Furthermore, CMS and reporting entities both currently bear an administrative burden- created when CMS needs documentation to confirm that a deletion is legitimate since attestation had previously been made as to the record's timeliness, completeness, and accuracy—when records are deleted without context. With proper reporting methodologies in place, deletions should be relatively rare and burden should be minimal, especially with respect to undisputed records. We believe that the proposed requirement will afford a needed layer of integrity to the data and we finalize it as proposed. However, we appreciate the feedback on logistical options and will take them into consideration as much as possible as we implement this requirement so as to minimize burden.

(5) Disallow Publication Delays of General Payments

Delayed publication is permitted for Open Payments records based on concerns that the information provided in the record details may reveal proprietary information about an entity's research activities. According to § 403.910, only payments that are made in connection with the following are allowed to be delayed from publication: (1) Research or development of a new drug, device, biological, or medical supply, or a new application of an existing drug, device, biological, or medical supply; or (2) Clinical investigations regarding a new drug, device, biological, or medical supply. As of December 26, 2020, there were 20,930 general records with a value of $26.4M that were delayed from publication for at least one Program Year, and based on the information provided in the current format required for the submission of general records, we are unable to verify these records' connection with research or clinical investigations. Therefore, we proposed to eliminate the ability to delay general payments from publication and only permit publication delay of research payments, whose formatting does require the appropriate information to be provided, the details of which are specified at § 403.904(f).

Reporting entities may hesitate to include records that are currently being delayed as general payments because they are associated with a research study, but are not directly outlined in that research agreement. For example, a company may pay for an airline ticket for a physician to conduct research that is associated with a research agreement, but that travel was not explicitly outlined in that agreement. However, we do not believe that the current requirements for a research payment would exclude these types of payments from being reported as research payments, as long as they are made in connection with, and subject to, a research agreement.

We received public comments on the removal of the ability to delay general payments. The following is a summary of the comments we received and our responses.

Comment: Commenters were supportive or neutral. One commenter asked CMS to clarify whether payments associated with research but not explicitly outlined in the written agreement should be reported as research payments instead of general payments.

Response: We believe that our proposal is clear that as long as a payment is made in connection with a written research agreement, it may be reported as a research payment even if it was not explicit in that agreement. We finalize this proposal as it was proposed, and we will update our guidance, including FAQs, to be aligned with this final rule.

(6) Short-Term Loans

The 2013 Open Payments final rule makes a reporting exception for short-term equipment loans. A short-term medical supply or device loan means the loan of a covered device or a device under development, or the provision of a limited quantity of medical supplies for a short-term trial period, not to exceed a loan period of 90 days or a quantity of 90 days of average daily use, to permit evaluation of the device or medical supply by the covered recipient. The Open Payments regulations also clarify that for a single product, the total number of days for the loan should not exceed 90 days for the entire year, regardless of whether the 90 days are consecutive. We believe that this aligns with the intention to limit the loan period to 90 days and not allow a new loan to start at the end of the previous loan period, thus avoiding the reporting requirements. We proposed to clarify this by stating that short-term medical supply or device loan means the loan of a covered device or a device under development, or the provision of a limited quantity of medical supplies for a short-term trial period, not to exceed a loan period of 90 cumulative days per calendar year or a quantity of 90 cumulative days of average daily use per calendar year, to permit evaluation of the device or medical supply by the covered recipient.

We received one public comment on the proposal to clarify the definition of a short-term loan. The following is a summary of the comment we received and our responses.

Comment: One commenter requested that this proposal be withdrawn on the basis that this behavior is not occurring and could impact the product evaluation process.

Response: This proposal is merely a clarification of the existing regulatory requirement, and we are finalizing it as proposed.

(7) Remove General Ownership Records

We currently have two ways for an entity to report ownership: entities may submit an ownership record; or a general record with a Nature of Payment category of “Ownership.” We proposed to remove the “Ownership” Nature of Payment category. The statute requires special rules for the reporting of ownership interest, including dollar amount invested and value of interest, which is not captured by the general payment with the Nature of Payment category of “Ownership.” Furthermore, this would create a cleaner and more consistent data set.

We received one public comment on the proposal to remove the ability to submit general ownership records.

Comment: One commenter supported this proposal.

Response: We will finalize as proposed.

(8) Updated Contact Information

When sending communications to entities, the Open Payments program often finds that their contact information is outdated, especially if the entity has not recertified recently. To ensure data integrity, including in instances where we might discern irregularities or potential noncompliance, it is important that the Open Payments program be able to contact reporting entities. We proposed to require that a company that has had reportable payments or transfers of value within the past 2 calendar years keep current its contact information within the Open Payments system. For example, if an applicable manufacturer or group purchasing organization had reported records in Program Years 2018 and 2022, but did not have records for Program Years 2019, 2020, or 2021, it would be required to keep updated contact information in the system during Program Years 2019 and 2020. The applicable manufacturer or group purchasing organization would not have to update its contact information for Program Year 2021. In Program Year 2022, since it once again had reportable records, it would be required to recertify and update its contact information as usual. We proposed to include this requirement at § 403.908(c)(3).

We received public comments on the requirement for reporting entities to keep their contact information updated. The following is a summary of the comments we received and our responses.

Comment: Two commenters supported the proposal. One commenter expressed concern that the contact field would not be able to be updated in the event that a company goes out of business.

Response: We acknowledge that the requirement to keep contact information updated, along with any other requirements, will be impossible to enforce if, for example, a company goes out of business. We will finalize as proposed.

IV. Summary of the Quality Payment Program Proposed Provisions, Analysis of and Responses to Public Comments, and Provisions of the Final Rule

A. CY 2022 Updates to the Quality Payment Program

1. Executive Summary

a. Overview

This section of the final rule sets forth changes to the Quality Payment Program starting January 1, 2022, except as otherwise noted for specific provisions. The CY 2022 performance period/2024 MIPS payment year of the Quality Payment Program continues to build on the first few years of implementation of the Quality Payment Program to focus more on our measurement efforts, refine how clinicians will be able to participate in a more meaningful way and encourage participation in Advanced Alternative Payment Models (APMs).

Authorized by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, April 16, 2015), the Quality Payment Program is an incentive program that includes two participation tracks, the Merit-based Incentive Payment System (MIPS) and Advanced APMs. MIPS eligible clinicians are subject to a MIPS payment adjustment based on their performance in four performance categories: cost, quality, improvement activities, and Promoting Interoperability. The weights of those four performance categories are specified in statute. For CY 2022, those weights are as follows: 30 percent for the quality performance category, 30 percent for the cost performance category, 15 percent for the improvement activities performance category, and 25 percent for the Promoting Interoperability performance category. If an eligible clinician participates in an Advanced APM and achieves Qualifying APM Participant (QP) status, they are excluded from the MIPS reporting requirements and payment adjustment. Those that are qualifying APM participants (QPs) for the year receive a 5 percent lump sum incentive payment during the corresponding payment year through CY 2024, or a differential payment update under the PFS for payment years beginning in 2026.

