Accounting for 3.5 of the new global capacity by 2023
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AGENCY:Centers for Medicare & Medicaid Services (CMS), Health and Human Services (HHS). ACTION:Proposed rule. SUMMARY:This major proposed 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 and Medicaid provider enrollment policies, including for skilled nursing facilities; updates to conditions of payment for DMEPOS suppliers; HCPCS Level II coding and payment for wound care management products; electronic prescribing for controlled substances for a covered Part D drug under a prescription drug plan or an MA-PD plan under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (SUPPORT Act); updates to the Medicare Ground Ambulance Data Collection System; and provisions under the Infrastructure Investment and Jobs Act. DATES:To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on September 6, 2022. ADDRESSES:In commenting, please refer to file code CMS-1770-P. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit a comment” instructions. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1770-P, P.O. Box 8016, Baltimore, MD 21244-8016. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services,Department of Health and Human Services, Attention: CMS-1770-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. Start Further Info FOR FURTHER INFORMATION CONTACT:, for any issues not identified below. Please indicate the specific issue in the subject line of the email. Michael Soracoe, (410) 786-6312, for issues related to practice expense, work RVUs, conversion factor, and PFS specialty-specific impacts. Kris Corwin, (410) 786-8864, for issues related to the comment solicitation on strategies for updates to practice expense data collection and methodology. Sarah Leipnik, (410) 786-3933, and Anne Blackfield, (410) 786-8518, for issues related to the comment solicitation on strategies for improving global surgical package valuation. Larry Chan, (410) 786-6864, for issues related to potentially misvalued services under the PFS. Kris Corwin, (410) 786-8864, Patrick Sartini, (410) 786-9252, and Larry Chan, (410) 786-6864, for issues related to telehealth services and other services involving communications technology. Regina Walker-Wren, (410) 786-9160, for issues related to nurse practitioner and clinical nurse specialist certification by the Nurse Portfolio Credentialing Center (NPCC). Lindsey Baldwin, (410) 786-1694, or , for issues related to PFS payment for behavioral health services. , for issues related to PFS payment for evaluation and management services. Geri Mondowney, (410) 786-1172, Morgan Kitzmiller, (410) 786-1623, Julie Rauch, (410) 786-8932, and Tamika Brock, (312) 886-7904, for issues related to malpractice RVUs and geographic practice cost indices (GPCIs). , for issues related to non-face-to-face nonphysician services/remote therapeutic monitoring services (RTM). Zehra Hussain, (214) 767-4463, or , for issues related to payment of skin substitutes. Pamela West, (410) 786-2302, for issues related to revisions to regulations to allow audiologists to furnish diagnostic Tests, as appropriate without a physician order. Emily Forrest, (202) 205-1922, Laura Ashbaugh, (410) 786-1113, and Erick Carrera, (410) 786-8949, for issues related to PFS payment for dental services. Heidi Oumarou, (410) 786-7942, for issues related to the rebasing and revising of the Medicare Economic Index (MEI). Laura Kennedy, (410) 786-3377, and Rachel Radzyner, (410) 786-8215, for issues related to requiring manufacturers of certain single-dose container or single-use package drugs payable under Medicare Part B to provide refunds with respect to discarded amounts. Laura Ashbaugh, (410) 786-1113, and Rasheeda Arthur, (410) 786-3434, for issues related to Clinical Laboratory Fee Schedule. Lisa Parker, (410) 786-4949, or , for issues related to FQHCs. Michele Franklin, (410) 786-9226, or , for issues related to RHCs. Daniel Feller, (410) 786-6913, and Elizabeth Truong (410) 786-6005, for issues related to coverage of colorectal cancer screening. Heather Hostetler, (410) 786-4515, for issues related to removal of selected national coverage determinations. Lindsey Baldwin, (410) 786-1694, for issues related to Medicare coverage of opioid use disorder treatment services furnished by opioid treatment programs. Kathleen Johnson, (410) 786-3295, and Sabrina Ahmed, (410) 786-7499, for issues related to the Medicare Shared Savings Program (Shared Savings Program) Quality performance standard and quality reporting requirements. Sabrina Ahmed, (410) 786-7499, for issues related to the Medicare Shared Start Printed Page 45861 Savings Program burden reduction proposal on OHCAs. Janae James, (410) 786-0801, or Elizabeth November, (410) 786-4518, or , for issues related to Shared Savings Program beneficiary assignment, and financial methodology. Naseem Tarmohamed, (410) 786-0814, or , for inquiries related to Shared Savings Program application, compliance and beneficiary notification requirements. Rachel Radzyner, (410) 786-8215, and Michelle Cruse, (443) 478-6390, for issues related to vaccine administration services. Katie Parker, (410) 786-0537, for issues related to medical necessity and documentation requirements for nonemergency, scheduled, repetitive ambulance services. Frank Whelan, (410) 786-1302, for issues related to Medicare provider enrollment regulation updates (including for skilled nursing facilities), State options for implementing Medicaid provider enrollment affiliation provisions, and conditions of payment for DMEPOS suppliers. Mei Zhang, (410) 786-7837, and Daniel Standridge, (410) 786-2419, 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 (section 2003 of the SUPPORT Act). Amy Gruber, (410) 786-1542, or , for issues related to the Medicare Ground Ambulance Data Collection System. Sundus Ashar, , for issues related to HCPCS Level II Coding for skin substitutes. Renee O'Neill, (410) 786-8821, or Kati Moore, (410) 786-5471, for inquiries related to Merit-based Incentive Payment System (MIPS). Richard Jensen, (410) 786-6126, for inquiries related to Alternative Payment Models (APMs). End Further Info End Preamble SUPPLEMENTARY INFORMATION:Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. Addenda Available Only Through the internet on the CMS website: The PFS Addenda along with other supporting documents and tables referenced in this proposed rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/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 2023 PFS proposed rule, refer to item CMS-1770-P. Readers with questions related to accessing any of the Addenda or other supporting documents referenced in this proposed rule and posted on the CMS website identified above should contact . CPT (Current Procedural Terminology) Copyright Notice: Throughout this proposed rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are a copyright of 2020 American Medical Association (AMA); all rights reserved; and CPT is a registered trademark of the AMA. Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply. I. Executive SummaryThis major annual rule proposes to revise payment polices under the Medicare PFS and makes other policy changes, including proposals to implement certain provisions of the Protecting Medicare and American Farmers from Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, December 10, 2021), Infrastructure Investment and Jobs Act (Pub. L. 117-58, November 15, 2021), 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 (SUPPORT) for Patients and Communities Act (the SUPPORT Act) (Pub. L. 115-271, October 24, 2018), related to Medicare Part B payment. In addition, this major proposed rule includes proposals regarding other Medicare payment policies described in sections III. and IV. B. Summary of the Major ProvisionsThe 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 proposed rule, we are proposing to establish RVUs for CY 2023 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 proposed rule also includes discussions and provisions regarding several other Medicare Part B payment policies. Specifically, this proposed rule addresses:
• Requiring Manufacturers of Certain Single-dose Container or Single-use Package Drugs to Provide Refunds with Respect to Discarded Amounts (§§ 414.902 and 414.940) (section III.A.) Start Printed Page 45862
3. Summary of Costs and BenefitsWe have determined that this proposed rule is economically significant. For a detailed discussion of the economic impacts, see section VII., Regulatory Impact Analysis, of this proposed rule. B. Determination of PE RVUs1. OverviewPractice 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 malpractice (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 Physician Fee Schedule (PFS) final rule with comment period (74 FR 61743 through 61748) for a more detailed explanation of the PE methodology. 2. Practice Expense Methodologya. Direct Practice ExpenseWe 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 DataWe 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 Start Printed Page 45863 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 2023 PFS proposed rule PE/HR” on the CMS website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. c. Allocation of PE to ServicesTo establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service. (1) Direct CostsThe 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 CostsWe 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:
(3) Facility and Nonfacility CostsFor 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 ComponentsDiagnostic 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 MethodologyFor 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 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This file contains a table that illustrates the calculation of PE RVUs as described in this proposed rule for individual codes. (a) Setup FileFirst, 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 RVUsSum 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. Start Printed Page 45864 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 RVUsCreate 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 interested parties. 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 interested parties 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. 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:
( 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.
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 RVUsStep 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs from Step 17 and apply the final PE budget Start Printed Page 45865 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 proposed 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
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• 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 Start Printed Page 45867 accordingly. Table 2 details the manner in which the modifiers are applied. We also adjust 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 required 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 applied 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.
(6) Equipment Cost per MinuteThe 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 proposed 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 Start Printed Page 45868 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 3.  We are not proposing any changes to the equipment interest rates for CY 2023. 3. Adjusting RVUs To Match PE Share of the Medicare Economic Index (MEI)For CY 2023, as explained in detail in section II.M. of this proposed rule, we are proposing to rebase and revise the Medicare Economic Index (MEI) to reflect more current market conditions faced by physicians in furnishing physicians' services. The MEI is an index that measures changes in the market price of the inputs used to furnish physician services. This index measure was authorized by statute and is developed by the CMS Office of the Actuary. We believe that the MEI is the best measure available of the relative weights of the three components in payments under the PFS—work, PE and malpractice. Accordingly, we believe that to assure that the PFS payments reflect the relative resources in each of these components as required by section 1848(c)(3) of the Act, the RVUs used in developing rates should reflect the same weights in each component as the MEI. In the past, we have proposed (and subsequently, finalized) to accomplish this by holding the work RVUs constant and adjusting the PE RVUs, the MP RVUs and the CF to produce the appropriate balance in RVUs among the PFS components and payment rates for individual services. The most recent adjustments to reflect changes in the MEI weights were made for the CY 2014 RVUs, when the MEI was last updated. In the CY 2014 PFS proposed rule (78 FR 43287 through 43288) and final rule (78 FR 74236 through 74237), we detailed the steps necessary to accomplish this result (see steps 3, 10, and 18). The CY 2014 proposed and finalized adjustments were consistent with our longstanding practice to make adjustments to match the RVUs for the PFS components with the MEI cost share weights for the components, including the adjustments described in the CY 1999 PFS final rule (63 FR 58829), CY 2004 PFS final rule (68 FR 63246 and 63247), and CY 2011 PFS final rule (75 FR 73275). In the past when we have proposed a rebasing and/or revision of the MEI, as we do in section II.M. of this proposed rule, we typically have also proposed to modify steps 3 and 10 to adjust the aggregate pools of PE costs (direct PE in step 3 and indirect PE in step 10) in proportion to the change in the PE share in the rebased and revised MEI cost share weights, as previously described in the CY 2014 PFS final rule (78 FR 74236 and 74237), and to recalibrate the relativity adjustment that we apply in step 18 as described in the CY 2014 PFS final rule. Instead, we are proposing to delay the adjustments to the PE pools in steps 3 and 10 and the recalibration of the relativity adjustment in step 18 until the public has an opportunity to comment on the proposed rebased and revised MEI, as discussed in section II.M. of this proposed rule. Because there are significant proposed methodological and data source changes to the MEI for CY 2023 and significant time has elapsed since the last rebasing and revision of the MEI, we believe it is important to allow public comment and Start Printed Page 45869 finalization of the proposed MEI changes based on the review of public comment before we incorporate the updated MEI into PFS ratesetting, and we believe this is consistent with our efforts to balance payment stability and predictability with incorporating new data through more routine updates. We refer readers to the comment solicitation in section II.B. of this proposed rule, where we discuss our ongoing efforts to update data inputs for PE to aid stability, transparency, efficiency, and data adequacy. Similarly, we are delaying the implementation of the proposed rebased and revised MEI for use in the PE geographic practice cost index (GPCI) and soliciting comment on appropriate timing for implementation for potential future rulemaking, discussed in detail in section II.G. and section VII. of this proposed rule. In light of the proposed delay in using the proposed update to the MEI to make the adjustments to the PE pools in steps 3 and 10 and the relativity adjustment in step 18, we are soliciting comment on when and how to best incorporate the proposed rebased and revised MEI discussed in section II.M. of this proposed rule into PFS ratesetting, and whether it would be appropriate to consider a transition to full implementation for potential future rulemaking. In section VII. of this proposed rule, we present the impacts of implementing the proposed rebased and revised MEI in PFS ratesetting through a 4-year transition and through full immediate implementation, that is, with no transition period. Given the significance of the impacts that result from a full implementation and the interaction with other CY 2023 proposals, we did not consider proposing to fully implement a rebased and revised MEI in PFS ratesetting for CY 2023. We are seeking comment on other implementation strategies for potential future rulemaking that are not outlined in section VII. of this proposed rule. 4. Changes to Direct PE Inputs for Specific ServicesThis section focuses on specific PE inputs. The direct PE inputs are included in the CY 2023 direct PE input public use files, which are available on the CMS website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. a. Standardization of Clinical Labor TasksAs 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 Start Printed Page 45870 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 2023, 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 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. b. Updates to Prices for Existing Direct PE InputsIn 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. Beginning in CY 2019 and continuing through CY 2022, we conducted a market-based supply and equipment pricing update, using information developed by our contractor, StrategyGen, which updated pricing recommendations for approximately 1300 supplies and 750 equipment items currently used as direct PE inputs. Given the potentially significant changes in payment that would occur, in the CY 2019 PFS final rule we finalized a policy 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. We believed that implementing the proposed updated prices with a 4-year phase-in would improve payment accuracy, while maintaining stability and allowing interested parties the opportunity to address potential concerns about changes in payment for particular items. This 4-year transition period to update supply and equipment pricing concluded in CY 2022; for a more detailed discussion, we refer readers to the CY 2019 PFS final rule with comment period (83 FR 59473 through 59480). For CY 2023, we are proposing to update the price of eight supplies and two equipment items in response to the public submission of invoices following the publication of the CY 2022 PFS final rule. The eight supply and equipment items with proposed updated prices are listed in the valuation of specific codes section of the preamble under Table 15, CY 2023 Invoices Received for Existing Direct PE Inputs. We are not proposing to update the price of another eight supplies and two equipment items which were the subject of public submission of invoices. Our rationale for not updating these prices is detailed below:
• Ethanol, 100% (SL189): We received an invoice submission for an increase in price from 0.33 cents per ml to 1.2 cents per ml for the SL189 supply. However, we noted that the invoice was Start Printed Page 45871 based on the price for a single gallon of 100% ethanol which is typically sold in much larger quantities than a single gallon. We found that 100% ethanol was readily available for sale online in larger unit sizes and the current price of 0.33 cents per ml (based on the past StrategyGen market research) appears to be accurate based on online bulk pricing. We also found that the submitted invoices for the ethanol, 70% (SL190), ethanol, 95% (SL248), and stain, PAP OG-6 (SL491) supplies were also based on pricing for a single gallon. Each of these supply items was also available for purchase in larger unit quantities which indicated that the current pricing remained typical for these supplies. Therefore, we are not proposing to update the prices for the SL189, SL190, SL248 or SL491 supply, as we do not believe that the higher prices paid for smaller quantities of these supplies would be typical.
• International Normalized Ratio (INR) analysis and reporting system w-software (EQ312): We did not receive an invoice for this equipment item, only a letter stating that the cost of the EQ312 equipment should be increased from the current price of $19,325 to $1,600,000. We previously finalized a policy in the CY 2011 PFS final rule (75 FR 73205) to update supply and equipment prices through an invoice submission process. We require pricing data indicative of the typical market price of the supply or equipment item in question to update the price. It is not sufficient to state a different price without providing information to support this new valuation. Since we did not receive an invoice to support the higher costs asserted in the letter, we are not proposing a new price for the EQ312 equipment item. Interested parties are encouraged to submit invoices with their public comments or, if outside the notice and comment rulemaking process, via email at . We also note that in order to be considered a direct PE input, an equipment item must be individually allocable to a particular patient for a particular service. Costs associated with the implementation, maintenance, and upgrade of equipment that is not individually allocable to a particular patient for a particular service, or other costs associated with running a practice, would typically be classified as forms of indirect PE under our methodology. The same interested parties that addressed the pricing of the EQ312 equipment item questioned the assignment of the General Practice specialty crosswalk for indirect PE for home Prothrombin Time (PT)/INR monitoring services. These individuals stated that the predominant code used for PT/INR monitoring (HCPCS code G0249) will be significantly and negatively impacted by the continuing implementation over a 4-year period of changes in the clinical labor rates finalized in the CY 2022 PFS final rule (86 FR 65024). The individuals requested that CMS change the crosswalk for home PT/INR monitoring services to All Physicians or Pathology which would partially offset the reduction that HCPCS code G0249 is facing due to changes in the clinical labor rates. We note for these interested parties that 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 and 84478). The data submitted by the commenters at the time 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, as we did in response to comments in the CY 2021 PFS final rule, that these home PT/INR monitoring services should 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). We also note that we have not received any new information about PT/INR monitoring services since CY 2021 to indicate that All Physicians or Pathology would be more accurate choices for use in indirect PE allocation but are open to receiving new relevant information that CMS could consider in future rulemaking. As such, we are not proposing to change the assigned specialty for PT/INR services; we direct interested parties to the previous discussion of this topic in the CY 2021 PFS final rule (85 FR 84477 and 84478) and again in the CY 2022 PFS final rule (86 FR 65000). Interested parties are encouraged to submit new information to support the most accurate specialty choice to use in indirect PE allocation for PT/INR monitoring services distinct from what has previously been reviewed during the last two rule cycles.
(1) Invoice SubmissionWe 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. Interested parties are encouraged to submit invoices with their public comments or, if outside the notice and comment rulemaking process, via email at . c. Clinical Labor Pricing UpdateSection 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. Start Printed Page 45872 Beginning in CY 2019, we updated the supply and equipment prices used for PE as part of a market-based pricing transition; CY 2022 was 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). Interested parties raised concerns that the long delay since clinical labor pricing was last updated created a significant disparity between CMS' clinical wage data and the market average for clinical labor. In recent years, a number of interested parties suggested that certain wage rates were inadequate because they did not reflect current labor rate information. Some interested parties also stated that updating the supply and equipment pricing without updating the clinical labor pricing could create distortions in the allocation of direct PE. They argued that 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 was considerable interest among interested parties 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), interested parties 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 (86 FR 39118 through 39123). We believed it was 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 our CY 2022 clinical labor proposal. We recognized 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 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. We ultimately finalized the use of median BLS wage data, as opposed to mean BLS wage data, in response to comments in the CY 2022 PFS final rule. To account for the employers' cost of providing fringe benefits, such as sick leave, we finalized the use of a benefits multiplier of 1.296 based on a BLS release from June 17, 2021 (USDL-21-1094). As an example of this process, for the Physical Therapy Aide (L023A) clinical labor type, the BLS data reflected a median hourly wage rate of $12.98, which we multiplied by the 1.296 benefits modifier and then divided by 60 minutes to arrive at the finalized per-minute rate of $0.28. After considering the comments on our CY 2022 proposals, we agreed with commenters that the use of a multi-year transition would help smooth out the changes in payment resulting from the clinical labor pricing update, avoiding potentially disruptive changes in payment for affected interested parties, and promoting payment stability from year-to-year. We believed it would be appropriate to use a 4-year transition, as we have for several other broad-based updates or methodological changes. While we recognized 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 agreed 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. Therefore, we finalized 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 finalized the implementation of 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 finalized in the CY 2022 PFS final rule is provided in Table 4. Start Printed Page 45873 (1) CY 2023 Clinical Labor Pricing Update ProposalsFor CY 2023, we received information from one interested party regarding the pricing of the Histotechnologist (L037B) clinical labor type. The interested party provided data from the 2019 Wage Survey of Medical Laboratories which supported an increase in the per-minute rate from the $0.55 finalized in the CY 2022 PFS final rule to $0.64. This rate of $0.64 for the L037B clinical labor type is a close match to the online salary data that we had for the Histotechnologist and matches the $0.64 rate that we initially proposed for L037B in the CY 2022 PFS proposed rule. Based on the wage data provided by the commenter, we are proposing this $0.64 rate for the L037B clinical labor type for CY 2023; we are also proposing a slight increase in the pricing for the Lab Tech/Histotechnologist (L035A) clinical labor type from $0.55 to $0.60 as it is a blend of the wage rate for the Lab Technician (L033A) and Histotechnologist clinical labor types. We are also proposing the same increase to $0.60 for the Angio Technician (L041A) clinical labor type, as we previously established a policy in the CY 2022 PFS final rule that the pricing for the L041A clinical labor type would match the rate for the L035A clinical labor type (86 FR 65032). The proposed pricing increase for these three clinical labor types is included in Table 5; the CY 2023 pricing for all other clinical labor types would remain unchanged from the pricing finalized in the CY 2022 PFS final rule. Start Printed Page 45874 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 Start Printed Page 45875 the 4-year transition period. We updated the pricing of a number of clinical labor types in the CY 2022 PFS final rule in response to information provided by commenters. We welcome additional feedback on clinical labor pricing from commenters in response to this proposed rule, especially any data that will continue to improve the accuracy of our final pricing. For the full discussion of the clinical labor pricing update, we direct readers to the CY 2022 PFS final rule (86 FR 65020 through 65037). 5. Soliciting Public Comment on Strategies for Updates to Practice Expense Data Collection and MethodologyThe PE inputs used in setting PFS rates, including both the development of PE RVUs and, historically, the relative shares among work, PE, and malpractice RVUs across the PFS, are central in developing accurate rates and maintaining appropriate relativity among PFS services and overall payment among the professionals and suppliers paid under the PFS. Consequently, the underlying PE data inputs are a consistent point of interest among interested parties. However, unlike other payment systems with cost reporting systems, PFS data inputs are primarily based on exogenous proprietary data that become available as the data are collected. Specifically, we rely on historical survey data (almost all of which is over a decade old), some publicly available data collected for other purposes (for example, Bureau of Labor Statistics (BLS) wage data), recommendations from the American Medical Association and other provider groups, and annual Medicare claims data. a. History of Updates to PE InputsEach year we continue to improve accuracy, predictability, and sustainability of updates to the PE valuation methodology to reduce the risks of possible misvaluation and other unintended outcomes. We have continued to develop policies geared toward providing more consistent updates to the direct PE inputs used in PFS ratesetting, including supply/equipment pricing and clinical labor rates. These efforts to develop these policies should contribute to improved standardization and transparency for all PE inputs used to update the PFS. As we continue our work to improve the information we use in our PE methodology, we are issuing a general comment solicitation to better understand how we might improve the collection of PE data inputs and refine the PE methodology. In recent years, we have refined specific PE data inputs using a combination of market research and publicly available data (for example, market research on medical supply and equipment items and BLS data to update clinical labor wages) to update the direct PE data inputs used in the PFS ratesetting process. Last year, we implemented a final transition year for supply and equipment pricing updates and started the first year of a 4-year phase-in update to the clinical labor rates. However, the indirect PE data inputs remain tied to legacy information that is well over a decade old. To build on much needed progress, we now believe indirect PE would also benefit from a refresh that implements similar standard and routine updates. We believe that a data refresh, and use of data sources that receive routine refreshes, would reduce the likelihood of unpredictable shifts in payment, especially when such shifts could be driven by the age of data available rather than comprehensive information about changes in actual costs. b. Data Collection, Analysis and FindingsIn light of feedback from interested parties, CMS has prioritized stability and predictability over ongoing updates, and has taken a measured approach to updating PE data inputs. We have worked with interested parties and CMS contractors over a period of years to study the landscape and identify possible strategies to reshape the PE portion of physician payments. The fundamental issues are clear, but thought leaders and subject matter experts have advocated for more than one tenable approach to updating our PE methodology. Thus, we must balance the various interests of the public, and any path forward should allow for ongoing and routine cycles of PE updates. Of the various PE data inputs, we believe that indirect PE data inputs, which reflect costs such as office rent, IT costs, and other non-clinical expenses, present the opportunity to build consistency, transparency, and predictability into our methodology to update PE data inputs. The primary source for indirect PE information is the Physician Practice Information Survey (PPIS), fielded by the AMA. The survey was most recently conducted in 2007 and 2008 (reflecting 2006 data). The survey respondents were self-employed physicians and selected nonphysician practitioners. In general, interested parties have expressed the following concerns regarding CMS's approach to indirect PE allocation:
Beyond these issues, we have also explored other concerns with our indirect PE allocation method in depth in previous rulemaking. For example, refer to our previous comment solicitation and discussion of resource costs for services involving the use of innovative technologies in our CY 2022 PFS proposed rule (86 FR 39125). PE data inputs, and the methodological and evidence-based principles that shape use of such information in the context of reimbursement, are discussed in depth in a RAND Corporation (“RAND”) report prepared for CMS, entitled Practice Expense Methodology and Data Collection Research and Analysis, available at https://www.rand.org/pubs/research_reports/RR2166.html.[1] Various interested parties have taken issue with the use of certain costs in our current PE allocation methodology that they do not believe are associated with increased indirect PE. Some interested parties argue that the costs of disposable supplies, especially expensive supplies, and equipment are not relevant to allocating indirect PE; or that similarly, work in the facility setting (for example, work RVUs for surgical procedures) is not relevant to allocating indirect PE, though they agree that work in the office setting may be relevant to allocating indirect PE.[2] However, we do not believe that there is sufficient, if any, Start Printed Page 45876 data or peer-reviewed evidence available to definitively show that shifting indirect PE allocations based on the setting of care, or based on specialty, would result in improved allocations of PE that reflect true costs. Further, varying indirect PE allocations based on setting of care or based on specialty might create unintended consequences such as reduced access to care for beneficiaries, or reduced competition and autonomy of small group practices or individual clinicians whose revenue is based in part on services furnished under contract in the facility setting. We believe it is necessary to establish a roadmap toward more routine PE updates, especially because potentially improper or outdated allocation of PE across services may affect access to certain services, which could exacerbate disparities in care and outcomes. Establishing payments that better reflect current practice costs would mitigate possible unintended consequences, such as labor market distortions due to indirect cost allocations that do not reflect the current evolution of health care practice.[3] Interested parties have reiterated their desire for CMS to move away from the current PE allocation approach and continued to raise concerns with CMS's methodology and the underlying PE data inputs. In response to these and other concerns, we continue to review the methodology we use to establish the PE RVUs and to identify refinements. As part of this effort, we have contracted with RAND to develop and assess potential improvements in the current methodology used to allocate indirect practice costs in determining PE RVUs for a service, model alternative methodologies for determining PE RVUs, and identify and assess alternative data sources that CMS could use to regularly update indirect practice cost estimates.[4] In this proposed rule, we are signaling our intent to move to a standardized and routine approach to valuation of indirect PE and we welcome feedback from interested parties on what this might entail, given our discussion above. We would propose the new approach to valuation of indirect PE in future rulemaking. We seek comment on the following topics related to identification of the appropriate instrument, methods, and timing for updating specialty-specific PE data:
We also seek comment on any alternatives to the above that would result in more predictable results, increased efficiencies, or reduced burdens. For example:
We also seek comment on the cadence, frequency, and phase-in of adjustments for each major area of prices associated with direct PE inputs (Clinical Labor, Supplies/Equipment). We ask that commenters address the following:
c. Changes to Health Care Delivery and Practice Ownership Structures, and Business Relationships Among Clinicians and Health Care OrganizationsMarket consolidation, and shifts in workforce alignment, as well as an evolution in the type of business entities predominant in health care markets, all suggest significant transformation in the composition and proportions of practice expenses required to furnish care. These evolving conditions collectively highlight the need for a comprehensive update to PE data inputs, and possibly the PE methodology as a whole.[5] Ideally, more comprehensive PE data inputs and a different PE calculation methodology would better account for indirect/overhead costs, current trends in the delivery of health care, the use of machine learning technology, and EHRs, and the cost differentials in independent versus facility-based practices. We seek comment on current and evolving trends in health care business arrangements, use of technology, or similar topics that might affect or factor into indirect PE calculations. We are interested in learning whether any PE data inputs may be obsolete, unnecessary, or misrepresentative of the actual costs involved in operating a medical practice. d. Unintended Consequences and Missing InformationWe request comment on additional information that we may have not considered or discussed above about updating and maintaining PE data inputs, as well as any unintended impacts (or positive outcomes) that could result from changes to the overall strategy. We are especially interested in public comment on any concerns about beneficiaries' access to care, possible consolidation of group practices, or burden on small group or solo practitioners. We are also interested in public comments on any collateral Start Printed Page 45877 program integrity or quality issues that could arise from potential updates. We request that any respondents who provide feedback ensure that the response includes discussion of any possible health equity impacts. 6. Soliciting Public Comment on Strategies for Improving Global Surgical Package ValuationIn preparation for future rulemaking, we are seeking public comment on strategies to improve the accuracy of payment for the global surgical packages (herein referred to as “global packages') under the PFS. Currently, there are over 4,000 physicians' services paid as global packages under the PFS. Global packages generally include the surgical procedure and any services typically provided during the pre- and postoperative periods (including evaluation and management (E/M) services and hospital discharge services). There are three types of global packages:
More detail about how global packages are billed and what activities are included may be found in Chapter 12, Section 40, of the Medicare Claims Processing Manual (Pub. 100-04). We have applied the concept of global payment for some procedures since the inception of the PFS on January 1, 1992 (54 FR 59502). However, in the past decade we have engaged with interested parties regarding numerous concerns about the accuracy and validity of the valuation of global packages, with particular attention paid to the E/M visits included in the services. We have made previous requests for public feedback on global packages, including solicitations for information or data that could be used to help support more accurate valuations. We now wish to expand on our conversations with the public, considering the current status of a multi-year data collection and analysis project, as well as ongoing changes we have made to payments for other types of patient care that may impact the global packages. a. History of Global Valuation DiscussionIn the CY 2013 PFS proposed rule (77 FR 44737 through 44738), we discussed two reports released by the HHS Office of the Inspector General in 2005 and 2012 with findings that practitioners were performing fewer E/M postoperative visits than had been included in the valuation for these global packages, suggesting that Medicare was paying for care that was not being delivered. In response to the concerns raised by the OIG reports, we solicited public feedback on methods of obtaining accurate and current data on E/M services furnished as part of a global package. We summarized public comment in the CY 2013 PFS final rule (77 FR 68911 through 68913). In the CY 2015 PFS proposed rule (79 FR 40341), we delved into barriers to accurate valuation of global packages, especially as compared to other forms of bundled payments made under the inpatient or outpatient prospective payment systems. In addition to the ongoing concerns about whether E/M visits presumed to be furnished in connection with global packages were actually being performed by the physician receiving the global package payment, we noted issues such as:
To address these concerns, we solicited comment and finalized a policy in the CY 2015 PFS final rule (79 FR 67586) intended to, over a period of several years, transition all services with 10-day and 90-day global periods to 0-day global periods. As stated in the CY 2015 PFS final rule, we believed it would be more accurate to value the surgical procedure-day services separately from postop E/M visits, and would avoid potentially duplicative or unwarranted payments. For our full discussion and rationale, refer to 79 FR 67586 through 67591. Implementation of this policy, however, was halted by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L.110-14). Section 523(a) of the MACRA amended section 1848(c)(8) of the Act to prohibit the Secretary from implementing the transition policy finalized in the CY 2015 PFS final rule. The amendments to section 1848(c)(8) also require CMS to collect additional data on how best to value global packages and to reassess every 4 years the continued need for this data collection. Section 1848(c)(8) of the Act directs CMS to use the information collected to improve the accuracy of valuation of these services under the PFS starting in CY 2019. (Refer to the CY 2016 PFS final rule at 80 FR 70915 for additional discussion of these requirements.) In response to the statutory requirements as added by section 523(a) of the MACRA, we engaged in multiple discussions with interested parties about methods of data collection and analysis, including through public comment solicitation in the CY 2016 PFS proposed rule (80 FR 41707) and CY 2017 PFS proposed rule (81 FR 46191), a national listening session, and a town hall meeting. (Materials for the January 20, 2016 listening session are available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2016-01-20-MCRA-Presentation.pdf. The transcript of the town hall meeting held August 25, 2016 is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/CY2017-PFS-FR-Townhall.pdf.) In the CY 2017 PFS final rule (81 FR 80209 through 80213), we finalized a claims-based process to collect data from practitioners on both Start Printed Page 45878 the number and level of postoperative visits furnished as part of the 10- and 90-day global packages. We also contracted with RAND to support this data collection and analysis. b. Data Collection, Analysis, and FindingsIn 2019, RAND issued two reports based on its analysis of the data collected through the data collection process we established. The reports examined, using claims-based and survey-based data, the number of postoperative visits furnished during the 10- and 90-day global periods for certain high-volume procedures and the level of visits furnished for certain procedures. (Complete details about the data collected are discussed in the CY 2017 PFS final rule starting at 81 FR 80212, the CY 2020 PFS final rule at 84 FR 62857, and in the reports themselves, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-.) Notably, RAND's analysis found that, according to claims-based data, the reported number of E/M visits matched the expected number (included for purposes of PFS valuation) for only 4 percent of reviewed 10-day global packages and 38 percent of reviewed 90-day global packages. Based on these analyses, RAND released a third report that analyzed the current valuation of global packages based on the difference between the number of postoperative E/M visits observed via the claims-based data collection process and the expected number of such E/M visits. The report modeled how valuation for global packages would change by adjusting the work RVUs, physician time, and direct PE inputs to reflect the observed number of E/M visits. The report provided hypothetical valuations for the global packages based on these adjustments. These three RAND reports were made available to the public and are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-. The RAND reports were shared with the public, and we received public comment about these reports in the CY 2020 PFS final rule (84 FR 62866). Public commenters raised concerns about the findings in the reports, including questions as to whether the E/M visit data were collected from a true representative sample of practitioners, and various other challenges to the validity of the RAND methodology. Other members of the public, however, were supportive of our overall efforts to collect and analyze the data, and supplied additional data similarly suggesting that the 10- and 90-day global packages are overvalued. In 2021, RAND responded to the CY 2020 public comments that were critical of the methodologies used in the three earlier reports in a separate report entitled, “Responses to Comments on RAND Global Services Reports,” which is available at https://www.rand.org/content/dam/rand/pubs/research_reports/RR4300/RR4314-1/RAND_RR4314-1.pdf/. While some interested parties have challenged the methodology or conclusions of the RAND reports, we have not yet received data suggesting that postoperative E/M visits are being performed more frequently than indicated by the data collected and analyzed in the RAND reports. We continue to be concerned that our current valuations of the global packages reflect certain E/M visits that are not typically furnished in the global period, and thus, are not occurring. We also believe that RAND has adequately responded to critiques of its methodologies and findings. However, as part of our ongoing assessment of our data collection process, we continue to welcome any comments from the public on ideas for other sources of data that would help us to assess global package valuation (including the typical number and level of E/M services), as well as our data collection methodology and the RAND report findings. c. Changes to Health Care Delivery and Payment for E/M ServicesSince the inception of the PFS 30 years ago, there have been significant changes in health care, including improvements in medical and information technology, new models of health care delivery and coordination between multiple clinicians furnishing care to a single patient, and an expanding beneficiary population. (For information on Medicare service utilization, beneficiary demographics, provider characteristics, and payment models, please visit the resources at data.cms.gov.) We are interested in hearing from the public on whether the postoperative health care landscape has changed in ways that impact the relevance of the global packages. We believe that changes to health care delivery may impact proper valuation of global services. We are soliciting comment on whether changes to health care delivery, including changes in coordination of care and use of medical technology over the past 3 decades, as well as during the recent PHE, have impacted: the number and level of postoperative E/M visits needed to provide effective follow-up care to patients; the timing of when postoperative care is being provided; and who is providing the follow-up care. We have formed hypotheses that some beneficiaries are not receiving the number of postoperative visits that were contemplated when valuing the global surgical packages or are not receiving any follow-up E/M visits at all during global periods either because the physician who performed the surgical procedure has determined they are unnecessary (perhaps due to improvements in medical technology or evolution in standards of care) or as the result of more comprehensive discharge planning. It has also been suggested by some interested parties that physicians are, in fact, performing the number of postoperative visits that were contemplated when valuing the global surgical packages, but the visits may, for various reasons, be scheduled outside the global period. Others have suggested that physicians are, without formally transferring follow-up care to another clinician, instructing patients to follow up with another physician or NPP (such as the patient's primary care physician or other practitioner), and that the other clinician then furnishes and bills for E/M services furnished for postoperative care (whether the care is performed during or after the global period). We would appreciate comments on these ideas, and on other factors not mentioned here that could affect the ways that postoperative E/M care is provided. We are also soliciting comment on whether, or how, recent changes in the coding and valuation of separately billable E/M services may have impacted global packages. One change is the expansion of payment for non-face-to-face care management services. Historically, an advantage of global packages was that they compensated physicians for non-face-to-face work related to the patient's transition from the hospital to the community, or management of other health care needs following a procedure or serious illness. Over the years, we have implemented payment for many care management services to better reflect non-face-to-face time spent by physicians and clinical staff on behalf of patients with complex health care needs, including transitional care management services in CY 2013 (77 FR 68978); chronic care management in CY 2015 (78 FR 74414) and CY 2019 (83 FR 58577); complex chronic care management in CY 2017 (81 FR 80244); and principal care management in CY 2020 (84 FR 62962). Start Printed Page 45879 We solicit comment on whether global packages, and especially those with 10- and 90-day global periods, continue to serve a purpose when physicians could otherwise bill separately not only for the postoperative E/M visits they furnish, but also for aspects of postoperative care management they furnish for some patients. We also would like to hear generally what, if any, components of preoperative or postoperative care are currently only compensated as part of payment for global packages. We have also heard from some interested parties who believe that recent changes to the coding and valuation of standalone office and outpatient E/M visits finalized in the CY 2021 PFS final rule have skewed the relativity between these visits and the E/M visits included in the current global package valuations (which were not modified in response to the coding and valuation changes). In the CY 2020 PFS final rule (84 FR 62851 through 84 FR 62854), we finalized new—and generally increased, RVUs for the CPT-revised office and outpatient E/M code set. Some commenters encouraged us to increase the value of the E/M visits included in the global surgical packages commensurate with the increased RVUs for the standalone E/M visits. However, we declined to do so, noting that at the time that it was unclear whether it would be appropriate to treat the E/M visits reflected in global packages as discrete components of the