Participation in the Quality Payment Program slightly rose in the fourth year with 99.9999 percent comparing with 99.8989 percent in the third year. We saw 99.9999 percent of MIPS eligible clinicians participate in MIPS in 2020: 933,549 MIPS eligible clinicians received a payment adjustment and 933,547 MIPS eligible clinicians participated by reporting at least one measure or activity. This was a slight increase from our 2019 participation rates where 954,670 MIPS eligible clinicians received a payment adjustment and 954,573 MIPS eligible clinicians participated by reporting at least one measure or activity. Therefore, participation in MIPS did not meaningfully change in 2020 as compared to 2019. We did see a slight decrease in the number of MIPS eligible clinicians receiving a payment adjustment with 933,549 MIPS eligible clinicians in 2020 compared to 954,670 in 2019. In addition, 90.6 percent of MIPS eligible clinicians received a positive payment adjustment for 2022 based on CY 2020 performance period/2022 MIPS payment year results. Please note that results for the CY 2020 performance period/2022 MIPS payment year are subject to change as a result of the targeted review process which began on August 2, 2021 and will conclude on November 29, 2021 at 8:00 p.m., eastern standard time. For more information on the targeted review process for 2020 please see our announcement from September 27th at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1631/2020%20Scoring%20Updates_EUC%20Reweighting%20Requests%20Extension_Listserv.pdf.

Regarding performance in Advanced APMs, for the 2020 QP Performance Period, 237,315 eligible clinicians earned Qualifying APM Participant (QP) status while another 10,609 eligible clinicians earned partial QP status. We note that due to the Public Health Emergency (PHE) for COVID-19, 192,344 (or about 20.60 percent of 933,549) MIPS eligible clinicians received reweighting for CY 2020 performance period/2022 MIPS payment year of one or more MIPS performance categories due to our MIPS extreme and uncontrollable circumstances policy.

We plan to continue developing Quality Payment Program policies that more effectively reward high-quality of care for patients and increase opportunities for Advanced APM participation. We are moving forward with MIPS Value Pathways (MVPs) as MVPs allow for a more cohesive participation experience by connecting activities and measures from the 4 MIPS performance categories that are relevant to a specialty, medical condition, or a particular population. The MVPs will include the Promoting Interoperability performance category as a foundational element and incorporate population health claims-based measures, as feasible, along with relevant measures and activities for the quality, cost, and improvement activities performance categories. To provide clinicians and third party intermediaries with sufficient time to prepare for a shift to this new participation framework, in this rule, we proposed to begin transitioning to MVPs in the CY 2023 performance period/2025 MIPS payment year.

As we make long-term improvements, evolve MIPS policies, and plan to implement MVPs in the future, we remain committed to our program goals. We are aligning with broader CMS initiatives, such as the CMS Quality Measure Action Plan ( https://www.cms.gov/files/document/2021-cms-quality-conference-cms-quality-measurement-action-plan-march-2021.pdf ), to unify strategic efforts to adopt measures most critical to providing high quality care and accelerate strategic improvements for quality programs and measures. The vision for the CMS Quality Measure Action Plan is to use impactful quality measures to improve health outcomes and deliver value by empowering patients to make informed care decisions while reducing burden to clinicians. This plan supports CMS' work to identify activities for transformation of quality measurement and value-based programs and recognizes the need to modernize the current quality ecosystem of measurement and programs. Additionally, it will encourage further reductions to the burden of quality measure reporting and address the current lack of alignment. These efforts will also support identifying activities that are driving better patient outcomes at lower costs. The planned implementation of MVPs aligns with many of the objectives and goals the CMS Quality Measure Action Plan will strive to achieve.

Through the proposals we describe below, we intend to transform and simplify the MIPS program through MVPs, promote the use of connected measures and activities, reward clinicians for providing high value care, and help all clinicians improve care and engage patients. We also intend to gather information from stakeholders to help guide efforts to advance health equity throughout CMS quality programs.

b. Summary of Major Provisions

(1) Major MIPS Provisions

The MIPS program aims to drive value through the collection, assessment, and public reporting of data that informs and rewards the delivery of high-value care. Within MIPS we intend to pay for health care services in a way that drives value by linking performance on cost, quality, and the patient's experience of care.

We have heard from clinicians that MIPS requirements are confusing, burdensome, and that it is difficult to choose measures from the several hundred MIPS and QCDR quality measures that are meaningful to their practices and have a direct benefit to patients. We have also heard concerns from stakeholders that MIPS does not allow for sufficient differentiation of performance across practices due in part to clinician quality measure selection bias. These aspects detract from the program's ability to effectively measure and compare performance, provide meaningful feedback, and incentivize quality. MVPs are intended to lead to a simplified MIPS clinician experience, improve value, reduce burden, and better inform patient choice in selecting clinicians. We noted that the MVP framework will connect measures and activities across the 4 MIPS performance categories, incorporate a set of administrative claims-based quality measures that focus on population health, provide data and feedback to clinicians, and enhance information provided to patients. We intend to focus the future of MIPS on MVP development and implementation.

Additionally, we have heard from patients, clinicians, and other stakeholders that they would like more comprehensive and granular reporting from the MIPS program. To that end, we proposed to establish voluntary subgroup reporting to help provide patients and clinicians information that is clinically meaningful at a more granular level.

We issued a request for information (RFI) to address the Advancing to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Physician Quality Programs; please refer to section IV.A.1.c. of this rule for more information. We also issued an RFI to address Closing the Health Equity Gap in CMS Clinician Quality Programs as discussed in section IV.A.1.d. of this rule.

(a) Basis and Scope

At § 414.1300, we previously codified the basis and scope of the MIPS and APMs. In order to support the continued application of voluntary reporters, we proposed to revise the basis and scope at § 414.1300(a)(2) to remove reference to section 1848(a) of the Act—Payment for Physicians' Services Based on Fee Schedule and instead redesignate the text at § 414.1300(a)(3) to § 414.1300(a)(2) to state section 1848(k) of the Act—Quality Reporting System. At § 414.1400(a)(3), we also proposed to add new language to state section 1848(m) of the Act—Incentive Payments for Quality Reporting.

We did not receive public comments on this proposal, and therefore, we are finalizing it as proposed.

(b) MIPS Value Pathways and APM Performance Pathway

We recognize that the transition to MVPs will take time and we will continue to evaluate the readiness of clinicians in making this transition, while balancing our strong interest in improving measurement and making MIPS more focused on value.

As discussed in section IV.A.3.b. of this final rule, for MIPS Value Pathways (MVPs) we are finalizing our proposals:

• To define who can report MVPs, through the term MVP Participant.
• A delay to the CY 2023 performance period/2025 MIPS payment year: MVP implementation and subgroup reporting timelines. After considering public comments, we are finalizing the proposal with a modification such that multispecialty groups will be required to form subgroups in order to report MVPs beginning in the CY 2026 performance period/2028 MIPS payment year, instead of the CY 2025 performance period/2027 MIPS payment year as proposed.
• An introductory set of 7 MVPs to be available beginning with the CY 2023 performance period/2025 MIPS payment year.
• MVP reporting requirements that account for the four MIPS performance categories.
• During the CY 2023, CY 2024 and CY 2025 performance periods/2025, 2026 and 2027 MIPS payment years, voluntary subgroup reporting within MIPS limited to reporting through MVPs or the APP. For the MIPS program, eligibility, special status determination, and QP determination will continue to be determined at the group level for subgroup participants. Subgroup performance will be assessed at the subgroup level for three performance categories (the quality, cost, and improvement activities performance categories) and will be assessed at the group level for one performance category (the Promoting Interoperability performance category). Additionally, subgroups will continue to be included in group level reporting but will receive scores separate from their affiliated group.
• MVP scoring policies closely align with those used in traditional MIPS, with few exceptions.
• MVP scoring policies including policies for scoring administrative claims measures, including population health measures, scoring only the cost measures specified in the MVP, assigning 20 points for each medium-weighted and 40 points for each high-weighted improvement activity specified in the MVP, scoring subgroups on their affiliated group's data for the Promoting Interoperability performance category, reweighting performance categories for subgroups in certain circumstances, and requirements that the quality performance category be scored with few exceptions for reweighting. While we are finalizing these policies as proposed, we may consider additional incentives to report MVPs in future rulemaking.
• To provide comparative feedback within performance feedback, comparing the performance of like clinicians who report on the same MVP.