package (in other words, to use a building-block approach to calculating the value of the service, versus valuing the services using the more holistic magnitude estimation, or possibly another approach.) Furthermore, we cited the uncertainty as to whether the E/M services included in valuing the global packages are typically furnished as part of global surgery services, reasoning that if the number and level of E/M services for global packages is not appropriate, adopting increases in the value of E/M services in global surgery codes would exacerbate rather than ameliorate any potential relativity issues. (Refer to the CY 2020 PFS final rule at 84 FR 62856 through 62860 for a complete summary of comments and our responses on the topic of increasing the value of E/M visits included in the global packages.) We welcome additional comments on the perceived misalignment between the E/M visits included in global packages and separately billable E/M services, including thoughts on how this current tension reflects on global payment valuation and the appropriate methodology for determining appropriate values for global packages. d. Strategies To Address Global Package ValuationConsistent with the discussion above, we continue to believe that: (1) there is strong evidence suggesting that the current RVUs for global packages are inaccurate; (2) many interested parties agree that the current values for global packages should be reconsidered, whether they believe the values are too low or too high; and (3) it is necessary to take action to improve the valuation of the services currently valued and paid under the PFS as global surgical packages. We would like to re-engage with the public about whether the global packages are indeed misvalued, and if so, what would be an appropriate approach to valuation. We have previously sought assistance from the public on possible methods of revaluation, such as in the CY 2015 PFS rule (at 79 FR 67586). As noted in the “Data Collection, Analysis, and Findings” section above (section II.B.6.b.), RAND has provided a comprehensive roadmap for a possible revaluation strategy. (See specifically the RAND report, “Using Claims-Based Estimates of Postoperative Visits to Revalue Procedures with 10- and 90-Day Global Periods,” available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-) We are soliciting additional input on the RAND methodology, including advantages and drawbacks of applying the RAND methodology to revaluation (in addition to previous feedback that was provided by the public in the CY 2020 final rule at 84 FR 62867). We also request input on specific alternatives, including: (1) requesting the RUC to make recommendations on new values; or (2) another method proposed by the public. We solicit feedback from the public on possible strategies for a revaluation process for global services. We believe that the available information provided in the RAND reports (discussed in section II.B.6.b. of this proposed rule and available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-) indicates that there is a mismatch between the value of the global package and work being performed. In particular, it appears that for some services, the number of postoperative visits typically furnished by the billing physician is much lower than what was reflected in the global package value, and thus we believe it may be necessary to revalue those services. (As noted in section II.B.6.b. of this proposed rule, RAND's analysis found that the reported number of E/M visits matched the expected E/M visits for only 4 percent of reviewed 10-day global packages and 38 percent of reviewed 90-day global packages. We refer specifically to the RAND report, “Claims-Based Reporting of Postoperative Visits for Procedures with 10- or 90-Day; Global Periods—Updated Results Using Calendar Year 2019 Data” available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-). Because there are a large number and volume of services paid as global packages, we must consider the resources needed to revalue even a subset of the global packages, as well as the impacts across the PFS and healthcare delivery system in general if we were to change the values of a significant number of services at one time. We are considering various approaches we could pursue, such as: (1) revaluing all 10- and 90-day global packages at one time (perhaps with staggered implementation dates); (2) revaluing only the 10-day global packages (because these appear to have the lowest rate of postoperative visit performance, per RAND's analysis of claims data); (3) revaluing 10-day global packages and some 90-day global packages (such as those with demonstrated low postoperative visit performance rates as identified in RAND's analysis of these services); or (4) relying on the Potentially Misvalued Code process to identify and revalue misvalued global packages over the course of many years. (We note that regardless of whether we review particular global packages as part of a specific revaluation strategy, the public may always nominate any global packages to be reviewed through the Potentially Misvalued Code process; refer to the description of the Potentially Misvalued Code process in section II.C. of this proposed rule.) We solicit comment on any of the strategies identified in this paragraph, as well as any additional ideas members of the public may have that would address the concerns described above about valuation of global packages. We also welcome comment on ancillary considerations including timing considerations for implementation of any future strategy (such as whether to have staggered effective dates for new valuations and what criteria to use if assigning staggered effective dates.) We also solicit comment on additional considerations affecting valuation of global services that may not have been thoroughly explored in Start Printed Page 45880 previous public comment opportunities. For instance, we are aware that some interested parties are concerned that not enough attention has been paid to the value of preservice work bundled into the global payment, which could affect accurate valuation of 10- and 90-day global packages, as well as the value of the service if it is transitioned to a 0-day global. We solicit additional information about this concern, as well as any other concerns about valuation not otherwise mentioned here. e. Other Payment Structure Changes, Unintended Consequences, and Missing InformationWe solicit public comment on any other aspects of the global payment structure (aside from the valuation of services) that commenters believe are noteworthy. Much of the discussion over the years has focused on whether global surgical packages are properly valued and whether they are needed at all. We encourage commenters to point out ways in which global surgical packages may continue to have a positive impact on health care delivery (such as their potential to support innovation). We also solicit suggestions on other ways that global surgical package payments could be modified (aside from changing their valuation) that could help improve accurate valuation or help address other concerns about the payments (such as the lack of transparency about what care is being provided as part of the package). We also request comment on additional information that we may not have considered or discussed above about proper valuation of the global packages, as well as any unintended impacts (or positive outcomes) that could result from changes to how we value global services. We are especially interested in public comment on any concerns about beneficiaries' access to care, continuity of care, cost sharing, or program integrity. C. Potentially Misvalued Services Under the PFS1. BackgroundSection 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 proposed 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 interested parties. 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 interested parties. 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 rise. 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 for which there is a significant difference in payment for the same service between different sites of service. Start Printed Page 45881
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 CodesTo 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 (76 FR 73026, 73058 through 73059), other individuals and groups submit nominations for review of potentially misvalued codes as well. Individuals and 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 at , 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 CY 2012 PFS final rule with comment period (76 FR 73052 through 73055). In the same CY 2012 PFS final rule with comment period, 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 CY 2013 PFS final rule with comment period (77 FR 68892, 68896 through 68897) 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 CY 2019 PFS proposed rule (73 FR 38589), 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 of Work RVUs proposed rule (76 FR 32410, 32419), 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 2023 Identification and Review of Potentially Misvalued ServicesIn 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 67548, 67606 through 67608), we modified this process whereby the public and interested parties 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:
• National surveys of work time and intensity from professional and management societies and Start Printed Page 45882 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 each year's final rule, we finalize our list of potentially misvalued codes. a. Public NominationsIn each proposed rule, we seek nominations from the public and from interested parties of codes that they believe we should consider as potentially misvalued. We received public nominations for potentially misvalued codes by February 10th and we displayed these nominations on our public website, where we include the submitter's name and their associated organization for full transparency. Some submissions are for specific, PE-related inputs for codes, and we refer readers to section II.B. of this rule under Determination of PE RVUs for further discussions on PE-related submissions. We summarize below this year's submissions under the potentially misvalued code initiative. An interested party nominated the home-based physician visit codes: CPT code 99344 ( Home visit for the evaluation and management of a new patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and 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 presenting problem(s) are of high severity. Typically, 60 minutes are spent face-to-face with the patient and/or family), CPT code 99345 ( Home visit for the evaluation and management of a new patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of high 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 unstable or has developed a significant new problem requiring immediate physician attention. Typically, 75 minutes are spent face-to-face with the patient and/or family), CPT code 99349 ( Home visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A detailed interval history; A detailed examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with other 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 moderate to high severity. Typically, 40 minutes are spent face-to-face with the patient and/or family), and CPT code 99350 ( Home visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A comprehensive interval history; A comprehensive examination; Medical decision making of moderate to high complexity. Counseling and/or coordination of care with other 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 moderate to high severity. The patient may be unstable or may have developed a significant new problem requiring immediate physician attention. Typically, 60 minutes are spent face-to-face with the patient and/or family) as potentially misvalued. In their submission, the nominator expressed concern that there is no payment for transportation costs incurred when it is medically necessary for a physician to drive to the home of the patient for a face-to-face in-home E/M Visit, and that they are not compensated for opportunity loss they incur by seeing fewer patients because they spend time commuting to patients' homes, versus seeing more patients that come to their offices. The nominator also argued that Medicare does not compensate physicians for the work and time associated with assessing a patient's home environment, which provides insight into a patient's overall health and living conditions. The nominator collectively called these non-medical factors that can affect a patient's overall health the “Social Determinants of Health” (SDoH). The nominator requested that we increase the overall RVUs for CPT codes 99344, 99345, 99349, and 99350, by including the resources associated with: (1) the physician's transportation costs to patients' homes; (2) lost income opportunity for home versus in-office visits; and (3) in-home SDoH assessment work. The nominator estimated that the adjustments to RVUs to reflect transportation costs and opportunity costs would result in Medicare payment that is 67 percent higher than the current Home-based E/M Visits payment rates, and that adjustments to account for the physician's SDoH assessment would add an additional 55 percent increase to the payment rates for Home-based E/M Visits. In total, the nominator suggests that if these resources were taken into account, the payment rates for Home-based E/M CPT codes would increase by what the nominator estimates as a 222 percent increase from their current amounts. The nominator included references as evidence to support their claim that the home-based E/M CPT codes are potentially misvalued, such as the CMS “Medicaid Non-Emergency Medical Transportation Booklet for Providers” (April 2016) [6 7] and a press release from the Better Medicare Alliance entitled, “Report Shows Dramatic Increase in Medicare Advantage Activity to Address Social Determinants of Health, But Barriers Remain”.[8] We note that the nominator did not nominate the entire family of home- based E/M visit codes. When we establish values for codes or consider whether codes are potentially misvalued under the PFS, we take into account the resources involved in furnishing the specific service as described by the CPT code. As such, historically, we do not take into account: (1) travel costs incurred by the physician or other practitioner; (2) potential opportunity costs to a physician or other practitioner when care is delivered in one setting versus another; or (3) the physician or other practitioner's work and time expended in performing activities that are outside the scope of the specific service as described by the CPT code. These are not considered to be resources involved in furnishing the service, are not included in establishing payment rates under the PFS in accordance with Start Printed Page 45883 section 1848 of the Act, and, as such, do not provide justification for potential misvaluation of those payments. That said, in February 2021, the AMA CPT Editorial Panel deleted the family of domiciliary codes, CPT codes 99324 to 99340, and merged the services described by those codes into the existing family of home-based E/M visits, CPT codes 99341 to 99350 (a range of codes that includes CPT codes 99344, 99345, 99349, and 99350). In addition, the AMA RUC has made recommendations regarding the values for these home-based E/M codes in section II.E. of this proposed rule. Since CMS has already received AMA RUC recommendations for these home-based E/M visit codes for this year's proposed rule, we refer readers to the discussion found in section II.E. of this proposed rule, Valuation of Specific Codes, where we seek additional public comments, recommendations, and independent analysis as supporting evidence from all interested parties regarding the valuations for the home-based E/M visits, including CPT codes 99344, 99345, 99349, and 99350. Because we address and are soliciting public comment on the valuation of these codes in section II.E. of this proposed rule, there is no need to consider these home-based E/M visits here as potentially misvalued. An interested party has nominated the following cataract surgery codes, CPT codes 65820 ( Goniotomy—Incision to improve eye fluid flow), 66174 ( Transluminal dilation of aqueous outflow canal; without retention of device or stent), 66982 ( Complex Extracapsular cataract removal with insertion of intraocular lens prosthesis (one stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification), 66984 ( Extracapsular cataract removal with insertion of intraocular lens prosthesis (one stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or phacoemulsification)), 66989 ( Complex Extracapsular cataract removal w/IOL insertion, complex; with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more), and 66991 ( Extracapsular cataract removal w/IOL insertion; with insertion of intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) anterior segment aqueous drainage device, without extraocular reservoir, internal approach, one or more), as well as the following retinal procedure codes, CPT codes 67015 ( Aspiration or release of vitreous, subretinal or choroidal fluid, pars plana approach (posterior sclerotomy)), 67036 ( Vitrectomy, mechanical, pars plana approach), 67039 ( Vitrectomy, mechanical, pars plana approach; with focal endolaser photocoagulation), 67040 ( Vitrectomy, mechanical, pars plana approach; with endolaser panretinal photocoagulation), 67041 ( Vitrectomy, mechanical, pars plana approach; with removal of preretinal cellular membrane (e.g., macular pucker)), 67042 ( Vitrectomy, mechanical, pars plana approach; with removal of internal limiting membrane of retina (e.g., for repair of macular hole, diabetic macular edema), includes, if performed, intraocular tamponade (i.e., air, gas or silicone oil)), 67043 ( Vitrectomy, mechanical, pars plana approach; with removal of subretinal membrane (e.g., choroidal neovascularization), includes, if performed, intraocular tamponade (i.e., air, gas or silicone oil) and laser photocoagulation), 67108 ( Repair of retinal detachment; with vitrectomy, any method, including, when performed, air or gas tamponade, focal endolaser photocoagulation, cryotherapy, drainage of subretinal fluid, scleral buckling, and/or removal of lens by same technique), and 67113 ( Repair of complex retinal detachment (e.g., proliferative vitreoretinopathy, stage C-1 or greater, diabetic traction retinal detachment, retinopathy of prematurity, retinal tear of greater than 90 degrees), with vitrectomy and membrane peeling, including, when performed, air, gas, or silicone oil tamponade, cryotherapy, endolaser photocoagulation, drainage of subretinal fluid, scleral buckling, and/or removal of lens), as potentially misvalued because there is currently no established non-facility payment rate for these global 090-day surgical procedures. These codes are complex surgical eye procedures and they require dedicated spaces, similar to facility-based spaces that are not typically found in an ophthalmologist's office, such as a well-lighted and sterile surgical theater, specific eye surgery equipment and possibly clinical staff and other medical personnel trained to assist in these surgeries and the patient's immediate post-surgery recovery, including anesthesia services. In the past, with concerns for patient safety and given the intricate and delicate nature of these surgeries, we understood that these procedures would only be performed in a well-equipped and fully staffed medical facility. This may still be the case, but this nominator suggests that these cataract and retinal procedures can be properly performed in the non-facility office, safely, effectively, and perhaps more conveniently for patients and physicians; and thus requests that we should establish non-facility RVUs under the PFS to recognize the additional resources that would be expended in the non-facility setting. The nominator has included a list of practice expense items involved in furnishing these services in the non-facility setting to help us to consider establishing non-facility values for these codes. They include the possible number and types of clinical staff and their work time in minutes, and a list of various equipment and supplies typically needed to furnish the services described by the nominated codes. The nominator also noted that there is projected backlog for these cataract and retinal services that may have been building up due to the COVID-19 restrictions from the past 2 years. We seek comment on the merits of continuing to value these codes only in the facility setting, as opposed to also establishing non-facility values for these cataract and retinal surgery codes. We also seek comment on any appropriate safety considerations for these codes in the non-facility setting and whether these codes are potentially misvalued. We note that in last year's CY 2022 PFS final rule with comment (86 FR 65096 through 65097), we did review CPT codes 66982, 66984, 66987, 66988, 66989, 66991, and 0671T (Cataract Removal with Drainage Device Insertion) and did not establish non-facility values for those services, but we did note a potential rank order anomaly when considering minimally invasive glaucoma surgeries (MIGS) and cataract surgeries together, and suggested that the AMA RUC should consider re-surveying all of these. An interested party has nominated add-on CPT code 20931 ( Allograft, structural, for spine surgery only (List separately in addition to code for primary procedure)) as a potentially misvalued service with respect to the physician's labor for spinal surgeries involving the use of biomechanical synthetic cage devices versus the use of structural allograft bone as it relates to a set of CPT codes related to anterior cervical discectomy and fusion (ACDF). Ordinarily, interested parties nominate a primary service code as potentially misvalued, or a primary service code and its related add-on codes, but not an add-on code alone. The valuation of an add-on code is typically developed with reference to some portion of the work (or other resource inputs) involved in furnishing the primary service code. For Start Printed Page 45884 example, the AMA CPT 2022 Professional Edition, page 147, states “Use code 20931 in conjunction with codes 22319, 22532-22533, 22548-22558, 22590-22612, 22630, 22633, 22634, 22800-22812”). The primary spinal surgery codes and the add-on CPT code 20931 have not been recently reconsidered or reviewed by the AMA RUC or CMS, and no new or additional information has been included with this nomination to persuade CMS that CPT code 20931 is individually potentially misvalued. This nomination of an add-on code as potentially misvalued is similar to the nomination we discussed in the CY 2022 PFS proposed rule (86 FR 65044) of CPT code 22551 ( Arthrodesis, anterior interbody, including disc space preparation, discectomy, osteophytectomy and decompression of spinal cord and/or nerve roots; cervical below C2) and the accompanying add-on codes. The nominator refers to two different methods of vertebral fusion—one using biomechanical synthetic cage devices, the other using structural allograft bone; and describes a typical vertebral fusion case that uses three units of one of these products. Both of these 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 also 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)), which have a total work RVU of 13.00 (6.50 × 2), and 1 unit of CPT code 22846 ( Anterior instrumentation; 4 to 7 vertebral segments (List separately in addition to code for primary procedure)), which has a work RVU of 12.40. The vertebral fusion method employing three synthetic cage devices with plate would involve three units of 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)) for a total work RVU of 12.75 (4.25 × 3), and one unit of 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 nominator states that the typical vertebral fusion employing three synthetic cage devices with plate would total to 63.15 work RVUs. In contrast, the nominator asserts that the vertebral fusion method employing structural allograft bones with plate involves the same set of services and codes (that is, one unit of CPT code 22551, two units of CPT code 22552, and one unit of CPT code 22846), but the structural allograft bone method includes CPT code 20931 ( Allograft, structural, for spine surgery only (List separately in addition to code for primary procedure)), with a work RVU of 1.81, instead of CPT codes 22853 and 20930, for a total work RVU of 52.21. The nominator suggests that this difference in total work RVUs for the two methods of vertebral fusion, 63.15 versus 52.21, is evidence that add-on CPT code 20931 is potentially misvalued; however, we do not agree with this nominator's method of aggregating and comparing sums of work RVUs for groups of services that may be furnished together as being potentially misvalued, nor consider CPT code 20931 as the source of misvaluation within this grouping. We understand that the nominator believes there should be an equivalent total sum payment for all services involved in vertebral fusion surgeries using either method, and that there should not be a potential incentive for physicians to prefer the method that uses synthetic cage devices because of the higher available payment amount. The nominator asserts that the total sum payment for this kind of spinal surgery using the structural allograft bone method is undervalued as compared to the total sum payment for this kind of spinal surgery using the synthetic cage method. We note that CPT code 22853, which the commenter associates with the synthetic cage device method of vertebral fusion, is a 45-minute ZZZ-code (indicating an add-on code) with an IWPUT (intra-service work (RVU) per unit of time) of 0.0944, whereas CPT code 20931, which the commenter associates with the allograph method of vertebral fusion, is a 20-minute ZZZ-code with an IWPUT of 0.0905. Given the much longer intra-service time and greater IWPUT for CPT code 22853 than for CPT code 20931, the allograph method of vertebral fusion would be expected to have a lower total sum of work RVUs. The nominator's description of why and how each vertebral fusion method is potentially misvalued when compared to the other does not present a situation that fits within our process for identifying individual services that are potentially misvalued 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 individual codes, or with the inter-code relativity between the RVUs assigned to several individual codes found within a family of codes with hierarchical relationships. CMS generally does not examine the summed differences in total RVUs (as is the case presented here), based on billing patterns for a combination of codes representing differing physician work for different methods of performing a service, and then comparing the total RVUs of each method as evidence of the potential misvaluation of codes. We do not believe that the nominator has provided sufficient evidence to demonstrate that CPT code 20931 itself is misvalued, and therefore, we are not inclined to propose this code as potentially misvalued; however, we seek additional comment and any independent analysis and studies (see the supporting documentation options listed above under “CY 2023 Identification and Review of Potentially Misvalued Services,” particularly in regard to any changes in the resources to providing a service) as supporting evidence from commenters in agreement or disagreement with this nomination. See Table 6 for the listing of nominated potentially misvalued codes. Start Printed Page 45885 D. Payment for Medicare Telehealth Services Under Section 1834(m) of the ActAs 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 Acta. Changes to the Medicare Telehealth Services ListIn 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:
• Reduced recovery time. Start Printed Page 45886 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: Category 3. 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 criterion described above. We assessed codes that were temporarily available on the list for the duration of the PHE to determine their appropriateness for inclusion on the Medicare Telehealth Services List on a Category 3 basis. We have reassessed the services that are temporarily available via telehealth for the PHE, based on both information provided by interested parties and our own internal review. We have assessed whether or not these services can, outside of the circumstances of the PHE, be furnished using the full scope of service elements via two-way, audio-video communication technology, without jeopardizing patient safety or quality of care, and we now believe that there are additional services that would be appropriate for addition to the Medicare Telehealth Services List on a Category 3 basis that we did not identify in the CY 2021 rulemaking. In this proposed rule, we are proposing to add these additional services to the Medicare Telehealth Services List on a Category 3 basis, as further discussed below. 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 2023, requests to add services to the Medicare Telehealth Services List must have been submitted and received by February 10, 2022. 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 submit 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 2023Under 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 criterion not only streamlines our review process for publicly requested services that fall into this category, but also expedites our ability to identify codes for the Medicare Telehealth Services List that resemble those services already on the Medicare Telehealth Services List. We add services on a Category 2 basis when the service does not fall within Category 1, and based upon our assessment of whether the services are accurately described by the corresponding code when delivered via telehealth and whether the use of a telecommunications system to deliver the service produces demonstrated clinical benefit to the patient. We add services on a temporary Category 3 basis when the services were temporarily included on the Medicare Telehealth Services List during the PHE, and we find that 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. We received several requests to permanently add various services to the Medicare Telehealth Services List effective for CY 2023. 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. We also assessed the appropriateness of adding these services to the Medicare Telehealth Services List on a Category 3 basis instead. We are not proposing changes to the length of time the services that we temporarily included on a Category 3 basis will remain on the Medicare Telehealth Services List; the services we temporarily included on the Medicare Telehealth Services List on a Category 3 basis will continue to be included through the end of CY 2023. In the event that the PHE extends well into CY 2023, we may consider revising this policy. We are proposing to add some services to the Medicare Telehealth Services List on a Category 3 basis through the end of 2023, some of which we had not previously added to the Medicare Telehealth List during the PHE, but will be added on a subregulatory basis as provided in § 410.78(f) of our regulations. For some of these services, we have received information from interested parties suggesting potential clinical benefit. For others, we continue to believe there is sufficient evidence of potential clinical benefit to warrant allowing additional time for interested parties to gather data to support their possible inclusion on the Medicare Telehealth Services List on a Category 1 or 2 basis. The Medicare Telehealth Services List requests for CY 2023 are listed in Table 7. Additionally, the Consolidated Appropriations Act, 2022 (CAA, 2022) (Pub. L. 117-103, March 15, 2022) amended section 1834(m) of the Act to extend a number of flexibilities that are in place during the PHE for COVID-19 for 151 days after the end of the PHE. To align the availability of these services with those flexibilities Start Printed Page 45887 extended under the Act, we are proposing to continue to allow certain telehealth services that would otherwise not be available via telehealth after the expiration of the PHE to remain on the Medicare Telehealth Services List for 151 days after the expiration of the PHE. Start Printed Page 45888 Start Printed Page 45889 We remind interested parties that the criterion for adding services to the Medicare Telehealth Services List under Category 1 is that the requested services are similar to professional consultations, office visits, and/or 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 listed in Table 7 met the Category 1 or 2 criteria. We received a request to permanently add CPT code S9443 ( Lactation classes, non-physician provider, per session) to the Medicare Telehealth Services List. This service has a status code of “I,” which means that it is not valid for Medicare billing purposes. We understand that this is a temporary code established by a private payor for private payor use, and thus, it is not valid for nor payable by Medicare. As such, this code is not separately billable under the PFS. We generally do not add services to the Medicare Telehealth Services List unless they are separately billable under the PFS. Outside of the circumstances of the PHE, the Medicare Telehealth Services List only includes services that are covered if they are furnished without the use of telecommunication technology in-person. Because CPT code S9443 is not billable under the PFS when furnished in-person, we do not believe it would be appropriate to allow the service to be billed separately when furnished as a Medicare telehealth service. As noted in the CY 2018 PFS final rule (82 FR 53011), if a service does not describe a service typically furnished in-person, it would not be considered a telehealth service under the applicable provisions of the statute. We are not proposing to add CPT code S9443 to the Medicare Telehealth Services List. (1) Therapy ServicesWe 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 on a Category 1 basis. In the CY 2022 PFS final rule (86 FR 65051), we determined that these services did not meet the Category 1 criteria for addition to the Medicare Telehealth Services List because they involve direct observation and/or physical contact between the practitioner and the patient and, in many instances, are therapeutic in nature, and that they did not meet Category 2 criteria, because we thought Start Printed Page 45890 that the request did not provide sufficient detail to determine whether all of the necessary elements of the service could be furnished remotely. We continue to believe this is the case. We still do not have sufficient information to determine whether these services meet the Category 2 criteria. However, we note that some of these codes, including codes 97110, 97112, 97116, 97150, 97530, 97161-97164, 97535, 97542, 97750, and 97755 have been added to the list on a temporary basis for the duration of the PHE. In assessing the evidence that was supplied by interested parties in support of adding these services to the Medicare Telehealth Services List on a Category 2 basis, we concluded that there was not sufficient information to determine whether all of the necessary elements of these services could be furnished remotely. Information regarding safety, appropriateness, and that indicates that all elements of a given CPT code can be furnished via telehealth is still needed to assess whether these services meet the Category 2 criteria. However, we also believe that the therapy services that are currently on the Medicare Telehealth Services List on a temporary basis for the PHE (including CPT codes 97150, 97530, and 97542), but are not currently included on a Category 3 basis, may continue to be furnished safely via two-way, audio-video communication technology outside of the circumstances of the PHE. Therefore, we are proposing that CPT codes 97150, 97530, and 97542 (the set of therapy services that are currently on the Medicare Telehealth Services List on a temporary basis for the PHE), should be added to the Medicare Telehealth Services List through the end of CY 2023 on a temporary, Category 3 basis, to allow time to gather additional data that could support their inclusion on the list on a permanent basis. Therefore, we are proposing to add CPT codes 97150, 97530, and 97542 to the Medicare Telehealth Services List on a Category 3 basis. CPT codes 97110, 97112, 97116, 97161-97164, 97535, 97750, and 97755 will continue to be available on the Medicare Telehealth Services List on a Category 3 basis. We anticipate that keeping these services on the Medicare Telehealth Services List on a Category 3 basis, as proposed, through the end of CY 2023 would preserve access to care and promote health equity, and based on information provided by interested parties and internal review, we believe that they may safely be furnished as telehealth outside of the circumstances of the PHE through the end of CY 2023. However, we remind readers that the practitioners who primarily furnish these services, physical therapists, are not, outside the circumstances of the PHE (and the 151 day period following the expiration of the PHE), authorized to furnish Medicare telehealth services. We note that if the PHE and the 151 day period following the expiration of the PHE both end in CY 2023, the pre-PHE rules will take effect, and these services could no longer be furnished by therapists as Medicare telehealth services. Certain other requested therapy services, namely CPT codes 97537, 97763, 90901, and 98960-98962 are not currently on the Medicare Telehealth Services List; however, we are adding these services to the Medicare Telehealth Services List on a temporary basis during the PHE, in accordance with § 410.78(f). As explained below in section II.D.1.d. of this proposed rule, services included on the Medicare Telehealth Services List on a temporary basis during the PHE that have not been added to the list on a Category 3 basis will remain on the list for 151 days following the end of the PHE. Furthermore, we are proposing to add CPT codes 97537, 97763, 90901, and 98960-98962 to the Medicare Telehealth Services List on a Category 3 basis through the end of CY 2023. Our clinical analyses of these services indicate that they can be furnished in full using two-way, audio and video technology during the circumstances of the PHE, and information provided by requestors indicates that there may be clinical benefit; however, there is not yet sufficient evidence available to consider the services for permanent addition to the Medicare Telehealth Services List under the Category 1 or Category 2 criteria. Including these services on the Medicare Telehealth Services List during the PHE and through CY 2023 would allow additional time for the development of evidence for CMS to consider when evaluating these services for potential permanent addition to the Medicare Telehealth Services List on a Category 1 or 2 basis. We continue to encourage commenters to supply additional information in support of adding these services to the Medicare Telehealth Services List on a permanent basis, including information regarding the safety and appropriateness of furnishing these services via telehealth. (2) Telephone E/M ServicesWe have also received requests to temporarily add Telephone E/M visit codes, CPT codes 99441, 99442, and 99443 to the Medicare Telehealth Services List on a Category 3 basis. In the March 31, 2020 interim final rule with comment period (IFC), we established separate payment for audio-only telephone E/M services (85 FR 19264 through 19266) for the duration of the PHE for the COVID-19 pandemic. Although these services were previously considered non-covered under the PFS, in the context of the PHE for COVID-19 and with the goal of reducing exposure risks associated with COVID-19 (especially in situations when two-way, audio and video technology is not available to furnish a Medicare telehealth service), we believed there were circumstances where prolonged, audio-only communication between the practitioner and the patient could be clinically appropriate, yet not fully replace a face-to-face visit. In the May 8, 2020 COVID-19 IFC, we noted that interested parties had informed us that use of audio-only services was more prevalent than we had previously considered, especially because many beneficiaries were not using video-enabled communication technology from their homes. In other words, there were many cases where practitioners who would ordinarily furnish audio-video telehealth or in-person visits to evaluate and manage patients' medical concerns were instead using audio-only interactions to manage more complex care (85 FR 27589 through 27590). While we had previously acknowledged the likelihood that, under the circumstances of the PHE for COVID- 19, more time would be spent interacting with the patient via audio-only technology, we stated that the intensity of furnishing an audio-only visit to a beneficiary during the unique circumstances of the PHE for COVID-19 was not accurately captured by the valuation of these services that we established in the March 31, 2020 IFC (85 FR 27590). This would be particularly true to the extent that these audio-only services are serving as a substitute for office/outpatient (O/O) Medicare telehealth visits for beneficiaries not using video-enabled telecommunications technology, which is contrary to the situation we anticipated when establishing separate payment for them in the March 31, 2020 IFC. In the May 8, 2020 COVID-19 IFC, we stated that, given our understanding that these audio-only services were being furnished primarily as a replacement for care that would otherwise be reported as an in-person or telehealth visit using the O/O E/M codes, we established new RVUs for the telephone E/M services based on crosswalks to the most analogous O/O E/M codes, based on the time Start Printed Page 45891 requirements for the telephone codes and the times assumed for valuation for purposes of the O/O E/M codes. Specifically, we crosswalked the levels 2-4 O/O E/Ms for established patients, as described by CPT codes 99212, 99213, and 99214, to CPT codes 99441, 99442, and 99443, respectively. Additionally, we stated that, given our understanding that these audio-only services were being furnished as substitutes for O/O E/M services, we recognized that they should be considered as telehealth services, and added them to the Medicare Telehealth Services List for the duration of the PHE for COVID-19 (85 FR 27590). In the CY 2022 PFS final rule (86 FR 65055), in response to requests that these codes be added to the Medicare Telehealth Services List on a Category 3 basis, we stated that we were finalizing a change to the definition of “telecommunications system” to allow telehealth services for the diagnosis, evaluation, and treatment of mental health conditions to be furnished through audio-only technology in certain circumstances after the end of the PHE. For example, the O/O E/M codes are on the Medicare Telehealth Services 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 Medicare Telehealth Services List is unnecessary for mental health telehealth services. For telehealth services other than mental health care, we stated that we believe that two-way, audio-video communications technology is the appropriate standard that will apply for telehealth services after the PHE ends. Further, we note that section 1834(m)(2)(A) of the Act requires that payment to a distant site physician or practitioner that furnishes Medicare telehealth services to an eligible telehealth individual be equal to the amount that would have been paid under Medicare if such physician or practitioner had furnished the service without a telecommunications system. We believe that the statute requires that telehealth services be so analogous to in-person care such that the telehealth service is essentially a substitute for a face-to-face encounter. However, these audio-only telephone E/M services are inherently non-face-to-face services, since they are furnished exclusively through remote, audio-only communications. Outside the circumstances of the PHE, the telephone E/M services would not be analogous to in-person care; nor would they be a substitute for a face-to-face encounter. Therefore, we do not believe it would be appropriate for these codes to remain on the Medicare Telehealth Services List after the end of the PHE and the 151-day post-PHE extension period. Accordingly, we are not proposing to keep these telephone E/M services on the Medicare Telehealth Services List after that period on a Category 3 basis, because the codes describe services that can only be furnished using audio-only telecommunications technology, and outside of the circumstances of the PHE, they do not describe services that are a substitute for an in-person visit. While we acknowledge that audio-only technology can be used to furnish mental health telehealth services to patients in their homes under certain circumstances after the PHE ends, two-way, audio-video communications technology continues to be the appropriate standard that will apply for Medicare telehealth services after the PHE and the 151-day extension period. As we noted in the CY 2021 PFS final rule (85 FR 84535), we will assign these Telephone E/M visit codes (CPT codes 99441, 99442, and 99443) a “bundled” status after the end of the PHE and the 151-day extension period, and we will post the RUC-recommended RVUs for these codes in accordance with our usual practice. (3) GI Tract Imaging and Continuous Glucose MonitoringWe received requests to add CPT codes describing GI Tract Imaging, CPT code 91110 ( Gastrointestinal tract imaging, intraluminal (e.g., capsule endoscopy), esophagus through ileum, with interpretation and report) and Ambulatory Continuous Glucose Monitoring, CPT code 95251 ( Ambulatory continuous glucose monitoring of interstitial tissue fluid via a subcutaneous sensor for a minimum of 72 hours; analysis, interpretation and report), to the Medicare Telehealth Services List on a Category 3 basis. We believe these codes may describe services that are inherently non-face-to-face services, (the patient need not be present in order for the service to be furnished in its entirety), and therefore, they do not describe services that are a substitute for an in-person visit. As stated earlier, we believe that the statute requires that telehealth services be so analogous to in-person care such that the telehealth service is essentially a substitute for a face-to-face encounter. For this and other reasons, we are not proposing to add these services to the Medicare Telehealth Services List on a Category 3 basis; we do not believe these CPT codes describe services that are a substitute for an in-person visit, and we believe that services that are not inherently face-to-face services are not services that can be furnished as Medicare telehealth services. Even so, we are interested in information that would help us to understand whether these services would meet the criteria for inclusion on the Medicare Telehealth Services List either for the PHE, as Category 3 services, or permanently on a Category 1 or 2 basis, given our questions as to whether they are inherently non-face-to-face services, and therefore, may not fit within the scope of services that could be furnished as Medicare telehealth services. Therefore, we are also seeking comment on whether these services would involve an in-person service when furnished without the use of a telecommunications system. (4) Neurostimulator Pulse Generator/TransmitterWe received requests to add codes describing the electronic analysis of an implanted neurostimulator pulse generator/transmitter to the Medicare Telehealth Services List. These included a request to add CPT codes 95976 ( Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with simple cranial nerve neurostimulator pulse generator/transmitter programming by physician or other qualified health care professional) and 95977 ( Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with complex cranial nerve neurostimulator pulse generator/transmitter programming by physician or other qualified health care professional) permanently on a Category 1 basis, as well as a request to add CPT codes 95970 ( Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group[s], Start Printed Page 45892 interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with brain, cranial nerve, spinal cord, peripheral nerve, or sacral nerve, neurostimulator pulse generator/transmitter, without programming ), 95983 ( Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with brain neurostimulator pulse generator/transmitter programming, first 15 minutes face-to-face time with physician or other qualified health care professional), and 95984 ( Electronic analysis of implanted neurostimulator pulse generator/transmitter (e.g., contact group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose lockout, patient selectable parameters, responsive neurostimulation, detection algorithms, closed loop parameters, and passive parameters) by physician or other qualified health care professional; with brain neurostimulator pulse generator/transmitter programming, each additional 15 minutes face-to-face time with physician or other qualified health care professional (List separately in addition to code for primary procedure)) to the Medicare Telehealth Services List on a temporary Category 3 basis. The request to add CPT codes 95976 and 95977, which are codes that describe analysis of cranial nerve neurostimulation, indicated that the ability to fully furnish this service using two-way, audio-video communication technology was forthcoming, but is currently unavailable. Therefore, we are not proposing to add CPT codes 95976 and 95977 to the Medicare Telehealth Services List, because the full scope of service elements described by these codes cannot currently be furnished via two-way, audio-video communication technology. However, we will consider additional evidence regarding the ability to furnish these services as telehealth services, such as information indicating that current technology has evolved, as it becomes available for future rulemaking. We are also not proposing to add them on a Category 1 basis because they do not describe services that are similar to professional consultations, office visits, and office psychiatry services that are currently on the Medicare Telehealth Services List. With regard to CPT codes 95970, 95983, and 95984, which describe general brain nerve neurostimulation, we have some concerns about whether the full scope of service elements could be furnished via two-way, audio-video communication technology, particularly since it is unclear whether the connection between the implanted device and the analysis/calibration equipment can be done remotely. Additionally, we are concerned about the immediate safety of the patient if the calibration of the neurostimulator were done incorrectly or if some other problem occurred. However, we did include these services on the Medicare Telehealth Services List on a temporary basis during the PHE, and Medicare claims data suggest that these services are being provided via telehealth. Based on this information, we believe there is some possible clinical benefit for these services when furnished via telehealth; however, there is not yet sufficient evidence available to consider the services for permanent addition to the Medicare Telehealth Services List under the Category 1 or Category 2 criteria. With that said, CPT codes 95970, 95983, and 95984 do meet the criteria for temporary inclusion on the Medicare Telehealth Services List on a Category 3 basis. Therefore, we are proposing to add CPT codes 95970, 95983, and 95984 to the Medicare Telehealth Services List on a Category 3 basis, while soliciting comment on our concerns regarding patient safety and whether these services are appropriate for inclusion on the Medicare Telehealth Services List outside the circumstances of the PHE. (5) Emotional/Behavior Assessment, Psychological, or Neuropsychological Testing and Evaluation ServicesWe received requests to add a number of emotional/behavior assessment, psychological, or neuropsychological testing and evaluation services, described by CPT codes 97151 ( Behavior identification assessment, administered by a physician or other qualified health care professional, each 15 minutes of the physician's or other qualified health care professional's time face-to-face with patient and/or guardian(s)/caregiver(s) administering assessments and discussing findings and recommendations, and non-face-to-face analyzing past data, scoring/interpreting the assessment, and preparing the report/treatment plan), 97152 ( Behavior identification-supporting assessment, administered by one technician under the direction of a physician or other qualified health care professional, face-to-face with the patient, each 15 minutes), 97153 ( Adaptive behavior treatment by protocol, administered by technician under the direction of a physician or other qualified health care professional, face-to-face with one patient, each 15 minutes), 97154 ( Group adaptive behavior treatment by protocol, administered by technician under the direction of a physician or other qualified health care professional, face-to-face with two or more patients, each 15 minutes), 97155 ( Adaptive behavior treatment with protocol modification, administered by physician or other qualified health care professional, which may include simultaneous direction of technician, face-to-face with one patient, each 15 minutes), 97156 ( Family adaptive behavior treatment guidance, administered by physician or other qualified health care professional (with or without the patient present), face-to-face with guardian(s)/caregiver(s), each 15 minutes), 97157 ( Multiple-family group adaptive behavior treatment guidance, administered by physician or other qualified health care professional (without the patient present), face-to-face with multiple sets of guardians/caregivers, each 15 minutes), 97158 ( Group adaptive behavior treatment with protocol modification, administered by physician or other qualified health care professional, face-to-face with multiple patients, each 15 minutes), 0362T ( Behavior identification supporting assessment, each 15 minutes of technicians' time face-to-face with a patient, requiring the following components: administration by the physician or other qualified health care professional who is on site; with the assistance of two or more technicians; for a patient who exhibits destructive behavior; completion in an environment that is customized to the patient's behavior.), and 0373T ( Adaptive behavior treatment with protocol modification, each 15 minutes of technicians' time face-to-face with a patient, requiring the following components: administration by the physician or other qualified health care professional who is on site; with the assistance of two or more technicians; for a patient who exhibits destructive behavior; completion in an environment that is customized to the patient's behavior.) to the Medicare Telehealth Services List permanently on a Category 2 basis. These services are currently on Start Printed Page 45893 the Medicare Telehealth Services List temporarily for the duration of the PHE. We believe that, for these services, there is likely to be clinical benefit when furnished via telehealth, and therefore, they meet the criteria for temporary inclusion on a Category 3 basis. We did not identify these services during our initial assessment of services that should be temporarily available on the Medicare Telehealth Services List on a Category 3 basis in the CY 2021 rulemaking; however, we are now proposing to include these services on the Medicare Telehealth Services List on a Category 3 basis, in light of information we received from the requestors describing the potential clinical benefit of these services when furnished via telehealth. However, we do have concerns regarding whether, outside the circumstances of the PHE, the full scope of service elements can occur in a manner that does not jeopardize quality of care, whether this patient population could be fully assessed via interactive audio-video technology, and whether these services could be conducted in a way that maintains the safety of the beneficiary. This patient population often includes patients with moderate to severe challenges in oral communication, and they may require close observation of their movements within all of their environmental cues, which include, for instance, smell, sound, and colors around the room. We are concerned that two-way, audio and video communications technology would not fully capture these behavioral nuances. We believe more time may be necessary to develop evidence that could support the decision to add these services to the Medicare Telehealth Services List permanently on a Category 1 or Category 2 basis. We are soliciting comment on our patient safety concerns. c. Other Services Proposed for Addition to the Medicare Telehealth Services ListAs discussed above, there are services that are included on the Medicare Telehealth Services List temporarily 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 to the list under the Category 1 or Category 2 criteria. In addition to the services discussed above that we are proposing for addition to the Medicare Telehealth Services List on a Category 3 basis in response to requests, we are also proposing to add a number of services to the list on a Category 3 basis that are currently included on the Medicare Telehealth Services List temporarily during the PHE. These services would be included on the Medicare Telehealth Services List through 2023 to allow us to evaluate data that may support their permanent addition to the list on a Category 1 or Category 2 basis. The services we are proposing for inclusion to the Medicare Telehealth Services List on a Category 3 basis include CPT codes 90875 ( Individual psychophysiological therapy incorporating biofeedback training by any modality (face-to-face with the patient), with psychotherapy (e.g., insight oriented, behavior modifying or supportive psychotherapy); 30 minutes), 92012 ( Ophthalmological services: medical examination and evaluation, with initiation or continuation of diagnostic and treatment program; intermediate, established patient), 92014 ( Ophthalmological services: medical examination and evaluation, with initiation or continuation of diagnostic and treatment program; comprehensive, established patient, 1 or more visits), 92507 ( Treatment of speech, language, voice, communication, and/or auditory processing disorder; individual), 94005 ( Home ventilator management care plan oversight of a patient (patient not present) in home, domiciliary or rest home (e.g., assisted living) requiring review of status, review of laboratories and other studies and revision of orders and respiratory care plan (as appropriate), within a calendar month, 30 minutes or more), 96105 ( Assessment of aphasia (includes assessment of expressive and receptive speech and language function, language comprehension, speech production ability, reading, spelling, writing, e.g., by Boston Diagnostic Aphasia Examination) with interpretation and report, per hour), 96110 ( Developmental screening (e.g., developmental milestone survey, speech and language delay screen), with scoring and documentation, per standardized instrument), 96112 ( Developmental test administration (including assessment of fine and/or gross motor, language, cognitive level, social, memory and/or executive functions by standardized developmental instruments when performed), by physician or other qualified health care professional, with interpretation and report; first hour), 96113 ( Developmental test administration (including assessment of fine and/or gross motor, language, cognitive level, social, memory and/or executive functions by standardized developmental instruments when performed), by physician or other qualified health care professional, with interpretation and report; each additional 30 minutes (List separately in addition to code for primary procedure)), 96127 ( Brief emotional/behavioral assessment (e.g., depression inventory, attention-deficit/hyperactivity disorder [ADHD] scale), with scoring and documentation, per standardized instrument), 96170 ( Health behavior intervention, family (without the patient present), face-to-face; initial 30 minutes), 96171 ( Health behavior intervention, family (without the patient present), face-to-face; each additional 15 minutes (List separately in addition to code for primary service)), 97129 ( Therapeutic interventions that focus on cognitive function (e.g., attention, memory, reasoning, executive function, problem solving, and/or pragmatic functioning) and compensatory strategies to manage the performance of an activity (e.g., managing time or schedules, initiating, organizing, and sequencing tasks), direct (one-on-one) patient contact; initial 15 minutes), 97130 ( Therapeutic interventions that focus on cognitive function (e.g., attention, memory, reasoning, executive function, problem solving, and/or pragmatic functioning) and compensatory strategies to manage the performance of an activity (e.g., managing time or schedules, initiating, organizing, and sequencing tasks), direct (one-on-one) patient contact; each additional 15 minutes (List separately in addition to code for primary procedure)), and 99473 ( Self-measured blood pressure using a device validated for clinical accuracy; patient education/training and device calibration). Our analyses of these services indicate that there is some evidence of possible clinical benefit associated with these services when furnished via telehealth. We believe these services can safely be furnished via real-time, audio and visual interactive telecommunications under the circumstances of the PHE, but there is not yet sufficient evidence available to consider the services for permanent addition to the Medicare Telehealth Services List under the Category 1 or Category 2 criteria. Some audiology testing services are currently temporarily available on the Medicare Telehealth Services List for the duration of the PHE. These are CPT codes 92550 ( Tympanometry and reflex threshold measurements), 92552 ( Pure tone audiometry (threshold); air only), 92553 ( Pure tone audiometry (threshold); air and bone), 92555 ( Speech audiometry threshold;), 92556 ( Speech audiometry threshold; with speech recognition), 92557 ( Comprehensive audiometry threshold Start Printed Page 45894 evaluation and speech recognition (92553 and 92556 combined) ), 92563 ( Tone decay test), 92565 ( Stenger test, pure tone), 92567 ( Tympanometry (impedance testing)), 92568 ( Acoustic reflex testing, threshold), 92570 ( Acoustic immittance testing, includes tympanometry (impedance testing), acoustic reflex threshold testing, and acoustic reflex decay testing), 92587 ( Distortion product evoked otoacoustic emissions; limited evaluation (to confirm the presence or absence of hearing disorder, 3-6 frequencies) or transient evoked otoacoustic emissions, with interpretation and report), 92588 ( Distortion product evoked otoacoustic emissions; comprehensive diagnostic evaluation (quantitative analysis of outer hair cell function by cochlear mapping, minimum of 12 frequencies), with interpretation and report), 92601 ( Diagnostic analysis of cochlear implant, patient younger than 7 years of age; with programming), 92625 ( Assessment of tinnitus (includes pitch, loudness matching, and masking)), 92626 ( Evaluation of auditory function for surgically implanted device(s) candidacy or postoperative status of a surgically implanted device(s); first hour), 92627 ( Evaluation of auditory function for surgically implanted device(s) candidacy or postoperative status of a surgically implanted device(s); each additional 15 minutes (List separately in addition to code for primary procedure)). We have received information that, during the PHE, certain practitioners have developed the capacity to perform these services using remote technology including specialized equipment inside an audiometric soundproof booth. We believe that, in circumstances in which such equipment is available at the originating site, these services can be furnished in a way in which all of the elements of the services are met and that there is likely to be a clinical benefit when these services are furnished via telehealth. Therefore, we are proposing to add these services to the Medicare Telehealth Services List on a Category 3 basis, which would allow these services to be available via telehealth through the end of CY 2023. We are soliciting comments regarding how widespread the availability of this remote technology is, and whether interested parties believe these services can be furnished in a way that does not jeopardize patient safety or quality of care when these services are furnished remotely. Additionally, as discussed in section II.F. of this proposed rule, we are proposing to create HCPCS codes GXXX1 ( Prolonged hospital inpatient or observation care evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99223, 99233, and 99236 for hospital inpatient or observation care evaluation and management services). (Do not report GXXX1 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 993X0). (Do not report GXXX1 for any time unit less than 15 minutes)), GXXX2 ( Prolonged nursing facility evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99306, 99310 for nursing facility evaluation and management services). (Do not report GXXX2 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 993X0,). (Do not report GXXX2 for any time unit less than 15 minutes)), and GXXX3 ( Prolonged home or residence evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99345, 99350 for home or residence evaluation and management services). (Do not report GXXX3 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 99417). (Do not report GXXX3 for any time unit less than 15 minutes)) to describe prolonged services associated with certain types of E/M services. These codes would be replacing existing codes that describe prolonged services, specifically inpatient prolonged services CPT codes 99356 ( Prolonged service in the inpatient or observation setting, requiring unit/floor time beyond the usual service; first hour (List separately in addition to code for inpatient or observation Evaluation and Management service)) and 99357 ( Prolonged service in the inpatient or observation setting, requiring unit/floor time beyond the usual service; each additional 30 minutes (List separately in addition to code for prolonged service)). These services are similar to services currently on the Medicare Telehealth Services List, such as CPT codes 99356 and 99357, which were added to the Medicare Telehealth Services List on a Category 1 basis in the CY 2016 rule (80 FR 71060-71062), as well as O/O prolonged service HCPCS code G2212 ( Prolonged service in the inpatient or observation setting, requiring unit/floor time beyond the usual service; each additional 30 minutes (List separately in addition to code for prolonged service)), which was added to the Medicare Telehealth Services List on a Category 1 basis in the CY 2021 rule (85 FR 84506). Similarly, we believe that these proposed HCPCS G codes would be sufficiently similar to psychiatric diagnostic procedures or O/O visits currently on the Medicare Telehealth Services List to qualify for inclusion on the list on a Category 1 basis. Therefore, we are proposing to add proposed HCPCS codes GXXX1, GXXX2, and GXXX3 to the Medicare Telehealth Services List on a Category 1 basis. Table 8 lists the services that we are proposing for addition to the Medicare Telehealth Services List on a Category 3 basis. Table 9 lists the services we are proposing for permanent addition to the Medicare Telehealth Services List on a Category 1 basis. Start Printed Page 45895 Start Printed Page 45896 d. Services Proposed for Removal From the Medicare Telehealth Services List After 151 Days Following the End of the PHEAs we noted in the CY 2022 PFS final rule (86 FR 65054), at the conclusion of the PHE for COVID-19, the 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 our regular notice-and-comment rulemaking process, through which we established Medicare Telehealth Services List. Services that have been added to the Medicare Telehealth Services List on a Category 3 basis will remain on the list through the end of CY 2023. Under our current policy, all other services that were temporarily added to the Medicare Telehealth Services List on an interim basis during the PHE and have not been added to the Medicare Telehealth Services List on a Category 1, 2, or 3 basis will not remain on the list after the end of the PHE (85 FR 84506-84509). As explained in section II.D.1.e. of this proposed rule, Division P, Title III, Subsection A of the Consolidated Appropriations Act, 2022 (CAA, 2022), extends some of the flexibilities implemented during the PHE for COVID-19 for an additional 151 days after the end of the PHE, including Section 301(a) of Division P, Title III, Subtitle A of the CAA, 2022, which specifies that, for services on the Medicare Telehealth Services List as of the date of enactment (March 15, 2022) furnished during 151 days after the end of the PHE, the originating site for the telehealth service can be any site in the United States at which the beneficiary is located when the service is furnished, including the beneficiary's home. To give full effect to this provision, we believe it is necessary to continue to include the services on the Medicare Telehealth Services List through the 151-day period after the end of the PHE that were temporarily added to the list during the PHE but have not since been added on a Category 3 or other basis, and which are currently set to be removed from the list at the end of the PHE. As such, we are proposing to continue to include on the Medicare Telehealth Services List the services that are currently set to be removed from the list when the PHE ends (that is, those not currently added to the list on a Category 1, 2, or 3 basis) for an additional 151 days after the PHE ends. Table 10 lists those services that are temporarily available for the PHE, which we are proposing to retain on the Medicare Telehealth Services List for an additional 151 days following the end of the PHE. The services listed in Table 10 will no longer be available on the Medicare Telehealth Services List on the 152nd day after the end of the PHE. On the 152nd day after the end of the PHE, payment for Medicare telehealth services will once again be limited by the requirements of section 1834(m) of the Act, as aforementioned, and telehealth claims for these codes will be denied. We are proposing to align those services that had been planned to stop being available as Medicare telehealth at the end of the PHE with the 151-day extensions of flexibilities enacted in the CAA, 2022 in order to simplify the process of when flexibilities will end and to minimize possible errors. Start Printed Page 45897 Start Printed Page 45898 e. Implementation of Telehealth Provisions of the Consolidation Appropriations Acts, 2021 and 2022As discussed in the CY 2021 PFS final rule (85 FR 84506), legislation enacted to address the PHE for COVID-19 provided the Secretary with new authorities under section 1135(b)(8) of the Act, as added by section 102 of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (Pub. L. 116-123, March 6, 2020) and subsequently amended by section 6010 of the Families First Coronavirus Response Act (Pub. L. 116-127, March 18, 2020) and section 3703 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136, March 27, 2020), to waive or modify Medicare telehealth payment requirements during the PHE for COVID-19. We used these authorities to establish several flexibilities to accommodate changes in the delivery of care during the PHE. Through waiver authority under section 1135(b)(8) of the Act, in response to the PHE for COVID-19, we removed the geographic and site of service originating site restrictions in section 1834(m)(4)(C) of the Act, as well as restrictions in section 1834(m)(4)(E) of the Act on the types of practitioners who may furnish telehealth services, for the duration of the PHE for COVID-19. We also used waiver authority to allow certain telehealth services to be furnished via audio-only communication technology. At the end of the PHE for COVID-19, these waivers and interim policies will expire, and payment for Medicare telehealth services will once again be limited by the requirements of section 1834(m) of the Act. 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)), removes the geographic restrictions under section 1834(m)(4)(C)(i) of the Act and authorizes the patient's home as a permissible originating site, for telehealth services furnished for purposes of treatment of a substance use disorder (SUD) or a co-occurring mental health disorder, furnished on or after July 1, 2019, to an individual with a SUD diagnosis. Section 123(a) of Division CC of the Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260, December 27, 2020) 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, 2021 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. For a full discussion of our implementation of section 123(a) of the CAA, 2021, refer to our CY 2022 PFS final rule (86 FR 64996). In this proposed rule, we are proposing to implement provisions of section 1834(m) of the Act (including the amendments made by the CAA, 2021) and provisions of the CAA, 2022 that extend certain Medicare telehealth flexibilities adopted during the PHE for 151 days after the end of the PHE. Sections 301, 302, 303, 304, and 305 of Division P, Title III, Subtitle A of the CAA, 2022 amended section 1834(m) of the Act to generally extend certain PHE-related telehealth policies for services that are on the Medicare Telehealth Services List as of the date of enactment (March 15, 2021). Specifically, section 301(a) of the CAA, 2022 amended section 1834(m)(4)(C) of the Act to add a new clause (iii), which temporarily expands the scope of telehealth originating sites for those services to include any site in the United States where the beneficiary is located at the time of the telehealth service, including an individual's home, for a 151-day period beginning on the first day after the end of the PHE for COVID-19. Section 301(a) also amended section 1834(m)(7)(A) of the Act to apply the expanded scope of telehealth originating site policy to include any location in the United States in new clause (iii) of section 1834(m)(4)(C) of the Act during the 151-day period for telehealth services furnished for the purposes of diagnosis, evaluation, or treatment of a mental health disorder and to individuals with a SUD diagnosis for purposes of treatment of the SUD or a co-occurring mental health disorder for this 151-day post-PHE extension period. In addition to this provision, section 301(b) of the CAA, 2022 amended section 1834(m)(2)(B) of the Act to add a new clause (iii) that allows payment of an originating site facility fee to an originating site with respect to those telehealth services furnished during the 151-day period only if the originating site is one that meets the geographic requirements in section 1834(m)(4)(C)(i) of the Act, and is a setting included on the enumerated list of originating sites under section 1834(m)(4)(C)(ii) of the Act (other than the patient's home). Section 302 of the CAA, 2022 amended section 1834(m)(4)(E) of the Act to temporarily expand the definition of eligible telehealth practitioners for the 151-day period beginning on the first day after the end of the PHE for COVID-19 to include qualified occupational therapists, qualified physical therapists, qualified speech-language pathologists, and qualified audiologists. Section 303 of the CAA, 2022 amended section 1834(m)(8) of the Act to temporarily continue payment for telehealth services furnished by FQHCs and RHCs for the 151-day period beginning on the first day after the end of the COVID-19 PHE using the methodology established for telehealth services furnished by FQHCs and RHCs during the PHE, which, in accordance with section 1834(m)(8)(B) of the Act, is based on payment rates that are similar to the national average payment rates for comparable telehealth services under the PFS. Section 304(a) of the CAA, 2022 amended section 1834(m)(7)(B)(i) of the Act to delay the requirement for an in-person visit with the physician or practitioner within 6 months prior to the initial mental health telehealth service, and again at subsequent intervals as the Secretary determines appropriate. In light of this amendment, the in-person requirements for telehealth services furnished for purposes of diagnosis, evaluation, or treatment of a mental health disorder will again be effective on the 152nd day after the PHE ends. In addition, section 304(b) and (c) of the CAA, 2022 modified sections 1834(y) and 1834(o)(4) of the Act, respectively, to similarly delay in-person visit requirements for mental health visits furnished by Rural Health Clinics and Federally Qualified Health Centers via telecommunications technology. Therefore, we are proposing to revise the regulatory text at § 410.78(b)(3)(xiv) to recognize the delay of the in-person requirements for mental health visits furnished by RHCs and FQHCs through telecommunication technology under Medicare until the 152nd day after the PHE for COVID-19, to conform with the statute. See section II.B.3. of this proposed rule for our proposal to implement similar changes for RHC and FQHC mental health visits. Start Printed Page 45899 Finally, section 305 of the CAA, 2022 added a new paragraph (9) to section 1834(m) of the Act to require the Secretary to continue to provide for coverage and payment of telehealth services included on the Medicare Telehealth Services List as of the March 15, 2022, date of enactment that are furnished via an audio-only telecommunications system during the 151-day period beginning on the first day after the end of the PHE for COVID-19. The new paragraph applies only to telehealth services specified on the Medicare Telehealth Services List under section 1834(m)(4)(F)(i) of the Act that are designated to as eligible to be furnished via audio-only technology as of the date of enactment of the CAA, 2022 (that is, March 15, 2022). These are the services for which CMS waived the requirements of section 1834(m)(1) of the Act and the first sentence of § 410.78(a)(3) for use of interactive telecommunications systems to furnish telehealth services, to the extent they require use of video technology, during the PHE. Under this waiver, CMS permitted the audio-only telephone E/M services and certain behavioral health counseling and educational services to be furnished via audio-only equipment during the PHE for COVID-19. CMS is proposing to continue to make payment for services included on the Medicare Telehealth Services List as of March 15, 2022 that are furnished via an audio-only telecommunications system for the 151-day period beginning on the first day after the end of the PHE. We read section 305 of the CAA, 2022 to require that we continue to make payment for services furnished via audio-only telecommunications systems (each described by a HCPCS code, including their successor codes) for the 151-day period after the end of the PHE. These services include certain behavioral health, counseling, and educational services. A list of the services that involve audio-only interaction but are included on the Medicare Telehealth Services List for the duration of the PHE is available at the CMS website, https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes. Section 309 of Division P, Title III, Subtitle A of the CAA, 2022 authorizes the Secretary to implement the amendments described above made by sections 301 through 305 through program instruction or otherwise. Given that the end date of the PHE is not yet known and could occur before the rulemaking process for the CY 2023 PFS is complete, and that the changes made by these provisions are very specific and concise, we are providing notice that we intend to issue program instructions or other subregulatory guidance to effectuate the changes described above, other than the proposed revisions to § 410.78, in the near future. We believe this approach will serve to ensure a smooth transition after the end of the PHE for COVID-19. f. Use of Modifiers for Medicare Telehealth Services Following the End of the PHE for COVID-19Prior to CY 2017, Medicare telehealth services furnished via interactive audio and video telecommunications systems were reported using the GT modifier. In the CY 2017 PFS Final Rule, CMS finalized creation of a new Place of Service (POS) code for Medicare telehealth, POS “02” (81 FR 80199-80201). When a physician or practitioner submits a claim for their services, including claims for telehealth services, they include a place of service (POS) code that is used to determine whether a service is paid using the facility or non-facility rate. Under the PFS, there are two payment rates for many physicians' services: the facility rate and the non-facility (or office) rate. The PFS non-facility rate is the single amount paid to a physician or other practitioner for services furnished in their office. The PFS facility rate is the amount generally paid to a professional when a service is furnished in a setting of care, like a hospital, where Medicare is making a separate payment to a facility entity in addition to the payment to the billing physician or practitioner. This separate payment, often referred to as a “facility fee,” reflects the facility's costs associated with the service (clinical staff, supplies, and equipment) and is paid in addition to what is paid to the professional under the PFS. POS “02” indicates payment at the facility payment rate. As discussed in the March 31, 2020 IFC, (refer to 85 FR 19230), we stated that, as physician practices suddenly transitioned a potentially significant portion of their services from in-person to telehealth visits in the context of the PHE for the COVID-19 pandemic, the relative resource costs of furnishing these services via telehealth may not significantly differ from the resource costs involved when these services are furnished in-person. Therefore, we instructed physicians and practitioners who bill for Medicare telehealth services to report the POS code that would have been reported had the service been furnished in person. This would allow our systems to make appropriate payment for services furnished via Medicare telehealth, which, if not for the PHE for the COVID-19 pandemic, would have been furnished in-person, at the same rate they would have been paid if the services were furnished in-person. In order to effectuate this change, we finalized on an interim basis (85 FR 19233) the use of the CPT telehealth modifier, modifier “95”, for the duration of the PHE for COVID-19, which should be applied to claim lines that describe services furnished via telehealth and that the practitioner should report the POS code where the service would have occurred had it not been furnished via telehealth. We further noted that we are maintaining the facility payment rate for services billed using the general telehealth POS code “02”, should practitioners choose to maintain their current billing practices for Medicare telehealth during the PHE for the COVID-19 pandemic. We propose that Medicare telehealth services furnished on or before the 151st day after the end of the PHE, in alignment with the extensions of telehealth-related flexibilities in the CAA, 2022, will continue to be processed for payment as Medicare telehealth claims when accompanied with the modifier “95”. We further propose that physicians and practitioners can continue to report the place of service code that would have been reported had the service been furnished in-person during the 151-day period after the end of the PHE, as finalized on an interim basis in the March 31 IFC (85 FR 19233). Medicare telehealth services performed with dates of service occurring on or after the 152nd day after the end of the PHE will revert to pre-PHE rules and will no longer require modifier “95” to be appended to the claim, but the appropriate place of service (POS) indicator will need to be included on the claim to be processed for payment as Medicare telehealth claims in order to properly identify the place where the service was furnished. For Medicare telehealth services furnished on or after the 152nd day after the end of the PHE, the POS indicators for Medicare telehealth will be: • POS “02”—which would be redefined, if finalized, as Telehealth Provided Other than in Patient's Home ( Descriptor: The location where health services and health related services are provided or received, through telecommunication technology. Patient is not located in their home when receiving health services or health related services through telecommunication technology.); and Start Printed Page 45900 • POS “10”—Telehealth Provided in Patient's Home ( Descriptor: The location where health services and health related services are provided or received through telecommunication technology. Patient is located in their home (which is a location other than a hospital or other facility where the patient receives care in a private residence) when receiving health services or health related services through telecommunication technology.). We remind readers that we defined “home” in our CY 2022 PFS final rule (86 FR 65059) as: “both in general and for this purpose, a beneficiary's home can include temporary lodging, such as hotels and homeless shelters. We clarified 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.” Once the flexibilities for the geographic restrictions and the site of service waivers for Medicare telehealth services expire (on the 152nd day after the end of the PHE, per the CAA, 2022), POS “02” will once again be required for all Medicare telehealth claims. The exceptions include claims for Medicare telehealth mental health services, clinical assessments for patients with ESRD that are receiving home dialysis, and Medicare telehealth mental health services that are co-occurring with substance use treatment that are furnished with the patient in their home (that is, the originating site is in a private residence and not a hospital or other facility setting), in which case POS “10” could be used by the billing practitioner. On or after the 152nd day after the PHE has expired, payment for Medicare telehealth services using either of the Medicare telehealth POS codes will be made at the PFS facility payment rate, in accordance with established policy outside the circumstances of the PHE. We propose to align those telehealth services described as taking place in the beneficiary's home, using POS “10” for Medicare telehealth, and those services not provided in a patient's home, using POS “02” for Medicare telehealth, to be made at the same facility payment amount. We believe that the facility payment amount best reflects the practice expenses, both direct and indirect, involved in furnishing services via telehealth (please see section II.B. of this proposed rule for further discussion regarding practice expense). We further propose that, beginning January 1, 2023, a physician or other qualified health care practitioner billing for telehealth services furnished using audio-only communications technology shall append CPT modifier “93” ( Synchronous Telemedicine Service Rendered Via Telephone or Other Real-Time Interactive Audio-Only Telecommunications System: Synchronous telemedicine service is defined as a real-time interaction between a physician or other qualified health care professional and a patient who is located away at a distant site from the physician or other qualified health care professional. The totality of the communication of information exchanged between the physician or other qualified health care professional and the patient during the course of the synchronous telemedicine service must be of an amount and nature that is sufficient to meet the key components and/or requirements of the same service when rendered via a face-to-face interaction) to Medicare telehealth claims (for those services for which the use of audio-only technology is permitted under § 410.78(a)(3)), to identify them as having been furnished using audio-only technology. We note that CMS has instructed RHCs, FQHCs, and OTPs to append Medicare modifier “FQ” ( Medicare telehealth service was furnished using audio-only communication technology) for allowable audio-only services furnished in those settings; however, consistent with our proposal for audio-only services furnished under the PFS, we are also proposing to require RHCs, FQHCs, and OTPs to use modifier 93 when billing for eligible mental health services furnished via audio-only telecommunications technology. We believe that using modifier “93”, which is a CPT modifier, will simplify billing, as this modifier is used by payers outside of Medicare. Currently, these modifiers can only be applied to Medicare telehealth mental health services and those telehealth services for the treatment of a SUD or a co-occurring mental health disorder when the originating site is the beneficiary's home. Supervising practitioners continue to be required to append the “FR” modifier on any applicable telehealth claim when required to be present through an interactive real-time, audio and video telecommunications link, as reflected in each service's requirement. 2. Other Non-Face-to-Face Services Involving Communications Technology Under the PFSa. Expiration of PHE Flexibilities for Direct Supervision RequirementsUnder Medicare Part B, certain types of services, including diagnostic tests, services incident to physicians' or practitioners' professional services, and other services, are required to be furnished under specific minimum levels of supervision by a physician or practitioner. For professional services furnished incident to the services of the 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), statutory requirements for immediate availability and accessibility of a physician are met 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. We have established this “immediate availability” requirement to mean in-person, physical, not virtual, availability (please see the April 6, 2020 IFC (85 FR 19245) and the CY 2022 PFS final rule (86 FR 65062)). Through the March 31, 2020 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 the March 31, 2020 IFC (85 FR 19246) and in our CY 2022 PFS final rule (see 85 FR 65063), 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 especially Start Printed Page 45901 relevant for services such as physical therapy, occupational therapy, and speech language pathology services, since those practitioners can only bill Medicare for telehealth services under Medicare telehealth waivers that are effective only during the PHE for COVID-19 (per the emergency waiver authority established in section 1135(b)(8) of the Act), and for 151 days after the final day of the PHE for COVID-19, as mandated by the CAA, 2022. We note that sections 1834(m)(4)(D) and (E) of the Act specify the types of clinicians who may furnish and bill for Medicare telehealth service. Outside of the PHE and the 151-day period after the PHE ends, such clinicians 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 remind readers that after December 31 of the year in which the PHE ends, the pre-PHE rules for direct supervision at § 410.32(b)(3)(ii) would apply. As noted in the CY 2022 PFS final rule (86 FR 65062), this means 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 would no longer apply, so telehealth services can no longer be performed by clinical staff incident to a physician's professional service. While we are not proposing to make the temporary exception to allow immediate availability for direct supervision through virtual presence permanent, as with last year's rulemaking (86 FR 39149-50), we continue to seek information on whether the flexibility to meet the immediate availability requirement for direct supervision through the use of real-time, audio/video technology should potentially be made permanent. We also seek 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. As discussed in last year's final rule (86 FR 65063), and based on gaps in the currently available evidence, we are in need of more information as we consider whether to make permanent a temporary exception to our direct supervision policy. 3. Telehealth Originating Site Facility Fee UpdateSection 1834(m)(2)(B) of the Act established the initial Medicare telehealth originating site facility fee for telehealth services furnished from October 1, 2001 through December 31, 2002, at $20.00, and specifies that 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 proposed MEI increase for CY 2023 is 3.7 percent and is based on the most current forecast of the percentage increase of the 2006-based MEI for the second quarter of 2022 (4.1 percent), and the most recent estimate of the historical productivity adjustment for calendar year 2021 (0.4 percent). Therefore, for CY 2023, the proposed payment amount for HCPCS code Q3014 ( Telehealth originating site facility fee) is $28.61. The final Medicare telehealth originating site facility fee will be revised for the final rule based on the historical data through the second quarter 2022 and the most recently available total factor productivity data. The Medicare telehealth originating site facility fee and the MEI increase by the applicable time period are shown in Table 11. Start Printed Page 45902 E. Valuation of Specific Codes1. Background: Process for Valuing New, Revised, and Potentially Misvalued CodesEstablishing 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 proposed 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 solicit 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 consider and responded to public comments received on the interim final values, and typically make any appropriate adjustments and finalize 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, Start Printed Page 45903 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 interested parties, 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 RVUsFor 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. We also include a summary of interested party reactions to our approach when available. We note that many commenters and interested parties have expressed concerns over the years with our reviews of and updates to work RVUs based on changes in the best available information 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 use to update the RVUs 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 Start Printed Page 45904 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 interested parties, including the RUC, have expressed general objections to our use of these methodologies to adjust for reductions in time, suggesting that our adjustments to the RUC-recommended work RVUs are inappropriate. Other interested parties have expressed general concerns with our refinements to RUC-recommended values. 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. In the CY 2017 PFS final rule (81 FR 80272 through 80277), we responded in detail to several comments that we received regarding our approach to RUC-recommended work times and RVUs. 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. 3. Methodology for the Direct PE Inputs To Develop PE RVUsa. BackgroundOn 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 14 details our refinements of the RUC's direct PE recommendations at the code-specific level. In section II.B. of this proposed rule, Determination of PE RVUs, we address certain proposed refinements that would be common across codes. We address refinements to particular codes in the portions of section II.B. that focus on particular codes. We note that for each refinement, we indicate the potential impact on direct costs for that service. We note 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. We also note that many of the refinements listed in Table 13 result in changes under the $0.35 threshold and would be unlikely to result in a change to the RVUs. We note that the proposed direct PE inputs for CY 2023 are displayed in the CY 2023 direct PE input files, available on the CMS website under the downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The inputs displayed there have been used in developing the proposed CY 2023 PE RVUs as displayed in Addendum B. b. Common Refinements(1) Changes in Work TimeSome 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 Start Printed Page 45905 or adjusted in the establishment of proposed direct PE inputs to resolve the discrepancies. (2) Equipment TimePrior 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 TasksIn 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. We refer readers to section II.B. of this proposed rule, Determination of 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 InputsIn 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 ItemsThe 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 2023, we received invoices for several new supply and equipment items. Tables 15 and 16 detail the invoices received for new and existing items in the direct PE database. As discussed in section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units, we encourage interested parties 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 interested parties 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 interested parties 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 15 and 16 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 interested parties 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 interested parties 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 interested parties 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 Start Printed Page 45906 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 SettingGenerally 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 CapWe 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 2023 are available on the CMS website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/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 technical component (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 hospital outpatient (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 2023, 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 2023, we propose to include the following services on the list of codes to which the OPPS cap applies: CPT codes 0493T ( Contact near-infrared spectroscopy studies of lower extremity wounds (e.g., for oxyhemoglobin measurement)), 0640T ( Noncontact near-infrared spectroscopy studies of flap or wound (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue oxygenation [StO2]); image acquisition, interpretation and report, each flap or wound), 0641T ( Noncontact near-infrared spectroscopy studies of flap or wound (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue oxygenation [StO2]); image acquisition only, each flap or wound), 0642T ( Noncontact near-infrared spectroscopy studies of flap or wound (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue oxygenation [StO2]); interpretation and report only, each flap or wound), 0651T ( Magnetically controlled capsule endoscopy, esophagus through stomach, including intraprocedural positioning of capsule, with interpretation and report), 0658T ( Electrical impedance spectroscopy of 1 or more skin lesions for automated melanoma risk score), 0689T ( Quantitative ultrasound tissue characterization (non-elastographic), including interpretation and report, obtained without diagnostic ultrasound examination of the same anatomy (e.g., organ, gland, tissue, target structure)), 0690T ( Quantitative ultrasound tissue characterization (non-elastographic), including interpretation and report, obtained with diagnostic ultrasound examination of the same anatomy (e.g., organ, gland, tissue, target structure) (List separately in addition to code for primary procedure)), 0694T ( 3-dimensional volumetric imaging and reconstruction of breast or axillary lymph node tissue, each excised specimen, 3-dimensional automatic specimen reorientation, interpretation and report, real-time intraoperative), 0700T ( Molecular fluorescent imaging of suspicious nevus; first lesion), 0701T ( Molecular fluorescent imaging of suspicious nevus; each additional lesion (List separately in addition to code for primary procedure)), and 76XX0 ( Ultrasound, nerve(s) and accompanying structures throughout their entire anatomic course in one extremity, comprehensive, including real-time cine imaging with image documentation, per extremity). 4. Valuation of Specific Codes for CY 2023(1) Anterior Abdominal Hernia Repair (CPT Codes 157X1, 49X01, 49X02, 49X03, 49X04, 49X05, 49X06, 49X07, 49X08, 49X09, 49X10, 49X11, 49X12, 49X13, 49X14, and 49X15)In April 2021, the RUC reviewed an existing code that describes hernia repair, CPT code 49565 ( Repair recurrent incisional or ventral hernia; reducible). CPT code 49565 was identified as being performed less than 50 percent of the time in the inpatient setting and being primarily performed in the outpatient setting. Interested parties requested referral to CPT to update the code's descriptor. In response to the disparate site of service and request to update the code's descriptor, CPT created new codes with 000-day global periods to describe this type of service. The codes within this family are differentiated by 3 characteristics: whether the hernia is initial or recurrent, whether it is reducible or strangulated, and the total length of the hernia. CPT also created two new codes that describe parastomal Start Printed Page 45907 hernia repair and an add-on code for removal of mesh. The RUC recommendations differentiate the post-operative periods for the codes within this family by whether there is a same-day discharge, overnight stay with a visit on the same date, or whether the patient is admitted to the hospital. We disagree with many of the RUC-recommended work RVUs for the codes within this family that have a post-operative overnight stay built into their valuation. More specifically, we disagree with the RUC-recommended work RVUs for such codes because the RUC did not completely apply the 23-hour policy calculation (finalized in the CY 2011 PFS final rule (75 FR 73226)) in formulating its recommendations. Additionally, we disagree with the RUC-recommended work RVUs for the CPT codes in this family for which the RUC considered the patient to be admitted during the post-operative period because the RUC did not apply the 23-hour policy when formulating its recommendations. As we noted in the CY 2011 PFS final rule (75 FR 73226), the work RVUs for services that are typically performed in the outpatient setting and require a hospital stay of less than 24 hours may in some cases involve multiple overnight stays while the patient is still considered to be an outpatient for purposes of Medicare payment. Because such services are typically furnished in the outpatient setting, they should not be valued to include inpatient post-operative E/M visits. The level of discharge day management services included in the valuation of such services should similarly not reflect an inpatient discharge and should therefore be reduced. And finally, as discussed in CY 2011 rulemaking, the intraservice time from the inpatient level E/M postoperative visit should be reallocated to the immediate postservice time of the service. The 23-hour policy calculation, when fully applied to the calculation of a work RVU, is used to reduce the value of discharge day management services, remove the inpatient E/M visits, and reallocate the intraservice time to the immediate post-service period. See the CY 2011 PFS final rule (75 FR 73226) for additional in-depth explanation of the 23-hour policy. For the codes with an overnight stay and an E/M visit on the same date built into their valuation, we believe the RUC only partially applied the 23-hour policy when it applied the policy to the immediate post service times, but not to the calculation of the work RVUs. Instead, we believe the 23-hour policy should be fully applied to the codes in this family that describe outpatient services for which there is an overnight stay during the post-operative period, regardless of the number of nights that a patient stays in the hospital. The services to which the 23-hour policy is usually applied would typically involve a patient stay in a hospital for less than 24 hours, which often means the patient may stay overnight in the hospital. On occasion, the patient may stay in the hospital longer than a single night; however, in both cases (one night or more than one night), the patient is considered to be a hospital outpatient, not an inpatient, for Medicare purposes. In short, we do not believe that the work that is typically associated with an inpatient service should be included in the work RVUs for the outpatient services to which the 23-hour policy applies. The RUC recommended a work RVU of 8.0 for CPT code 157X1 ( Implantation of absorbable mesh or other prosthesis for delayed closure of defect(s) (ie, external genitalia, perineum, abdominal wall) due to soft tissue infection or trauma). CPT code 157X1 was surveyed with having one subsequent hospital visit, CPT code 99232 ( subsequent hospital care/day 25 minutes) and 25 minutes of immediate post service time. For purposes of calculating the recommended work RVU of 8.0, the RUC considered CPT code 157X1 to describe an inpatient service, while we consider CPT code 157X1 to describe an outpatient service for purposes of Medicare billing. As noted above, we do not believe that work that is typically associated with an inpatient service should be included in the work RVUs for the outpatient services to which the 23-hour policy applies. Therefore, the valuation for this code should not include inpatient work in the post-operative period. See the CY 2022 PFS final rule (86 FR 65090) for further discussion on the 23-hour policy as it relates to outpatient billing. We believe the 23-hour policy should be fully applied to CPT code 157X1, and we disagree with the RUC-recommended work RVU of 8.0. In accordance with the 23-hour policy valuation methodology we established in the CY 2011 PFS final rule, we are instead proposing a work RVU of 7.05 for CPT code 157X1 and a reallocation of the time associated with the intra-service portion of the inpatient hospital visit to the immediate postservice time of CPT code 157X1. The steps for the 23-hour policy calculation are as follows:
* 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. The following CPT codes have a post-operative period that is considered an overnight stay with a visit on the same date: CPT codes 49X02 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis, when performed, total length of defect(s); less than 3 cm, incarcerated or strangulated), 49X03 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis, when performed, total length of defect(s); 3 cm to 10 cm, reducible), 49X04 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis, when performed, total length of defect(s); 3 cm to 10 cm, incarcerated or strangulated), 49X05 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis, when performed, total length of defect(s); greater than 10 cm, reducible), 49X08 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis, when performed, total length of defect(s); less than 3 cm, incarcerated or strangulated), and 49X09 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis, when performed, total length of defect(s); 3 cm to 10 cm, reducible). The RUC recommended a work RVU of 9.0 for CPT code 49X02, 10.80 for CPT code 49X03, 14.0 for CPT code 49X04, 14.88 for CPT code 49X05, 10.79 for CPT code 49X08, and 12.0 for CPT code 49X09. CPT codes 49X02, 49X03, 49X08, and 49X09 were surveyed with Start Printed Page 45908 one subsequent inpatient hospital visit at a level of CPT code 99231 ( subsequent hospital care/day 15 minutes). The RUC applied the 10 minutes of intraservice time from CPT code 99231 to the immediate postservice time of these codes, resulting in a total immediate postservice time of 30 minutes for these codes. CPT codes 49X04 and 49X05 were surveyed with a subsequent inpatient hospital visit at a level of CPT code 99232. The RUC applied the 20 minutes of intraservice time from CPT code 99232 to the immediate postservice time of both codes, resulting in a total immediate postservice time of 40 minutes. Much like our concerns regarding the RUC-recommended work RVU for CPT code 157X1, we do not believe that the RUC fully applied the 23-hour policy calculation when calculating the work RVUs for these codes and we disagree with the RUC-recommended RVUs. While the RUC removed the 99231 and 99232 inpatient visits included in the post-operative period for these codes, the RUC did not subtract the values of these visits from the work RVUs before making their work RVU recommendations. In the CY 2011 PFS final rule (75 FR 73226), we stated that we do not believe that the post-procedure hospital visits for outpatient services should be at the inpatient level since the typical case is an outpatient who would be ready to be discharged from the hospital in 23 hours or less. However, we agree with the RUC that the intra-service time of the inpatient hospital visit may be included in the valuation for 23-hour stay codes. Therefore, we believe that step 2 of the 23-hour hour policy calculation, which involves deducting the RVUs of the inpatient hospital visits from the starting work RVU value and subsequently reallocating the time associated with the intra-service portion of the inpatient hospital visits to the immediate postservice time of the 23-hour stay code, should be fully applied when calculating the work RVUs for CPT codes 49X02, 49X03, 49X04, 49X05, 49X08, and 49X09. Using the 23-hour policy calculation described above and in the CY 2011 PFS final rule, we are proposing work RVUs of 8.46 for CPT code 49X02, 10.26 for CPT code 49X03, 13.46 for CPT code 49X04, 13.94 for CPT code 49X05, 10.25 for CPT code 49X08, and 11.46 for CPT code 49X09. The following CPT codes have a post-operative period that the RUC considers to be admitted to a hospital: CPT code 49X06 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis, when performed, total length of defect(s); greater than 10 cm, incarcerated or strangulated), 49X10 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis, when performed, total length of defect(s); 3 cm to 10 cm, incarcerated or strangulated), 49X11 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis, when performed, total length of defect(s); greater than 10 cm, reducible), 49X12 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis, when performed, total length of defect(s); greater than 10 cm, incarcerated or strangulated), 49X13 ( Repair of parastomal hernia, any approach (ie, open, laparoscopic, robotic), initial or recurrent, including placement of mesh or other prosthesis, when performed; reducible), and 49X14 ( Repair of parastomal hernia, any approach (ie, open, laparoscopic, robotic), initial or recurrent, including placement of mesh or other prosthesis, when performed; incarcerated or strangulated). The RUC recommended a work RVU of 18.67 for CPT code 49X06, 15.55 RVUs for CPT code 49X10, 16.03 RVUs for CPT code 49X11, 22.67 RVUs for CPT code 49X12, 13.70 RVUs for CPT code 49X13, and 17.06 RVUs for CPT code 49X14. CPT codes 49X06 and 49X12 were surveyed and recommended with one subsequent inpatient hospital visit at a level of CPT code 99233 ( subsequent hospital care/day 35 minutes). The RUC recommendations include an immediate postservice time of 25 minutes for CPT code 49X06 and 30 minutes for CPT code 49X12. CPT codes 49X10, 49X11, and 49X14 were surveyed and recommended with one subsequent inpatient hospital visit at a level of CPT code 99232. The RUC recommendations include an immediate postservice time of 25 minutes for 49X10, 28 minutes for CPT code 49X11, and 25 minutes for CPT code 49X14. CPT code 49X13 was surveyed and recommended with one subsequent inpatient hospital visit at a level of CPT code 99231 and an immediate postservice time of 25 minutes. For purposes of calculating the recommended work RVUs, the RUC considered these CPT codes to describe an admitted inpatient service, while we consider the CPT codes to describe outpatient services for purposes of billing. Therefore, we believe that inpatient work in the post-operative period should not be included in the valuation. We believe the 23-hour policy should be applied to these codes. Using the 23-hour policy calculation described above and in the CY 2011 PFS final rule, we are proposing a work RVU of 18.67 for CPT code 49X06, 15.55 RVUs for CPT code 49X10, 16.03 RVUs for CPT code 49X11, 22.67 RVUs for CPT code 49X12, 13.70 RVUs for CPT code 49X13, and 17.06 RVUs for CPT code 49X14. We are also proposing revised immediate postservice times for the reallocation of the time associated with the intraservice portion of the inpatient hospital visit. We are proposing immediate post service times of 40 minutes for CPT code 49X06, 35 minutes for CPT code 49X10, 38 minutes for CPT code 49X11, 45 minutes for CPT code 49X12, 30 minutes for CPT code 49X13, and 35 minutes for CPT code 49X14. The following CPT codes have a post-operative period that the RUC considers to be a same day discharge: CPT code 49X01 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), initial, including placement of mesh or other prosthesis, when performed, total length of defect(s); less than 3 cm, reducible) and 49X07 ( Repair of anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, including placement of mesh or other prosthesis, when performed, total length of defect(s); less than 3 cm, reducible). The RUC-recommended a work RVU of 6.27 for CPT code 49X01 and 7.75 for CPT code 49X07. We disagree with the RUC-recommended RVU for CPT code 49X01 because it falls above the median value for codes with similar times. We are proposing a work RVU of 5.96 RVUs based on the intraservice time ratio, which is the ratio of 90 minutes of intraservice time of a current hernia repair code—CPT code 49560 ( Repair initial incisional or ventral hernia; reducible) and the 45 minutes of intraservice time for CPT code 49X01. The proposed work RVU of 5.96 is also supported by reference CPT code 93453 ( Combined right and left heart catheterization including Start Printed Page 45909 intraprocedural injection(s) for left ventriculography, imaging supervision and interpretation, when performed ). CPT code 93453 has a work RVU of 5.99, the same intraservice time as CPT code 49X01(45 minutes), and a slightly higher total time of 113 minutes. For CPT code 49X07, we disagree with the RUC-recommended work RVU of 7.75, as it is above the median range compared to codes with similar times. We are proposing a work RVU of 7.42 RVUs for CPT code 49X07 based off of the intraservice time ratio of 100 minutes of intraservice time for a current hernia repair code—CPT code 49565 ( Repair recurrent incisional or ventral hernia; reducible), compared to the 60 minutes of intraservice time for CPT code 49X07. The proposed work RVU of 7.42 is also supported by reference CPT code 52353 ( Cystourethroscopy, with ureteroscopy and/or pyeloscopy; with lithotripsy (ureteral catheterization is included)). CPT code 52353 has a work RVU of 7.50 with the same intraservice time of 60 minutes and a very similar total time of 133 minutes. CPT code 49X15 ( Removal of total or near-total non-infected mesh or other prosthesis at the time of initial or recurrent anterior abdominal hernia repair or parastomal hernia repair, any approach (ie, open, laparoscopic, robotic)) is an add-on code. The RUC recommended a work RVU of 5.0 for CPT code 49X15. The RUC recommendation is higher than the work RVUs for many other CPT add-on codes with similar times. We are proposing a work RVU of 2.61 RVUs for CPT code 49X15, based on the reverse building block methodology. The proposed work RVU of 2.61 is also supported by reference CPT code 15774 ( Grafting of autologous fat harvested by liposuction technique to face, eyelids, mouth, neck, ears, orbits, genitalia, hands, and/or feet; each additional 25 cc injectate, or part thereof (List separately in addition to code for primary procedure)), which has a work RVU of 2.50 and the same total time of 45 minutes. We reviewed the RUC-recommended direct PE inputs for all of the codes within this family. We disagree with the RUC's recommendations of 66 total minutes of clinical staff time for CPT codes 49X01 and 49X07, 60 total minutes of clinical staff time for CPT codes 49X02, 49X03, 49X04, 49X05, 49X06, 49X08, 49X09, 49X10, 49X11, 49X12, 49X13, and 49X14, and 20 total minutes of clinical staff time for CPT code 157X1. We note that the RUC recommended 090-day pre-service times for all of these codes despite surveying all of the services as 000-day services. In the CY 2022 PFS final rule (86 FR 65090), we stated we continue to believe that setting and maintaining clinical labor time and valuation standards provides greater consistency among codes that share clinical labor tasks and could improve relativity of values among codes. Therefore, we believe that the standard clinical labor packages that are in accordance with the surveyed global period continue to be the most appropriate for purposes of clinical labor valuation. The RUC recommendations for CPT codes 49X01 and 49X07, and CPT codes 49X02, 49X03, 49X04, 49X05, 49X06, 49X08, 49X09, 49X10, 49X11, 49X12, 49X13, and 49X14, include the standard for 090-day preservice times for clinical labor activities, which is 60 minutes. For 49X01 and 49X07 in particular, the RUC also recommended an additional 6 minutes in the post service period to conduct patient communications. We disagree with the RUC-recommended 090-day times as these CPT codes were surveyed by the RUC as 000-day services and should have times consistent with 000-day services. Therefore, we are proposing the standard clinical labor times for a 000-day extensive package for a total pre-service clinical staff time of 30 minutes for CPT codes 49X01 through 49X14 with an additional standard 3 minutes of post-service patient communications for 49X01 and 49X07. CPT code 49X15 is an add-on code and does not have RUC-recommended direct PE inputs. For CPT code 157X1, the RUC recommendation is 20 minutes of clinical staff activities, which is standard for an emergent procedure package. We do not agree that the service described by CPT code 157X1 should be considered an emergent procedure. Therefore, we are proposing the minimal clinical staff package minus pre-service education for CPT code 157X1, for a total of 12 clinical staff time minutes. (2) Removal of Sutures or Staples (CPT Codes 15851, 158X1, and 158X2)In October 2021, the CPT Editorial Panel approved the deletion of CPT code 15850 and revised CPT code 15851 ( Removal of sutures or staples requiring anesthesia (ie, general anesthesia, moderate sedation)), and created two new related CPT add-on codes, 158X1 and 158X2, to describe Removal of sutures or staples requiring anesthesia (i.e., general anesthesia, moderate sedation). The RUC reviewed the three codes: 15851, 158X1 and 158X2 at the January 2022 RUC meeting. After reviewing CPT code 15851, we are proposing the RUC-recommended work RVU of 1.10. CPT code 158X1 ( Removal of sutures OR staples not requiring anesthesia (List separately in addition to E/M code)), and 1581X2 ( Removal of sutures OR staples not requiring anesthesia (List separately in addition to E/M code), are valued by the RUC as PE-only codes. The RUC did not recommend any work inputs for these two add-on codes and we are not proposing any work RVU refinements. We are also proposing the RUC-recommended direct PE inputs for CPT codes 15851, 158X1, and 158X2 without refinement. (3) Arthrodesis Decompression (CPT Codes 22630, 22632, 22633, 22634, 63052, and 63053)In October 2020, the CPT Editorial Panel approved the revision of four codes describing arthrodesis and the addition of two new add-on codes, CPT codes 63052 ( 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; 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] [eg, spinal or lateral recess stenosis]), during posterior interbody arthrodesis, lumbar; each additional segment (List separately in addition to code for primary procedure)), to report laminectomy, facetectomy, or foraminotomy during posterior interbody arthrodesis, lumbar to more appropriately identify the decompression that may be separately reported. In January 2021, the RUC reviewed the survey results for the two new codes and expressed concern that the four base codes had not been surveyed along with the two new add-on codes. The RUC recommended that the entire family be resurveyed and presented for review at its April 2021 meeting. The RUC suggested that until new values could be established, interim values be established for CPT codes 63052 and 63053, which CMS revised for CY 2022 based on the survey data and RUC review available to us at the time of the development of the CY 2022 PFS proposed rule. We have noted in similar circumstances, such as the minimally invasive glaucoma surgery (MIGS) procedures with cataract surgery discussed in the CY 2022 PFS final rule (86 FR 65097), that it is best for entire Start Printed Page 45910 code families to be surveyed at the same time. We also noted that we finalized a policy in the CY 2015 PFS final rule (79 FR 67602 through 67609) 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. For CPT codes 22630 ( Arthrodesis, posterior interbody technique, including laminectomy and/or discectomy to prepare interspace (other than for decompression), single interspace; lumbar), 22633 ( Arthrodesis, combined posterior or posterolateral technique with posterior interbody technique including laminectomy and/or discectomy sufficient to prepare interspace (other than for decompression), single interspace; lumbar), 22634 ( Arthrodesis, combined posterior or posterolateral technique with posterior interbody technique including laminectomy and/or discectomy sufficient to prepare interspace (other than for decompression), single interspace; each additional interspace and segment (List separately in addition to code for primary procedure)), 63052, and 63053, we disagree with the RUC-recommended work RVUs of 22.09, 26.80, 7.96, 5.70, and 5.00, respectively, because these values do not account for the surveyed changes in time, and we are proposing a work RVU of 20.42 for CPT code 22630, a work RVU of 24.83 for CPT code 22633, a work RVU of 7.30 for CPT code 22634, the current work RVU of 4.25 for CPT code 63052 and a work RVU of 3.78 for CPT code 63053. For CPT code 22632 ( Arthrodesis, posterior interbody technique, including laminectomy and/or discectomy to prepare interspace (other than for decompression), single interspace; each additional interspace (List separately in addition to code for primary procedure)), we agree with the RUC-recommended maintenance of the current work RVU of 5.22, as there were no surveyed changes in time. We are proposing a work RVU of 20.42 for CPT code 22630 based on the reverse building block methodology to account for the surveyed 8-minute decrease in total time, 10-minute decrease in pre-service time, 30-minute decrease in intraservice time, and 2-minute decrease in immediate post-service time. 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, it would be inappropriate to maintain the current work RVU given the significant decrease in intraservice time without adequate justification of increased intensity. There are currently three CPT code 99231 ( Subsequent hospital care/day 15 minutes) and four 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.) visits bundled in CPT code 22630's 090-day global period and valuation. The RUC recommended that the post-operative period for CPT code 22630 change to include two CPT code 99232 ( subsequent hospital care/day 25 minutes), one CPT code 99231, one CPT code 99214 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using time for code selection, 30-39 minutes of total time is spent on the date of the encounter.), and two CPT code 99213 visits. The currently bundled post-operative visits total to 6.16 work RVUs, whereas the RUC-recommended changes to the post-operative visits total 6.98 work RVUs, resulting in a 0.82 work RVU increase (if no other changes occurred to CPT code 22630). The proposed work RVU of 20.42 for CPT code 22630 maintains the same IWPUT of 0.067 and maintains the 0.82 work RVU difference between the current and RUC-recommended post-operative period. We believe this proposed work RVU is more accurate than the RUC-recommended work RVU because there was no obvious or explicitly stated rationale in the RUC's recommendations for the change in intensity of intraservice time, and there was a 30-minute decrease in intraservice time for CPT code 22630. 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, it would be inappropriate to propose the RUC-recommended work RVU for CPT code 22630. Similarly, we are proposing a work RVU of 24.83 for CPT code 22633, based on the reverse building block methodology, to account for the surveyed 56-minute decrease in total time, 20-minute decrease in intraservice time, and 33-minute decrease in post-operative time. The reverse building block methodology accounts for the time and intensity of post-operative work through long-established and agreed-upon times and intensities for bundled post-operative visits, and accurately adjusts for the changes occurring in the post-operative period. There is currently one post-operative CPT code 99232, two CPT code 99233 ( Subsequent hospital care/day 35 minutes), and three CPT code 99213 visits bundled in CPT code 22633's valuation. The RUC recommended that the post-operative period for CPT code 22633 change to include two CPT code 99232, one CPT code 99231, one CPT code 99214 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using time for code selection, 30-39 minutes of total time is spent on the date of the encounter.), and two CPT code 99213 visits. The currently bundled post-operative visits total to 8.30 work RVUs, whereas the RUC-recommended changes to the post-operative visits total 6.98 work RVUs, resulting in a 1.32 work RVU decrease (if no other changes occurred to CPT code 22633). Using the reverse building block methodology, the proposed work RVU of 24.83 maintains the same IWPUT of 0.080 and the 1.32 work RVU difference between the current and RUC-recommended post-operative period. We believe this proposed work RVU is more accurate than the RUC-recommended work RVU because there was no obvious or explicitly stated rationale in the RUC's recommendations for the change in intensity of intraservice time, and there was a 20-minute decrease in intraservice time for CPT code 22633. 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, it would be inappropriate to propose the RUC-recommended work RVU decrease of 0.95, which is only about three-quarters of the established decrease in work RVU of 1.32 and intensity from the changes in the post-operative period alone. We also considered the apparent decrease in intraservice time and the lack of an adequate justification for increased intensity to arrive at our proposed work RVU of 24.83 for CPT code 22633. We are proposing a work RVU of 7.30 for CPT code 22634 based on a comparison to its base code, CPT code 22633. We used the proposed work RVU of 24.83 for the parent CPT code (22633) as the numerator and the current work Start Printed Page 45911 RVU for CPT code 22633 of 27.75 as the denominator, and multiplied that fraction by the current work RVU of 8.16 for CPT code 22634 to arrive at a proportionate proposed work RVU of 7.30 for CPT code 22634 ((24.83/27.75) * 8.16) = 7.30). The proposed work RVU accounts for the decrease in intraservice time and is well bracketed by CPT code 34820 ( Open iliac artery exposure for delivery of endovascular prosthesis or iliac occlusion during endovascular therapy, by abdominal or retroperitoneal incision, unilateral (List separately in addition to code for primary procedure)), valued at 7.00 work RVUs with an intraservice time of 60 minutes, and CPT code 34833 ( Open iliac artery exposure with creation of conduit for delivery of endovascular prosthesis or for establishment of cardiopulmonary bypass, by abdominal or retroperitoneal incision, unilateral (List separately in addition to code for primary procedure)), valued at 8.16 work RVUs with an intraservice time of 72 minutes. CPT codes 63052 and 63053 were new add-on codes to report decompression when performed in conjunction with posterior interbody arthrodesis at the same interspace for CY 2022. The proposed work RVU for CPT code 63052 would maintain the current work RVU, despite a surveyed change in time. In the CY 2022 PFS final rule, we finalized a work RVU of 4.25 for CPT code 63052 for CY 2022 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. Despite a surveyed 5-minute intraservice time increase for CPT code 63052, we believe the crosswalk to CPT code 22853 is still valid, given that only 3 months passed between the two surveys, as it now has the same intraservice time as CPT code 63052, is a spinal procedure, and is an add-on code to the same base codes as CPT code 63052. Commenters on the CY 2022 PFS proposed rule 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)), and therefore, we noted that the final work RVU of 4.25 for CY 2022 was supported by the commenters (86 FR 65092). 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, and therefore, although both codes require the same time, the physician work and intensity of CPT code 63052 is greater than CPT code 34812. In the CY 2022 PFS final rule, we finalized a work RVU of 3.19 for CPT code 63053 for CY 2022 based on an intraservice time ratio between CPT codes 63052 and 63053 ((30 minutes/40 minutes) * 4.25 = 3.19). We believe this intraservice time ratio between the two CPT codes is still valid, given that only 3 months passed between the two surveys, and therefore, we are proposing a work RVU of 3.78 based on the surveyed time changes for CPT codes 63052 and 63053 ((40 minutes/45 minutes) * 4.25 = 3.78) in order to maintain consistency with previous analysis of time and intensity of these two add-on codes. Due to the lack of an obvious or explicitly stated rationale in the RUC's April recommendations for the change in intensity between the January 2021 and April 2021 surveys, we relied on the changes in surveyed time to calculate the proposed work RVUs for CPT codes 63052 and 63053. We are proposing the RUC-recommended PE inputs for CPT codes 22630 and 22633. (4) Total Disc Arthroplasty (CPT Codes 22857 and 228XX)In September 2021, the CPT Editorial Panel created CPT Category I code 228XX to describe Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression); second interspace, lumbar (List separately in addition to code for primary procedure) and replace CPT Category III code 0163T ( Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression), each additional interspace, lumbar (List separately in addition to code for primary procedure)), which prompted CPT codes 228XX and 22857 ( Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression); single interspace, lumbar) to be surveyed for the January 2022 RUC meeting. At the January 2022 RUC meeting, the specialty societies indicated, and the RUC agreed, that the survey results for both CPT codes 22857 and 228XX were erroneous and that the codes should be resurveyed for the April 2022 RUC meeting. Therefore, we are proposing to maintain the RUC-recommended work RVU of 27.13 for CPT code 22857 and contractor pricing for CPT code 228XX for CY 2023. We will revisit the valuations of CPT codes 22857 and 228XX in future rulemaking when we have received the April 2022 RUC recommendations, based on our annual review process discussed in the Background section of this proposed rule. (5) Insertion of Spinal Stability Distractive Device (CPT Codes 22869 and 22870)For CPT codes 22869 ( Insertion of interlaminar/interspinous process stabilization/distraction device, without open decompression or fusion, including image guidance when performed, lumbar; single level) and 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)), we are proposing to maintain the current work RVUs of 7.03 and 2.34, respectively. We are proposing the RUC-recommended direct PE inputs for CPT code 22869 without refinement. (6) Knee Arthroplasty (CPT Codes 27446 and 27447)CPT codes 27446 ( Arthroplasty, knee, condyle and plateau; medial OR lateral compartment) and 27447 ( Arthroplasty, knee, condyle and plateau; medial AND lateral compartments with or without patella resurfacing (total knee arthroplasty)) were reviewed by the RUC in April 2021. We previously reviewed CPT code 27447 in the CY Start Printed Page 45912 2021 PFS final rule; (see 85 FR 84609 and 84610 for our previous discussion). The RUC proposed a revised survey instrument to ask about additional pre-operative time and resources spent on pre-optimization patient work. The RUC agreed that the pre-service planning activities are being performed routinely for the typical patient but the inclusion of this work is not reflected in the 090-day global period structure. The RUC indicated that separate planning codes may be developed, or current codes such as the prolonged service codes may be reported for these activities. We are proposing the RUC-recommended work RVU of 17.13 for CPT code 27446. The survey 25th percentile actually showed an increase in work RVU even though there was a decrease in total time. One post facility visit, CPT code 99232 ( Subsequent hospital care/day 25 minutes), was removed and replaced with CPT code 99214 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using time for code selection, 30-39 minutes of total time is spent on the date of the encounter) a post-operative visit in the office. Given a decrease in the total time spent and a lower level post-operative visit, it is reasonable that the work RVU went down. There was no change in the global period. For CPT code 27447, the RUC reaffirmed the same valuation that it recommended for the CY 2021 PFS rulemaking cycle. Since we did not receive any new information regarding this code, we are not proposing to change our previously finalized values (see 85 FR 84609 and 84610 for our previous discussion of this code in the CY 2021 PFS final rule). We are proposing to maintain a work RVU of 19.60 for CPT code 27447, the value that we previously finalized through rulemaking. We are proposing the RUC-recommended direct PE inputs for CPT code 27446 and we are proposing to maintain the direct PE inputs for CPT code 27447. (7) Endovascular Pulmonary Arterial Revascularization (CPT Codes 338X3, 338X4, 338X5, 338X6, and 338X7)At the February 2021 meeting of the CPT Editorial Panel, CPT approved a new family of Category I CPT codes to describe percutaneous endovascular repair of pulmonary artery stenosis (PAS) by stent replacement. CPT codes 338X3 through 338X7 were surveyed by the RUC at the October 2021 RUC meeting. We disagree with the RUC-recommended work RVU of 14.0 for CPT code 338X3 ( Percutaneous pulmonary artery revascularization by stent placement, initial; normal native connections, unilateral). The RUC recommendation is the survey median and appears to be high compared to codes with similar times. We are proposing the survey 25th percentile work RVU of 11.03 for CPT code 338X3. A work RVU of 11.03 is supported by a bracket of reference CPT codes, including CPT code 61650 and CPT code 61640. CPT code 61650 ( Endovascular intracranial prolonged administration of pharmacologic agent(s) other than for thrombolysis, arterial, including catheter placement, diagnostic angiography, and imaging guidance; initial vascular territory) has a work RVU of 10.0 and the same intraservice time of 90 minutes and the same total time of 206 minutes. CPT code 61640 ( Balloon dilatation of intracranial vasospasm, percutaneous; initial vessel) has a work RVU of 12.32 and an intraservice time of 90 minutes and a higher total time of 233 minutes. There are no direct PE inputs for CPT Code 338X3. We disagree with the RUC-recommended work RVU of 18.0 for CPT code 338X4 ( Percutaneous pulmonary artery revascularization by stent placement, initial; normal native connections, bilateral). The RUC recommendation is the survey median and appears to be high compared to codes with similar times. We are proposing the survey 25th percentile work RVU of 14.50. A work RVU of 14.50 is supported by a reference CPT code—CPT code 11005. CPT code 11005 ( Debridement of skin, subcutaneous tissue, muscle and fascia for necrotizing soft tissue infection; abdominal wall, with or without fascial closure) has a work RVU of 14.24 and the same intraservice time of 120 minutes and nearly the same total time of 235 minutes. There are no direct PE inputs for CPT Code 338X4. We disagree with the RUC-recommended work RVU of 17.33 for CPT code 338X5 ( Percutaneous pulmonary artery revascularization by stent placement, initial; abnormal connections, unilateral). The RUC recommendation is the survey median and appears to be high compared to codes with similar times. We are proposing the survey 25th percentile work RVU of 14.0. A work RVU of 14.0 is supported by a reference CPT code—CPT code 61640. CPT code 61640 ( Balloon dilatation of intracranial vasospasm, percutaneous; initial vessel) has a work RVU of 12.32 and the same intraservice time of 90 minutes and a higher total time of 233 minutes. There are no direct PE inputs for CPT Code 338X5. We disagree with the RUC-recommended work RVU 20.0 for CPT code 338X6 ( percutaneous pulmonary artery revascularization by stent placement, initial; abnormal connections, bilateral). The RUC recommendation is the survey median and appears to be high compared to codes with similar times. Although we disagree with the RUC-recommended work RVU, we concur that the relative difference in work between CPT codes 338X4 and 338X6 is equivalent to the RUC-recommended interval of 2.0 RVUs. Therefore, we are proposing a work RVU of 16.50 for CPT code 338X6, based on the recommended interval of 2.0 additional RVUs above our proposed work RVU of 14.50 for CPT code 338X4. A work RVU of 16.50 is also supported by a reference code—CPT code 11005. CPT code 11005 ( Debridement of skin, subcutaneous tissue, muscle and fascia for necrotizing soft tissue infection; abdominal wall, with or without fascial closure) has a work RVU of 14.24 and the same intraservice time of 120 minutes and a higher total time of 265 minutes. There are no direct PE inputs for CPT Code 338X6. We disagree with the RUC-recommended RVU of 7.27 for CPT code 338X7 ( Percutaneous pulmonary artery revascularization by stent placement, each additional vessel or separate lesion, normal or abnormal connections (list separately in addition to code for primary procedure) (use 338X7 in conjunction with 338X3, 338X4, 338X5, 338X6)). The RUC recommendation is the survey median and appears to be high compared to codes with similar times. We are proposing the survey 25th percentile work RVU of 5.53. A work RVU of 5.53 is supported by a reference code—CPT code 57267. CPT code 57267 ( Insertion of mesh or other prosthesis for repair of pelvic floor defect, each site (anterior, posterior compartment), vaginal approach (List separately in addition to code for primary procedure) has a work RVU of 4.88 and the same time of 45 minutes. There are no direct PE inputs for CPT code 338X7. (8) Percutaneous Arteriovenous Fistula Creation (CPT Codes 368X1 and 368X2)In October 2021, the CPT Editorial Panel created CPT codes 368X1 ( Percutaneous arteriovenous fistula creation, upper extremity, single access of both the peripheral artery and Start Printed Page 45913 peripheral vein, including fistula maturation procedures (e.g., transluminal balloon angioplasty, coil embolization) when performed, including all vascular access, imaging guidance and radiologic supervision and interpretation ) and 368X2 ( Percutaneous arteriovenous fistula creation, upper extremity, separate access sites of the peripheral artery and peripheral vein, including fistula maturation procedures (e.g., transluminal balloon angioplasty, coil embolization) when performed, including all vascular access, imaging guidance and radiologic supervision and interpretation) to describe the creation of an arteriovenous fistula in an upper extremity via a percutaneous approach. Previously, CPT coding did not account for percutaneous arteriovenous access creation, as current the CPT codes only describe an open surgical approach. Given that new technologies have been developed that allow for less invasive approaches that utilize percutaneous image-guided methods to approximate a target artery and vein using magnets or mechanical capture, we created HCPCS codes G2170 ( Percutaneous arteriovenous fistula creation (avf), direct, any site, by tissue approximation using thermal resistance energy, and secondary procedures to redirect blood flow (e.g., transluminal balloon angioplasty, coil embolization) when performed, and includes all imaging and radiologic guidance, supervision and interpretation, when performed) and G2171 ( Percutaneous arteriovenous fistula creation (avf), direct, any site, using magnetic-guided arterial and venous catheters and radiofrequency energy, including flow-directing procedures (e.g., vascular coil embolization with radiologic supervision and interpretation, when performed) and fistulogram(s), angiography, venography, and/or ultrasound, with radiologic supervision and interpretation, when performed) in July 2020 that describe two approaches to percutaneous arteriovenous access creation. The RUC intends for CPT codes 368X1 and 368X2, which represent two percutaneous approaches to creating arteriovenous access for End-Stage Renal Disease (ERSD) patients during hemodialysis, to replace HCPCS codes G2170 and G2171, and has requested both G2170 and G2171 be deleted. For CY 2023, the RUC recommended a work RVU of 7.50 for CPT code 368X1, and a work RVU of 9.60 for CPT code 368X2. We disagree with the RUC-recommended RVUs for CPT codes 368X1 and 368X2. We found that the recommended work RVUs were high when compared to other codes with similar time values. The RUC-recommended RVU of 7.50 for 368X1 is the second highest RVU for codes with 55 to 65 minutes of intraservice time and 94 to 114 minutes of total time, with RVUs ranging from 2.45 to 8.84. Similarly, the RUC-recommended RVU of 9.60 for 368X2 is the third highest RVU for codes with 65 to 85 minutes of intraservice time and 109 to 129 minutes of total time, with RVUs ranging from 4.69 to 10.95. Therefore, we are proposing a work RVU of 7.20 for CPT code 368X1, and a work RVU of 9.30 for CPT code 368X2. We disagree with the RUC-recommended work RVU of 7.50 for CPT code 368X1 and are proposing an RVU of 7.20 that is based on the intra-service time ratio calculation using the second reference code from the RUC survey, CPT code 36905 ( Percutaneous transluminal mechanical thrombectomy and/or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s); with transluminal balloon angioplasty, peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty). The proposed RVU of 7.20 is based on the intra-service time ratio using the RUC-recommended 60 minutes intra-service time for CPT code 368X1 divided by 75 minutes of intra-service time for CPT code 36905, then multiplying by the RVU of 9.00 for CPT code 36905 ((60/75) × 9.00 = 7.20). We chose to use the second reference code from the RUC survey, CPT code 36905, in this calculation because its intra-service time and total time values were closer to the time values proposed by the RUC for CPT code 368X1. We note that the RUC-recommended RVU of 7.50 is one of the highest values within the range of reference codes we reviewed with the same intra-service time and similar total time. The proposed work RVU of 7.20 is supported by the reference CPT codes we compared to CPT code 368X1 with the same 60 minutes of intra-service time and similar total time as CPT code 368X1; reference CPT code 47541 ( Placement of access through the biliary tree and into small bowel to assist with an endoscopic biliary procedure (e.g., rendezvous procedure), percutaneous, including diagnostic cholangiography when performed, imaging guidance (e.g., ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation, new access) has a work RVU of 6.75, and reference CPT code 33991 ( Insertion of ventricular assist device, percutaneous, including radiological supervision and interpretation; left heart, both arterial and venous access, with transseptal puncture) has a work RVU of 8.84. Again, we believe 7.20 is a more appropriate value overall than 7.50 when compared to the range of codes with the same intra-service time and similar total time. Although we disagree with the RUC-recommended work RVU of 9.60 for CPT code 368X2, we concur that the relative difference in work between CPT codes 368X1 and 368X2 is equivalent to the RUC-recommended interval of 2.10 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 are proposing a work RVU of 9.30 for CPT code 368X2, based on the RUC-recommended interval of 2.10 RVUs above our proposed work RVU of 7.20 for CPT code 368X1. For the direct PE inputs, we are seeking additional information on two equipment items and four supply items. For two of those four supply items, we are requesting a justification for their inclusion as direct PE inputs. The RUC submitted invoices for two new equipment inputs; one for a Wavelinq EndoAVF generator (EQ403) used for CPT code 368X2, and the other for an Ellipsys EndoAVF generator (EQ404) used for CPT code 368X1. We are seeking comments and requesting information that may inform us why the Wavelinq generator (EQ403) is so much more expensive on its invoice as compared with the Ellipsys generator (EQ404) since the former costs $18,580 and the latter costs $3,000. In addition, the RUC included supply items SD149 (catheter, balloon inflation device) and SD152 (catheter, balloon, PTA) as direct PE inputs for CPT codes 368X1 and 368X2. We are seeking comments and requesting information that may inform us if supply items SD149 and SD152 are typical, and how often they are used, for CPT codes 368X1 and 368X2. Also, the RUC included supply items SF056 (detachable coil) and SF057 (non-detachable embolization coil) as direct PE inputs for CPT code 368X2 (one each for SF056 and two each for SF057). We are seeking comments and requesting information that may provide us with a Start Printed Page 45914 justification for keeping supply items SF056 and SF057 as direct PE inputs for CPT code 368X2. We need to know if both of these supply items are typical and how often they are used for CPT code 368X2. If these supply inputs are not typical for these procedures, we believe that they should be removed from the direct PE inputs. We are proposing to delete HCPCS codes G2170 and G2171 and replace them with CPT codes 368X1 and 368X2 as recommended by the RUC. (9) Energy Based Repair of Nasal Valve Collapse (CPT Codes 37X01 and 30468)In September 2021, the CPT Editorial Panel created CPT code 37X01 ( Repair of nasal valve collapse with low energy, temperature-controlled (i.e., radiofrequency) subcutaneous/submucosal remodeling) which is currently reported with an unlisted code. For the January 2022 RUC meeting, both CPT code 37X01 and CPT code 30468 ( Repair of nasal valve collapse with subcutaneous/submucosal lateral wall implant(s)) were reviewed. For CY 2023, the RUC recommended a work RVU of 2.70 for CPT code 37X01, and no change to the current work RVU of 2.80 for CPT code 30468. The RUC reviewed the specialty society request to affirm the recent RUC valuations for CPT code 30468, which was surveyed and valued by the RUC in January 2020 for CY 2021. The RUC agreed, so for CY 2023, the RUC is not recommending any change to the current work RVU of 2.80 for CPT code 30468. In addition, the PE Subcommittee reviewed the direct practice expense inputs and made modifications to the pre-service clinical staff time to CPT code 30468 in accordance with current standards. There was a previous oversight in valuing the direct PE inputs for CPT code 30468. Therefore, 3 minutes of clinical staff time has been added to CPT code 30468 for clinical activity CA005 (complete pre-procedure phone calls and prescription). We are proposing to maintain the current work RVU of 2.80 for CPT code 30468 as recommended by the RUC. We are also proposing the RUC-recommended direct PE inputs for CPT code 30468, which now includes clinical activity code CA005, without refinement. For CPT code 37X01, the RUC recommended a work RVU of 2.70 based on a direct work RVU crosswalk from CPT code 31295 ( Nasal/sinus endoscopy, surgical, with dilation (e.g., balloon dilation); maxillary sinus ostium, transnasal or via canine fossa). We disagree with the RUC-recommended work RVU of 2.70. Therefore, we are proposing a work RVU of 2.44 for CPT code 37X01, which is the same RVU as CPT code 31297 ( Nasal/sinus endoscopy, surgical, with dilation (e.g., balloon dilation); sphenoid sinus ostium) and has the same 20 minutes of intra-service time and similar total time. We note that CPT code 31295, which the RUC used as a direct crosswalk for the work RVU for CPT code 37X01, has the same 20 minutes of intra-service time and 56 minutes of total time as CPT code 31297. We believe the RUC should have used CPT code 31297 as the crosswalk for CPT code 37X01. Both CPT codes 31295 and 31297 were reviewed in 2017 and are in the same code family. The proposed work RVU of 2.44 is supported by the reference CPT codes we compared to CPT code 37X01 with the same 20 minutes of intra-service time and similar total time as CPT code 37X01; reference CPT code 31233 ( Nasal/sinus endoscopy, diagnostic; with maxillary sinusoscopy (via inferior meatus or canine fossa puncture)) with an RVU of 2.18, and CPT code 31295 with an RVU of 2.70. Again, we believe 2.44 is a more appropriate value overall than 2.70 when compared to the range of codes with the same intra-service time and similar total time. We are proposing the RUC-recommended direct PE inputs for CPT code 37X01 without refinement. (10) Drug Induced Sleep Endoscopy (DISE) (CPT Code 42975)In October 2020, the CPT Editorial Panel created 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) to report drug induced sleep endoscopy (DISE) flexible, diagnostic. At the January 2021 RUC Meeting, the RUC requested that this service be resurveyed for the April 2021 RUC Meeting using a standard 000-day survey template. For CY 2023, the RUC recommended a work RVU of 1.95 for CPT code 42975. We disagree with the RUC-recommended work RVU of 1.95 for CPT code 42975 and are proposing a work RVU of 1.58. We believe the RVU should be lower than the RUC recommendation of 1.95 to reflect the decrease in total time from 68 minutes to 50 minutes. The proposed RVU of 1.58 is based on the total time ratio calculation using the RUC-recommended 50 minutes total time for CPT code 42975 divided by the 48 minutes of total time for CPT code 43197 ( Esophagoscopy, flexible, transnasal; diagnostic, including collection of specimen(s) by brushing or washing, when performed (separate procedure)), then multiplying by the RVU of 1.52 for CPT code 43197 ((50/48) × 1.52 = 1.58). We found that CPT code 43197 has the same intra-service time and similar total time as CPT code 42975. Also, CPT code 43197 is a similar endoscopic procedure as CPT codes 42975 and 31579 ( Laryngoscopy, flexible or rigid telescopic, with stroboscopy). We note that CPT code 31579 is the first key reference code in the RUC survey. The proposed work RVU of 1.58 is supported by the reference CPT codes we compared to CPT code 42975 with the same 15 minutes of intra-service time and similar total time as CPT code 42975; reference CPT code 43200 ( Esophagoscopy, flexible, transoral; diagnostic, including collection of specimen(s) by brushing or washing, when performed (separate procedure)) with an RVU of 1.42, and CPT code 62272 ( Spinal puncture, therapeutic, for drainage of cerebrospinal fluid (by needle or catheter)) with an RVU of 1.58. Again, we believe the proposed RVU of 1.58 is a more appropriate value overall than 1.95 when compared to the range of codes with the same intra-service time and similar total time. We are proposing the RUC-recommended direct PE inputs for CPT code 42975 without refinement. (11) Endoscopic Bariatric Device Procedures (CPT Codes 43235, 43X21, and 43X22)In February 2021, the CPT Editorial Panel created CPT codes 43X21 ( Esophagogastroduodenoscopy, flexible, transoral; with deployment of intragastric bariatric balloon) and 43X22 ( Esophagogastroduodenoscopy, flexible, transoral; with removal of intragastric bariatric balloon(s)) for endoscopic bariatric device procedures to the esophagogastroduodenoscopy (EGD) code family. CPT code 43235 ( Esophagogastroduodenoscopy, flexible, transoral; diagnostic, including collection of specimen(s) by brushing or washing, when performed (separate procedure)) is the base code for the EGD family and was surveyed with the new endoscopic bariatric device procedures, 43X21 and 43X22. All three of these CPT codes were reviewed at the April 2021 RUC meeting. For CY 2023, the RUC recommended an RVU of 3.11 for CPT code 43X21, an RVU of 2.80 for CPT code 43X22, and maintaining the current work RVU of 2.09 for CPT code 43235. We are proposing the RUC-recommended work RVU of 3.11 for Start Printed Page 45915 CPT code 43X21, the RUC-recommended work RVU of 2.80 for CPT code 43X22, and maintaining the current work RVU of 2.09 for CPT code 43235 for this code family. We are proposing the direct PE inputs for CPT code 43235 without refinement. However, we are proposing refinements to the direct PE inputs for CPT codes 43X21 and 43X22. For CPT code 43X21, we are proposing refinements to the direct PE inputs for clinical labor activity codes CA001 ( complete pre-service diagnostic and referral forms) and CA011 (provide education/obtain consent). We are proposing to refine CA001 from 5 minutes to the standard 3 minutes since no explanation was provided to support 5 minutes for this clinical labor activity. We are proposing to refine CA011 from 15 minutes to 10 minutes since it was not clear why this much time for education is needed, and we do not believe that the recommended 15 minutes would be typical for the procedure. Also, when we looked at other procedures with clinical labor activity code CA011 we did not find many procedures with more than 12 minutes for this activity. Therefore, we are proposing to refine the clinical labor activity times for CA001 and CA011 for CPT code 43X21 as described above, and to accept the remaining RUC-recommended direct PE inputs without refinement. For CPT code 43X22, we are proposing a refinement to the direct PE input for clinical labor activity code CA016 ( prepare, set-up and start IV, initial positioning and monitoring of patient) from 10 minutes to the standard 2 minutes. In the PE Summary of Recommendations for non-facility direct PE inputs provided by the RUC, the RUC recommended 8 minutes above the standard 2 minutes for CA016 and stated this