We also discuss in section IV.A.3.b. of this final rule, future considerations and goals of the MIPS program:

• We requested comment on the timeline to sunset traditional MIPS in the future, and to eventually make MVP reporting mandatory. Note: we are referring to the established MIPS participation options collectively as traditional MIPS (85 FR 84844).
• Through the MVP development work, gradually implement MVPs for all specialties and subspecialties that participate in the program.

As discussed in section IV.A.3.c. of this final rule, for the APM Performance Pathway, to create stability within the APP, we did not propose any major changes to the APP.

(c) Other MIPS and APM Policies

We are finalizing our proposals for the following provisions for MIPS beginning with the CY 2022 performance period/2024 MIPS payment year:

• As discussed in section IV.A.3.d. of this final rule, for the MIPS Performance Measures and Activities, we are finalizing our proposals and finalizing with modification our proposals regarding the data completeness threshold for the CY 2023 performance period/2025 MIPS payment year and the quality measure set for the CY 2023 performance period/2025 MIPS payment year:

++ In section IV.A.3.d.(1) of this final rule, for the quality performance category, to maintain the data completeness criteria threshold at 70 percent for the CY 2021 and 2022 performance periods/2023 and 2024 MIPS payment years; maintain the data completeness criteria threshold at 70 percent for the CY 2023 performance period/2025 MIPS payment year; extend the availability of the CMS Web Interface as a collection and submission type for the CY 2022 performance period/2024 MIPS payment year; establish a set of 200 MIPS quality measures; and solicited public comments through a request for information (RFI) regarding the draft COVID-19 Vaccination by Clinicians measure specifications.

++ In section IV.A.3.d.(2) of this final rule, for the cost performance category, to establish 5 new episode-based cost measures for implementation into MIPS, which adds to the 2 global or population-based measures and 18 episode-based measures. Additionally, we are finalizing a process for stakeholders to develop cost measures, outside the current measure development process where all cost measures are developed by CMS' measure development contractor.

In section IV.A.3.e.(2) of this final rule, in regard to calculating the final score, we are finalizing our proposal on formulas for the complex patient bonus with two separate components (one for medical complexity and one for social complexity) and an overall cap of 10 bonus points. Lastly, we are finalizing our proposal on updating the formulas for the bonuses to base them on standardized scores and to reward those who fall in higher quintiles and not reward those who fall below a cut-off point.

• As discussed in section IV.A.3.f. of this final rule, beginning with year 6 of MIPS (2024 MIPS payment year), the performance threshold must be either the mean or median of the final scores for all MIPS eligible clinicians for a prior period. We are finalizing our proposal to establish the performance threshold using the mean and the CY 2017 performance period/2019 MIPS payment year data, which will result in a performance threshold of 75 points. In addition, for the CY 2022 performance period/2024 MIPS payment year, the additional performance threshold must be set at either (1) the 25th percentile of the range of possible final scores above the performance threshold, or (2) the 25th percentile of the actual final scores for MIPS eligible clinicians with final scores at or above the performance threshold with respect to a prior period. We note that under section 1848(q)(6)(C) of the Act, the additional MIPS payment adjustment factors for exceptional performance are available through the CY 2022 performance period/2024 MIPS payment year, making this the last year of the additional performance threshold and the associated additional MIPS payment adjustment factors for exceptional performance. We are also finalizing our proposal to establish an additional performance threshold of 89 points. This is the 25th percentile of actual final scores from the CY 2017 performance period/2019 MIPS payment year at or above 75 points.
• As discussed in section IV.A.3.h. of this final rule, for Third Party Intermediaries, we are finalizing our proposals to modify third party intermediary requirements, remedial actions and termination policies. Specifically, beginning with the CY 2023 performance period/2025 MIPS payment year, QCDRs, qualified registries, and health IT vendors must support MVPs that are applicable to the MVP participants on whose behalf they submit MIPS data. QCDRs, qualified registries, and, health IT vendors may also support the APP. We also are finalizing our proposal to require QCDRs, qualified registries, health IT vendors, and CMS-approved survey vendors to support subgroup reporting beginning with the CY 2023 performance period/2025 MIPS payment year. Although we did not address any changes to the QCDR measure testing requirement at § 414.1400(b)(3)(v)(C)(1) in the CY 2022 PFS proposed rule, based on public comments received on our proposals, we are considering proposing in next year's rulemaking to further delay this requirement for traditional MIPS until the CY 2024 performance period/2026 MIPS payment year, instead of the CY 2023 performance period/2025 MIPS payment year as previously finalized.
• As discussed in section IV.A.3.i. of this final rule, for Public Reporting on Compare Tools hosted by the U.S. Department of Health and Human Services (Compare Tools), we are finalizing our proposal to publicly report clinician affiliations to certain types of facilities (for example, LTCHs, IRFs, etc.). We also solicited comments through a RFI to inform the ways in which utilization data may be useful to patients and caregivers for their health care decisions. In order to give MIPS eligible clinicians time to familiarize themselves with MVPs and subgroup reporting, we are finalizing our proposal to delay public reporting of new improvement activities and Promoting Interoperability measures and attestations reported via MVPs by 1 year, and begin publicly reporting subgroup-level performance information in PY 2024, on the compare tool hosted by the U.S. Department of Health and Human Services. We also are finalizing our proposal to create a separate subgroup workflow that would allow subgroup performance information to be publicly reported in an online location that can be navigated to and from an individual clinician or group profile page. This also aligns with the historical approach to report performance information at the level that it is submitted.
• As discussed in sections IV.A.4.b. and IV.A.4.c. of this rule, we are finalizing our proposal on a change to the APM Incentive Payment payment hierarchy to include at each level payment to one or more TINs associated with the QP during the payment year.

c. Advancing to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Physician Quality Programs—Request for Information

We aim to move fully to digital quality measurement in CMS quality reporting and value-based purchasing programs by 2025. As also detailed in the FY 2022 Hospital Inpatient PPS proposed rule (86 FR 25549 through 25554), as part of this modernization of our quality measurement enterprise, we are issuing this request for information (RFI). The purpose of this RFI is to gather broad public input solely for planning purposes for our transition to digital quality measurement. Any updates to specific program requirements related to providing data for quality measurement and reporting provisions would be addressed through future rulemaking, as necessary. This RFI contains five parts:

• Background. This part provides information on our quality measurement programs and our goal to move fully to digital quality measurement by 2025. This part also provides a summary of recent HHS policy developments that are advancing interoperability and could support our move towards full digital quality measurement.

• Definition of Digital Quality Measures (dQMs). This part provides a potential definition for dQMs. Specific requests for input are included in the section.

• Use of Fast Healthcare Interoperability Resources (FHIR®) for current electronic clinical quality measures (eCQMs). This part provides information on current activities underway to align CMS eCQMs with the FHIR standard and support quality measurement via application programming interfaces (APIs), and contrasts this approach to current eCQM standards and practice.

• Changes Under Consideration to Advance Digital Quality Measurement: Actions in Four Areas to Transition to Digital Quality Measures by 2025 . This part introduces four possible steps that would enable transformation of CMS' quality measurement enterprise to be fully digital by 2025. Specific requests for input are included in the section.

• Solicitation of Comments. This part lists all requests for input included in the sections of this RFI.