clinical labor activity was identical to the 10 minutes for positioning the patient as CPT code 43260 ( Endoscopic retrograde cholangiopancreatography (ERCP); diagnostic, including collection of specimen(s) by brushing or washing, when performed (separate procedure)). However, our study of this code family could not find 10 minutes of non-facility direct PE inputs for clinical labor activity CA016. Also, CPT code 43260 is only performed in a facility and does not have any non-facility clinical labor times. Therefore, we are proposing to refine the clinical labor activity time for CA016 for CPT code 43X22 as described above, and to accept the remaining RUC-recommended direct PE inputs without refinement. This proposed reduction of 8 minutes to the CA016 clinical labor activity also carries over to the equipment times for the suction machine (Gomco) (EQ235), the scope video system (monitor, processor, digital capture, cart, printer, LED light) (ES031), and the multi-channeled flexible digital scope, esophagoscopy gastroscopy duodenoscopy (EGD) (ES087) which we are proposing to reduce by the same 8 minutes. (12) Delayed Creation Exit Site From Embedded Catheter (CPT Code 49436)CPT code 49436 ( Delayed creation of exit site from embedded subcutaneous segment of intraperitoneal cannula or catheter) was finalized as potentially misvalued in the CY 2022 PFS final rule (86 FR 64996) and the code was found to be appropriate to value for the non-facility/office setting. The RUC only reviewed the PE inputs for this service at the January 2022 meeting. The RUC recommended 5 minutes for Clinical Activity Code CA013, line 34 in the non-facility/office setting on the RUC-recommended PE spreadsheet. We disagree with the RUC-recommended time, and are proposing the standard time of 2 minutes, as an adequate rationale was not provided for the additional time in the global space. This proposed reduction of 3 minutes to the CA013 clinical labor activity also carries over to the equipment times, which we are proposing to reduce by the same 3 minutes. Otherwise, we agreed with the RUC-recommended clinical labor times for activity codes CA011 and CA018, and we are proposing the remaining refinements as recommended. The RUC did not recommend any work inputs for this code and we are not proposing any work RVU refinements. (13) Percutaneous Nephrolithotomy (CPT Codes 50080, 50081)In September 2021, the CPT Editorial Panel revised the descriptors to CPT codes 50080 ( Percutaneous nephrolithotomy or pyelolithotomy, lithotripsy stone extraction, antegrade ureteroscopy, antegrade stent placement and nephrostomy tube placement, when performed, including imaging guidance; simple (e.g., stone[s] up to 2 cm in a single location of kidney or renal pelvis, nonbranching stones)) and 50081 ( Percutaneous nephrolithotomy or pyelolithotomy, lithotripsy stone extraction, antegrade ureteroscopy, antegrade stent placement and nephrostomy tube placement, when performed, including imaging guidance; complex (e.g., stone[s] > 2 cm, branching stones, stones in multiple locations, ureter stones, complicated anatomy)), that in recent claims data were identified via the site of service anomaly screen, to be performed less than 50 percent of the time in the inpatient setting, but both codes have 090 day global periods, which include post-op inpatient hospital E/M services as a component of their value, typical of major surgery codes. The revised code descriptors also include image guidance and nephrostomy tube placement, which were not present in the old descriptors, and were reported as procedures that were separate from CPT codes 50081 and 50082. These codes have not been reviewed for nearly 30 years. CPT code 50080 currently has a work RVU of 15.74 with 117 minutes of intra-service time and 359.5 minutes of total time. The RUC recommended a work RVU of 13.50, 90 minutes of intra-service time, and 244 minutes of total time for CPT code 50080, which represents a reduction from the current values. However, the recommended intra-service times dropped by 76.9 percent from the current intra-service time and the RUC recommended work RVU is reduced only by 85.9 percent. Therefore, we disagree with the RUC recommended work RVU and we are proposing a work RVU of 12.11 for CPT code 50080 with the RUC recommended 90 minutes of intra-service time and 244 minutes of total time. We note that our proposed work RVU for CPT code 50080 falls between CPT code 36830 ( Creation of arteriovenous fistula by other than direct arteriovenous anastomosis (separate procedure); nonautogenous graft (e.g., biological collagen, thermoplastic graft)), with a work RVU of 12.03 and the same intra-service time of 90 minutes, and CPT code 36818 ( Arteriovenous anastomosis, open; by upper arm cephalic vein transposition), with a work RVU of 12.39 and the same intra-service time of 90 minutes (and both with similar total times to CPT code 50080). CPT code 50081 currently has a work RVU of 23.50 with 42 minutes of pre-service evaluation time, 0 minutes of pre-service positioning time, 25 minutes of pre-service scrub/dress/wait time, 195 minutes of intra-service time, 27 minutes of immediate post-service time, and 507.5 minutes of total time. The RUC recommended 22.00 work RVUs with 40 minutes of pre-service evaluation time, 3 minutes positioning time, 10 minutes scrub/dress/wait time, 140 minutes of intra-service time, 44 minutes of immediate post-service time, for a sum of 302 minutes of total time. The RUC-recommended intra-service time and total time for CPT code 50081 are less than the current times for this code and we expect the work RVUs to also be less than the current work RVUs. Start Printed Page 45916 Though the RUC recommended a work RVU of 22.00 that is less than the current 23.50 work RVU, a substantial reduction in time should be better reflected in the work RVU. The RUC recommended 13.50 work RVUs for CPT code 50800 and 22.00 for CPT code 50081, with an incremental difference between the two codes of 8.50 work RVUs (22.00−13.50 = 8.50). We are proposing a work RVU of 20.61 for CPT code 50081, based on the proposed CPT code 50080's work RVU of 12.11 plus the RUC-recommended incremental difference 8.50 work RVUs between CPT code 50080 and CPT code 50081 (12.11 + 8.50 = 20.61). We are proposing the direct PE inputs as recommended by the RUC for both codes in the family. (14) Laparoscopic Simple Prostatectomy (CPT Codes 55821, 55831, 55866, and 558XX)In October 2021, the CPT Editorial Panel added CPT placeholder code 558XX ( Laparoscopy, surgical prostatectomy, simple subtotal (including control of postoperative bleeding, vasectomy, meatotomy, urethral calibration and/or dilation, and internal urethrotomy), includes robotic assistance, when performed) and prompted this family of Laparoscopic Simple Prostatectomy codes for survey and review for the January 2022 RUC meeting. The RUC recommends a work RVU of 15.18 for CPT code 55821 ( Prostatectomy (including control of postoperative bleeding, vasectomy, meatotomy, urethral calibration and/or dilation, and internal urethrotomy); suprapubic, subtotal, 1 or 2 stages) with 33 minutes of pre-service evaluation time, 3 minutes positioning time, 10 minutes scrub/dress/wait time, 120 minutes of intra-service time, and 25 minutes of immediate post-service time, for a sum of 329 minutes of total time. CPT code 55821 currently has a work RVU value of 15.76 with 102.0 minutes of intra-service time and 399.5 minutes of total time. After reviewing this code and relative similar codes in the PFS, we are proposing the RUC-recommended work RVU of 15.18 with 315 minutes of total time. The RUC recommends a work RVU of 15.60 for CPT code 55831 ( Prostatectomy (including control of postoperative bleeding, vasectomy, meatotomy, urethral calibration and/or dilation, and internal urethrotomy); retropubic, subtotal), with 40 minutes of pre-service evaluation time, 3 minutes positioning time, 10 minutes scrub/dress/wait time, 120 minutes of intra-service time, 25 minutes of immediate post-service time, for a sum of 329 minutes of total time. CPT code 55831 currently has a work RVU value of 17.19 with 114.0 minutes of intra-service time and 422.5 minutes of total time. The RUC notes an additional degree of difficulty with this retropubic incision approach (behind the pubis) compared to the suprapubic approach. After reviewing this code and relative similar codes in the PFS, we are proposing the RUC recommended work RVU of 15.60 with 322 minutes of total time. The RUC recommends a work RVU of 22.46 for CPT code 55866 ( Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed) with 40 minutes of pre-service evaluation time, 15 minutes positioning time, 12 minutes scrub/dress/wait time, 180 minutes of intra-service time, 50 minutes of immediate post-service time, for a sum of 362 minutes of total time. CPT code 55866 currently has a work RVU value of 26.80 with 180 minutes of intra-service time and 422 minutes of total time. The RUC notes that this procedure removes the entire prostate with robotic assistance, and the complexity of nerve sparing when operating with a cancerous prostate, increases the medical complexity and intensity of this procedure. After reviewing this code and relative similar codes in the PFS, we are proposing the RUC recommended work RVU of 22.46 with 362 minutes of total time to CPT code 55866. The RUC recommends a work RVU of 19.53 for CPT code 558XX ( Laparoscopy, surgical prostatectomy, simple subtotal (including control of postoperative bleeding, vasectomy, meatotomy, urethral calibration and/or dilation, and internal urethrotomy), includes robotic assistance, when performed) with 40 minutes of pre-service evaluation time, 8 minutes positioning time, 11 minutes scrub/dress/wait time, 180 minutes of intra-service time, 50 minutes of immediate post-service time, for a sum of 354 minutes of total time. The RUC offers CPT code 42420 ( Excision of parotid tumor or parotid gland; total, with dissection and preservation of facial nerve) with a work RVU of 19.53, 180 minutes of intra-service time and 383 minutes of total time)) as a crosswalk to CPT code 558XX. After reviewing this code and relative similar codes in the PFS, we are proposing the RUC-recommended work RVU of 19.53 with 354 minutes of total time to CPT code 558XX. We are proposing the RUC-recommended direct PE inputs for CPT codes 55821, 55831, 55866, and 558XX without refinement. (15) Lumbar Laminotomy With Decompression (CPT Codes 63020, 63030, and 63035)In October 2018, CPT code 63030 ( Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; 1 interspace, lumbar) was identified by the AMA as having an anomalous site of service when compared to Medicare utilization data. The Medicare data from 2014 through 2017 indicated that CPT code 63030 was performed less than 50 percent of the time in the inpatient setting, yet included inpatient hospital evaluation and management (E/M) services within its global period. In January 2019, the RUC recommended that this code be reviewed in 2 years (January 2021) to determine if previous changes to differentiate percutaneous, endoscopic, and open spine procedures were effective to correct reporting of this service. In December 2020, the Relativity Assessment Workgroup noted that CPT code 63030 continues to be primarily reported in the outpatient setting, but still includes inpatient hospital visits in its valuation. The specialty society indicated that there is still confusion about this code, and therefore, the RUC recommended that CPT code 63030 be referred to the CPT Editorial Panel to revise the descriptor to mitigate the incorrect reporting in the outpatient setting, but the CPT Editorial Panel did not accept the code change application to differentiate inpatient (63030) versus outpatient (630X0) at the September 2021 CPT meeting. Since this is a site of service issue, CPT code 63030 was surveyed with the code family for the January 2022 RUC meeting. For CPT codes 63020 ( Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; 1 interspace, cervical), 63030, and 63035 ( Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; each additional interspace, cervical or lumbar (List separately in addition to code for primary procedure)), we disagree with the RUC's recommended work RVUs of 15.95, 13.18, and 4.00, respectively, because they do not account for the surveyed changes in time for CPT codes 63020, 63030, and Start Printed Page 45917 63035, and the full application of the 23-hour policy to CPT code 63030. We are proposing a work RVU of 14.91 for CPT code 63020, a work RVU of 12.00 for CPT code 63030, and a work RVU of 3.86 for CPT code 63035. The RUC recommends 40 minutes pre-service evaluation, 20 minutes pre-service positioning, 15 minutes pre-service scrub/dress/wait time, 90 minutes intraservice time, 30 minutes immediate post-service time, and one CPT code 99232 ( subsequent hospital care/day 25 minutes), one CPT code 99231 ( Subsequent hospital care/day 15 minutes), one CPT code 99238 ( Hospital discharge day management; 30 minutes or less), one CPT code 99214 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using time for code selection, 30-39 minutes of total time is spent on the date of the encounter.), and two 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.) visits in the post-operative period. This results in a 15-minute decrease in the pre-service period, a 30-minute decrease in intraservice time, a 5-minute decrease in immediate post-service time, and a 17-minute increase in the post-operative period. The proposed work RVU of 14.91 is based on the total time ratio calculation using the RUC-recommended 379 minutes of total time divided by the current total time of 412 minutes for CPT code 63020, then multiplying by the current work RVU of 16.20 for CPT code 63020 ((379 minutes/412 minutes) * 16.20 = 14.90). We note that this is a direct crosswalk to CPT code 27057 ( Decompression fasciotomy(ies), pelvic (buttock) compartment(s) (e.g., gluteus medius-minimus, gluteus maximus, iliopsoas, and/or tensor fascia lata muscle) with debridement of nonviable muscle, unilateral), which has a work RVU of 14.91, identical intraservice and immediate post-service time of 90 minutes and 30 minutes, respectively, and only 10 more minutes of total time. We believe this work RVU more adequately accounts for the decrease in total and intraservice time than the RUC recommended work RVU, and we note that we considered the reverse building block methodology, which would result in a work RVU of 14.30, but we felt that it decreased the valuation of CPT code 63020 too much, considering the shift in post-operative work to include a longer, more intense office/outpatient visit (CPT code 99214). We disagree with the RUC-recommended work RVU for CPT code 63030. More specifically, we disagree with the RUC recommended work RVU for CPT code 63030 because the RUC did not completely apply the 23-hour policy calculation (finalized in the CY 2011 PFS final rule (75 FR 73226)) in formulating its recommendations. Additionally, we disagree with the RUC recommended work RVU for this code for which the RUC considered the patient to be admitted during the post-operative period because the RUC did not fully apply the 23-hour policy when formulating their recommendations. As we noted in the CY 2011 PFS final rule (75 FR 73226), and as we discuss earlier in this section of this proposed rule (“(1) Anterior Abdominal Hernia Repair (CPT codes 157X1, 49X01, 49X02, 49X03, 49X04, 49X05, 49X06, 49X07, 49X08, 49X09, 49X10, 49X11, 49X12, 49X13, 49X14, and 49X15”), the work RVUs for services that are typically performed in the outpatient setting and require a hospital stay of less than 24 hours may in some cases involve multiple overnight stays while the patient is still considered to be an outpatient for purposes of Medicare payment. Because such services are typically furnished in the outpatient setting, they should not be valued to include inpatient post-operative E/M visits. The level of discharge day management services included in the valuation of such services should similarly not reflect an inpatient discharge and should therefore be reduced. And finally, as discussed in CY 2011 rulemaking, the intraservice time from the inpatient level E/M postoperative visit should be reallocated to the immediate postservice time of the service. The 23-hour policy calculation, when fully applied to the calculation of a work RVU, is used to reduce the value of discharge day management services, remove the inpatient E/M visits, and reallocate the intraservice time to the immediate post-service period. We refer readers to the 2011 PFS final rule (75 FR 73226) for an in-depth explanation of the 23-hour policy. For CPT code 63030, we believe the RUC only partially applied the 23-hour policy when it applied the policy to the immediate post service time, but not to the calculation of the work RVU. Instead, we believe the 23-hour policy should be fully applied to this code that describes outpatient services for which there is an overnight stay during the post-operative period, regardless of the number of nights that a patient stays in the hospital. The services to which the 23-hour policy is usually applied would typically involve a patient stay in a hospital for less than 24 hours, which often means the patient may stay overnight in the hospital. On occasion, the patient may stay in the hospital longer than a single night; however, in both cases (one night or more than one night), the patient is considered to be a hospital outpatient, not an inpatient, for Medicare purposes. In short, we do not believe that the work that is typically associated with an inpatient service should be included in the work RVUs for the outpatient services to which the 23-hour policy applies, especially considering the previously discussed site of service anomaly for CPT code 63030. In accordance with the 23-hour policy valuation methodology we established in the CY 2011 PFS final rule, we are instead proposing a work RVU of 12.00 for CPT code 63030.The steps are as follows:
*Value associated with 1/2 hospital discharge day management service **Value associated with an inpatient hospital visit, CPT code 99231. ***Value associated with the reallocated intraservice time multiplied by the post-service intensity of the 23-hour stay code. The RUC recommends the maintenance of the current work RVU of 13.18 because there was no change in intraservice time and the 37-minute decrease in total time is largely due to the change in immediate post-service time and post-operative period from the application of the 23-hour policy. We note that the proposed work RVU of 12.00 is higher than the other valuations that we considered, including the total time ratio work RVU of 11.75 ((305 minutes/342 minutes) * 13.18 = 11.75) and the reverse building block work RVU of 11.45. We note that the proposed work RVU of 12.00 is well-bracketed by two 90-minute intraservice timed 090-day CPT codes 28725 ( Arthrodesis; subtalar), with a work RVU of 11.22, and 58720 ( Salpingo-oophorectomy, complete or partial, unilateral or bilateral (separate procedure)), with a work RVU of 12.16. We note that, in the summary of recommendations (SOR) submitted to CMS by the RUC, the specialty societies assert that the surveyed total time would be the same as the current total Start Printed Page 45918 time if the 23-hour policy was not fully applied to the immediate post-service time and post-operative period, with only a shift of work from facility to office, but we note that this is not true. The surveyed total time is 339 minutes, but the RUC recommended 40 minutes for the pre-service evaluation time rather than the specialty societies' surveyed 45 minutes. If the RUC had recommended the survey times, with the pre-service evaluation refinement, the reverse building block work RVU would be 12.62, still less than the RUC-recommended work RVU of 13.18, effectively accounting for the shift from facility to office post-operative visits. For CPT code 63035, we are proposing a work RVU of 3.86 based on the reverse building block methodology to account for the 11-minute increase in intraservice time. We note that this proposed value is between the surveyed 25th percentile value of 3.50 and the RUC-recommended work RVU of 4.00. We note that the proposed work RVU is well-bracketed by two 60-minute add-on CPT codes—CPT code 50706 and 63231. CPT code 50706 ( Balloon dilation, ureteral stricture, including imaging guidance (e.g., ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation (List separately in addition to code for primary procedure)), has a work RVU of 3.80, and CPT code 63621 ( Stereotactic radiosurgery (particle beam, gamma ray, or linear accelerator); each additional spinal lesion (List separately in addition to code for primary procedure)), has a work RVU of 4.00. For the direct PE inputs, we are proposing to remove the 125 minutes of equipment time for EQ168 (light, exam) for CPT codes 63020 and 63030 because the RUC contested the typicality of its use to assess the wound and remove staples. Because it is a standard piece of equipment in a neurosurgeon and orthopedic exam room, and the RUC questioned its typicality, we are proposing 0 minutes for EQ168 for CPT codes 63020 and 63030. (16) Somatic Nerve Injections (CPT Codes 64415, 64416, 64417, 64445, 64446, 64447, 64448, 76942, 77002, and 77003)In May 2021, the CPT Editorial Panel revised the descriptors and billing instructions for CPT codes 64415 ( Injection(s), anesthetic agent(s) and/or steroid; brachial plexus, including imaging guidance, when performed), 64416 ( Injection(s), anesthetic agent(s) and/or steroid; brachial plexus, continuous infusion by catheter (including catheter placement), including imaging guidance, when performed), 64417 ( Injection(s), anesthetic agent(s) and/or steroid; axillary nerve, including imaging guidance, when performed), 64445 ( Injection(s), anesthetic agent(s) and/or steroid; sciatic nerve, including imaging guidance, when performed), 64446 ( Injection(s), anesthetic agent(s) and/or steroid; sciatic nerve, continuous infusion by catheter (including catheter placement), including imaging guidance, when performed), 64447 ( Injection(s), anesthetic agent(s); femoral nerve, including imaging guidance, when performed), 64448 ( Injection(s), anesthetic agent(s) and/or steroid; femoral nerve, continuous infusion by catheter (including catheter placement), including imaging guidance, when performed), 77002 ( Fluoroscopic guidance for needle placement), 77003 ( Fluoroscopic guidance and localization of needle or catheter tip for spine or paraspinous diagnostic or therapeutic injection procedures (epidural or subarachnoid)) and 76942 ( Ultrasonic guidance for needle placement, imaging supervision and interpretation). These codes were then surveyed by the RUC in October 2021. We last finalized values for CPT codes 64415, 64416, 64417, 64445, 64446, 64447, and 64448 in the CY 2020 PFS final rule (84 FR 62744 through 62745). In May 2018, the CPT Editorial Panel approved the revision of descriptors and guidelines for codes in the somatic nerve injection family. At its October 2018 meeting, the RUC recommended work RVU and PE inputs for a number of somatic nerve injection codes, including CPT codes 64415, 64416, 64417, 64445, 64446, 64447, and 64448. (Note that in 2018, the codes did not include “including imaging guidance, when performed” in their descriptors.) During the October 2018 RUC presentation for this family of services, the specialty societies stated that CPT codes 64415, 64416, 64417, 64446, 66447, and 64448 were reported with the imaging code CPT code 76942 more than 50 percent of the time. In reviewing this family of services in the CY 2020 PFS final rule, our finalized work and PE values for the codes did not consider the simultaneous performance of injection and imaging (84 FR 62744). In May 2021, the CPT Editorial Panel revised the codes to include “with imaging, when performed” in the descriptors. When presenting its CY 2023 valuation recommendations, the RUC pointed out that the current values and times for CPT codes 64415, 64416, 64417, 64445, 64446, 64447, and 6448 reflect only the work and time of the injection. The revised codes, however, include both injection and imaging. In order to make an equitable comparison between the RUC recommendations and the current values, the RUC suggested we compare the RUC recommendations to values that combined the current work and estimated time of the injection codes and the imaging code with which they are being bundled, CPT code 76942. We agreed with this approach and thank the RUC for providing combined work RVUs and estimated combined times, which we considered as part of the RUC's recommendations. As part of its recommendations, the RUC reaffirmed its prior recommendations for a number of codes that were previously reviewed or reaffirmed in the CY 2020 PFS final rule, including: CPT codes 64400 ( Injection(s), anesthetic agent(s); trigeminal nerve, each branch (i.e., ophthalmic, maxillary, mandibular)), 64408 ( Injection(s), anesthetic agent(s), and/or steroid; vagus nerve), 64420 ( Injection(s), anesthetic agent(s) and/or steroid; intercostal nerve, single level), 64421 ( Injection(s), anesthetic agent(s) and/or steroid; intercostal nerves, each additional level (List separately in addition to code for primary procedure)), 64425 ( Injection(s), anesthetic agent(s) and/or steroid; ilioinguinal, iliohypogastric nerves), 64430 ( Injection(s), anesthetic agent(s) and/or steroid; pudendal nerve), 64435 ( Injection(s), anesthetic agent(s) and/or steroid; paracervical (uterine) nerve), 64449 ( Injection(s), anesthetic agent(s) and/or steroid; lumbar plexus, posterior approach, continuous infusion by catheter (including catheter placement)), and 64450 (Injection(s), anesthetic agent(s); other peripheral nerve or branch) (84 FR 62744 through 62745); CPT code 64451 ( Injection(s), anesthetic agent(s) and/or steroid; nerves innervating the sacroiliac joint, with image guidance (ie, fluoroscopy or computed tomography) (84 FR 62740); and CPT code 64454 ( Injection(s), anesthetic agent(s) and/or steroid; genicular nerve branches including imaging guidance, when performed) (84 FR 62749). The RUC also reaffirmed its recommendation for CPT code 64455 ( Injection(s), anesthetic agent(s) and/or steroid; plantar common digital nerve(s) (e.g., Morton's neuroma)), which was reviewed and valued in the CY 2019 PFS final rule (83 FR 58542). The codes the RUC wishes to reaffirm for CY 2023 have not been revised by the CPT Editorial Panel and were not resurveyed by the RUC since their prior valuation. Since we have not received new Start Printed Page 45919 information regarding these codes, we acknowledge the RUC's reaffirmation but are not reviewing the values of these codes at this time. We also note that the RUC-reaffirmed values for CPT codes 64435 (work RVU of 0.75), 64450 (work RVU of 0.75), 64451 (work RVU of 1.52), and 64454 (work RVU of 1.52) are the same as the current work RVUs that we finalized in the CY 2020 PFS final rule. The RUC reaffirmed work RVU of 0.94 for CPT code 64405 is the current work RVU, which was finalized in the CY 2019 PFS final rule (83 FR 59542) and reaffirmed in the CY 2020 final rule, and the RUC-reaffirmed work RVU of 1.10 for CPT code 64418 is the current work RVU value finalized in the CY 2018 PFS final rule (82 FR 53054) and reaffirmed in the CY 2020 PFS final rule. The RUC reaffirmed a work RVU of 0.75 for CPT code 64455 which is the current work RVU we finalized in the CY 2019 PFS final rule (83 FR 58542). For CY 2023, we are proposing the RUC-recommended work RVUs for CPT codes 64417 (work RVU of 1.31), 64447 (work RVU of 1.34), 64448 (work RVU of 1.68), 77002 (work RVU of 0.54), 77003 (work RVU of 0.60), and 76942 (work RVU of 0.67). For CPT code 64415, we disagree with the RUC-recommended work RVU of 1.50 and are proposing a work RVU of 1.35, based on the intraservice time ratio calculated using the “combined” values for CPT code 64415 and the imaging CPT code 76942 provided by the RUC. (The combined work RVU the RUC offered for comparison was 2.02 (the sum of the work RVUs for both codes: CPT code 64415 is 1.35 and CPT code 76942 is 0.67), and an estimated intraservice time of 15 minutes and total time of 43 minutes.) This proposed work RVU of 1.35 for CPT code 64415 is supported by a crosswalk to CPT code 11982 (Removal, non-biodegradable drug delivery implant), which has a work RVU of 1.34, an identical service time, and a total time that is two minutes lower than CPT code 64415. This value is further supported by a bracket of CPT codes: CPT code 64486 and CPT code 33285. CPT code 64486 (Transversus abdominis plane (TAP) block (abdominal plane block, rectus sheath block) unilateral; by injection(s) (includes imaging guidance, when performed)) has a work RVU of 1.27 and identical intraservice and total time values to CPT code 64415, and CPT code 33285 (insertion, subcutaneous cardiac rhythm monitor, including programming) has a work RVU of 1.53, an intraservice time of 10 minutes and a total time of 40 minutes. We note that when compared to the current time file for CPT code 64415, the RUC-recommended intraservice time decreased from 12 to 10 minutes (16.7 percent reduction) and RUC-recommended total time decreased from 40 to 35 minutes (12.5 percent reduction). However, the RUC-recommended work RVU increased by 0.15 which is an 11.1 percent increase. Although we do not imply that the decrease in time as reflected in survey values must always 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, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has increased, significant decreases in time should not be met with significant increases to work RVUs without adequate justification. Additionally, while we do acknowledge that adding imaging does bundle some additional work into the code, we do not believe that the recoding of the services in this family has resulted in a significant increase in their intensity, only a change in the way in which they will be reported, and through the bundling of some of these frequently reported services, it is reasonable to expect that the new coding system will achieve efficiencies via elimination of duplicative assumptions of the resources involved in furnishing particular services. We believe the new coding assigns more accurate work times, and thus, reflects efficiencies in resource costs that existed but were not reflected in the services as they were previously reported. If the addition of imaging guidance had made the new CPT codes significantly more intense to perform, we believe that this would have been reflected in the surveyed work times, which in the case of CPT code 64415 actually decreased from the predecessor code. Thus, we are disinclined to ignore the impact of decreased times on the work RVU. We believe our proposed value of 1.35 appropriately reflects both the additional work and the decrease of time. We considered proposing a work RVU of 1.27 for CPT code 64415, using CPT code 64486 as a comparison code, since it has the same intraservice and total times as the revised CPT code 64415. However, CPT code 64486, with a work RVU of 1.27, has a lower work RVU than the current work RVU of 64415 (1.35.) We are in general agreement with the RUC that it is important to acknowledge that there is some additional work that comes with adding imaging to this procedure. For CPT code 64416, we disagree with the RUC-recommended work RVU of 1.80 and are proposing a work RVU of 1.65. While we disagree with the RUC's recommended work RVU, we did agree with the RUC's proposed increment of +0.30 between CPT codes 64415 and 64416. (The RUC recommendation for CPT code 64415 was 1.50, and the recommendation for CPT code 64416 was 1.80.) We found persuasive the RUC's observation that the current increment between CPT codes 64415 and 64416 is unusually small when compared to other sets of related codes in the family. Typically, the codes that add catheter placement in addition to the injection are 0.30-0.36 work RVUs higher than the codes for an injection in the same nerve group or region. Retaining such a narrow interval of 0.15 between CPT codes 64415 and 64416 would create a rank order anomaly within the family in light of adjustments to some of the other codes' work RVUs. Our proposed work RVU of 1.65 for CPT code 64416 is supported by a bracket of CPT codes: CPT code 64448 and CPT code 36573. CPT code 64448 ( Transversus abdominis plane (TAP) block (abdominal plane block, rectus sheath block) bilateral; by injections (includes imaging guidance, when performed)) has a work RVU of 1.60, 15 minutes intraservice time and 40 minutes total time, and CPT code 36573 ( Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the insertion; age 5 years or older) has a work RVU of 1.70, 15 minutes intraservice time and 40 minutes total time. We note that, when compared to the current time file, the RUC-recommended intraservice time for CPT code 64416 decreased from 20 to 15 minutes (25 percent reduction) and the RUC-recommended total time decreased from 49 to 44 minutes (10.2 percent reduction). However, the RUC recommended a 0.32 increase in the work RVU, which is a 21.6 percent increase. We note that the RUC-recommended work RVU of 1.80 would give CPT code 64416 the highest work RVU of the surveyed codes, and would make it among the highest valued codes in the family. We do not believe the RUC-recommended work RVU appropriately accounts for the reductions in the surveyed total time for the procedure, and did not receive specific information explaining why, despite the decrease in time, the value should receive such a significant Start Printed Page 45920 increase relative to the other surveyed codes. As stated previously, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has increased significantly, decreases in time should be reflected in the revised work RVUs. As noted in our discussion of CPT code 64415 above, if the addition of imaging guidance had made the new CPT codes significantly more intense to perform, we believe that this would have been reflected in the surveyed work times, which in the case of CPT code 64416, are now actually lower. We believe our proposed work RVU of 1.65 corrects the increment between CPT code 64415 and 64416, while also acknowledging that, the addition of imaging notwithstanding, the times for CPT code 64416 have noticeably decreased. For CPT code 64445, we disagree with the RUC-recommended work RVU of 1.39 and are proposing a work RVU of 1.28, based on the intraservice time ratio calculated using the. “combined” values for CPT code 64445 and the imaging CPT code 76942 provided by the RUC. (The combined work RVU the RUC offered for comparison was 1.67 (the sum of the work RVUs for both codes: CPT code 64445 is 1.00 and CPT code 76942 is 0.67), and an estimated intraservice time of 13 minutes and total time of 27 minutes.) This proposed value of 1.28 is supported by a comparison to CPT code 64486 ( Transversus abdominis plane (TAP) block (abdominal plane block, rectus sheath block) unilateral; by injection(s) (includes imaging guidance, when performed)), which has a work RVU of 1.27 and intraservice time of 10 minutes and total time of 35 minutes. The value is also supported by a low bracket of CPT code 58100 ( Endometrial sampling (biopsy) with or without endocervical sampling (biopsy), without cervical dilation, any method (separate procedure)), with a work RVU of 1.21, identical intraservice time and almost identical total time, and a high bracket of CPT code 11982 ( Removal, non-biodegradable drug delivery implant), with a work RVU of 1.34, identical intraservice time and a higher total time of 33 minutes. We note that the RUC-recommended intraservice time and total time for CPT code 64445 are identical to the current intraservice and total times in the time file for CPT code 64445. However, the RUC recommended a 0.39 increase to the work RVU. We do not imply that the lack of change to the intraservice and total times means that the work RVU cannot be increased. 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, the RUC-proposed increase in the work RVU does not seem justified. As noted in our discussion of CPT code 64415 above, if the addition of imaging guidance had made the new CPT codes significantly more intense to perform, we believe that this would have been reflected in the surveyed work times, which in the case of CPT code 64445, are the same as the predecessor code. We considered proposing a work RVU of 1.10 for CPT code 64445, using CPT code 30901 ( Control nasal hemorrhage, anterior, simple (limited cautery and/or packing) any method) as a comparison code, with a work RVU of 1.10 and identical intraservice and total times as CPT code 64445. However, we believed this would cause a rank order anomaly within the family. For example, CPT code 64418 ( Injection(s), anesthetic agent(s) and/or steroid; suprascapular nerve) also has a work RVU of 1.10, but does not include imaging. Again, we generally agree with the RUC that it is important to acknowledge the additional work that comes with adding imaging to this procedure, and to ensure that this additional work is reflected within the relative values of the family, but we are still proposing a work RVU of 1.28 for CPT code 64445. For CPT code 64446, we disagree with the RUC-recommended work RVU of 1.75 and are proposing a work RVU of 1.64. This recommended work RVU is 0.36 higher than the proposed work RVU for CPT code 64445 (1.28). We note that the current increment between the current values of 64445 and 64446 (1.00 and 1.36, respectively) is 0.36. The RUC recommendations for these codes (1.39 and 1.75) preserved this increment. Since the same imaging activity is being added to both codes, we agree with preserving the relationship between the values of CPT codes 64445 and 64446. Our proposed work RVU of 1.64 for CPT code 64446 is supported by a bracket of CPT codes: CPT code 64448 and 36573. CPT code 64448 ( Transversus abdominis plane (TAP) block (abdominal plane block, rectus sheath block) bilateral; by injections (includes imaging guidance, when performed)) has a work RVU of 1.60, 15 minutes intraservice time and 40 minutes total time, and CPT code 36573 ( Insertion of peripherally inserted central venous catheter (PICC), without subcutaneous port or pump, including all imaging guidance, image documentation, and all associated radiological supervision and interpretation required to perform the insertion; age 5 years or older) has a work RVU of 1.70, 15 minutes intraservice time and 40 minutes total time. (We note that this is the same bracket we suggested to support the proposed value for CPT code 64416. As revised, the intraservice and total times for CPT codes 64416 and 64446 are the same.) We note that, compared to the time file for CPT code 64446, the RUC-recommended intraservice time stayed the same (15 minutes) and the total time increased from 40 to 44 minutes (10 percent increase). The RUC-recommended work RVU for CPT code 64446, is 0.39 higher than the current RVU, a 28.7 percent increase. We believe the RUC-recommended work RVU increase is disproportionate to the change in time. Additionally, we note that the RUC-recommended times result in CPT code 64416 and CPT code 64446 having identical intraservice and total times. We believe it best preserves rank order within the family to assign CPT code 64416 and CPT code 64446 similar work RVUs. We are proposing the direct PE inputs as recommended by the RUC for all of the codes in the Somatic Nerve Injections family. (17) Transcutaneous Passive Implant-Temporal Bone (CPT Codes 69714, 69716, 69717, 69719, 69726, 69727, 69XX0, 69XX1, and 69XX2)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. The RUC submitted interim recommendations to CMS for six codes in this family following the January 2021 RUC meeting, and CMS proposed and finalized the recommended work RVU for all six of these codes in the CY 2022 PFS final rule (86 FR 65099 through 65100). For CY 2023, the CPT Editorial Panel established three additional new codes and the coding structure of the family was changed to describe the different techniques more appropriately for transcutaneous passive implant procedures that vary in time and intensity depending on the indication for the procedure, device chosen, and patient anatomy. The nine codes in the family were surveyed again for the January 2022 RUC meeting and new recommendations were submitted to CMS. We are proposing the RUC-recommended work RVU for six of the nine codes in the Transcutaneous Passive Implant-Temporal Bone family. Start Printed Page 45921 We are proposing a work RVU of 9.03 for CPT code 69716 ( Implantation, osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor within the mastoid and/or resulting in removal of less than 100 mm2 surface area of bone deep to the outer cranial cortex), a work RVU of 9.97 for CPT code 69XX0 ( Implantation, osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor, outside of the mastoid and resulting in removal of greater than or equal to 100 mm2 surface area of bone deep to the outer cranial cortex), a work RVU of 9.46 for CPT code 69719 ( Revision/replacement (including removal of existing device), osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor, within the mastoid and/or involving a bony defect less than 100 mm2 surface area of bone deep to the outer cranial cortex), a work RVU of 10.25 for CPT code 69XX1 ( Revision/replacement (including removal of existing device), osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor, outside the mastoid and involving a bony defect greater than or equal to 100 mm2 surface area of bone deep to the outer cranial cortex), a work RVU of 7.38 for CPT code 69727 ( Removal, entire osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor, within the mastoid and/or involving a bony defect less than 100 mm2 surface area of bone deep to the outer cranial cortex), and a work RVU of 8.50 for CPT code 69XX2 ( Removal, entire osseointegrated implant, skull; with magnetic transcutaneous attachment to external speech processor, outside the mastoid and involving a bony defect greater than or equal to 100 mm2 surface area of bone deep to the outer cranial cortex). We disagree with the RUC's recommended work RVU for the other three codes in the family for the procedures describing percutaneous attachment to external speech processor. We disagree with the RUC's recommended work RVU of 8.00 for CPT code 69714 ( Implantation, osseointegrated implant, skull; with percutaneous attachment to external speech processor) and we are instead proposing a work RVU of 6.68 based on a crosswalk to CPT code 38305 ( Drainage of lymph node abscess or lymphadenitis; extensive). In reviewing CPT code 69714, we noted that the recommended intraservice time is decreasing from 40 minutes to 30 minutes (25 percent reduction), and the recommended total time is decreasing from 182 minutes to 146 minutes (20 percent reduction); however, the RUC-recommended work RVU is only decreasing from 8.69 to 8.00, which is a reduction of just over 8 percent. Although we did 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, significant decreases in time should be appropriately reflected in decreases to work RVUs. In the case of CPT code 69714, we believe that it is more accurate to propose a work RVU of 6.68 based on a crosswalk to CPT code 38305 to account for these decreases in the surveyed work time. We also disagree with the recommended work RVU of 8.00 because it results in an intensity which is anomalously high in relationship to the rest of the code family. At the recommended work RVU of 8.00, the intensity of CPT code 69714 is increasing by nearly 50 percent as compared with the survey conducted last year, and the resulting intensity of the service would be significantly higher than any of the other codes in the family. We do not agree that this intensity would be typical given that the percutaneous form of implant described by CPT code 69714 should have the lowest intensity of the three types described in this code family. The implantation procedure described by this code should also typically have lower intensity than the revision/replacement procedures elsewhere in the family. We believe that the intensity of CPT code 69714 is more accurately described at our proposed work RVU of 6.68 based on a crosswalk to CPT code 38305. This code shares the same intraservice time of 30 minutes as CPT code 69714 and has a higher total time of 186 minutes; we agree that CPT code 69714 is more intense than CPT code 38305 which is offset by our crosswalk code having an additional office visit in its global period. We disagree with the RUC's recommended work RVU of 8.48 for CPT code 69717 ( Revision/replacement (including removal of existing device), osseointegrated implant, skull; with percutaneous attachment to external speech processor) and we are instead proposing a work RVU of 7.91 based on a crosswalk to CPT code 46262 ( Hemorrhoidectomy, internal and external, 2 or more columns/groups; with fistulectomy, including fissurectomy, when performed). In reviewing CPT code 69717, we noted that although the intraservice time remains essentially unchanged (decreasing from 45 minutes to 44 minutes), the recommended total time is decreasing from 187 minutes to 159 minutes (15 percent reduction). However, the RUC-recommended work RVU is only decreasing from 8.80 to 8.48, which is a reduction of less than 4 percent. Although we did 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, significant decreases in time should be appropriately reflected in decreases to work RVUs. In the case of CPT code 69717, we believe that it is more accurate to propose a work RVU of 7.91 based on a crosswalk to CPT code 46262 to account for these decreases in the surveyed work time. We also disagree with the recommended work RVU of 8.48 because it results in a higher intensity than the other two revision/replacement codes (CPT codes 69719 and 69XX1) in this family. CPT code 69717 describes the percutaneous form of implant which should have the lowest intensity of the three revision/replacement codes in this family, however at the recommended work RVU of 8.48 it would have the highest intensity of this group. While the intensity at the recommended work RVU for CPT code 69717 is nowhere near the anomalous nature of the intensity at the recommended work RVU for CPT code 69714, we still believe that the intensity would be more typical at the proposed work RVU of 7.91. This proposed valuation restores the relationship between the three revision/replacement codes by placing the intensity of CPT code 69717 slightly lower than CPT codes 69719 and 69XX1. Therefore, we believe that the intensity of CPT code 69717 is more accurately described at our proposed work RVU of 7.91 based on a crosswalk to CPT code 46262. This code has nearly the same intraservice time of 45 minutes as CPT code 69717 and has a higher total time of 179 minutes; we agree that CPT code 69717 is more intense than CPT code 46262 which is offset by our crosswalk code having an additional office visit in its global period. We disagree with the RUC's recommended work RVU of 7.50 for CPT code 69726 ( Removal, entire osseointegrated implant, skull; with percutaneous attachment to external speech processor) and we are instead proposing a work RVU of 6.36 based on a crosswalk to CPT code 67912 ( Correction of lagophthalmos, with implantation of upper eyelid lid load Start Printed Page 45922 (e.g., gold weight) ). In reviewing CPT code 69726, we noted that the recommended intraservice time is increasing from 30 minutes to 35 minutes (17 percent increase), and the recommended total time is increasing from 148 minutes to 150 minutes (1 percent increase); however, the RUC-recommended work RVU is increasing from 5.93 to 7.50, which is an increase of just over 26 percent. Although we did not imply that the increase in time as reflected in survey values must equate to a one-to-one or linear increase in the valuation of work RVUs, we believe that since the two components of work are time and intensity, modest increases in time should be appropriately reflected in modest increases to work RVUs. In the case of CPT code 69726, we believe that it is more accurate to propose a work RVU of 6.36 based on a crosswalk to CPT code 67912 to account for these increases in the surveyed work time. We also disagree with the recommended work RVU of 7.50 because it results in an intensity which is anomalously high in relationship to the rest of the code family and creates a rank order anomaly within the work RVUs. CPT code 69726 describes the percutaneous form of the removal procedure which should have the lowest intensity of all nine codes in this family. However, the intensity of CPT code 69726 at the recommended work RVU of 7.50 would be the second-highest in the family, even higher than CPT code 69XX1 which describes the revision/replacement procedure with magnetic transcutaneous attachment resulting in removal of greater than or equal to 100 square mm surface area of bone. We do not agree that this would be typical and we believe that the intensity would be more accurate at our proposed work RVU of 6.36. We also note that the recommended work RVU of 7.50 for CPT code 69726 creates a rank order anomaly within the family as it would be higher than the recommended work RVU of 7.38 for CPT code 69727 which describes a more complex procedure and has higher surveyed work times. We therefore believe that the work and intensity of CPT code 69726 are more accurately described at our proposed work RVU of 6.36 based on a crosswalk to CPT code 67912. This code has nearly the same intraservice time of 40 minutes as CPT code 69726 and has a higher total time of 166 minutes; we agree that CPT code 69726 is more intense than CPT code 69726 which is offset by our crosswalk code having an additional office visit in its global period. We are proposing the direct PE inputs as recommended by the RUC for all nine codes in the Transcutaneous Passive Implant-Temporal Bone family. (18) Contrast X-Ray of Knee Joint (CPT Code 73580)CPT code 73580 ( Radiologic examination, knee, arthrography, radiological supervision and interpretation) was first identified via the high-volume growth screen in 2008. In 2021, the Relativity Assessment Workgroup (RAW) noted that code 73580 was never surveyed and remains CMS/Other sourced, and recommended that it be surveyed. CPT code 73580 was then surveyed. We are proposing the RUC-recommended work RVU of 0.59. We are also proposing the RUC-recommended direct PE inputs without refinement. (19) 3D Rendering With Interpretation and Report (CPT Code 76377)We nominated this code in the CY 2020 PFS final rule as potentially misvalued, stating that we believe it is of the same family as CPT code 76376 ( 3D rendering with interpretation and reporting of computed tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under concurrent supervision; not requiring image postprocessing on an independent workstation), which was reviewed at the April 2018 RUC meeting. CMS requested that CPT code 76377 also be reviewed to maintain relativity within the code family (84 FR 62625). The specialty societies maintain that these services are more accurately viewed as separate code families. Furthermore, the RUC cites changes in technique and patient population as compelling evidence to maintain a physician work RVU of 0.79 despite a 5-minute recommended reduction in physician total time compared to the current physician time. We are proposing the RUC recommended work RVU of 0.79 for CPT code 76377; however, we reiterate that we continue to believe that CPT code 76376 and 76377 would be more appropriately viewed as belonging to the same code family and we request that they be surveyed together. We are proposing the RUC-recommended direct PE inputs without