(1) Background

As required by law, we implement quality measurement and value-based purchasing programs across a broad range of inpatient acute care, outpatient, and post-acute care (PAC) settings consistent with our mission to improve the quality of health care for Americans through measurement, transparency, and increasingly, value-based purchasing. These quality programs are foundational for incentivizing value-based care, contributing to improvements in health care, enhancing patient outcomes, and informing consumer choice. In October 2020, we launched the CMS Quality Measure Action Plan. One key goal of the plan is to improve the efficiency of quality measures by a transition to digital measures and use of advanced data analytics. Our objective is to use data and information as essential aspects of a healthy, robust healthcare infrastructure to allow for payment and management of accountable, value-based care and development of learning health organizations. Consistent with the CMS Quality Measure Action Plan, we aim to move fully to digital quality measurement by 2025. We acknowledge providers within the various care and practice settings covered by our quality programs may be at different stages of readiness, and therefore, the timeline for achieving full digital quality measurement across our quality reporting programs may vary.

We also continue to evolve the Medicare Promoting Interoperability Program's focus on the use of certified electronic health record (EHR) technology, from an initial focus on electronic data capture to enhancing information exchange and expanding quality measurement (83 FR 41634). However, reporting data for quality measurement via EHRs remains burdensome, and our current approach to quality measurement does not readily incorporate emerging data sources such as patient-reported outcomes (PRO) and patient-generated health data (PGHD). There is a need to streamline our approach to data collection, calculation, and reporting to fully leverage clinical and patient-centered information for measurement, improvement, and learning.

Additionally, advancements in technical standards and associated regulatory initiatives to improve interoperability of healthcare data are creating an opportunity to significantly improve our quality measurement systems. In May 2020, we finalized interoperability requirements in the CMS Interoperability and Patient Access final rule (85 FR 25510) to support beneficiary access to data held by certain payers. At the same time, the Office of the National Coordinator for Health Information Technology (ONC) finalized policies in the ONC 21st Century Cures Act final rule (85 FR 25642) to advance the interoperability of health information technology (IT) as defined in section 4003 of the Cures Act, including the “complete access, exchange, and use of all electronically accessible health information.” Closely working with ONC, we collaboratively identified Health Level 7 (HL7®) FHIR Release 4.0.1 as the standard to support Application Programming Interface (API) policies in both rules. ONC, on behalf of HHS, adopted the HL7 FHIR Release 4.0.1 for APIs and related implementation specifications at 45 CFR 170.215. We believe the FHIR standard has the potential to be a more efficient and modular standard to enable APIs. We also believe this standard enables collaboration and information sharing, which is essential for delivering high-quality care and better outcomes at a lower cost. By aligning technology requirements for payers, health care providers, and health IT developers HHS can advance an interoperable health IT infrastructure that ensures providers and patients have access to health data when and where it is needed.

In the ONC 21st Century Cures Act final rule, ONC adopted a “Standardized API for Patient and Population Services” certification criterion for health IT that requires the use of FHIR Release 4 and several implementation specifications. Health IT certified to this criterion will offer single patient and multiple patient services that can be accessed by third party applications (85 FR 25742). The ONC 21st Century Cures Act final rule also requires health IT developers to update their certified health IT to support the United States Core Data for Interoperability (USCDI) standard. The scope of patient data identified in the USCDI and the data standards that support this data set are expected to evolve over time, starting with data specified in Version 1 of the USCDI. In November 2020, ONC issued an interim final rule with comment period extending the date when health IT developers must make technology meeting updated certification criteria available under the ONC Health IT Certification Program until December 31, 2022 (85 FR 70064).

The CMS Interoperability and Patient Access final rule (85 FR 25510) and program policies build on the ONC 21st Century Cures Act final rule (85 FR 25642). The CMS Interoperability and Patient Access final rule and policies require certain payers (for example, Medicare Advantage organizations, Medicaid and CHIP FFS programs, Medicaid managed care plans, CHIP managed care entities, and issuers of certain Qualified Health Plan [QHP] on the Federally-facilitated Exchanges [FFEs]) to implement and maintain a standards-based Patient Access API using HL7 FHIR Release 4.0.1 to make available certain data to their enrollees and beneficiaries (called “patients” in the CMS interoperability rule). These certain data include data concerning claims and encounters, with the intent to ensure access to their own health care information through third-party software applications. The rule also established new Conditions of Participation for Medicare and Medicaid participating hospitals and critical access hospitals (CAHs), requiring them to send electronic notifications to another healthcare facility or community provider or practitioner when a patient is admitted, discharged, or transferred if the hospital or CAH utilizes an electronic medical records system or other electronic administrative system which is conformant with the content exchange standard at 45 CFR 170.205(d)(2) (85 FR 25603). In the CY 2021 PFS final rule (85 FR 84472), we finalized a policy to align the certified EHR technology required for use in the Promoting Interoperability Programs and the MIPS Promoting Interoperability performance category with the updates to health IT certification criteria finalized in the ONC 21st Century Cures Act final rule. Under this policy, MIPS eligible clinicians, and eligible hospitals and CAHs participating in the Promoting Interoperability Programs, must use technology meeting the updated certification criteria for performance and reporting periods beginning in 2023 (85 FR 84825).

The use of APIs can also reduce longstanding barriers to quality measurement. Currently, health IT developers are required to implement individual measure specifications within their health IT products. The health IT developer must also accommodate how that product connects with the unique variety of systems within a specific care setting. This may be further complicated by systems that integrate a wide range of data schemas. This process is burdensome and costly, and it is difficult to reliably obtain high quality data across systems. As health IT developers map their health IT data to the FHIR standard and related implementation specifications, APIs can enable these structured data to be easily accessible for quality measurement or other use cases, such as care coordination, clinical decision support, and supporting patient access.

We believe the emerging data standardization and interoperability enabled by APIs will support the transition to full digital quality measurement by 2025, and are committed to exploring and seeking input on potential solutions for the transition to digital quality measurement as described in this RFI.

(2) Definition of Digital Quality Measures

In this section we seek to refine the definition of digital quality measures (dQMs) to further operationalize our objective of fully transitioning to dQMs by 2025. We previously noted dQMs use “sources of health information that are captured and can be transmitted electronically and via interoperable systems.” (85 FR 84845) In this RFI, we solicited input on future elaboration that would define a dQM as a software that processes digital data to produce a measure score or measure scores. Data sources for dQMs may include administrative systems, electronically submitted clinical assessment data, case management systems, EHRs, instruments (for example, medical devices and wearable devices), patient portals or applications (for example, for collection of patient-generated health data), health information exchanges (HIEs) or registries, and other sources. We also note that dQMs are intended to improve the patient experience including quality of care, improve the health of populations, and/or reduce costs.

We discuss one potential approach to developing dQM software in section IV.A.1.c of this final rule. In this section, we solicited comments on the potential definition of dQMs in this RFI.

We also solicited feedback on how leveraging advances in technology (for example, FHIR APIs) to access and electronically transmit interoperable data for dQMs could reinforce other activities to support quality measurement and improvement (for example, the aggregation of data across multiple data sources, rapid-cycle feedback, and alignment of programmatic requirements).

The transition to dQMs relies on advances in data standardization and interoperability. As providers and payers work to implement the required advances in interoperability over the next several years, we will continue to support reporting of eCQMs through CMS quality reporting programs and through the Promoting Interoperability programs. These fully digital measures continue to be important drivers of interoperability advancement and learning. As discussed in the next section, CMS is currently re-specifying and testing these measures to use FHIR rather than the currently adopted Quality Data Model (QDM) in anticipation of the wider use of FHIR standards. CMS intends to apply significant components of the output of this work, such as the re-specified measure logic and the learning done through measure testing with FHIR APIs, to define and build future dQMs that take advantage of the expansion of standardized, interoperable data.

(3) Use of FHIR for Current eCQMs

Since we adopted eCQMs in our hospital and clinician quality programs, we have heard from stakeholders about the technological challenges, burden, and related costs of reporting eCQM data. The CMS eCQM Strategy Project engaged with stakeholders through site visits and listening sessions with health systems and provider organizations to learn about their experiences. This stakeholder feedback identified recommendations to improve processes related to alignment; development; implementation and reporting; certification; and communication, education, and outreach. Over the past 2 years, we have focused on opportunities to streamline and modernize quality data collection and reporting processes, such as exploring FHIR® ( http://hl7.org/fhir ) as a framework for measure structure and data submission for quality reporting programs, specifically for eCQMs. FHIR is a free and open source standards framework (in both commercial and government settings) created by Health Level Seven International (HL7®) that establishes a common language and process for all health information technology. FHIR allows systems to communicate and information to be shared seamlessly, with a lower burden for hospitals, providers, clinicians, vendors, and quality measurement stakeholders. Specifically, for quality reporting, FHIR enables representing the data in eCQMs, as well as provides a structure for eCQMs and reporting, using FHIR as the standard for all. Whereas today, multiple standards being used to report eCQMs is challenging and burdensome.

We are working to convert current eCQMs to the FHIR standard. We are currently testing the exchange of data elements represented in FHIR to CMS through ongoing HL7 Connectathons and integrated system testing by using and refining implementation guides. Submitting data through FHIR APIs has the potential to improve data exchange by providing consistent security, performance, scalability, and structure to all users. In addition, development of FHIR APIs could decrease provider burden by automating more of the measure data collection process. We continue to explore and expand potential applications of the FHIR standard and testing with eCQM use cases, and we are considering a transition to FHIR-based quality reporting with the use of the FHIR standard for eCQMs in quality and value-based reporting programs. As we move to an all-dQM format for quality programs, we are depending on testing results and community readiness to improve interoperability, reduce burden, and facilitate better patient care. We will continue to consider how to leverage the interoperability advantages offered by the FHIR standards and API-based data submission, including digital quality measurement.

(4) Changes Under Consideration To Advance Digital Quality Measurement: Potential Actions in Four Areas To Transition to Digital Quality Measures by 2025

Building on the advances in interoperability and learning from testing of FHIR-converted eCQMs, we aim to move fully to dQMs, originating from sources of health information that are captured and can be transmitted electronically via interoperable systems, by 2025.

To enable this transformation, we are considering further modernization of the quality measurement enterprise in four major ways: (1) Leverage and advance standards for digital data and obtain all EHR data required for quality measures via provider FHIR-based APIs; (2) redesign our quality measures to be self-contained tools; (3) better support data aggregation; and (4) work to align measure requirements across our reporting programs, other Federal programs and agencies, and the private sector where appropriate.

These changes would enable us to collect and utilize more timely, actionable, and standardized data from diverse sources and care settings to improve the scope and quality of data used in quality reporting and payment programs, reduce quality reporting burden, and make results available to stakeholders in a rapid-cycle fashion. Data collection and reporting efforts would become more efficient, supported by advances in interoperability and data standardization. Aggregation of data from multiple sources would allow assessments of costs and outcomes to be measured across multiple care settings for an individual patient or clinical conditions. We believe that aggregating data for measurement can incorporate a more holistic assessment of an individual's health and health care and produce the rich set of data needed to enable patients and caregivers to make informed decisions by combining data from multiple sources (for example, patient reported data, EHR data, and claims data) for measurement.

Perhaps most importantly, these steps would help us deliver on the full promise of quality measurement and drive us toward a learning health system that transforms healthcare quality, safety, and coordination and effectively measures and achieves value-based care. The shift from a static to a learning health system hinges on the interoperability of healthcare data, and the use of standardized data. dQMs would leverage this interoperability to deliver on the promise of a learning health system wherein standards-based data sharing and analysis, rapid-cycle feedback, and quality measurement and incentives are aligned for continuous improvement in patient-centered care. Similarly, standardized, interoperable data used for measurement can also be used for other use cases, such as clinical decision support, care coordination and care decision support, which impacts health care and care quality.

We solicited comments on four potential future actions that would enable transformation to a fully digital quality measurement enterprise by 2025.

(a) Leveraging and Advancing Standards for Digital Data and Obtaining All EHR Data Required for Quality Measures via Provider FHIR-Based APIs

We are considering targeting the data required for our quality measures that utilize EHR data to be data retrieved via FHIR-based APIs based on standardized, interoperable data. Utilizing standardized data for EHR-based measurement (based on FHIR and associated implementation guides) and aligning where possible with interoperability requirements can eliminate the data collection burden providers currently experience with required chart-abstracted quality measures and reduce the burden of reporting digital quality measure results. We can fully leverage this advance to adapt eCQMs and expand to other dQMs through the adoption of interoperable standards across other digital data sources. We are considering methods and approaches to leverage the interoperability data requirements for APIs in certified health IT set by the ONC 21st Century Cures Act final rule to support modernization of CMS quality measure reporting. As discussed previously, these requirements will be included in certified technology in future years (85 FR 84825) including availability of data included in the USCDI via standards-based APIs, and CMS will require clinicians and hospitals participating in MIPS and the Promoting Interoperability Programs, respectively, to transition to use of certified technology updated consistent with the 2015 Cures Edition Update (85 FR 84825).

Digital data used for measurement could also expand beyond data captured in traditional clinical settings, administrative claims data, and EHRs. Many important data sources are not currently captured digitally, such as survey and PGHD. We intend to work to innovate and broaden the digital data used across the quality measurement enterprise beyond the clinical EHR and administrative claims. Agreed upon standards for these data, and associated implementation guides will be important for interoperability and quality measurement. We will consider developing clear guidelines and requirements for these digital data that align with interoperability requirements, for example, requirements for expressing data in standards, exposing data via standards-based APIs, and incentivizing technologies that innovate data capture and interoperability.

High quality data are also essential for reliable and valid measurement. Hence, in implementing the shift to collect all clinical EHR data via FHIR-based APIs, we would support efforts to strengthen and test the quality of the data obtained through FHIR-based APIs for quality measurement. We currently conduct audits of electronic data submitted to the Hospital IQR Program with functions including checks for data completeness and data accuracy, confirmation of proper data formatting, alignment with standards, and appropriate data cleaning (82 FR 38398 through 38402). These functions would continue and be applied to dQMs and further expanded to automate the manual validation of the data compared to the original data source (for example, the medical record) where possible. Analytic advancements such as natural language processing, big data analytics, and artificial intelligence, can support this evolution. These techniques can be applied to validating observed patterns in data and inferences or conclusions drawn from associations, as data are received, to ensure high quality data are used for measurement.

We solicited feedback on the goal of aligning data needed for quality measurement with interoperability requirements and the strengths and limitations of this approach. We also solicited feedback on the importance of and approaches to supporting inclusion of PGHD and other currently non-standardized data. We also welcome comment on approaches for testing data quality and validity.

(b) Redesigning Quality Measures To Be Self-Contained Tools

We are considering approaches for including quality measures that take advantage of standardized data and interoperability requirements that have expanded flexibility and functionality compared to CMS' current eCQMs. We are considering defining and developing dQM software as end-to-end measure calculation solutions that retrieve data from primarily FHIR-based resources maintained by providers, payers, CMS, and others; calculate measure score(s), and produce reports. In general, we believe to optimize the use of standardized and interoperable data, the software solution for dQMs should do the following:

• Have the flexibility to support calculation of single or multiple quality measure(s).

• Perform three functions—

++ Obtain data via automated queries from a broad set of digital data sources (initially from EHRs, and in the future from claims, PRO, and PGHD);

++ Calculate the measure score according to measure logic; and

++ Generate measure score report(s).