refinement. (20) Neuromuscular Ultrasound (CPT Codes 76881, 76882, and 76XX0)Since their creation in 2011, CPT codes 76881 ( Ultrasound, complete joint (ie, joint space and peri-articular soft-tissue structures), real-time with image documentation) and 76882 ( Ultrasound, limited, joint or other nonvascular extremity structure(s) (e.g., joint space, peri-articular tendon[s], muscle[s], nerve[s], other soft-tissue structure[s], or soft-tissue mass[es]), real-time with image documentation) have been reviewed numerous times as New Technology/New Services by the Relativity Assessment Workgroup (RAW). In October 2016, the RAW reviewed these codes and agreed with the specialty societies that the dominant specialties providing the complete (CPT code 76881) versus the limited (CPT code 76882) ultrasound of extremity services were different than originally thought, causing variation in the typical practice expense inputs. The RAW recommended referral to the Practice Expense Subcommittee for review of the direct practice expense inputs and the CPT Editorial Panel to clarify the introductory language regarding the reference to one joint in the complete ultrasound. The PE Subcommittee reviewed the direct practice expense inputs for CPT codes 76881 and 76882 and adjusted the clinical staff time at the January 2017 RUC meeting, and the CPT Editorial Panel editorially revised CPT codes 76881 and 76882 to clarify the distinction between complete and limited studies and revised the introductory guidelines to clarify reference to one joint in the complete ultrasound procedure in June 2017. In October 2021, the CPT Editorial Panel approved the addition of CPT code 76XX0 for reporting real-time, complete neuromuscular ultrasound of nerves and accompanying structures throughout their anatomic course, per extremity, and the revision of CPT code 76882 to add focal evaluation. CPT codes 76881 and 76882 were identified as part of the neuromuscular ultrasound code family with CPT code 76XX0 and surveyed for the January 2022 RUC meeting. For CPT codes 76881, 76882, and 76XX0, we disagree with the RUC-recommended work RVUs of 0.90, 0.69, and 1.21, respectively, as they do not account for the surveyed time changes or appropriate comparisons for the new add-on code, CPT code 76XX0, and are proposing a work RVU of 0.54 for CPT code 76881, a work RVU of 0.59 for CPT code 76882, and a work RVU of 0.99 for CPT code 76XX0. CPT code 76881 represents a complete evaluation of a specific joint in an extremity. This service requires ultrasound examination of all the following joint elements: joint space (for example, effusion), peri-articular soft-tissue structures that surround the joint (that is, muscles, tendons, other soft-tissue structures), and any identifiable abnormality. In some circumstances, additional evaluations such as dynamic Start Printed Page 45923 imaging or stress maneuvers may be performed as part of the complete evaluation. The RUC recommended 5 minutes of pre-service time, 20 minutes of intraservice time, and 5 minutes of post-service time, based on the survey. The RUC discussed the 5-minute increase in intraservice time and determined that the increase relates to the change in the dominant specialty provider since the creation of the code, as previously there was 15 minutes of intraservice time for the radiologist to scan and/or review the sonographer-obtained images. Now, the rheumatologist is performing the scanning and it takes 20 minutes for the typical patient. For rheumatology, physicians typically scan the patients with portable ultrasound devices rather than utilizing sonographers as originally described in the 2010 survey. The RUC noted that this code is reported with an office E/M visit 58.9 percent and a non-facility office E/M visit 66.3 percent of the time; the RUC stated that CPT code 76881 is imaging-specific so the physician work described would not overlap with the E/M service, but we disagree, as the descriptions of pre-service and post-service work directly overlap. The description of pre-service work for CPT code 76881 states “Review pertinent clinical information. Review any prior applicable imaging studies.” Pre-service work for CPT code 99214 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using time for code selection, 30-39 minutes of total time is spent on the date of the encounter.), the most common E/M code reported with CPT code 76811, includes “Review interval correspondence, referral notes, medical records, and diagnostic data generated since the last visit.” Post-service work of CPT code 76881 is described as “Discuss significant findings with the referring physician. Review and sign final report,” whereas the post-service work for CPT code 99214 includes “Arrange diagnostic testing and referral if necessary. Document the encounter in the medical record, spending time to further refine the differential diagnosis, workup, or treatment plan as necessary. Coordinate care by discussing the case with other physicians and members of the health care team and write letters of referral if necessary. Perform electronic data capture and reporting to comply with quality payment program and other electronic mandates. Review and analyze interval testing results and refine the differential diagnosis, workup, and treatment plan based on these results. Order additional testing based on these results. Communicate results and plan modifications with patient and/or family.” We believe there is distinct overlap in pre-service and post-service work between the E/M visit and CPT code 76881, and therefore, we are proposing 0 minutes for the pre-service and post-service time rather than the RUC-recommended 5 minutes of pre-service and post-service time. The proposed work RVU of 0.54 is the reverse building block valuation based on the removal of the 5 minutes of pre-service and post-service time, with a long-standing intensity of 0.0224 (10 minutes * 0.0224 work/minute = 0.224 work RVUs). The proposed work RVU accounts for the 0.224 work RVU decrease as a result of the removal of pre-service and post-service time, and the increase of 5 minutes of intraservice time, while maintaining the same IWPUT of 0.027, as there was no discussed change in intensity. The specialty societies and the RUC asserted that there was an increase of 5 minutes as a result of the intraservice work changing due to a change in dominant specialty providing the service (from radiology to rheumatology), but did not present a change in intensity. We note that the specialty societies used CPT code 76700 ( Ultrasound, abdominal, real time with image documentation; complete) with a work RVU = 0.81, 11 minutes of intra-service time, and 21 minutes total time, as a reference code because it has identical pre- and post-service time but less intra-service time than the surveyed code and is a clinically similar ultrasound code. We note that this is not an appropriate reference code as it is billed alone 72.8 percent of the time, and therefore, the valuation of CPT code 76700 accounts for pre- and post-service work that would not overlap with an E/M visit like the pre- and post-service work does for CPT code 76881. CPT code 76882 represents a limited evaluation of a joint or focal evaluation of a structure(s) in an extremity other than a joint (for example, soft-tissue mass, fluid collection, or nerve[s]). This evaluation includes assessment of a specific anatomic structure(s) (for example, joint space only [effusion] or tendon, muscle, and/or other soft-tissue structure[s] that surround the joint) that does not assess all the elements included in CPT code 76881, although it does include all surrounding anatomy and any associated pathology or contralateral comparison as indicated. The RUC discussed the four-minute increase in intraservice time and determined that the increase relates to the change in dominant supplier of this service since the creation of the code, as there is currently 11 minutes of intraservice time that included scanning performed only by the podiatrist, and now the radiologist works with the sonographer to obtain and interpret the images in addition to the physician performing additional scanning as needed. Because radiologists no longer use portable ultrasound devices as originally described in the 2010 survey or in the 2017 PE update, the RUC and specialty societies assert that the physician work (time) has changed due to supervision of the sonographer in addition to the radiologist performing the scanning. The specialty societies and RUC also note that ultrasound technology has evolved immensely since 2010, including proliferation of high-frequency ultrasound probes dedicated to musculoskeletal imaging, as well as producing images with higher fidelity and more detail, whereby the number and quality of images that can be reviewed and the pathology to evaluate have greatly increased since 2010. Therefore, the typical patient requires 15 minutes of intraservice time. While we agree with the RUC that 15 minutes of intraservice time is warranted for CPT code 76882, we note there was no information indicating a change in intensity, and therefore, for CPT code 76882, we are proposing the reverse building block work RVU of 0.59 to account for the 4-minute increase in intraservice time and the maintenance of the current IWPUT of 0.024. We note that commenters may raise concern about a potential rank order anomaly with the proposed work RVUs of 0.54 and 0.59 for CPT codes 76881 and 76882, respectively, but we note that the IWPUT of each code adequately reflects the increased intensity of intraservice work for the complete ultrasound (CPT code 76881; IWPUT = 0.027) versus the limited/focal ultrasound (CPT code 76882; IWPUT = 0.024), and the lesser work RVU of 0.54 for CPT code 76881 stems from the removal of the overlapping pre- and post-service time with the E/M visits that are typically performed. The RUC noted that consistency of intensity measures is demonstrated across the range of codes ascending from the limited code (CPT code 76881) to the new, most complex code (CPT code 76XX0). By proposing work RVUs that maintain the current IWPUTs, we maintain relativity both among the neuromuscular ultrasound family, as well as the larger family of ultrasound Start Printed Page 45924 imaging codes. We also note that the difference between the RUC-recommend IWPUTs and our proposed IWPUTs for CPT codes 76881 and 76882 is the same, where CPT code 76882 has an IWPUT that is 0.003 less than the IWPUT of CPT code 76881. CPT code 76XX0 will be available for CY 2023 to report real-time, complete neuromuscular ultrasound of nerves and accompanying structures throughout their anatomic course, per extremity. This code will examine a nerve throughout its length, within one extremity, including evaluation of multiple areas for potential nerve compression, measurement of cross-sectional areas, evaluation of echogenicity, vascularity, mobility including dynamic maneuvers when indicated, evaluation for any associated muscular denervation, with comparison to unaffected muscles or nerves within that extremity as needed. CPT code 76XX0 also requires permanently recorded images and cine loop and a written report containing a description of each of the elements evaluated. The RUC recommended 7 minutes of pre-service time, 25 minutes of intra-service time and 7 minutes of post-service time as supported by the survey. The RUC clarified that this service would not typically be reported with an office E/M visit. The RUC arrived at a recommended work RVU of 1.21 by comparing the pre-, intra-, and post-service times to those of CPT code 76881, which CMS is proposing to modify due to overlapping work in the pre- and post-service time with E/M visits. When we compared the proposed times of 0 minutes of pre-service time, 20 minutes of intraservice time, and 0 minutes of post-service time, and a work RVU of 0.54 for CPT code 76881, and the proposed times of 7 minutes of pre-service time, 25 minutes of intraservice time, and 7 minutes of post-service time for CPT code 76XX0, we arrived at a reverse building block work RVU of 0.99. For the direct PE inputs, we are proposing to remove the 2 minutes of clinical labor time for CA006 ( Confirm availability of prior images/studies), the 1 minute of clinical labor time for the CA007 ( Review patient clinical extant information and questionnaire), and the 2 minutes for CA011 ( Provide education/obtain consent) for CPT code 76881 because these RUC recommendations describe clinical labor activities that overlap with the E/M visit that is typically billed with CPT code 76881. We are proposing the direct PE inputs as recommended by the RUC for CPT codes 76882 and 76XX0. (21) Immunization Administration (CPT Codes 90460, 90461, 90471, 90472, 90473, and 90474)Especially in the context of the current PHE for COVID-19, it is evident that consistent beneficiary access to vaccinations is vital to public health. As discussed in the CY 2021 PFS proposed rule (85 CFR 50162), many interested parties raised concerns about the reductions in payment rates for the preventive vaccine administration services that had occurred over the past several years. The codes for immunization administration services include CPT codes 90460, 90471, and 90473, as well as the three Healthcare Common Procedural Coding System (HCPCS) codes that describe the services to administer the Part B preventive vaccinations other than the COVID-19 vaccine: G0008 (influenza), G0009 (pneumococcal), and G0010 (HBV). Until CY 2019, we generally had established payment rates for these immunization administration services 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 the crosswalk code for CY 2018, and because the reductions in overall valuation for that code have been subject to the multi-year phase-in of significant reductions in RVUs, the payment rate for these vaccine administration codes has been concurrently reduced. Further, because the reduction in RVUs for the crosswalk code, 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 Table 21 of the CY 2022 PFS proposed rule (86 FR 39222), the national payment rate for administering these preventive vaccines has declined more than 30 percent since 2015. We have attempted to address the reduction in payment rates for the Part B preventive vaccine administration HCPCS G-codes in the last three 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 (84 FR 62798). In the CY 2021 PFS proposed rule, we proposed to crosswalk CPT codes 90460, 90471, and 90473, as well as HCPCS codes 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 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 CPT codes 90460-90474, as well as HCPCS codes 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. For the CY 2022 rulemaking cycle, we requested feedback from interested parties 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 (influenza, pneumococcal, HBV, and COVID-19) for physicians, NPPs, mass immunizers and certain other providers and suppliers. We invited commenters to submit their detailed feedback to a series of questions and requests that we believed would assist us in establishing payment rates for these services that could be appropriate for use on a long-term basis; we direct readers to the full discussion of this topic in the CY 2022 PFS final rule (86 FR 65179 through 65193). For CY 2022, we finalized 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. We explained that since 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, the payment rates we established for these services in the Start Printed Page 45925 CY 2022 PFS final rule are independent of the PFS, and will be updated as necessary independently of the valuation of any specific codes under the PFS (86 FR 65186). We discuss the current payment policy for administration of preventive vaccines and our proposals for CY 2023 in section III.H. of this proposed rule. We note that as we consider payment policies to ensure adequate access to the Part B preventive vaccines, including consideration of resource costs, the RUC surveyed and reviewed CPT codes 90460-90474 at the April 2021 meeting and submitted recommendations to CMS for our consideration in the CY 2023 rulemaking cycle. We are proposing the RUC-recommended work RVU for all six codes in the Immunization Administration family. We are proposing a work RVU of 0.24 for CPT code 90460 ( Immunization administration through 18 years of age via any route of administration, with counseling by physician or other qualified health care professional; first or only component of each vaccine or toxoid administered), a work RVU of 0.18 for CPT code 90461 ( Immunization administration through 18 years of age via any route of administration, with counseling by physician or other qualified health care professional; each additional vaccine or toxoid component administered), a work RVU of 0.17 for CPT code 90471 ( Immunization administration (includes percutaneous, intradermal, subcutaneous, or intramuscular injections); 1 vaccine (single or combination vaccine/toxoid)), a work RVU of 0.15 for CPT code 90472 ( Immunization administration (includes percutaneous, intradermal, subcutaneous, or intramuscular injections); each additional vaccine (single or combination vaccine/toxoid)), a work RVU of 0.17 for CPT code 90473 ( Immunization administration by intranasal or oral route; 1 vaccine (single or combination vaccine/toxoid)), and a work RVU of 0.15 for CPT code 90474 ( Immunization administration by intranasal or oral route; each additional vaccine (single or combination vaccine/toxoid)). For the direct PE inputs, we are proposing to remove 1 minute of clinical labor time for the CA008 ( Perform regulatory mandated quality assurance activity (pre-service)) activity for CPT codes 90460 and 90471-90474. The RUC recommendations describe these activities as “Checking historical and current temperatures for vaccine refrigerator; recording temperatures; reporting temperatures; vaccine inventorying; ordering vaccines; completing required Vaccines for Children (VFC) paperwork; receiving vaccines; inspecting/logging vaccines and putting them in the vaccine refrigerator; creating lot numbers in HER.” Checking refrigerator temperatures, vaccine inventorying, and filling out vaccine paperwork are administrative tasks which are not individually allocable to a particular patient for a particular service. We are removing this 1 minute of clinical labor time as these administrative tasks are forms of indirect PE. We are also refining the equipment times for CPT codes 90460 and 90471-90474 to conform to our established policies for non-highly technical equipment. In consideration of the information provided in the recommendation for these services, we are proposing the RUC's recommended work RVUs and direct PE inputs (with minor refinements) for these vaccine administration services. However, we continue to seek additional information from commenters that specifically identifies the resource costs and inputs that should be considered to establish payment for these vaccine administration services on a long-term basis, consistent with our policy objectives for ensuring maximum access to immunization services. (22) Orthoptic Training (CPT Codes 92065 and 920XX)In October 2019, the RUC identified CPT code 92065 ( Orthoptic and/or pleoptic training, with continuing medical direction and evaluation; performed by a physician or other qualified health care professional) as needing review because it was Harvard Valued (that is, the value of the code had not been reviewed since the implementation of the Resource-Based Relative Value Scale (RBRVS)) and its utilization surpassed 30,000 in each of several recent years. At its January 2020 meeting, during review of CPT code 92065, the RUC noted that the use of “and/or” in the descriptor defined different patient populations and treatment techniques and recommended that the code be reviewed by the CPT Editorial Panel (CPT) in order to create two separate codes. Additionally, based upon review and analysis of survey data, specialty societies decided to submit a new code change application for the February 2021 CPT meeting. During the February 2021 meeting, CPT noted that the services of CPT code 92065 are delivered in two different ways: directly by the practitioner and by a technician under the supervision of the practitioner. In response to this observation, CPT suggested that two codes be created to identify who furnishes the orthoptic service. Identifying in the code descriptor who furnishes the services would ensure more accurate valuation of both the work and the practice expense associated with the service. The CPT formally revised code 92065 and created new CPT code 920XX to describe orthoptic services furnished under the supervision of a physician or qualified health care professional. During its April 2021 meeting, the RUC revalued the work associated with the services of CPT code 92065 ( Orthoptic training; performed by a physician or other qualified health care professional) and valued the PE inputs for new CPT code 920XX ( Orthoptic training; performed by a physician or other qualified health care professional under supervision of a physician or other qualified health care professional). CPT code 920XX is valued as a PE-only code. After reviewing CPT code 92065, we are proposing to accept the RUC-recommended work RVU of 0.71. We also are proposing to accept the RUC-recommended direct PE inputs for CPT code 92065. We are proposing to accept the RUC-recommended direct PE inputs for CPT code 920XX as well. (23) Dark Adaptation Eye Exam (CPT Code 92284)CPT code 92284 ( Dark adaptation examination with interpretation and report) was identified in July 2020 as Harvard Valued with a utilization of over 30,000 claims. In January 2021, the RUC recommended that the code be surveyed for the April 2021 RUC meeting. The RUC reviewed the survey results for the procedure and noted that the 25th percentile work value of 0.45 was greater than the code's current value. The RUC recommended a work RVU of 0.14, based on a direct work RVU crosswalk from CPT code 76514 ( Ophthalmic ultrasound, diagnostic; corneal pachymetry, unilateral or bilateral (determination of corneal thickness)). We disagree with the RUC-recommended work RVU of 0.14 for CPT code 92284. We found that the recommended work RVU did not adequately reflect reductions in physician time, since this diagnostic screening is usually completed during an E/M visit and largely consists of interpreting machine generated results. Instead, we are proposing a work RVU of 0.00 for CPT code 92284, which is comparable to other ophthalmic screening tests; such as 99172 ( Visual function screening, automated or semi-automated bilateral quantitative determination of visual acuity, ocular Start Printed Page 45926 alignment, color vision by pseudoisochromatic plates, and field of vision (may include all or some screening of the determination[s] for contrast sensitivity, vision under glare) ) and 99173 ( Screening test of visual acuity, quantitative, bilateral). Alternatively, we considered using a total-time methodology with a work RVU of 0.03 and a reverse building block methodology with a work RVU of 0.06. We are seeking comments and requesting information that may inform why CPT code 92284 should include additional valuation as this procedure is included in an E/M visit. For the direct PE inputs, we are proposing to refine the equipment time for the lens set (EQ165) from 24 minutes to 15 minutes and motorized table (EF030) from 24 minutes to 15 minutes. The reduction in time for both equipment types is proposed to match the RUC-recommended 15 minutes in Clinical Activity Code CA021. We are seeking public comment to provide further rationale for the additional 9 minutes recommended. (24) Anterior Segment Imaging (CPT Code 92287)For CPT code 99287 ( Anterior segment imaging with interpretation and report; with fluorescein angiography), we are proposing the RUC-recommended work RVU of 0.40. We are proposing the RUC-recommended direct PE inputs for CPT code 92287 without refinement. (25) 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's work RVU 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 contained 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. Interested parties 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 included this supply input (CPT codes 93241, 93243, 93245, and 93247) to allow additional time to receive more pricing information. We noted that interested parties have continued to engage with CMS and the MACs on payment for this service. We remained concerned that we continued to hear that the supply costs as initially considered in our CY 2021 PFS proposal were much higher than they should be. At the same time, we also 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 in the CY 2022 PFS proposed rule (86 FR 39179) to support CMS' future rulemaking to establish a uniform national payment that appropriately reflects the PE inputs that are used to furnish these services. During the comment period, we received invoices and additional information for use in pricing the SD339 supply from the commenters. Based on this information, we finalized an updated price of $200.15 for the extended external ECG patch, medical magnetic tape recorder” (SD339) supply in the CY 2022 PFS final rule based on the average of the ten invoices we received (86 FR 65125). We believed that the invoice data for this supply item, which ranged from a minimum price of $179.80 to a maximum price of $241.99, suggested that our updated price of $200.15 was more accurate than the suggested crosswalk to the SD214 supply at a price of $325.98. We believed that considering 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 feedback from interested parties. Therefore, we did not finalize national pricing at this time and finalized our proposal to maintain contractor pricing for CPT codes 93241, 93243, 93245, and 93247 for CY 2022. For CY 2023, we received a series of additional invoices for the SD339 supply from two impacted parties. Each of the invoices priced the supply item at either $265.00 or $226.38; we are therefore proposing to average together these prices and establish a proposed price of $245.69 for the SD339 supply. We believe that this represents the most typical price for the supply based on the invoice data that has been provided over the past 2 years. We are also proposing Start Printed Page 45927 national pricing for CPT codes 93241, 93243, 93245, and 93247 for CY 2023 now that the SD339 supply has an established price. The proposed CY 2023 RVUs for these CPT codes are displayed in Addendum B on the CMS website under downloads for the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. (26) Cardiac Ablation (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 the 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. From the survey results presented to CMS last year, 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). Since then, the RUC has re-surveyed these Cardiac Ablation codes in April 2021 for re-review. In the interim, the work RVUs for the newly bundled CPT codes were maintained at their current values until the new recommendations were presented for CY 2023. The RUC re-surveyed and reviewed 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), and recommends a work RVU of 15.00 with 31 minutes of pre-service evaluation time, 3 minutes positioning time, 15 minutes scrub/dress/wait time, 120 minutes of intra-service time, 30 minutes of immediate post-service time, for a sum of 199 minutes of total time. CPT code 93653 currently has a work RVU value of 14.75 with 23 minutes of pre-service evaluation time, 1 minutes positioning time, 5 minutes scrub/dress/wait time, 180 minutes of intra-service time, 30 minutes of immediate post-service time, for a sum of 239 minutes of total time. The time and the physician's work of CPT add-on code 93613 ( Intracardiac electrophysiologic 3-dimensional mapping (List separately in addition to code for primary procedure) with a work RVU of 5.23 and 90 minutes of total time, and CPT add-on 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)) with a work RVU of 1.50 and 20 minutes of total time are bundled within CPT code 93653. When all three codes are separately considered, they currently sum up to 21.48 work RVUs, much greater than the 15.00 work RVUs that the RUC has recommended. These codes also add up to much more physician total time than the RUC-recommended 199 minutes. After reviewing this code and relative similar codes in the PFS, we propose a comparator CPT code 37229 ( Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with atherectomy, includes angioplasty within the same vessel, when performed) with a work RVU of 13.80 and a similar intra-service time of 120 minutes and similar pre-service evaluation, pre-service positioning, pre-service scrub/dress/wait times, and immediate post-service times, for a sum of 188 minutes of total time for a 000 day global period, compared to the RUC-recommended 199 minutes of total time for CPT code 93653. We propose a work RVU of 13.80 for the bundled CPT code 93563. The RUC re-surveyed and reviewed 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), and recommends a work RVU of 18.10 with 40 minutes of pre-service evaluation time, 3 minutes positioning time, 15 minutes scrub/dress/wait time, 200 minutes of intra-service time, 33 minutes of immediate post-service time, for a sum of 291 minutes of total time. CPT code 93654 currently has a work RVU value of 19.75 with 23 minutes of pre-service evaluation time, 1 minutes positioning time, 5 minutes scrub/dress/wait time, 240 minutes of intra-service time, 40 minutes of immediate post-service time, for a sum of 309 minutes of total time. CPT code 93654 is currently and continues to be a bundled code. The RUC recommended intra-service times and total times for CPT code 93654 are less than the current times for this code, and the RUC-recommended work RVUs are also less than the current work RVUs. Though the RUC recommended a work RVU of 18.10, it is still a relatively high value compared to the existing 19.75 value. The RUC recommended a work RVU of 15.00 for CPT code 93653, and 18.10 for CPT code 93654, with a relative increment between them of 3.10 work RVUs. We are proposing to maintain the relative increment RVU difference of 3.10 between CPT code 93653 and CPT code 93654, so because we are proposing a work RVU of 13.80 for CPT code 93653, we are proposing a work RVU of 16.90 (13.80 plus 3.10) for CPT code 93654, with 200 minutes of intra-service time and 291 minutes of total time. CPT add-on 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 5.50 with a physician intra-service time of 60 minutes as finalized last year, from a previous value of 7.50 work RVUs with 90 minutes of physician intra-service time. The RUC recommended the re-surveyed intraservice time of 60 minutes and 7.00 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 CPT add-on code 22854 Start Printed Page 45928 ( 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 add-on code 93655 and we believe that this is a more accurate valuation than the RUC's work RVU comparison to CPT add-on code 93592 ( Percutaneous transcatheter closure of paravalvular leak; each additional occlusion device (List separately in addition to code for primary procedure)) with a work RVU of 8.00 and an intra-service and total time of 60 minutes, and to CPT add-on code 34820 ( Open iliac artery exposure for delivery of endovascular prosthesis or iliac occlusion during endovascular therapy, by abdominal or retroperitoneal incision, unilateral (List separately in addition to code for primary procedure)) with a work RVU of 7.00 and an intra-service and total time of 60 minutes. After reviewing this code and relative similar codes in the PFS, we propose to maintain the current work RVU for CPT code 93655 of 5.50 with a physician intra-service time of 60 minutes, as finalized last year (86 FR 65108). The RUC re-surveyed and reviewed 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), and recommends a work RVU of 17.00 with 35 minutes of pre-service evaluation time, 3 minutes positioning time, 15 minutes scrub/dress/wait time, 180 minutes of intra-service time, 30 minutes of immediate post-service time, for a sum of 263 minutes of total time. CPT code 93656 currently has a work RVU of 19.77 with 23 minutes of pre-service evaluation time, 1 minute positioning time, 5 minutes scrub/dress/wait time, 240 minutes of intra-service time, 40 minutes of immediate post-service time, for a sum of 309 minutes of total time. CPT code 93656 has bundled within it, the time and the physician's work of CPT add-on code 93613 ( Intracardiac electrophysiologic 3-dimensional mapping (List separately in addition to code for primary procedure) with a work RVU of 5.23 and 90 minutes of total time and CPT add-on code 93662 ( Intracardiac echocardiography during therapeutic/diagnostic intervention, including imaging supervision and interpretation (List separately in addition to code for primary procedure)) with a work RVU of 1.44 and 25 minutes of total time. When all three codes are separately considered, they sum up to 26.44 work RVUs, which is much greater than the 17.00 work RVUs that is recommended and has much more physician total time than the RUC recommended 263 total time minutes. The RUC recommended intra-service times and total times for CPT code 93656 that are less than the current times for this code and we expect the work RVUs to also be less than the current work RVUs. Though the RUC recommended a work RVU of 17.00, it is still a high value compared to the existing 19.77. The RUC recommended the work RVU for CPT code 93653 as 15.00, and for CPT code 93656 as 17.00, with a relative increment between them of 2.00 work RVUs. As a better valuation for CPT code 93656, CMS proposes the proposed CPT code 93653's 13.80 work RVU plus the relative increment RVU difference of 2.00 that the RUC is maintaining between CPT code 93653 and CPT code 93656 (15.00 subtracted from 17.00 equals 2.00). This would value CPT code 93656 at 15.80 (13.80 plus 2.00) work RVUs for 180 minutes of intra-service time and 263 minutes of total time, which we propose for CY 2023. CPT add-on 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)) has a current work RVU of 5.50 with a physician intra-service time of 60 minutes as finalized last year (86 FR 65108). The previous work RVU was 7.50 with 90 minutes of physician intraservice time. The RUC recommended the re-surveyed intra-service time of 60 minutes and 7.00 work RVUs. The primary change to CPT add-on code 93657 is the reduction of the intra-service time from before the re-survey and the current RUC-recommended time, from 90 minutes to 60 minutes, which is a reduction of about 67 percent, and which we used as a guide to determine an appropriate work RVU. We compare CPT add-on 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 intra-service and total time, and a work RVU of 5.50, to CPT add-on code 93657, and believe that this is a more accurate comparison for valuation than the RUC's work RVU comparison to CPT add-on code 93592 ( Percutaneous transcatheter closure of paravalvular leak; each additional occlusion device (List separately in addition to code for primary procedure)) with a work RVU of 8.00 and an intra-service and total time of 60 minutes, and to CPT add-on code 34820 ( Open iliac artery exposure for delivery of endovascular prosthesis or iliac occlusion during endovascular therapy, by abdominal or retroperitoneal incision, unilateral (List separately in addition to code for primary procedure)) with a work RVU of 7.00 and an intra-service and total time of 60 minutes. After reviewing this code and relative similar codes in the PFS, we are proposing to re-affirm the current work RVU of 5.50 with a physician intraservice time of 60 minutes for CPT add-on code 93657, as finalized last year (86 FR 65108). The RUC did not recommend, and we are not proposing, direct PE inputs for CPT codes 93653-93657. (27) Pulmonary Angiography (CPT Codes 93XX0, 93XX1, 93XX2, 93XX3, 93563, 93564, 93565, 93566, 93567, and 93568)In May 2021, the CPT Editorial Panel revised CPT code 93568 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for nonselective pulmonary arterial angiography (List separately in addition to code for primary procedure) which resulted in the creation of four new related CPT add-on codes. CPT add-on codes 93563 to 93567 were surveyed with the four new codes, as part of the same code family. The RUC surveyed and reviewed CPT code 93563 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective coronary angiography during congenital heart Start Printed Page 45929 catheterization (List separately in addition to code for primary procedure) ), and recommends a work RVU of 1.11 for 15 minutes of intra-service and total time for this add-on service. The current work RVU is 1.11 for 25 minutes of intra-service and total time, so there is a reduction of 10 minutes in physician time. With the reduction of physician time, it is typical that there would be some reduction in the work RVUs. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 64494 ( Injection(s), diagnostic or therapeutic agent, paravertebral facet (zygapophyseal) joint (or nerves innervating that joint) with image guidance (fluoroscopy or CT), lumbar or sacral; second level (List separately in addition to code for primary procedure)), with a work RVU of 1.00 for 15 minutes of intra-service and total time. CPT code 64494 is a good comparator in terms of both the new physician time and due to the proportional work RVU, as compared to CPT code 93563. Therefore, we are proposing a work RVU of 1.00 and 15 minutes of intra-service and total time for add-on CPT code 93563. The RUC surveyed and reviewed CPT code 93564 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective opacification of aortocoronary venous or arterial bypass graft(s) (e.g., aortocoronary saphenous vein, free radial artery, or free mammary artery graft) to one or more coronary arteries and in situ arterial conduits (e.g., internal mammary), whether native or used for bypass to one or more coronary arteries during congenital heart catheterization (List separately in addition to code for primary procedure)), and recommends a work RVU of 1.13 for 18 minutes of intra-service and total time for this add-on service. The current work RVU is 1.13 for 25 minutes of intra-service and total time, so there is a reduction of 7 minutes in physician time. With the reduction of physician time, it is typical that there would be some reduction in the work RVUs. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 31632 ( Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; with transbronchial lung biopsy(s), each additional lobe (List separately in addition to code for primary procedure)) with a work RVU of 1.03 for 18 minutes of intra-service and total time. CPT code 31632 is a good comparator in terms of both the new physician time and due to the proportional work RVU, as compared to CPT code 93564. Therefore, we are proposing a work RVU of 1.03 and 18 minutes of intra-service and total time for add-on CPT code 93564. The RUC surveyed and reviewed CPT code 93565 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective left ventricular or left atrial angiography (List separately in addition to code for primary procedure)), and recommends a work RVU of 0.86 for 10 minutes of intra-service and total time for this add-on service. The current work RVU is 0.86 for 20 minutes of intra-service and total time, so there is a reduction of 10 minutes in physician time. With the reduction of physician time, it is typical that there would be some reduction in the work RVUs. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 64421 ( Injection(s), anesthetic agent(s) and/or steroid; intercostal nerve, each additional level (List separately in addition to code for primary procedure)) with a work RVU of 0.50 for 10 minutes of intra-service and total time. CPT code 64421 is a good comparator code in terms of both the new physician time and due to the proportional work RVU as compared to CPT code 93565. Therefore, we are proposing a work RVU of 0.50 and 10 minutes of intra-service and total time for add-on CPT code 93565. The RUC surveyed and reviewed CPT code 93566 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective right ventricular or right atrial angiography (List separately in addition to code for primary procedure)) and recommends a work RVU of 0.86 for 10 minutes of intra-service and total time for this add-on service. The current work RVU is 0.86 for 20 minutes of intra-service and total time, so there is a reduction of 10 minutes in physician time. With the reduction of physician time, it is typical that there would be some reduction in the work RVUs. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 64421 ( Injection(s), anesthetic agent(s) and/or steroid; intercostal nerve, each additional level (List separately in addition to code for primary procedure)) with a work RVU of 0.50 for 10 minutes of intra-service and total time. CPT code 64421 is a good comparator code in terms of both the new physician time and due to the proportional work RVU, as compared to CPT code 93566. Therefore, we are proposing a work RVU of 0.50 and 10 minutes of intra-service and total time. The RUC surveyed and reviewed CPT code 93567 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for supravalvular aortography (List separately in addition to code for primary procedure)), and recommends a work RVU of 0.97 for 10 minutes of intra-service and total time for this add-on service. The current work RVU is 0.97 for 15 minutes of intra-service and total time, so there is a reduction of 5 minutes in physician time. With the reduction of physician time, it is typical that there would be some reduction in the work RVUs. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 74248 ( Radiologic small intestine follow-through study, including multiple serial images (List separately in addition to code for primary procedure for upper GI radiologic examination)) with a work RVU of 0.70 for 10 minutes of intra-service and total time. CPT code 74248 is a good comparator code in terms of both the new physician time and due to the proportional work RVU, as compared to CPT code 93567. Therefore, we are proposing a work RVU of 0.70 and 10 minutes of intra-service and total time. The RUC surveyed and reviewed CPT code 93568 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for nonselective pulmonary arterial angiography (List separately in addition to code for primary procedure)), and recommends a work RVU of 0.88 for 13 minutes of intra-service and total time for this add-on service. The current work RVU is 0.88 for 20 minutes of intra-service and total time, so there is a reduction of 7 minutes in physician time. With the reduction of physician time, it is typical that there would be some reduction in the work RVUs. After reviewing this code and relative similar codes in the PFS, we agree with the RUC recommendation and are proposing a work RVU of 0.88 with 13 minutes of intra-service and total time for add-on CPT code 93568. For the first of the related four new add-on codes to this family, temporarily designated as CPT placeholder code 93XX0 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective pulmonary arterial angiography, unilateral (List separately Start Printed Page 45930 in addition to code for primary procedure) ), the RUC recommends a work RVU of 1.05 for 11 minutes of intra-service and total time for this add-on service. The RUC noted that the typical patient for this service is pediatric. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 78434 ( Absolute quantitation of myocardial blood flow (AQMBF), positron emission tomography (PET), rest and pharmacologic stress (List separately in addition to code for primary procedure)) with a work RVU of 0.63 for 11 minutes of intra-service and total time. CPT code 78434 is a good comparator code in terms of both the physician time, and due to the proportional work RVU, as compared to CPT code 93XX0. Therefore, we are proposing a work RVU of 0.63 and 11 minutes of intra-service and total time for add-on CPT code 93XX0. For the second of the related four new add-on codes to this family, temporarily designated as CPT placeholder code 93XX1 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective pulmonary arterial angiography, bilateral (List separately in addition to code for primary procedure)), the RUC recommends a work RVU of 1.75 for 18 minutes of intra-service and total time for this add-on service. The RUC noted that the typical patient for this service is pediatric and that this service is bilateral. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be HCPCS code G0289 ( Arthroscopy, knee, surgical, for removal of loose body, foreign body, debridement/shaving of articular cartilage (chondroplasty) at the time of other surgical knee arthroscopy in a different compartment of the same knee (List separately in addition to code for primary procedure)) with a work RVU of 1.48 for 20.5 minutes of intra-service and total time and that this service is bilateral. G0289 has 2.5 minutes of additional physician intra-service time, so we adjust the comparator work RVU from 1.48 to 1.30. Therefore, we are proposing 1.30 work RVUs for 18 minutes of intra-service and total time for add-on CPT code 93XX1. For the third of the related four new add-on codes to this family, temporarily designated as CPT placeholder code 93XX2 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective pulmonary venous angiography of each distinct pulmonary vein during cardiac catheterization. (List separately in addition to code for primary procedure)), the RUC recommends a work RVU of 1.84 for 20 minutes of intra-service and total time for this add-on service. The RUC noted that the typical patient for this service is pediatric. After reviewing this code and relative similar codes in the PFS, we believe a better comparator add-on code would be CPT code 93598 ( Measurement of output of blood from heart, performed during cardiac catheterization for evaluation of congenital heart defects (List separately in addition to code for primary procedure)) with a work RVU of 1.44 for 20 minutes of intra-service and total time. CPT code 93598 is a good comparator code in terms of both the physician time, and due to the proportional work RVU, as compared to CPT code 93XX2. Therefore, we are proposing 1.44 work RVUs for 20 minutes of intra-service and total time for add-on CPT code 93XX2. For the last of the related four new add-on codes to this family, temporarily designated as CPT placeholder code 93XX3 ( Injection procedure during cardiac catheterization including imaging supervision, interpretation, and report; for selective pulmonary angiography of major aortopulmonary collateral arteries (MAPCAs) arising off the aorta or its systemic branches, each distinct vessel)), the RUC recommends a work RVU of 1.92 for 20 minutes of intra-service and total time for this add-on service. The RUC describes this service and the physician's work as very time-intensive and complicated, and the typical patient for this service is pediatric. We agree with the RUC recommendations and are proposing a work RVU of 1.92 with 20 minutes of intra-service and total time for add-on CPT code 93XX3. The RUC did not recommend, and we are not proposing, direct PE inputs for CPT codes 93563-93XX3. (28) Quantitative Pupillometry Services (CPT Code 959XX)The CPT Editorial Panel approved a new Category I CPT code to replace the sunset Category III (CPT code 0341T Quantitative pupillometry with interpretation and report, unilateral or bilateral) and 92499 (Unlisted ophthalmological service or procedure for reporting this service). We are not proposing the RUC-recommended work RVU of 0.25 for CPT code 959XX, as we believe this is an overestimation based on a comparison to other codes with similar time values, particularly the key reference code CPT code 92081 ( Visual field examination, unilateral or bilateral, with interpretation and report; limited examination (e.g., tangent screen, Autoplot, arc perimeter, or single stimulus level automated test, such as Octopus 3 or 7 equivalent). In the interest of maintaining relativity with similarly timed codes, we are instead proposing a work RVU of 0.18 with a crosswalk to CPT code 92504 ( Binocular microscopy (separate diagnostic procedure)). We note that this value falls between the work RVUs of 0.17 for CPT code 94010 ( Spirometry, including graphic record, total and timed vital capacity, expiratory flow rate measurement(s), with or without maximal voluntary ventilation) and 0.20 for CPT code 77081 ( Dual-energy X-ray absorptiometry (DXA), bone density study, 1 or more sites; appendicular skeleton (peripheral) (e.g., radius, wrist, heel)); both codes have identical intraservice times and similar total times. We are proposing the RUC-recommended direct PE inputs without refinement. (29) Caregiver Behavior Management Training (CPT Codes 96X70 and 96X71)CPT code 96X70 ( Multiple-family group behavior management/modification training for guardians/caregivers of patients with a mental or physical health diagnosis, administered by physician or other qualified health care professional (without the patient present), face-to-face with multiple sets of guardians/caregivers; initial 60 minutes) and its add-on code, CPT code 96X71 ( Multiple-family group behavior management/modification training for guardians/caregivers of patients with a mental or physical health diagnosis, administered by physician or other qualified health care professional (without the patient present), face-to-face with multiple sets of guardians/caregivers; each additional 15 minutes (List separately in addition to code for primary service)), are new codes created by the CPT Editorial Panel during its February 2021 meeting. The two codes are to be used to report the total duration of face-to-face time spent by the physician or other qualified health professional providing group training to guardians or caregivers of patients. Although the patient does not attend the group trainings, the goals and outcomes of the sessions focus on interventions aimed at improving the patient's daily life. According to the CPT Summary of Recommendations, during the face-to-face time service time, caregivers are taught how to structure the patient's environment to support and reinforce Start Printed Page 45931 desired patient behaviors, to reduce the negative impacts of the patient's diagnosis on patient's daily life, and to develop highly structured technical skills to manage patient behavior. As a means of identifying work values for CPT codes 96X70 and 96X71, three specialty societies sent surveys to a random sample of a subset of their members. Based upon survey results and after discussion, the RUC recommended a work RVU of 0.43 per identified patient service for CPT code 96X70. The RUC noted that this recommendation is based upon a median group size of six caregivers and includes 10 minutes pre-time, 60 minutes intra-time, and 20 minutes post-time for a total time of 90 minutes. For CPT code 96X71, the 15-minute add-on code, the RUC recommended a work RVU of 0.12, which is also based upon a median group size of six. After reviewing the caregiver training codes, we have determined that CPT codes 96X70 and 96X71 are not payable under the PFS. Under section 1862(a)(1)(A) of the Act, Medicare payment is generally limited to those items and services that are reasonable and necessary for the diagnosis or treatment of illness or injury or that improve the functioning of a malformed body member. In past rulemaking, we have explained that we read section 1862(a)(1)(A) of the Act to limit Medicare coverage and payment to items and services that are reasonable and necessary for the diagnosis and treatment of an individual Medicare beneficiary's illness or injury or that improve the functioning of an individual Medicare beneficiary's malformed body member. For example, in the CY 2013 PFS final rule (77 FR 68979), when discussing payment for the non-face-to-face care management services that are part of E/M services, we stated that Medicare does not pay for services that are furnished to parties other than the beneficiary. We listed as an example, communication with caregivers. Because the codes for caregiver behavior management training describe services furnished exclusively to caregivers rather than to the individual Medicare beneficiary, we did not review the RUC-recommended valuation of these codes for purposes of PFS payment. However, recognizing our focus on ensuring equitable access to reasonable and necessary medical services, we are seeking comment about the services described by these two codes. First, we are seeking comment on the ways in which a patient may benefit when a caregiver learns strategies to modify the patient's behavior. We are also seeking comment on how current Medicare policies regarding these caregiver training services may impact Medicare beneficiary health. Finally, we are seeking comment about how the services described by these codes might be bundled into Medicare covered services as incident to services or as practitioner work that is part of some care management codes. (30) Cognitive Behavioral Therapy Monitoring (CPT Code 989X6).See the Remote Therapeutic Monitoring (RTM) section II.I. of this proposed rule for a review of new device code, CPT code 989X6. (31) Code Descriptor Changes for Annual Alcohol Misuse and Annual Depression Screenings (HCPCS Codes G0442 and G0444)Interested parties have raised concerns with the portion of the code descriptors that require a certain number of minutes to bill for the HCPCS codes G0442 ( Annual alcohol misuse screening, 15 minutes) and G0444 ( Annual depression screening, 15 minutes). Over the past several years, AAFP and the ACP have requested that CMS revise the code descriptors to state “up to 15 minutes” instead of the current “15 minutes,” allowing practitioners to efficiently furnish the service. As currently described, claims for the service are said to be denied by MACs in instances where records suggest that a full 15 minutes was not reached by the practitioner when furnishing the service. Both codes are high in volume for 2019 and 2020, with over 700,000 reported services in our Medicare claims data. Medicare Part B coverage for such screenings originated from a national coverage determination (NCD) from 2011 and 2012. We believe that these screenings may not require a full 15 minutes to perform for the typical patient, so we believe that it would be appropriate to propose to revise the descriptors to specify that screening times of 5 to 15 minutes would be the typical range to furnish these services. This will establish a lower time limit for both HCPCS codes G0442 and G0444. Therefore, we propose to modify the descriptor for HCPCS code G0442 to read “ Annual alcohol misuse screening, 5 to 15 minutes” and for HCPCS code G0444 to read “ Annual depression screening, 5 to 15 minutes.” (32) Insertion, and Removal and Insertion of New 180-Day Implantable Interstitial Glucose Sensor System (HCPCS Codes G0308 and G0309)For the CY 2021 PFS final rule (85 FR 84645), we established national pricing for 3 Category III CPT codes that describe continuous glucose monitoring. Category III CPT codes 0446T ( Creation of subcutaneous pocket with insertion of implantable interstitial glucose sensor, including system activation and patient training), 0447T ( removal of implantable interstitial glucose sensor from subcutaneous pocket via incision), and 0448T ( removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new implantable sensor, including system activation) describe the services related to the insertion, removal, and removal and insertion of an implantable interstitial glucose sensor from a subcutaneous pocket. The implantable interstitial glucose sensors are part of systems that can allow real-time glucose monitoring, provide glucose trend information, and signal alerts for detection and prediction of episodes of low blood glucose (hypoglycemia) and high blood glucose (hyperglycemia). The direct PE inputs for CPT code 0446T include a 90-day supply item, SD334 (implantable interstitial glucose sensor), and a 90-day smart transmitter proxy equipment item, EQ392 (heart failure patient physiologic monitoring equipment package). The direct PE inputs for CPT code 0448T include only the 90-day SD334 interstitial glucose sensor. For CY 2022, based on requests from interested parties for CMS to allow beneficiaries critical access to a newly approved 180-day continuous glucose monitoring system, CMS established two new HCPCS codes to describe the new 180-day monitoring service. Specifically, CMS established HCPCS code G0308 ( Creation of subcutaneous pocket with insertion of 180-day implantable interstitial glucose sensor, including system activation and patient training) and G0309 ( removal of implantable interstitial glucose sensor with creation of subcutaneous pocket at different anatomic site and insertion of new 180-day implantable sensor, including system activation). The newly approved 180-day continuous glucose monitoring system extends the monitoring period from the previous 90 days to allow for a longer monitoring period between replacement of the sensor. We believe it is important for beneficiaries to have continued access to this service during the transition from a 90- to 180-day monitoring period where the 90-day sensor may become obsolete. Therefore, HCPCS codes G0308 and G0309 are contractor priced and effective July 1, 2022. We are seeking information and invoices from Start Printed Page 45932 interested parties on the costs of the 180-day interstitial glucose supply and 180-day smart transmitter equipment direct PE inputs for HCPCS codes G0308 and G0309 to ensure proper payment for these physician's services, for consideration of national payment amounts for CY 2023. We note that the 90-day supply item, SD334, is currently priced at $1,500 based on information we received from interested parties. The 90-day smart transmitter, EQ392, is currently priced at $1,000 and assigned a time value of 25,290 minutes derived from 60 minutes per hour times 24 hours per day times 90 days per billing quarter divided by 1 minute of equipment use of every 5 minutes of time. HCPCS code G0308 includes the smart transmitter and interstitial glucose sensor and HCPCS code G0309 includes the interstitial glucose sensor only. (33) Chronic Pain Management and Treatment (CPM) Bundles (HCPCS GYYY1, and GYYY2)(a) Background and ProposalIn the CY 2022 PFS proposed rule (86 FR 39104, 39179-39181), we explored refinements to the PFS that would appropriately value chronic pain management and treatment (CPM) by soliciting comment on CPM for the purpose of future rulemaking. In our solicitation, we described Federal efforts for more than a decade to effectively address pain management as a response to the nation's overdose crisis,[9] such as the National Pain Strategy [10] and the HHS Pain Management Best Practices Inter-Agency Task Force (PMTF) Report.[11] As we noted in our CY 2022 comment solicitation, several sections of the Support for Patients and Communities Act of 2018 [12] (SUPPORT Act) describe actions the Department of Health and Human Services has been directed to take to improve pain care, such as section 2003, which amended Medicare's Annual Wellness Visit [13] to include a review of factors for evaluation related to pain for patients using opioid medications; section 6086, the Dr. Todd Graham Pain Management Study; [14] and section 6032, which required CMS to furnish a Report to Congress and develop a related Action Plan to review coverage and payment policies in Medicare and Medicaid related to the treatment of opioid use disorder and for non-opioid therapies to help manage acute and chronic pain.[15] In the section 6032 Report and the Action Plan, CMS included a recommendation to explore the possibility of establishing a new bundled payment under the Medicare Physician Fee Schedule for integrated multimodal pain care that could include certain elements such as diagnosis, a person-centered plan of care, care coordination, medication management, and other aspects of pain care. As described in Goal 3 of CMS's 2022 Behavioral Health Strategy [16] (Strategy), CMS intends to improve the care experience for individuals with acute and chronic pain, expand access to evidence-based treatments for acute and chronic pain, and increase coordination between primary and specialty care through payment episodes, incentives, and payment models. In late 2019, the CMS Office of Burden Reduction & Health Informatics launched the “Chronic Pain Stakeholder Engagement”, which focused on understanding access to covered treatment and services for people living with pain.[17] CMS recently released information gathered from interested parties through this Engagement using qualitative research methods and the human-centered design process, to uncover provider burden, and identify opportunities to improve access to covered services by illustrating the experiences of people living with, and treating, chronic pain. The intent of this project was to highlight the most prominent barriers people with pain face in accessing care, and the factors influencing clinicians that can affect people with chronic pain, the quality of their care, and their quality of life. In the context of the Biden-Harris' Administration's commitment to equity,[18] and the inclusion of equity as a pillar of CMS's Strategic Vision,[19] disparities exist in pain treatment due to bias in treatment, language barriers, and socioeconomic status. We are also aware that pain is a factor in suicidality and suicide, prioritized in the Surgeon General's Call to Action to Implement the National Strategy for Suicide Prevention [20] and in HHS's work to implement “988,[21] ” the new national dialing code for suicide and crisis assistance to be implemented nationally this year. In coordination with all of these initiatives, we also have continued to explore refinements to the PFS that would appropriately value CPM. In the CY 2022 PFS proposed rule, we sought comment on whether we should approach CPM through a standalone code or E/M add-on coding, and about the specific activities that are involved in CPM, how we might value such a code or service, the settings where this care is provided, the types of practitioners that furnish this care, and whether the service or any components of it could or should be furnished as “incident to” [22] services under the direction of the billing practitioner by other members of the care team (86 FR 39182). We received just under two thousand comments on this comment solicitation, including comments from national health care organizations including provider associations, federations, and societies that represent health care professionals; organizations that educate, connect, and advocate for people with pain; State-based health care organizations, medical societies and associations; cancer care centers; health care companies; device manufacturers; pain care providers; and people living with pain. Almost all commenters were supportive of our efforts to carefully consider an approach to coding and payment for care for CPM. Many commenters supported the creation of separate coding and payment for CPM under the PFS. We summarized these comments, expressed appreciation for the commenters' attention to informing our approach to payment and coding for comprehensive CPM services, and thanked the commenters for their comments in the CY 2022 PFS final rule (86 FR 65129). Generally, commenters agreed that efforts are needed to effectively support the complex needs of beneficiaries with chronic pain. Commenters emphasized that there are numerous conditions giving rise to chronic pain and that people presenting with chronic pain respond variably to various treatment modalities, and often require longer office visit times, and longer follow-up coordinating care with social workers Start Printed Page 45933 and case managers, mental and behavioral health support, communications with emergency department physicians and nurses, and numerous medication adjustments. One commenter stated that beneficiaries with complex chronic pain conditions may require a lot of time for correct dosing of medications and counseling, and that such time is not captured effectively using existing E/M codes. This commenter also believed that separate coding and payment for chronic pain management could help with better understanding of the treatment of chronic pain than when the service is reported with existing visit codes and would allow for valuation based on the resources involved in furnishing these specific services to people with chronic pain, enhancing the likelihood of appropriate payment, especially for non-face-to-face time involved with the service. A few commenters expressed preference for using existing E/M codes and the creation of codes to be used in conjunction with E/M codes. 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 and a 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. One commenter who was agreeable with various approaches to payment suggested that the guidelines for Cognitive Assessment and Care Plan Services code 99483 include “chronic pain syndromes” in the “assessment of factors that could be contributing to cognitive impairment” and that these codes could be reported by physicians who consult with a pain specialist about their patient's pain. This commenter also suggested that Transitional Care Management could also potentially include pain management following inpatient care to help prevent acute pain from progressing to chronic pain. Other commenters also likened CPM services to chronic care management services. We believe that chronic care management codes, which, except for Principal Care Management, specify that the chronic condition being managed is expected to last at least one year or until death, would not properly describe the condition of many beneficiaries with chronic pain. For example, the 11th revision of the World Health Organization's International Classification of Diseases and Related Health Problems define chronic pain as persistent or recurring pain lasting longer than three months.[23] Commenters included feedback about other specific activities involved in the management of patients with chronic pain in addition to those we specified in the comment solicitation. Commenters also identified codes that CMS might examine as models for payment, either as stand-alone timed codes or monthly bundles. Commenters suggested which practitioners should be able to bill such CPM codes, which practitioners should be able to furnish CPM services incident to the services of a physician or other practitioner, and expressed views on adding CPM services to the Medicare Telehealth Services List and obtaining beneficiary consent for CPM services. We agree with commenters who believe that E/M codes may not reflect all the services and resources required to furnish comprehensive, chronic pain management to beneficiaries living with pain. While we agree in principle that it might be appropriate to establish bundled all-inclusive coding with monthly payment for a broader set of CPM services, we do not have data at the present time on the full scope of services and resource inputs involved in care for patients with chronic pain to support development of a proposed monthly bundled all-inclusive rate. We do believe that E/M codes do not appropriately reflect the time and other potential resources involved in furnishing comprehensive CPM for beneficiaries with chronic pain. Beginning in the CY 2014 PFS final rule (78 FR 74414 through 74427), we recognized that the resources involved in furnishing comprehensive care to patients with multiple chronic conditions are greater than those required to support 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). The following year, in the CY 2015 PFS final rule (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). In the CY 2017 PFS final rule (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 Start Printed Page 45934 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 with the identical descriptor, CPT code 99439, and assigned the same valuation as for 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 directly performs the services (that is, clinical staff, or the physician or NPP), and the time spent furnishing the services. The RUC-recommended values for work RVUs and direct PE inputs for these codes in CY 2022 were derived from a recent RUC specialty society survey. We proposed to accept the RUC-recommended values, considered public comments, and finalized the proposed values for the 10 CCM/CCCM/PCM codes. In consideration of the supportive comments we received last year in response to our comment solicitation, clinical expertise within CMS, and internal input from CMS staff and from our HHS operating division partners, we are proposing to create separate coding and payment for CPM services beginning January 1, 2023. We recognize that there is currently no existing CPT code that specifically describes the work of the clinician who performs comprehensive, holistic CPM. We also believe the resources involved in furnishing CPM services to beneficiaries with chronic pain are not appropriately recognized under current coding and payment mechanisms. As noted above, we do not believe that E/M codes and values appropriately reflect time involved in furnishing CPM for beneficiaries with chronic pain. CMS has authority under section 1848 of the Act to establish codes that describe services furnished by clinicians and suppliers that bill for physicians' services, and to establish payment amounts for those services that reflect the relative value of the resources involved in furnishing them. We also expect that creating separate coding and payment for CPM will help facilitate the development of data regarding the prevalence and impact of chronic pain in the Medicare population, where conditions including osteoarthritis, cancer, and other similar conditions that cause pain over extended periods of time are common.[24] Such information can assist us in identifying potential coding and valuation refinements to ensure appropriate payment for these services. We also believe that the comprehensive care management involved in CPM services may potentially prevent or reduce the need for acute services, such as those due to falls [25] and emergency department care [26] associated with chronic pain, and also have the potential to reduce the need for treatment for concurrent behavioral health disorders, including substance use disorders. There is some evidence that addressing chronic pain early in its course may result in averting the development of “high-impact” chronic pain [27] in some individuals; these people report more severe pain, more difficulty with self-care, and higher health care use than others with chronic pain. There are various definitions for chronic pain from, for example, the Centers for Disease Control and Prevention [28] and the National Institutes of Health,[29] and in the Institute of Medicine's (IOM) “Relieving Pain in America: A Blueprint for Transforming Prevention, Care, Education, and Research”,[30] and in the World Health Organization International Classification of Disease Edition 11,—most define chronic pain consistently, with some variation, as pain that persists longer than three months. The CDC, for example, has defined chronic pain within its 2016 opioid prescribing Guideline as “pain that typically lasts >3 months or past the time of normal tissue healing, and can be the result of an underlying medical disease or condition, injury, medical treatment, inflammation, or an unknown cause.” For clarity and operational use, we propose to define chronic pain as “persistent or recurrent pain lasting longer than three months.” We welcome comments from the public regarding whether this is an appropriate definition of chronic pain, or whether we should consider some other interval or description to define chronic pain. We are also interested in hearing from commenters about how the chronic nature of the person's pain should be documented in the medical record. A monthly payment approach may also be more financially straightforward from the standpoint of beneficiaries receiving treatment for chronic pain, particularly with respect to applicable coinsurance, which is generally 20 percent of the payment amount, after the annual Part B deductible amount is met.[31] Beginning for CY 2023, we are proposing to create two HCPCS G-codes to describe monthly CPM services. The codes and descriptors for the proposed G-codes are: • HCPCS code GYYY1: Chronic pain management and treatment, monthly bundle including, diagnosis; assessment and monitoring; administration of a validated pain rating scale or tool; the development, implementation, revision, and maintenance of a person-centered care plan that includes strengths, goals, clinical needs, and desired outcomes; Start Printed Page 45935 overall treatment management; facilitation and coordination of any necessary behavioral health treatment; medication management; pain and health literacy counseling; any necessary chronic pain related crisis care; and ongoing communication and care coordination between relevant practitioners furnishing care (e.g., physical therapy and occupational therapy, and community-based care), as appropriate. Required initial face-to-face visit at least 30 minutes provided by a physician or other qualified health professional; first 30 minutes personally provided by physician or other qualified health care professional, per calendar month. (When using GYYY1, 30 minutes must be met or exceeded.) • HCPCS code GYYY2: Each additional 15 minutes of chronic pain management and treatment by a physician or other qualified health care professional, per calendar month (List separately in addition to code for GYYY1). (When using GYYY2, 15 minutes must be met or exceeded.) We are interested in hearing from commenters regarding our proposed inclusion of “administration of a validated pain assessment rating scale or tool,” as an element of the proposed CPM services, and including it within the descriptor of the proposed HCPCS code GYYY1. We also solicit comment on whether a repository or list of such tools would be helpful to practitioners delivering CPM services. We are proposing to include, as an element of the CPM codes, the development of and/or revisions to a person-centered care plan that includes goals, clinical needs, and desired outcomes, as outlined above and maintained by the practitioner furnishing CPM services. We are proposing to include health literacy counseling as an element of the CPM codes because we believe it will enable beneficiaries with chronic pain to make well-informed decisions about their care, increases pain knowledge, and strengthens self-management skills. Health literacy is the degree to which individuals have the ability to find, understand, and use information and services to inform health-related decisions and actions for themselves and others.[32] Adequate health literacy may improve the person's capability to take responsibility for their health, including pain-related health issues such as adherence to treatment regimens and medication administration, and have a positive influence on health outcomes, and health disparities. CMS' Network of Quality Improvement and Innovation Contractors have used health literacy counseling to improve health counseling,[33] and health literacy counseling has been used to treat arthritis.[34] We are interested in hearing from commenters about how pain and health literacy counseling is or may be effectively used as a service element to help beneficiaries with chronic pain make well-informed decisions about their own care, weigh risks and benefits, make decisions, and take actions that are best for them and their health. For HCPCS code GYYY1, we propose to include an initial face-to-face visit of at least 30 minutes, provided by a physician or other qualified health professional, to a beneficiary who has chronic pain, as defined above, or is being diagnosed with chronic pain that has lasted more than 3 months at the time of the initial visit. After consultation with our medical officers, we believe the management of a new patient with chronic pain would involve an initial face-to-face visit of at least 30 minutes due to the complexity involved with the initial assessment. We believe follow-up or subsequent visits could be non-face to face. HCPCS code GYYY2 describes an additional 15 minutes of CPM and treatment by a physician or other qualified health care professional, per calendar month (listed separately in addition to GYYY1). We are seeking comment on the appropriateness of the proposed 30-minute duration per calendar month for GYYY1, and also on the proposed duration and frequency for GYYY2. We are also seeking comment on whether we should consider specifying a longer duration of time for GYYY1 (for example, one hour—or 45 minutes). Similarly, we seek comment on whether we should consider specifying a longer duration of time for GYYY2 (for example, 20-minute increments). We also welcome comment on our proposal to permit billing of CPM services for beneficiaries who have already been diagnosed with chronic pain, and for those who are being diagnosed with chronic pain during the visit. We welcome comments regarding how best the initial visit and subsequent visits should be conducted (for example, in-person, via telehealth, or the use of a telecommunications system, and any implications for additional or different coding). We will also consider whether to add the CPM codes to the Medicare Telehealth Services List, based on our review of any information provided through the public comments and our analysis of how these new services may be appropriately furnished to Medicare beneficiaries. We are also asking for comment regarding whether there are components of the proposed CPM services that do not necessarily require face-to-face interaction with the billing practitioner, such as care that could be provided by auxiliary staff incident to the billing practitioner's services. For any components that could be furnished incident to the services of the billing practitioner, we request comment on whether these could be appropriately furnished under the general supervision of the billing physician or non-physician practitioner (NPP), for example, administration of a pain rating scale or tool, or elements of care coordination, as we have provided for certain care management services. We believe that most CPM services would be billed by primary care practitioners who are focused on long-term management of their patients with chronic pain. As calls for improved pain management have increased in recent years, this has resulted in better education and training of primary care practitioners and heightened awareness of the need for pain care nationally. We believe the codes we are proposing for CPM services will create appropriate payment for physicians and other practitioners (beyond primary care practitioners) that reflects the time and resources involved in attending comprehensively to the needs of beneficiaries with chronic pain. As the IOM “Blueprint” report noted, even people who need consultation with a pain specialist should benefit from the sustained involvement of a primary care practitioner who is able to help coordinate care across the full spectrum of health care providers, as such coordination “helps prevent people from seeking relief from multiple providers and treatment approaches that may leave them frustrated and angry and worse off both physically and mentally, and from falling into a downward spiral of disability, withdrawal, and hopelessness.” [35] The Blueprint stated that this type of fragmentation hinders the development of a strong, mutually trusting relationship with a single health professional who takes responsibility, and that this established relationship is one of the keys to successful pain treatment. We anticipate that if these Start Printed Page 45936 proposed codes are finalized, primary care practitioners will employ a variety of person-centered pain management strategies, such as those suggested in the PMTF Report and illustrated in CMS' CPM graphic [36] including medications, therapies, exercise, behavioral health approaches, complementary and integrative health, and community-based care based on the complexity, goals, and characteristics of each person they serve with chronic pain and according to the person-centered plan of care. It is also important to note that, in many parts of the country, people have access only to their primary care practitioner for chronic pain care.[37] We understand, however, the need or desire that some individuals with chronic pain have to be seen on an ongoing basis for CPM by a pain specialist who has received special training and/or certification to meet the needs of the most complex and challenging patients with chronic pain. Therefore, we are proposing to permit billing by another practitioner after HCPCS code GYYY1 has already been billed in the same calendar month by a different practitioner. In these situations, we anticipate that there could be occasional instances where care of an individual with chronic pain is transferred to a pain specialist or other specialist during the same month they received the CPM services from a primary care practitioner, for ongoing care. In these or other situations (such as when the beneficiary elects to choose a different physician or practitioner to furnish CPM services), we would anticipate GYYY1 and potentially GYYY2 could be billed by another practitioner during the same month, for the same beneficiary. We believe that it would be unlikely for GYYY1 to be billed more than twice per month under such circumstances and are proposing placing a limit on the number of times the code could be billed per beneficiary per calendar month, at a maximum of twice per calendar month. We seek comment on our proposal to permit billing by another practitioner after the GYYY1 has already been billed in the same month by a different practitioner, and on the number of times the code could be appropriately billed per month, per beneficiary. We propose to require that the beneficiary's verbal consent to receive CPM services at the initiating visit be documented in the beneficiary's medical record, as not all Medicare beneficiaries with chronic pain eligible to receive these separately billable CPM services may understand or want to receive these services, and the beneficiary should be aware that they are receiving them. At the initial visit, the beneficiary with chronic pain should be educated regarding what the CPM services are, how often they may generally expect to receive the services, and have an explanation of any cost sharing that may apply in their particular situation. Practitioners have informed us that beneficiary cost sharing is a significant barrier to provision of similar care management services, such as CCM services, and we are seeking comment on how best to effectively educate both practitioners and beneficiaries with chronic pain about the existence of, and the benefits and value of, the proposed CPM services. We are seeking comment regarding whether the initiating visit is the appropriate time for billing practitioners to obtain beneficiary verbal consent, if consent should be given at each visit, and also if beneficiary consent should be sought by the practitioners with whom CPM billing practitioners coordinate other Medicare services under the CPM plan of care, or even more broadly. We believe there might be some potential for duplicative payment for services allocated to the same patient concurrent with certain other Medicare care management services, such as CCM or behavioral health integration (BHI) services; however, we believe the proposed CPM codes have features that would mitigate such circumstances, such as the elements of the service that specifically address the beneficiary's pain—for example, the administration of a validated pain rating scale or tool. We welcome comments regarding what, if any, Medicare services we should consider that could not be billed by the same practitioner for the same patient concurrent with any other Medicare services, to avoid duplication of payment, and help limit financial burden to the Medicare beneficiary with chronic pain. We note that we would expect to refine these codes as needed through future rulemaking as we receive more information how the codes are being used, and how they are implemented in practice. To the extent that components of the proposed CPM codes are also components of other care management services, we reiterate our policy against double-counting time and require that the time used in reporting CPM services may not represent time spent in any other reported service. We propose that the CPM codes could be billed in the same month as a care management service, such as CCM, or BHI. We believe there are circumstances in which it is reasonable and necessary to provide both services in a given month, based on the needs of the Medicare beneficiary with chronic pain, for example, when the beneficiary has both chronic pain, and a mental disorder(s), or multiple chronic conditions. We are also proposing that the CPM codes would be able to be billed for the same Medicare patient in the same month as another bundled service such as HCPCS Codes G2086-G2088, which describe bundled payments under the PFS for opioid use disorders. We note that patient consent would need to be obtained for both of the bundled services such as, for example, CPM and BHI, and all other requirements to report CPM and to report the other service or services would need to be met. We invite comments on these billing proposals and their appropriateness in the context of CPM. Finally, we are asking commenters whether we should consider creating additional coding and payment to address acute pain. We are interested in information regarding a definition for acute pain, standalone or E/M coding, the specific activities that could be furnished, how we might value and price such a code or service, the settings where care should be provided, the types of practitioners that should furnish acute pain care, if the service or any components should be furnished as “incident to” services under the direction of the billing practitioner or by other members of the care team, and other information that might help us in proposing such a code or codes. (b) Valuation of Chronic Pain Management ServicesConsistent with the valuation methodology for other services under the PFS, proposed HCPCS codes GYYY1 and GYYY2 would be valued based on what we believe to be a typical case, and we understand that, based on variability in patient needs, some patients will require more resources, and some fewer. The proposed CPM codes would separately pay for a specified set of CPM elements furnished during a month, including the administration of validated rating scales, establishment and review of a person-centered care plan that includes goals, clinical needs, and desired outcomes, and other elements as described in the proposed code descriptors. To value CPM, we compared the proposed services to codes that involve care management. In doing so, we concluded that the CPM services were similar in work (time and intensity) to that of PCM in that both the Start Printed Page 45937 PCM codes and proposed CPM codes reflect services that have similar complexities, possible comorbidities, require cognitive time on the part of the practitioner, and may involve coordination of care across multiple practitioners. For HCPCS code GYYY1, we developed proposed inputs using a crosswalk to CPT code 99424 ( 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 that 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.), which is assigned a work RVU of 1.45. Additionally, for GYYY1 we are proposing to use a crosswalk to the direct PE inputs associated with CPT code 99424. We believe that the work and practice expense described by this crosswalk code is analogous to the services described in GYYY1, because GYYY1 includes similar care plan, medication management, unusually complex clinical management; care coordination between relevant practitioners furnishing care; and time for care provided personally by a physician or other qualified health care professional, as described in CPT code 99424. We are proposing to value GYYY2 at a work RVU of 0.50, using a crosswalk to CPT code 99425 ( 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 GYYY1), which is assigned a work RVU of 1.00. However, the required minimum number of minutes described in GYYY2 is half of the number of minutes in CPT code 99425. For HCPCS code GYYY2, we are proposing to use a crosswalk to half of the direct PE inputs associated with CPT code 99425. We believe that the work and practice expense described by this crosswalk code is analogous to the services described in GYYY2, because GYYY2 includes similar activities as described in CPT code 99425. We are proposing that GYYY1 can only be billed when the full 30 minutes of service time has been met or exceeded. Additionally, we are proposing that the add-on code (GYYY2) can only be billed when the full 15 minutes of service time is met or exceeded. Our proposed valuation of CPM services includes services that are personally performed by a physician (or other appropriate billing practitioner, such as a nurse practitioner (NP) or physician assistant (PA)) described by certain E/M visit codes that apply to a new patient in various settings. Accordingly, we are proposing that GYYY1/GYYY2 must be furnished by the physician (or other appropriate billing practitioner) and could not be billed on the same date of service as CPT codes 99202-99215 ( Office/outpatient visits new), since these codes reflect face-to-face services furnished by the physician or other billing practitioner for related, separately billable services that are being furnished to a patient the practitioner has not previously seen. We believe it would be unlikely the practitioner is prepared to address the complex pain needs of a new patient on the same day he or she is seen for a general visit, or a visit where the person is being seen for some other illness or condition. We do not believe that the services included in GYYY1/GYYY2 would significantly overlap with CCM services; Transitional Care Management (TCM) services; or BHI services, which have various clinical purposes separate from CPM. We do believe there is likely overlap in the Medicare beneficiary population eligible to receive CCM, TCM, BHI, and the proposed CPM services, but we believe there are distinctions in the nature and extent of the assessments, care coordination, medication management, and care planning for CPM to allow concurrent billing for services that are medically reasonable and necessary, and that it is particularly important to allow for the provision of needed services, including behavioral health services to beneficiaries with chronic pain. We are soliciting comment on whether we have appropriately identified the codes Medicare should not pay if furnished during the same day as the proposed CPM codes, and if there are circumstances where multiple care planning codes could be furnished without overlap or other situations, such as where the practitioner is seeing a new patient. We note that the proposed CPM codes would be limited to beneficiaries in office or other outpatient or domiciliary settings. We will consider for future rulemaking separately identifying and paying for CPM services furnished to beneficiaries in any appropriate setting of care, in recognition of the prevalence and burden of pain across all settings of care, and the associated time and service complexity to provide care for chronic pain. We appreciate comments on other settings where CPM services could be provided. (c) Request for CommentWe believe there could be circumstances in which a beneficiary receiving CPM services needs referrals or recommendations, based on a clinician's assessment, for services or interventions that are not included as elements of the CPM services, such as for community-based care or physical and occupational therapy. We welcome comments on the care coordination that may occur between relevant practitioners furnishing services, such as complementary and integrative care, and on the community-based care element included in the descriptors for proposed GYYY1 and GYYY2. Commenters may also wish to weigh in on how documentation of the performance of the elements of CPM services might best be addressed in medical recordkeeping. We are seeking general comment on whether there are any elements of CPM services outlined in this proposal that the public and interested parties believe are not typically furnished in connection with comprehensive chronic pain management, or any proposed elements of the CPM services that should be removed or altered. We also seek comment on whether there are elements of CPM services that we have not identified and should be added to the code descriptors. Additionally, we are seeking comment on which, if any, CPM elements could be furnished as “incident to” services, and whether to add GYYY1 and GYYY2 to the list of services for which we allow general supervision as described in our regulation at § 410.26(b)(5). We welcome comments from the public for future rulemaking regarding what elements of the CPM services could be furnished under general supervision, or direct supervision. For example, facilitation and coordination of any necessary behavioral health treatment, chronic pain related crisis care, and ongoing communication and care coordination between relevant practitioners furnishing care might be appropriate activities to be considered under general supervision. The proposed CPM codes may involve arrangements where the physician or Start Printed Page 45938 other health professional might work in collaboration with other health care providers or members of a care team, such as a psychologist, dental practitioner, or social worker, where these individuals might furnish certain elements of the service bundle under the direction of the physician or qualified health practitioner, such as assessments, person-centered care planning, referrals to community-based care, and other activities, as appropriate. We are requesting comments on if, and how, we should structure the proposed CPM code and payment for these services to account for these types of arrangements that could include team-based care. (34) Proposed Revisions to the “Incident to” Physicians' Services Regulation for Behavioral Health ServicesIn the CY 2014 PFS final rule with comment period (78 FR 74425 through 74427), we created an exception to our “incident to” regulation at § 410.26(b)(5) under which “incident to” services generally must be furnished under direct supervision. Specifically, we finalized a policy to require general, rather than direct, supervision when chronic care management services are furnished incident to the billing physician's or NPP's services outside of the practice's normal business hours by clinical staff. In the CY 2017 PFS final rule (81 FR 80255), we finalized a revision to our regulation under § 410.26(b)(5) to require a general, rather than direct, level of supervision for designated care management services, and established that we would designate care management services through notice and comment rulemaking. We understand that circumstances related to the PHE for COVID-19 have likely contributed to an increase in the demand for behavioral health services while also exacerbating existing barriers to beneficiaries' access to needed behavioral health services. For example, the American Psychological Association (APA) conducted a survey in 2020 and a follow-up survey in 2021 to better understand the impact of the COVID-19 pandemic on mental health treatment and the work of practicing psychologists. In the 2021 follow-up survey, many psychologists reported increases in the demand for treatment of anxiety and depression. They reported the greatest increases in treating anxiety disorders (84 percent, up from 74 percent), depressive disorders (72 percent, up from 60 percent), and trauma- and stress-related disorders (62 percent, up from 50 percent). Other diagnoses with large increases included sleep-wake disorders, obsessive-compulsive and related disorders, and substance-related and addictive disorders.[38] Additionally, according to HRSA's National Center for Health Workforce Analysis, by 2025, shortages are projected nationally for a variety of behavioral health practitioners, including psychiatrists; clinical, counseling, and school psychologists; mental health and substance use social workers; school counselors; and marriage and family therapists.[39] Currently, there is no separate benefit category under the statute that recognizes the professional services of licensed professional counselors (LPCs) and Licensed Marriage and Family Therapists (LMFTs). Therefore, payment for the services of LPCs and LMFTs can only be made under the PFS indirectly when an LPC or LMFT performs services as auxiliary personnel incident to, the services, and under the direct supervision, of the billing physician or other practitioner. According to the American Counseling Association, there are more than 140,000 licensed professional counselors (LPCs) in the U.S., and the Medicare program's reimbursement for mental health treatment services delivered by this professional group could address provider shortages.[40] Additionally, according to the U.S. Bureau of Labor Statistics, there were approximately 54,800 Marriage and Family Therapists (MFTs) as of May 2021.[41] In the 2022 CMS Behavioral Health Strategy,[42] CMS included a goal to improve access to and quality of mental health care services. In light of the current needs among Medicare beneficiaries for improved access to behavioral health services, and the existing workforce shortages impeding access to needed treatment for behavioral health, we have considered regulatory revisions that may help to reduce existing barriers and make greater use of the services of LPCs and LMFTs. We note that CMS does not have authority to create a statutory benefit category for practitioner types. Therefore, we are proposing to amend the direct supervision requirement under our “incident to” regulation at § 410.26 to allow behavioral health services to be furnished under the general supervision of a physician or NPP when these services or supplies are provided by auxiliary personnel incident to the services of a physician or NPP. We are limiting the scope of this proposal to behavioral health services at this time due to increased needs for behavioral health treatment and workforce shortages in this field. We believe that this proposed change will facilitate utilization and extend the reach of behavioral health services. We believe that any risk associated with this proposed change would be minimal, since the auxiliary personnel providing the services would need to meet all of the applicable requirements to provide incident to services, including any applicable licensure requirements imposed by the State in which the services are being furnished, as described in § 410.26(a)(1). (35) New Coding and Payment for General Behavioral Health Integration (BHI) Billed by Clinical Psychologists (CPs) and Clinical Social Workers (CSWs)In the CY 2017 PFS final rule (81 FR 80230), we established G-codes to describe monthly services furnished using the Psychiatric Collaborative Care Model (CoCM), an evidence-based approach to behavioral health integration that enhances “usual” primary care by adding care management support and regular psychiatric inter-specialty consultation. These G-codes were replaced by CPT codes 99492-99494, which we established for payment under the PFS in the CY 2018 PFS final rule (82 FR 53077 through 53078). Additionally, we created a fourth G-code to describe services furnished using other models of BHI in the primary care setting, which was replaced by CPT code 99484 in the CY 2018 PFS final rule (82 FR 53077 through 53078). We stated in the CY 2017 PFS final rule (81 FR 80236) that we recognized that the psychiatric CoCM is prescriptive and that much of its demonstrated success may be attributable to adherence to a set of elements and guidelines of care. We finalized a code set to pay accurately for care furnished using this specific model of care, given its widespread adoption and recognized effectiveness. However, we stated we recognized that there are primary care practices that are incurring, or may incur, resource costs inherent to treatment of patients with similar conditions based on BHI models of care other than the psychiatric CoCM that may benefit beneficiaries with behavioral health conditions, and Start Printed Page 45939 therefore finalized a General BHI code which may be used to report a range of models of BHI services, and that we expected this code to be refined over time as we receive more information about other BHI models in use. In the CY 2018 PFS final rule (82 FR 53078), we stated that we had received inquiries from interested parties about whether professionals who were not eligible to report the approved initiating visit codes for BHI services to Medicare might nonetheless serve as a primary hub for BHI services. For example, interested parties have suggested that a CP might serve as the primary practitioner that integrates medical care and psychiatric expertise. For purposes of future rulemaking, we sought comment on the circumstances under which this model of care is happening and whether additional coding would be needed to accurately describe and value other models of care. A few commenters suggested that CMS create separate codes to describe behavioral health care management services that could be billed by CPs and NPPs who are not authorized to bill Medicare for E/M services. One commenter suggested that CMS include psychiatric diagnostic evaluation services that can be furnished and billed by CPs as eligible initiating visits. Commenters also described other models of care that are in use, including the STAR-VA model and a model used in outpatient health care settings where a clinical social worker (CSW) not only furnishes psychiatric care but also assists with psychosocial aspects of medical care. In the CY 2017 PFS final rule (81 FR 80239), we stated that we had received a few comments suggesting that in addition to the qualifying E/M services (or an AWV or IPPE), the initiating visit services for BHI should include in-depth psychological evaluations delivered by a CP including CPT codes 90791, 96116 or 96118, which include care plan development. In this final rule, we established that the same services that qualify as the initiating visit for CCM would also qualify as initiating services for BHI, which do not include in-depth psychological evaluation by a CP and which were not, in their entirety, within the scope of CPs' practice, and therefore, CPs would not be able to report the General BHI code directly (although a psychiatrist may be able to do so) (81 FR 80239). In the 2022 CMS Behavioral Health Strategy,[43] CMS included a goal to improve access to and quality of mental health care services, and included an objective to “increase detection, effective management and/or recovery of mental health conditions through coordination and integration between primary and specialty care providers.” As previously noted in this proposed rule, we understand that circumstances related to the COVID-19 PHE have likely contributed to an increase in the demand for behavioral health services while also exacerbating existing barriers in beneficiaries' access to needed behavioral health services. In light of the feedback we have received and considering the increased needs for mental health services, we are proposing to create a new G code describing General BHI performed by CPs or CSWs to account for monthly care integration where the mental health services furnished by a CP or CSW are serving as the focal point of care integration. The proposed new code is GBHI1 ( Care management services for behavioral health conditions, at least 20 minutes of clinical psychologist or clinical social worker time, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales; behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; facilitating and coordinating treatment such as psychotherapy, coordination with and/or referral to physicians and practitioners who are authorized by Medicare law to prescribe medications and furnish E/M services, counseling and/or psychiatric consultation; and continuity of care with a designated member of the care team.) We are proposing to value this service under the proposed HCPCS code GBHI1 based on a direct crosswalk to the work values and direct PE inputs for CPT code 99484 ( Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales; behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and continuity of care with a designated member of the care team), because the services described by GBHI1 closely mirror those described by CPT code 99484. Therefore, we believe that this crosswalk is an appropriate valuation of the level, time, and intensity of the proposed service described by HCPCS code GBHI1. CPs are authorized under their statutory benefit category at section 1861(ii) of the Act to furnish “qualified psychologist services” to include “such services and such services and supplies furnished as an incident to his service furnished by a clinical psychologist (as defined by the Secretary) which the psychologist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) as would otherwise be covered if furnished by a physician or as an incident to a physician's service.” Additionally, the statutory benefit category for CSWs at Section 1861(hh)(2) of the Act defines “clinical social worker services” as “services performed by a clinical social worker (as defined in paragraph (1)) for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital and other than services furnished to an inpatient of a skilled nursing facility which the facility is required to provide as a requirement for participation) which the clinical social worker is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) of the State in which such services are performed as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service.” Based on the authorizations under the CP and CSW statutory benefit categories, CPs are authorized to furnish and bill for services that are provided by clinical staff incident to their professional services when the “incident to” requirements specified in § 410.26 of our regulations are met, and would be authorized to do the same when furnishing services described by proposed HCPCS code GBHI1, whereas CSWs would only be able to bill Medicare for services they furnish directly and personally. The proposed work value for HCPCS code GBHI1 is 0.61 (based on a direct crosswalk to CPT code 99484). We are seeking comment on whether this proposed value accurately reflects the resource costs involved in furnishing these models of care, or whether additional coding may be needed, for example, separate coding for CPs and CSWs. We are also seeking comment on the proposed requirements for billing GBHI1, including any applicable “incident to” requirements, Start Printed Page 45940 and the role and responsibilities of CSWs and CPs. In the CY 2017 PFS final rule (81 FR 80239), we finalized the requirement of an initiating visit for the BHI codes for new patients or beneficiaries not seen within a year of commencement of BHI services. We stated that the initiating visit would establish the beneficiary's relationship with the billing practitioner (most aspects of the BHI services would be furnished incident to the billing practitioner's professional services), ensure the billing practitioner assesses the beneficiary prior to initiating care management processes, and provide an opportunity to obtain beneficiary consent. We noted that the existing eligible initiating visit codes are not, in their entirety, within the scope of the CP's practice. Given that, we are proposing to allow a psychiatric diagnostic evaluation (CPT code 90791) to serve as the initiating visit for GBHI1. We welcome comment on whether we should consider additional codes to qualify as the initiating visit. In the CY 2017 PFS final rule (81 FR 80235), we established that CCM and BHI services could be billed during the same month for the same beneficiary if all the requirements to bill each service are separately met. We are also proposing that HCPCS code GBHI1 could be billed during the same month as CCM and TCM services, provided that all requirements to report each service are met and time and effort are not counted more than once. The patient consent requirements would apply to each service independently. In the CY 2017 PFS final rule (81 FR 80235), we established that the BHI services may be furnished incident to the billing professional's services under general supervision because we do not believe it is clinically necessary that the professionals on the team who provide services other than the treating practitioner (namely, the behavioral health care manager and the psychiatric consultant) to have the billing practitioner immediately available to them at all times, as would be required under a higher level of supervision. We believe this is also the case for the service described by GBHI1. Therefore, consistent with other care management codes paid under the PFS, we are proposing to add HCPCS code GBHI1 to the list of designated care management services for which we allow general supervision. (36) Request for Information: Medicare Part B Payment for Services Involving Community Health Workers (CHWs)The American Public Health Association (APHA) defines a community health worker as a “frontline public health worker who is a trusted member of and/or has an unusually close understanding of the community served. This trusting relationship enables the worker to serve as a liaison/link/intermediary between health/social services and the community to facilitate access to services and improve the quality and cultural competence of service delivery.” Community Health Workers are classified as a workforce category by the Department of Labor. The Community Health Worker Core Consensus Project (C3) lists the following ten roles of CHWs: [44]