• Be compatible with any data source systems that implement standard interoperability requirements.
• Exist separately from digital data source(s) and respect the limitations of the functionality of those data sources.
• Be tested and updated independently of the data source systems.
• Operate in accordance with health information protection requirements under applicable laws and comply with governance functions for health information exchange.
• Have the flexibility to be deployed by individual health systems, health IT vendors, data aggregators, and health plans; and/or run by CMS depending on the program and measure needs and specifications.
• Be designed to enable easy installation for supplemental uses by medical professionals and other non-technical end-users, such as local calculation of quality measure scores or quality improvement.
• Have the flexibility to employ current and evolving advanced analytic approaches such as natural language processing.
• Be designed to support pro-competitive practices for development, maintenance, and implementation, as well as diffusion of quality measurement and related quality improvement and clinical tools through, for example, the use of open-source core architecture.

We solicited comments on these suggested functionalities and other additional functionalities that quality measure tools should ideally have particularly in the context of the possible expanding availability of standardized and interoperable data (for example, standardized EHR data available via FHIR-based APIs).

We are also interested whether and how this more open, agile strategy may facilitate broader engagement in quality measure development, the use of tools developed for measurement for local quality improvement, and/or the application of quality tools for related purposes such as public health or research.

(c) Building a Pathway to Data Aggregation in Support of Quality Measurement

Using multiple sources of collected data to inform measurement would reduce data fragmentation (or, different pieces of data regarding a single patient stored in many different places). Additionally, we are considering expanding and establishing policies and processes for data aggregation and measure calculation by third-party aggregators that include, but are not limited to, HIEs and clinical registries. Health IT vendors that meet the requirements of a Qualified Clinical Data Registries (QCDRs) and qualified registries that report quality measures for eligible clinicians in the MIPS program are potential examples at section IV.A.3.g. of this final rule and can also support measure reporting.

We solicited feedback on aggregation of data from multiple sources to inform measurement and potential policy considerations. We also solicited feedback on the role data intermediaries can and should play in CMS quality measure reporting in collaboration with providers, and how we can best facilitate and enable aggregation.

(d) Potential Future Alignment of Measures Across Reporting Programs, Federal and State Agencies, and the Private Sector

We are committed to using policy levers and working with stakeholders to solve the issue of interoperable data exchange and to transition to full digital quality measurement. We are considering the future potential development and multi-staged implementation of a common portfolio of dQMs across our regulated programs, agencies, and private payers. This common portfolio would require alignment of: (1) Measure concepts and specifications including narrative statements, measure logic, and value sets; and (2) the individual data elements used to build these measure specifications and calculate the measure logic. Further, the required data elements would be limited to standardized, interoperable data elements to the fullest extent possible; hence, part of the alignment strategy will be the consideration and advancement of data standards and implementation guides for key data elements. We would coordinate closely with quality measure developers, Federal and State agencies, and private payers to develop and to maintain a cohesive dQM portfolio that meets our programmatic requirements and that fully aligns across Federal and State agencies and payers to the extent possible.

We intend for this coordination to be ongoing and allow for continuous refinement to ensure quality measures remain aligned with evolving healthcare practices and priorities (for example, PROs, disparities, and care coordination), and track with the transformation of data collection, alignment with health IT module updates including capabilities and standards adopted by ONC (for example, standards to enable APIs). It would focus on the quality domains of safety, timeliness, efficiency, effectiveness, equitability, and patient-centeredness. It would leverage several existing Federal and public-private efforts including our Meaningful Measures 2.0 Framework; the Federal Electronic Health Record Modernization (Department of Defense and Veterans Affairs [DoD/VA]); the Agency for Healthcare Research and Quality's Clinical Decision Support Initiative; the Centers for Disease Control and Prevention's Adapting Clinical Guidelines for the Digital Age initiative; Core Quality Measure Collaborative, which convenes stakeholders from America's Health Insurance Plans (AHIP), CMS, National Quality Forum (NQF), provider organizations, private payers, and consumers and develops consensus on quality measures for provider specialties; and the NQF-convened Measure Applications Partnership (MAP), which recommends measures for use in public payment and reporting programs. We would coordinate with HL7's ongoing work to advance FHIR resources in critical areas to support patient care and measurement such as social determinants of health. Through this coordination, we would identify which existing measures could be used or evolved to be used as dQMs, in recognition of current healthcare practice and priorities.

This multi-stakeholder, joint Federal, State, and industry effort, made possible and enabled by the pending advances towards true interoperability, would yield a significantly improved quality measurement enterprise. The success of the dQM portfolio would be enhanced by the degree to which the measures achieve our programmatic requirements for measures, as well as the requirements of other agencies and payers.

We solicited feedback on initial priority areas for the dQM portfolio given evolving interoperability requirements (for example, measurement areas, measure requirements, tools, and data standards). We also seek to identify opportunities to collaborate with other Federal agencies, States, and the private sector to adopt standards and technology-driven solutions to address our quality measurement priorities across sectors.

(5) Solicitation of Comments

As noted previously, we solicited input on the future development of the following:

(a) Definition of Digital Quality Measures

We solicited feedback on the following as described in section IV.A.1.c. of this final rule:

• Do you have feedback on the dQM definition?
• Does this approach to defining and deploying dQMs to interface with FHIR-based APIs seem promising? We also welcome more specific comments on the attributes or functions to support such an approach of deploying dQMs.

(b) Use of FHIR for Current eCQMs

We solicited feedback on the following as described in section IV.A.1.c. of this final rule:

• Do you agree that a transition to FHIR-based quality reporting can reduce burden on health IT vendors and providers? Please explain if you do not agree.
• Would access to near real-time quality measure scores benefit your practice? How so?
• What parts of the current CMS QRDA IGs cause the most burden (please explain the primary drivers of burden)?
• In what ways could a CMS FHIR Reporting IG be crafted to reduce burden on providers and vendors?

(c) Changes Under Consideration To Advance Digital Quality Measurement

Actions in Four Areas to Transition to Digital Quality Measures by 2025.

• We solicited feedback on the following as described in section IV.A.1.c. of this final rule:

++ Do you agree with the goal of aligning data needed for quality measurement with interoperability requirements? What are the strengths and limitations of this approach? Are there specific FHIR Implementation Guides suggested for consideration?

++ How important is a data standardization approach that also supports inclusion of PGHD and other currently non-standardized data?

++ What are possible approaches for testing data quality and validity?

• We solicited feedback on the following as described in section IV.A.1.c. of this final rule:

++ What functionalities, described in section (4)(b) or others, should quality measure tools ideally have in the context of the pending availability of standardized and interoperable data (for example, standardized EHR data available via FHIR-based APIs)?

++ How would this more open, agile strategy for end-to-end measure calculation facilitate broader engagement in quality measure development, the use of tools developed for measurement for local quality improvement, and/or the application of quality tools for related purposes such as public health or research?

• We solicited feedback on the following as described in section IV.A.1.c. of this final rule:

++ What are key policy considerations for aggregation of data from multiple sources being used to inform measurement?

++ What role can or should data aggregators play in CMS quality measure reporting in collaboration with providers? How can CMS best facilitate and enable aggregation?

• We solicited feedback on the following as described in section IVA.1.c. of this final rule:

++ What are initial priority areas for the dQM portfolio given evolving interoperability requirements (for example, measurement areas, measure requirements, tools)?

++ We also seek to identify opportunities to collaborate with other Federal agencies, States, and the private sector to adopt standards and technology-driven solutions to address our quality measurement priorities and across sectors.

Commenters should consider provisions in the CMS Interoperability and Patient Access final rule (85 FR 25510), CMS CY 2021 PFS final rule (85 FR 84472), and the ONC 21st Century Cures Act final rule (85 FR 25642).

We plan to continue working with other agencies and stakeholders to coordinate and to inform any potential transition to dQMs by 2025. While we will not be responding to specific comments submitted in response to this Request for Information in the CY 2022 PFS final rule, we will actively consider all input as we develop future regulatory proposals or future subregulatory policy guidance. Any updates to specific program requirements related to quality measurement and reporting provisions may be addressed through separate and future notice-and-comment rulemaking, as necessary.

We thank commenters for the feedback received through this request for information. We may consider this information to inform future rulemaking.

d. Closing the Health Equity Gap in CMS Clinician Quality Programs—Request for Information (RFI)

Persistent inequities in health care outcomes exist in the United States, including among Medicare patients. In recognition of persistent health disparities and the importance of closing the health equity gap, we request information on revising several related CMS programs to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable for hospitals, providers, and patients. The following is part of an ongoing effort across CMS to evaluate appropriate initiatives to reduce health disparities. Feedback will be used to inform the creation of a future, comprehensive, RFI focused on closing the health equity gap in CMS programs and policies (86 FR 25554 through 255561).

Belonging to a racial or ethnic minority group; living with a disability; being a member of the lesbian, gay, bisexual, transgender, and queer (LGBTQ+) community; living in a rural area; or being near or below the poverty level, is often associated with worse health outcomes. Such disparities in health outcomes are the result of number of factors, but importantly for CMS programs, although not the sole determinant, poor access and provision of lower quality health care contribute to health disparities. For instance, numerous studies have shown among Medicare beneficiaries, racial and ethnic minority individuals often receive lower quality of care, report lower experiences of care, and experience more frequent hospital readmissions and procedural complications.

We are committed to achieving equity in health care outcomes for Medicare beneficiaries by supporting providers in quality improvement activities to reduce health inequities, enabling them to make more informed decisions, and promoting provider accountability for health care disparities. For the purposes of this rule, we are using a definition of equity established in Executive Order 13985, issued on January 25, 2021, as “the consistent and systematic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities who have been denied such treatment, such as Black, Latino, and Indigenous and Native American persons, Asian Americans and Pacific Islanders and other persons of color; members of religious minorities; lesbian, gay, bisexual, transgender, and queer (LGBTQ+) persons; persons with disabilities; persons who live in rural areas; and persons otherwise adversely affected by persistent poverty or inequality.” We note this definition was recently established and provides a useful, common definition for equity across different areas of government, although numerous other definitions of equity exist.

Our ongoing commitment to closing the equity gap in CMS quality programs is demonstrated by a portfolio of programs aimed at making information on the quality of health care providers and services, including disparities, more transparent to consumers and providers. The CMS Equity Plan for Improving Quality in Medicare outlines a path to equity which aims to support Quality Improvement Network Quality Improvement Organizations (QIN-QIOs); Federal, State, local, and tribal organizations; providers; researchers; policymakers; beneficiaries and their families; and other stakeholders in activities to achieve health equity. The CMS Equity Plan for Improving Quality in Medicare focuses on three core priority areas which inform our policies and programs: (1) Increasing understanding and awareness of health disparities; (2) developing and disseminating solutions to achieve health equity; and (3) implementing sustainable actions to achieve health equity. The CMS Quality Strategy and Meaningful Measures Framework also include elimination of racial and ethnic disparities as central principles. Our efforts aimed at closing the health equity gap to date have included providing transparency of health disparities, supporting providers with evidence-informed solutions to achieve health equity, and reporting to providers on gaps in quality as follows:

• The CMS Mapping Medicare Disparities Tool which is an interactive map which identifies areas of disparities and is a starting point to understand and investigate geographic, racial and ethnic differences in health outcomes for Medicare patients.

• The Racial, Ethnic, and Gender Disparities in Health Care in Medicare Advantage Stratified Report , which highlights racial and ethnic differences in health care experiences and clinical care, compares quality of care for women and men, and looks at racial and ethnic differences in quality of care among women and men separately for Medicare Advantage plans.

• The Rural-Urban Disparities in Health Care in Medicare Report which details rural-urban differences in health care experiences and clinical care.

• The Standardized Patient Assessment Data Elements for certain post-acute care Quality Reporting Programs, which now includes data reporting for race and ethnicity and preferred language, in addition to screening questions for social needs (84 FR 42536 through 42588)

• The CMS Innovation Center's Accountable Health Communities Model which includes standardized collection of health-related social needs data.

• The Guide to Reducing Disparities which provides an overview of key issues related to disparities in readmissions and reviews set of activities which can help hospital leaders reduce readmissions in diverse populations.

• The CMS Disparity Methods which provide hospital-level confidential results stratified by dual eligibility for condition-specific readmission measures currently included in the Hospital Readmissions Reduction Program (see 84 FR 42496 through 42500 for a discussion of using stratified data in additional measures).

These programs are informed by reports by the National Academies of Science, Engineering and Medicine (NASEM) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE) which have examined the influence of social risk factors on several of our quality programs. In this RFI, we discuss initiatives specific to further bridging the health equity gap within the MIPS track of the Quality Payment Program.

In Appendix 2: Improvement Activities of this final rule, we discussed an improvement activity titled “create and implement an anti-racism plan”. This improvement activity acknowledges it is insufficient to gather and analyze data by race, and document disparities by different population groups. Rather, it emphasizes systemic racism is the root cause for differences in health outcomes between socially defined racial groups. Further, we also proposed to modify five existing improvement activities to address health equity. We note that some improvement activities within our current Inventory already aim to improve equity. We believe further modifying them can more explicitly link the activity to health equity without changing the core activity. In other cases, our proposals to modify an activity fundamentally shifts the activity to focus on health equity specifically.

Additionally, in the CY 2022 PFS proposed rule (86 FR 39439 through 39446), we proposed to update the complex patient bonus formula. We specifically refer to ASPE's second report, Social Risk and Performance in Medicare's Value-Based Purchasing Programs, which was publicly-released in May 2020. The second report builds on the analyses included in the initial report and provides additional insight for addressing risk factors in MIPS and other value-based payment programs. More specifically, the report has a 3-pronged strategy approach to: Measure and report quality; set high, fair quality standards; and reward and support better outcomes for beneficiaries with social risk. As a part of this 3-pronged strategy, the report supports use of the complex patient bonus in MIPS, explaining that it is well supported because this policy gives additional points to clinicians with a higher share of medically and socially complex patients and does not lower the standard of care. Hence, although, ASPE's reports to Congress support the use of a complex patient bonus at the final score level, we respond to other findings reported in other literature studies by identifying ways to make the complex patient bonus more targeted for clinicians caring for high risk and complex patients and to mitigate differences in resources that affect MIPS scores. Hence, the proposed formula is based on standardized scores and to reward only those clinicians who fall in higher quintiles in order to focus the bonus on those serving a higher proportion of more complex and vulnerable patients.

Lastly, we acknowledge that small practices within the MIPS program often face challenges in many ways. More specifically, as noted in section IV.A.3.e.(2) of this final rule, the Quality Payment Program gives an advantage to large organizations because such organizations have more resources invested in the infrastructure required to track and report measures to MIPS (82 FR 53776). In response to the feedback on the potential burden on small practices, we have established special policies available for small practices including the small practice bonus and special scoring policies. For example, in the CY 2018 QPP final rule (82 FR 53682 through 53683), we established a significant hardship exception for small practices for the Promoting Interoperability performance category. To further alleviate the burden on small practices and reduce this disparity between large and small practices, we proposed in section IV.A.3.d.(4) to automatically redistribute the Promoting Interoperability performance category weight for any small practice that does not submit data for the performance category, and in section IV.A.3.e.(2), we proposed different redistribution weights for small practices.

We are committed to advancing health equity by improving data collection to better measure and analyze disparities across programs and policies. We have been considering, among other things, expanding our efforts to provide stratified data for additional social risk factors and measures, optimizing the ease-of-use of the results, enhancing public transparency of equity results, and building towards provider accountability for health equity. We solicited public comments on two potential future expansions of the CMS Disparity Methods, including: (1) Future potential stratification of quality measure results by race and ethnicity, and (2) improving demographic data collection.

(1) Future Potential Stratification of Quality Measure Results by Race and Ethnicity

The Administration's Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government directs agencies to assess potential barriers that underserved communities and individuals may face to enrollment in and access to benefits and services in Federal programs. As summarized previously, studies have shown that among Medicare beneficiaries, racial and ethnic minority persons often experience worse health outcomes, including more frequent hospital readmissions and procedural complications. We are considering expanding the disparity methods to include stratification of the condition/procedure-specific readmission measures by race and ethnicity. The 1997 Office of Management and Budget (OMB) Revisions to the Standards for the Collection of Federal Data on Race and Ethnicity, outlines the racial and ethnic categories which may potentially be used for reporting the disparity methods, which we note are intended to be considered as social and cultural, and not biological or genetic. The 1997 OMB Standard lists five minimum categories of race: (1) American Indian or Alaska Native; (2) Asian; (3) Black or African American; (4) Native Hawaiian or Other Pacific Islander; (5) and White. In the OMB standards, Hispanic or Latino is the only ethnicity category included, and since race and ethnicity are two separate and distinct concepts, persons who report themselves as Hispanic or Latino can be of any race. Another example, the “Race & Ethnicity—CDC” code system in PHIN Vocabulary Access and Distribution System (VADS) permits a much more granular structured recording of a patient's race and ethnicity with its inclusion of over 900 concepts for race and ethnicity. The recording and exchange of patient race and ethnicity at such a granular level can facilitate the accurate identification and analysis of health disparities based on race and ethnicity. Further, the “Race & Ethnicity—CDC” code system has a hierarchy that rolls up to the OMB minimum categories for race and ethnicity and, thus, supports aggregation and reporting using the OMB standard. ONC includes both the CDC and OMB standards in its criterion for certified health IT products. For race and ethnicity, a certified health IT product must be able to express both detailed races and ethnicities using any of the 900 plus concepts in the “Race & Ethnicity—CDC” code system in the Public Health Information Network (PHIN) Vocabulary Access and Distribution Systems (VADS), as well as aggregate each one of a patient's races and ethnicities to the categories in the OMB standard for race and ethnicity. This approach can reduce burden on providers recording demographics using certified products.

Self-reported race and ethnicity data are the gold standard for classifying an individual according to race or ethnicity. However, CMS currently does not consistently collect self-reported race and ethnicity for the Medicare program, but instead gets the data from the Social Security Administration (SSA) and the data accuracy and comprehensiveness have proven challenging despite capabilities in the marketplace via certified health IT products. Historical inaccuracies in Federal data systems and limited collection classifications have also contributed to the limited quality of race and ethnicity information in our administrative data systems. In recent decades, to address these data quality issues, we have undertaken numerous initiatives, including updating data taxonomies and conducting direct mailings to some beneficiaries to enable more comprehensive racial and ethnic identification. Despite those efforts, studies reveal varying data accuracy in identification of racial and ethnic groups in Medicare administrative data, with higher sensitivity for correctly identifying white and Black individuals, and lower sensitivity for correctly identifying individuals of Hispanic ethnicity or of Asian/Pacific Islander (API) and American Indian/Alaskan Native race. Incorrectly classified race or ethnicity may result in overestimation or underestimation in the quality of care received by certain groups of beneficiaries.

We continue to work with public and private partners to better collect and leverage data on social risk to improve our understanding of how these factors can be better measured in order to close the health equity gap. Among other things, we have developed an Inventory of Resources for Standardized Demographic and Language Data Collection and supported collection of specialized International Classification of Disease, 10th Edition, Clinical Modification (ICD-10-CM) codes for describing the socioeconomic, cultural, and environmental determinants of health, and sponsored several initiatives to statistically estimate race and ethnicity information when it is absent. The Office of the National Coordinator for Health Information Technology (ONC) included social, psychological, and behavioral standards in the 2015 Edition health information technology certification criteria (2015 Edition), providing interoperability standards (LOINC [Logical Observation Identifiers Names and Codes] and SNOMED CT [Systematized Nomenclature of Medicine—Clinical Terms]) for financial strain, education, social connection and isolation, and others. Additional stakeholder efforts underway to expand capabilities to capture additional social determinants of health data elements include the Gravity Project to identify and harmonize social risk factor data for interoperable electronic health information exchange for EHR fields, as well as proposals to expand the ICD-10 (International Classification of Diseases, Tenth Revision) z-codes, the alphanumeric codes used worldwide to represent diagnoses.

While development of sustainable and consistent programs to collect data on social determinants of health can be considerable undertakings, we recognize that another method to identify better race and ethnicity data is needed in the short term to address the need for reporting on health equity. In working with our contractors, two algorithms have been developed to indirectly estimate the race and ethnicity of Medicare beneficiaries (as described further in the next section). We believe that using indirect estimation can help to overcome the current limitations of demographic information and enable timelier reporting of equity results until longer term collaborations to improve demographic data quality across the health care sector materialize. The use of indirect estimated race and ethnicity for conducting stratified reporting does not place any additional collection or reporting burdens on hospitals as these data are derived using existing administrative and census-linked data.

Indirect estimation relies on a statistical imputation method for inferring a missing variable or improving an imperfect administrative variable using a related set of information that is more readily available. Indirectly estimated data are most commonly used at the population level (such as the hospital or health plan-level) where aggregated results form a more accurate description of the population than existing, imperfect data sets. These methods often estimate race and ethnicity using a combination of other data sources which are predictive of self-identified race and ethnicity, such as language preference, information about race and ethnicity in our administrative records, first and last names matched to validated lists of names correlated to specific national origin groups, and the racial and ethnic composition of the surrounding neighborhood. Indirect estimation has been used in other settings to support population-based equity measurement when self-identified data are not available.

As described earlier, we previously supported the development of two such methods of indirect estimation of race and ethnicity among Medicare beneficiaries. One indirect estimation approach developed by our contractor uses Medicare administrative data, first name and surname matching, derived from the U.S. Census and other sources, with beneficiary language preference, State of residence, and the source of the race and ethnicity code in Medicare administrative data to reclassify some beneficiaries as Hispanic or API. In recent years, we have also worked with another contractor to develop a new approach, the Medicare Bayesian Improved Surname Geocoding (MBISG), which combines Medicare administrative data, first and surname matching, geocoded residential address linked to the 2010 U.S. Census, and uses both Bayesian updating and multinomial logistic regression to estimate the probability of belonging to each of six racial/ethnic groups.

The MBISG model is currently used to conduct the national, contract-level, stratified reporting of Medicare Part C and D performance data for Medicare Advantage Plans by race and ethnicity. Validation testing reveals concordance of 0.88-0.95 between indirectly estimated and self-report among individuals who identify as White, Black, Hispanic and API for the MIBSG version 2.0 and concordance with self-reported race and ethnicity of 0.96-0.99 for these same groups for MBISG version 2.1. The algorithms under consideration are considerably less accurate for individuals who self-identify as American Indian/Alaskan Native or multiracial. Indirect estimation can be a statistically reliable approach for calculating population-level equity results for groups of individuals (such as the hospital-level) and is not intended, nor being considered, as an approach for inferring the race and ethnicity of an individual.