Findings from randomized controlled trials indicate that particular CHW interventions reduce chronic disease disparities in low income, racial and ethnic minority communities, such as type 2 diabetes, hypertension, HIV/AIDS, and obesity.[45 46 47 48 49] CMS is also interested in better addressing the social needs of beneficiaries; for example, in the FY 2023 IPPS/LTCH NPRM, CMS proposed new measures under the Hospital Inpatient Quality Reporting Program pertaining to assessing social determinants of health. The CHW skillset may position this workforce to address these social needs. In light of the significant benefits that services involving CHWs can potentially offer the health of Medicare beneficiaries, including a reduction in health disparities, CMS is interested in learning more about how services involving CHWs are furnished in association with the specific Medicare benefits established by the statute. Over the past several years, we have worked to develop payment mechanisms under the PFS to improve the accuracy of valuation and payment for the services furnished by physicians and other health care professionals, especially in the context of evolving models of care. For example, physicians and other eligible practitioners are able to report care management services and behavioral health integration services based on tasks personally provided by clinical staff under their supervision. Some of the elements of the comprehensive care plans referenced in the description of care management services include medication management, community/social services ordered, and coordination with other agencies, which are also some of the services personally provided by CHWs. Section 1862(a)(1)(A) of the Act generally excludes from coverage services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. We are interested in learning whether and how CHWs, as auxiliary personnel of physicians and hospitals, may provide reasonable and necessary services to Medicare beneficiaries under the appropriate supervision of health care professionals that are responsible more broadly for medical care, including behavioral health care. We are also looking to understand whether and how services involving CHWs are accounted for under the existing CCM codes or other care management or behavioral health integration services, including whether the employment and supervision arrangements ordinarily adopted within the industry would meet the requirements that allow for billing by supervising professionals or providers, including RHCs and FQHCs. For example, do CHWs tend to be Start Printed Page 45941 employees of physicians or of the same entities that employ physicians? Are physicians or other medical professionals supervising their interaction with patients in a manner consistent with direct supervision—for example, immediate availability in the same location? We note that CHWs are employed in a number of sectors, including local government, community-based organizations, and social services sectors. Therefore, the health care providers working with CHWs may have established nontraditional relationships with these organizations outside of the health sector. We are interested in learning how payments between health care provider organizations, and community-based organizations, local governments, and social service organizations, account for the costs of services provided by CHWs, and how health care provider organizations ensure that the funding amount is sufficient to cover the costs of the full range of CHW services. We are also seeking comment on whether and to what extent CHW services are provided in association with preventive services, including those covered by Medicare. Physicians and certain other health care practitioners are authorized to bill Medicare for services furnished incident to their professional services by auxiliary personnel. Our regulation at § 410.26 requires that auxiliary personnel who perform services incident to the services of the billing physician or other practitioner must be acting under the supervision of the billing practitioner, and must meet any applicable requirements, including licensure, imposed by the State in which the services are furnished. We understand that there is wide variation in State standards for CHWs. In addition, the training that CHWs receive is typically provided by employers but varies widely in terms of its breadth and scope.[50] We are trying to understand how CHWs might also be recognized as auxiliary personnel in the Medicare context, and are therefore interested in learning how States may have determined whether and under what circumstances CHWs have the necessary qualifications to perform services that would improve the health of Medicare beneficiaries and others being treated by supervising professionals or providers. (37) Proposed Recognition of the Nurse Portfolio Credentialing Commission (NPCC)The Medicare program established qualifications under regulations at § 410.75 for NPs and, under 42 CFR 410.76 for clinical nurse specialists (CNS). Both the NP and CNS qualification regulations require that NPs and CNSs be certified as a NP or a CNS by a recognized national certifying body that has established standards for NPs and/or CNSs, and that a listed certifying body must be approved by the Secretary. An identical list of Medicare recognized and approved national certifying bodies for NPs and CNSs is included under Chapter 15, section 200 and 210 of the Medicare Benefit Policy Manual, pub. 100-02. The organizations listed under program manual instructions as recognized national certifying bodies for NPs and CNSs are as follows:
The Nurse Portfolio Credentialing Center (NPCC) has requested to have its organization added to the lists of recognized national certifying bodies for NPs and CNSs who specialize in clinical genetics/genomics and are awarded the Advanced Clinical Genomics Nurse (ACGN) credential. The NPCC's request to CMS describes the NPCC as a non-profit organization, established in 2018 by genetics/genomics nurse leaders as the only organization that now offers new credentials to advanced practice registered nurses (APRNs) who specialize in genetics/genomics, a nursing specialty recognized by the American Nurses Association. Additionally, the NPCC's letter states that its organization evolved directly from the American Nurses Credentialing Center (a listed, CMS-recognized national certifying body) and the Genetic Nursing Credentialing Commission, which are the organizations that awarded new genetics/genomics nursing credentials from 2001 to 2018. However, as of 2019, the American Nurses Credentialing Center (ANCC) stopped offering new credentialing to genetics nurses and instead offers only renewal credentialing to nurses who specialize in genetics. Since 2019, the NPCC has awarded the ACGN credential to 32 APRNs from 17 States. Now, with the NPCC being the only organization that offers new credentialing to nurses in genetics, the NPCC is concerned that the absence of its organization from the current list of recognized national certifying bodies appropriate for NPs and CNSs presents a barrier and a disadvantage for newly credentialed APRNs. Specifically, the NPCC is concerned that newly NPCC credentialed NPs and CNSs seeking enrollment under Medicare would be denied on the basis that they do not meet Medicare's certification requirement unless the NPCC is listed as a recognized national certifying body appropriate for NPs and CNSs who specialize in genetics/genomics. The website for the NPCC is available at https://www.nurseportfolio.org. When considering previous requests to add other organizations to the list of recognized national certifying bodies for NPs and CNSs, we stated that it is not our intention to be overly restrictive in our program requirements and consequently prevent qualified NPs and CNSs who specialize in areas of medicine other than those certified by the ANCC from participating in the Medicare program as NPs or CNSs and from rendering care to patients in need of specialized services (see 71 FR 69707). Accordingly, we are proposing to add the NPCC organization to the list of recognized national certifying bodies in manual instructions for NPs at section 200 and CNSs at section 210 of the Medicare Benefit Policy Manual, pub. 100-02. We request public comments on this proposal. (38) Request for Information: Medicare Potentially Underutilized ServicesMedicare provides payment for many kinds of services that support beneficiaries in promoting health and well-being and that may also, in some cases, reduce unnecessary spending within the health care system by decreasing the need for more expensive kinds of care. Some examples of these services may include patient educational services, like Diabetes Self-Management Training or preventive services, like the Annual Wellness Visit. We are seeking comments on ways to identify specific services and to recognize possible barriers to improved access to these kinds of high value, potentially underutilized services by Start Printed Page 45942 Medicare beneficiaries. We are also seeking comment regarding how we might best mitigate some of these obstacles, including for example, through examining conditions of payment or payment rates for these services or by prioritizing beneficiary and provider education investments. “High value” health services have been described as those “services that provide the best possible health outcomes at the lowest possible cost.” [51] The American College of Physicians states that high value services seek “to improve health, avoid harms, and eliminate wasteful practices.” [52] However, we believe that some high value Medicare services may be potentially underutilized by beneficiaries. In some cases, limited use of these kinds of services occurs disproportionately in underserved communities. Disparities in health and healthcare persist despite decades of research and widespread efforts to improve health outcomes in the United States.[53] Certain populations, including groups experiencing racial disparity, people with disabilities, individuals dually eligible for Medicare and Medicaid, and those living in rural and underserved areas are more likely to experience challenges accessing healthcare services, lower quality of care, and below average health outcomes when compared to the general population.[54 55 56] Many known factors impede efficient and equitable healthcare, including workforce challenges, transportation issues, healthcare costs, language barriers, a lack of health literacy, and confusion about health insurance coverage and processes.[57] Additional factors include social determinants of health and community-level burdens that contribute to the exacerbation of health disparities. For example, disparities in cancer screening and treatment across racial and ethnic groups have been well documented. Research demonstrates that minority populations are less likely to receive cancer screening tests than their white counterparts and, consequently, are more likely to be diagnosed with late-stage cancer.[58] Additionally, racial and ethnic minorities with positive test results are more likely to experience delays in receiving the diagnostic tests that would serve to confirm cancer diagnoses.[59] CMS is committed to building solutions that will help close gaps in healthcare quality, access, and outcomes.[60] We are working to advance health equity by designing, implementing, and operationalizing policies and programs that support health for all the people served by our programs, eliminating avoidable differences in health outcomes experienced by people who are disadvantaged or underserved, and providing the care and support that our beneficiaries need to thrive.[61] Health equity as defined by CMS [62] means the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes. More information regarding CMS's Strategic Plan for health equity is available in the CMS Strategic Plan Pillar: Health Equity Fact Sheet: https://www.cms.gov/sites/default/files/2022-04/Health%20Equity%20Pillar%20Fact%20Sheet_1.pdf. In light of the concerns regarding the potential underutilization of high value health services, particularly among potentially underserved communities, we are committed to promoting these high value services within the Medicare program. In concert with the CMS strategy to advance health equity in addressing health disparities that underlie our health system, we seek to engage with interested parties and solicit comment regarding ways to identify and improve access to high value, potentially underutilized services by Medicare beneficiaries. We are seeking comment on how to best define and identify high value, potentially underutilized health services. We are also looking to understand what existing services within current Medicare benefits may represent high value, potentially underutilized services, such as:
Other examples of Medicare preventive services are available at the following website: https://www.cms.gov/Medicare/Prevention/PrevntionGenInfo/medicare-preventive-services/MPS-QuickReferenceChart-1.html. We invite the public to submit information about specific obstacles to Start Printed Page 45943 accessing these services and how specific potential policy, payment or procedural changes could reduce potential obstacles and facilitate better access to high value health services. Specifically, we are soliciting new and innovative ideas that may help broaden perspectives about potential solutions. Ideas may include, but are not limited to:
We are interested in learning about how CMS might best promote high value care and health equity, address concerns regarding health disparities, and increase access to high value services, which could improve the health of Medicare beneficiaries. Comments received in response to this RFI may be used to identify potential opportunities for improvement to and refinement of existing Medicare FFS and MA programs. (39) Change in Procedure Status for Family PsychotherapyThe CPT codes that describe family psychotherapy are payable under Medicare, but are currently assigned a restricted status indicator in the Medicare Physician Fee Schedule payment files. The codes describing family psychotherapy with the patient present are CPT code 90847 (Family psychotherapy (conjoint psychotherapy) (with patient present), 50 minutes) and CPT code 90849 (Multiple-family group psychotherapy). We note that CPT code 90846 (Family psychotherapy (without the patient present), 50 minutes) describes family psychotherapy without the patient present. In past rulemaking, we have discussed that Medicare coverage is limited to items and services that are for the diagnosis and treatment of the individual beneficiary. For example, in the CY 2013 PFS final rule (77 FR 68979), we stated that Medicare does not pay for services that are furnished to parties other than the beneficiary and which Medicare does not cover, for example, communication with caregivers. During the COVID-19 pandemic, the number of adults reporting adverse behavioral health conditions has increased sharply, with higher rates of depression, substance use, and self-reported suicidal thoughts observed in racial and ethnic minority groups.[63] We are seeking to ensure that appropriate care is furnished to Medicare beneficiaries and note that CPT codes 90847 and 90849 are payable under Medicare. Accordingly, we are proposing to update our payment files to remove the restricted (“R”) procedure status indicator for CPT codes 90847 and 90849 and assigning these codes an active (“A”) procedure status indicator. We note that there are national coverage determinations (NCDs) addressing family psychotherapy described by CPT codes 90847 and 90849 describing the settings of care in which these services are covered, documentation requirements and other guidelines.[64] The Medicare National Coverage Determinations (NCD) Manual, Pub. 100-03, section 70.1, titled “Consultations with a Beneficiary's Family and Associates” states that “family counseling services are covered only where the primary purpose of such counseling is the treatment of the patient's condition.” [65] The change to the “A” status indicator for these subject CPT codes does not alter the policy under the applicable coverage determinations for these codes. (40) Comment Solicitation on Intensive Outpatient Mental Health Treatment, Including Substance Use Disorder (SUD) Treatment, Furnished by Intensive Outpatient Programs (IOPs)There are a range of services described by existing coding under the PFS that can be billed for treatment of mental health conditions, including SUDs, such as individual, group, and family psychotherapy. Over the past several years, in collaboration with interested parties and the public, we have increased the coding and payment mechanisms for substance use treatment services paid under the PFS. For example, in the CY 2020 PFS final rule (84 FR 62673), we finalized the creation of new coding and payment describing a bundled episode of care for the treatment of Opioid Use Disorder (OUD) (HCPCS codes G2086-G2088). In the CY 2021 PFS final rule, we finalized expanding the bundled payments described by HCPCS codes G2086-G2088 to be inclusive of all SUDs (85 FR 84642 through 84643). Additionally, in the CY 2020 PFS final rule (84 FR 62630 through 62677), we implemented coverage requirements and established new codes describing bundled payments for episodes of care for the treatment of OUD furnished by Opioid Treatment Programs (OTPs). Medicare also covers services furnished by inpatient psychiatric facilities and partial hospitalization programs (PHP). PHP services can be furnished by a hospital outpatient department or a Medicare-certified Community Mental Health Center (CMHC). PHPs are structured to provide intensive psychiatric care through active treatment that utilizes a combination of the clinically recognized items and services described in § 1861(ff) of the Social Security Act (the Act). According to the Medicare Benefit Policy Manual, Chapter 6, Section 70.3, the treatment program of a PHP closely resembles that of a highly structured, short-term hospital inpatient program and is at a level more intense than outpatient day treatment or psychosocial rehabilitation. PHPs work best as part of a community continuum of mental health services which range from the most restrictive inpatient hospital setting to less restrictive outpatient care and support. We understand that in some cases, people that do not require a level of care for mental health needs that meets the standards for PHP services, nonetheless require intensive services on an outpatient basis. We are interested in whether or not the current coding and payment mechanisms under the PFS adequately account for intensive outpatient services that are part of a continuum of care in the treatment. For example, according to SAMHSA's Advisory on Clinical Issues in Intensive Outpatient Treatment for Substance Use Disorders, IOP programs for substance use disorders (SUDs) offer services to clients seeking primary treatment; step-down care from inpatient, residential, and withdrawal management settings; or step-up treatment from individual or group outpatient treatment. IOP treatment includes a prearranged schedule of core services for example, Start Printed Page 45944 individual counseling, group therapy, family psychoeducation, and case management) for a minimum of 9 hours per week for adults or 6 hours per week for adolescents. The 2019 National Survey of Substance Abuse Treatment Services reports that 46 percent of SUD treatment facilities offer IOP treatment.[66] We are seeking comment on whether there is a gap in coding under the PFS or other Medicare payment systems that may be limiting access to needed levels of care for treatment of mental health or substance use disorder treatment, including and especially SUDs, for Medicare beneficiaries. We are particularly interested in the extent to which any potential gaps would best be addressed by the creation of new codes, revision of particular billing rules for some kinds of care in specific settings, or whether the valuation of particular codes (existing or new) needs to be addressed in order to better reflect the relative resource costs involved in furnishing intensive outpatient mental health services. We are also interested in additional, detailed information about IOP services, such as the settings of care in which these programs typically furnish services, the range of services typically offered, the range of practitioner types that typically furnish those services, and any other relevant information, especially to the extent it would inform our ability to ensure that Medicare beneficiaries have access to this care. (41) Comment Solicitation on Payment for Behavioral Health Services Under the PFSAs discussed throughout this proposed rule, CMS is committed to ensuring that beneficiaries have access to needed services for mental and behavioral health. Through the CMS Behavioral Health Strategy, CMS seeks to remove barriers to care and services, and to adopt a data-informed approach to evaluate our behavioral health programs and policies. CMS strives to support a person's whole emotional and mental well-being and promote person-centered behavioral health care.[67] As part of our review of our payment policies and systems, we understand that the PFS ratesetting methodology and application of budget neutrality may impact certain services more significantly than others based on factors such as how frequently codes are revalued and the ratio of physician work to practice expense (PE). In the CY 2018 PFS final rule (82 FR 52999), we discussed that some interested parties had suggested that for codes in which direct PE inputs for a service are very low, the methodology for allocating indirect PE does not allow for a site of service differential that accurately reflects the relative indirect costs involved in furnishing services in non-facility settings. We stated that primary therapy and counseling services available to Medicare beneficiaries for treatment of behavioral health conditions, including substance use disorders, are among the services most affected by our methodology. We are soliciting comment on how we can best ensure beneficiary access to behavioral health services, including any potential adjustments to the PFS ratesetting methodology, for example, any adjustments to systematically address the impact on behavioral health services paid under the PFS. Start Printed Page 45945 Start Printed Page 45946 Start Printed Page 45947 Start Printed Page 45948 Start Printed Page 45949 Start Printed Page 45950 Start Printed Page 45951 Start Printed Page 45952 Start Printed Page 45953 Start Printed Page 45954 Start Printed Page 45955 Start Printed Page 45956 Start Printed Page 45957 Start Printed Page 45958 Start Printed Page 45959 Start Printed Page 45960 Start Printed Page 45961 Start Printed Page 45962 Start Printed Page 45963 Start Printed Page 45964 Start Printed Page 45965 Start Printed Page 45966 Start Printed Page 45967 Start Printed Page 45968 Start Printed Page 45969 Start Printed Page 45970 Start Printed Page 45971 Start Printed Page 45972 Start Printed Page 45973 Start Printed Page 45974 Start Printed Page 45975 Start Printed Page 45976 Start Printed Page 45977 Start Printed Page 45978 Start Printed Page 45979 Start Printed Page 45980 Start Printed Page 45981 Start Printed Page 45982 Start Printed Page 45983 Start Printed Page 45984 Start Printed Page 45985 Start Printed Page 45986 F. Evaluation and Management (E/M) Visits1. BackgroundOver the past several years, CMS has engaged in a multi-year effort with the American Medical Association (AMA) and other interested parties to update coding and payment for evaluation and management (E/M) visits, so that they better reflect the current practice of medicine, are less administratively complex, and are paid more accurately under the PFS. This work is critical to help reduce practitioner burnout in general, especially in light of the COVID-19 pandemic. In a step-wise approach, the AMA CPT Editorial Panel revised the office/outpatient (O/O) E/M visit code family first. Effective January 1, 2021, the CPT Editorial Panel redefined the O/O E/M visits, such that visit level is selected based on the amount of practitioner time spent performing the visit or the level of medical decision-making (MDM) as redefined in the CPT E/M Guidelines. Additionally, effective January 1, 2021, history of present illness (History) and a physical exam are no longer required elements of these services or used to select the O/O E/M visit level. (See 85 FR 84549). Also, effective January 1, 2021, the CPT Editorial Panel revised the O/O E/M visit descriptor times and the CPT E/M Guidelines. We generally adopted these revised codes and changes in CPT code selection and documentation guidance for payment purposes under the PFS effective January 1, 2021 (84 FR 62844 through 62859). While we accepted the revised CPT codes and approach for the O/O E/M visits, we did not accept the revisions for prolonged O/O services, because we were concerned that they could have resulted in overpayment, were administratively complex, and would have impacted our ability to tell how much total time was spent with the Start Printed Page 45987 patient (see 84 FR 62849 through 62850). We created G2212 for reporting of prolonged O/O E/M services. Finally, the AMA RUC resurveyed the O/O E/M visits, and we generally accepted the RUC recommendations, which reflected increased service times (84 FR 62851 through 62854). This resulted in increased values for the O/O E/M codes beginning in CY 2021. Also, we created add-on code G2211 ( office/outpatient E/M visit complexity) that can be reported in conjunction with O/O E/M visits to better account for resources associated with primary care or care services that are part of ongoing care related to a patient's single, serious, or complex chronic condition(s). (84 FR 62854 through 62856). The Consolidated Appropriations Act, 2021 imposed a moratorium on Medicare payment for these services by prohibiting CMS from making payment under the physician fee schedule for HCPCS code G2211 before January 1, 2024. See our fact sheet available at Physician Fee Schedule (PFS) Payment for Office/Outpatient Evaluation and Management (E/M) Visits—Fact Sheet [68] ( cms.gov). For CY 2023, the AMA CPT Editorial Panel has revised the rest of the E/M visit code families (except critical care services) to match the general framework of the O/O E/M visits, including inpatient and observation visits, emergency department (ED) visits, nursing facility visits, domiciliary or rest home visits, home visits, and cognitive impairment assessment. Hereafter in this proposed rule, we refer to these other E/M visit code families as “Other E/M” visits or CPT codes, as relevant. Effective January 1, 2023, the CPT Editorial Panel has redefined the Other E/M visits so that they parallel the O/O E/M visits, where visit level will be selected based on the amount of practitioner time spent with the patient or the level of MDM as redefined in the CPT E/M Guidelines. History and physical exam will only be considered when and to the extent that they are medically appropriate, and will no longer impact the Other E/M visit level. The CPT Editorial Panel also revised the service times within the descriptors, the associated prolonged service codes, and the CPT E/M Guidelines for the Other E/M CPT codes. We note that the CPT Editorial Panel also consolidated a considerable number of the Other E/M CPT codes, with inpatient and observation visits being combined into a single code set, and home and domiciliary visits being combined into a single code set. Currently there are approximately 75 Other E/M CPT codes, and in 2023 there will be approximately 50 Other E/M CPT codes. The CPT Editorial Panel created one new CPT code for prolonged inpatient services by physicians and other qualified healthcare professionals on the date of the E/M visit. Finally, the RUC has resurveyed the Other E/M visits and associated prolonged service codes, and provided revaluation recommendations to CMS. In total, E/M visits comprise approximately 40 percent of all allowed charges under the PFS. The subset of Other E/M visits comprises approximately 20 percent of all allowed charges. Accordingly, our final policies for the Other E/M visits will have a significant impact on relative resource valuation under the PFS, which could potentially impact patient care more broadly. In this section of our proposed rule, we propose policies addressing coding and revaluation of Other E/M visits beginning for CY 2023. We also propose a technical correction to the placement of our regulation text for split (or shared) visits, and, as we further consider feedback from interested parties, we propose to delay implementation of our policy to define the substantive portion of a split (or shared) visit at § 415.140 based on the amount of time spent by the billing practitioner until January 1, 2024. Finally, we provide clarification and propose a technical correction regarding how time is reported for split (or shared) critical care visits. 2. Overview of Policy ProposalsWe are proposing to generally adopt the revised CPT E/M Guidelines for Other E/M visits, which are available online at www.ama-assn.org/cpt-evaluation-management. We propose to adopt the general CPT framework for Other E/M visits, such that practitioner time or MDM would be used to select the E/M visit level. This includes the listing of qualifying activities by the physician or NPP that count toward the time spent when time is used required to select the visit level. History and physical exam would be considered, as medically appropriate, and would no longer be used to select visit level. We would not adopt the general CPT rule [69] where a billable unit of time is considered to have been attained when the midpoint is passed (for example, we would not consider a service with a time descriptor of 30 minutes to have been satisfied if only 15 minutes of time had been spent furnishing that service). We similarly interpreted this rule for O/O E/M visits, when time is used to select visit level. For example, we required the full time within the CPT code descriptors to be met in order to select an O/O E/M visit level using time, rather than half of the descriptor time (84 FR 62848 through 62851). Also, we do not interpret the CPT E/M Guidelines as adopting this general CPT rule regarding the midpoint of time. We are proposing to adopt the revised CPT codes and descriptors for Other E/M visits, except where specified otherwise. Under our proposed policies, we would adopt the new CPT codes and descriptors for Other E/M visits except for prolonged services, for which we propose Medicare-specific coding. For administrative simplicity and payment accuracy purposes, and to enable us to determine how much time was spent with the patient using claims data, prolonged Other E/M services would be reported under one of three proposed G codes (one for each family for which prolonged services apply, namely inpatient/observation visits, nursing facility visits, and home or residence visits). This would be consistent with our previously finalized approach to prolonged O/O E/M services. We are proposing to adopt the CPT E/M Guidelines regarding MDM for E/M services. The CPT Editorial Panel revised the CPT E/M guidelines for levels of MDM, and we are proposing to adopt them as revised. In addition, as we note in the Medicare Claims Processing Manual ((pub 100-04) chapter 26, section 10.8), our longstanding taxonomy for PFS services will continue to apply, where, for payment purposes, physicians and NPPs are not classified as having the same specialty, and the PFS does not recognize subspecialties. However, we are continuing to consider whether we could better align this payment taxonomy with clinical practice, where we might consider NPPs as working in the same specialty as the physicians with whom they work, and/or recognize subspecialties. Regarding valuation of the Other E/M CPT codes, the RUC recommended direct work RVU comparisons for many Other E/M CPT codes to those currently assigned to O/O E/M CPT codes. In some cases, there were assumptions that patient needs were inherently more complex or work was more intense for E/M visits furnished in non-office settings (for example, inpatient, ED, and home settings) when compared to the office settings. This direct comparison to the O/O visit codes may not be appropriate or accurate, given that Start Printed Page 45988 practitioners furnishing visits in the office setting face particular uncertainties in their estimates of illness and treatment courses, and the office settings have fewer resources close at hand. For example, compared to fully-staffed institutional settings, office settings generally have smaller, ancillary staff complements (such as pharmacists, registered nurses, social workers, and other paraprofessionals) who provide specialized advice and services, spend time coordinating with other practitioners for review and evaluation of medical records and test results, educate patients, manage medications, and assess and help address social determinants of health. Additionally, those practicing in institutional settings generally have ready availability of diagnostic equipment (for example, imaging and other advanced services), allowing for more immediate access to clinical information and reducing the amount of time needed to manage a given case. This access is critical for positive health outcomes, to treat or prevent acute exacerbations of chronic conditions and timely manage patients to prevent deterioration and improve outcomes. The challenge of coordinating and gathering these types of care and information in the office setting may add additional time and complexity to the case management. Further, some of the Other E/M CPT code families are being merged into lower complexity settings, such as CPT codes for observation services migrating into the inpatient visit CPT codes. The values we established for the revised O/O E/M CPT codes in the CY 2021 PFS final rule were finalized in concert with a policy that would have provided separate payment for the new add-on code G2211. This add-on code describes the complexity inherent to E/M visits associated with primary care and other similar types of care (specifically, E/M visits associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient's single, serious condition or a complex condition, regardless of the specialty of the billing professional) (see 85 FR 84569 through 84572). Section 113 of the Consolidated Appropriations Act, 2021 delayed Medicare payment for G2211 until at least January 1, 2024 (see the following Fact Sheet available on our website at Physician Fee Schedule [70] (PFS) Payment for Office/Outpatient Evaluation and Management (E/M) Visits—Fact Sheet (cms.gov). To the extent we are proposing to adopt the RUC-recommended values for Other E/M visits beginning for CY 2023, we do not agree with the RUC that the current visit payment structure among and between care settings fully accounts for the complexity of certain kinds of visits, especially for those in the office setting, nor do they fully reflect appropriate relative values, since separate payment is not yet made for G2211. 3. Hospital Inpatient or Observation Care (CPT Codes 99218-99236)a. Coding Changes and Visit Selection for Hospital Inpatient or Observation Care ServicesThe CPT Editorial Panel deleted seven observation care codes and revised nine codes effective January 1, 2023, to create a single set of codes for inpatient and observation care. (Note that the CPT Editorial Panel also made changes to codes for inpatient and observation discharge, which will be discussed in section II.F.4. of this proposed rule.) The CPT Editorial Panel also changed the code descriptors to allow level of service to be based on total time or MDM, as well as updating documentation requirements. The CPT Editorial Panel deleted the six codes that were used to report observation care visits: three initial observation care codes, CPT codes 99218 (Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; a detailed or comprehensive examination; and 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 problem(s) requiring admission to outpatient hospital “observation status” are of low severity. Typically, 30 minutes are spent at the bedside and on the patient's hospital floor or unit), 99219 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; a comprehensive examination; and 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 problem(s) requiring admission to outpatient hospital “observation status” are of moderate severity. Typically, 50 minutes are spent at the bedside and on the patient's hospital floor or unit), and 99220 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; a comprehensive examination; and medical decision making of high 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 problem(s) requiring admission to outpatient hospital “observation status” are of high severity. Typically, 70 minutes are spent at the bedside and on the patient's hospital floor or unit); and three subsequent observation care codes, CPT codes 99224 ( Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: Problem focused interval history; 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), 99225 ( Subsequent observation 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 99226 ( Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of Start Printed Page 45989 these 3 key components: A detailed interval history; a detailed examination; medical decision making of high 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 unstable or has developed a significant complication or a significant new problem. Typically, 35 minutes are spent at the bedside and on the patient's hospital floor or unit ). The CPT Editorial Panel also revised the six hospital inpatient care codes. The revisions allow these codes to be reported for hospital inpatient or observation care services and allow the codes to be selected by the billing practitioner based on either MDM or time. In addition, the CPT Editorial Panel changed the name of the “Hospital Inpatient Care” code family to “Hospital and Observation Care,” and the new code family includes three initial hospital or observation care codes: CPT codes 99221 ( Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low-level medical decision-making. When using total time on the date of the encounter for code selection, 40 minutes must be met or exceeded), 99222 ( Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 55 minutes must be met or exceeded), and 99223 (Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making When using total time on the date of the encounter for code selection, 75 minutes must be met or exceeded); and three subsequent inpatient or observation care codes, CPT codes 99231 ( Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low level of medical decision making. When using total time on the date of the encounter for code selection, 25 minutes must be met or exceeded), 99232 ( Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 35 minutes must be met or exceeded), and 99233 ( Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 50 minutes must be met or exceeded). The CPT Editorial Panel also revised the three codes under “Observation or Inpatient Care Services (including Admission and Discharge)” (frequently referred to as “same-day discharge” codes). Billing practitioners could already use these codes to bill for patients in inpatient or observation status, but the CPT Editorial Panel revised the codes to allow the billing practitioner to select the code level based either on MDM or time. The same-day discharge codes were renamed as “Hospital Inpatient or Observation Care (Admission and Discharge)”: CPT codes 99234 ( Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, which requires a medically appropriate history and/or examination and straightforward or low level of medical decision making. When using total time on the date of the encounter for code selection, 45 minutes must be met or exceeded), 99235 ( Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 70 minutes must be met or exceeded), and 99236 ( Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 85 minutes must be met or exceeded). We propose to adopt the revised CPT codes 99221 through 99223 and 99231 through 99236. We highlight that the CPT code descriptors specify that, when selecting the code level based on time, the indicated increment of time must be “met or exceeded.” We propose that, when a physician or practitioner selects CPT codes 99221 through 99223 and 99231 through 99236 based on time, the number of minutes specified in the descriptor for the relevant CPT code must be “met or exceeded.” We note that we are not proposing to adopt the CPT Codebook instructions regarding the application of prolonged codes to CPT codes 99223, 99233, and 99236; refer to additional discussion under “Prolonged Codes for Hospital Inpatient or Observation Care” in this section. We also note that the descriptors for CPT codes 99221 through 99223 and 99231 through 99236 specify that the time counted toward the code is “per day.” We propose to adopt the 2023 CPT Codebook instruction that “per day,” also referred to as “date of encounter,” means the “calendar date.” (2023 CPT Codebook citation forthcoming.) We also propose to adopt the 2023 CPT Codebook instruction that when using MDM or time for code selection, a continuous service that spans the transition of 2 calendar dates is a single service and is reported on one date, which is the date the encounter begins. If the service is continuous before and through midnight, all the time may be applied to the reported date of the service, that is, the calendar date the encounter began. (2023 CPT Codebook citation forthcoming.) We note that nothing in this proposal is intended to conflict with our proposed retention of the “8 to 24 hour rule,” discussed in the next section. Finally, we propose to retain our policy that a billing practitioner shall bill only one of the hospital inpatient or observation care codes for an initial visit, a subsequent visit, or inpatient or observation care (including admission and discharge), as appropriate, once per calendar date. We propose that the practitioner would select a code that reflects all of the practitioner's services provided during the date of the service, as provided in the Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.B. We discuss additional policies relating to a single billing practitioner providing services to a single beneficiary on the same day in section II.F.3.d. of this proposed rule. b. Proposed “8 to 24 Hour Rule” for Hospital Inpatient or Observation CareWe propose to retain what is known as the “8 to 24-hour rule” regarding payment of discharge CPT codes 99238 ( Hospital inpatient or observation discharge day management; 30 minutes or less) and 99239 ( more than 30 minutes). (CPT codes 99238 and 99239 are discussed in further detail in section Start Printed Page 45990 II.F.4. of this proposed rule.) The “8 to 24 hour rule” is described in further detail in the Medicare Claims Processing Manual (IOM 100-04, Chapter 12, 30.6.8.B and 30.6.9.1.C.). As we discussed in the CY 2001 PFS final rule (65 FR 65376), the “8 to 24 hour rule” was designed to avoid unintended incentives to keep a patient in the hospital past midnight during a stay lasting less than 24 hours. When this policy was memorialized in the CY 2001 PFS final rule, it was applied to both the initial inpatient hospital care codes (CPT codes 99221 through 99223) and the initial observation care codes (CPT codes 99218 through 99220) which CPT has deleted for 2023. The policy we propose to retain is as follows:
We believe it remains necessary to retain our 8 to 24 hour policy to avoid overpayments or create incentives to unnecessarily extend beneficiaries' hospital stays past midnight. Hospital inpatient and observation care codes (CPT codes 99221 through 99223 and 99234 through 99239) are billed “per day,” and have been valued to account for all services a practitioner furnishes during the day-long billing period. In an environment such as a hospital, where admissions can occur 24 hours a day, relying solely on the calendar date of an admission or observation stay, to determine a billing day can be misleading, which is why we propose to retain the existing 8 to 24 hour policy. For example, Patient A was admitted by Physician A at 11:00 p.m. on April 1st and discharged at 6:00 a.m. on April 2nd. Patient B was admitted by Physician B at 8:00 a.m. on April 1st and discharged at 9:00 p.m. on April 2nd. Both Patient A and Patient B were in the hospital on the same two calendar dates (April 1 and April 2), but Patient A's stay was only 7 hours and Patient B's stay was 25 hours. Allowing both Physician A and Physician B to bill similarly (that is, both an initial hospital visit for April 1 and a discharge day management code for April 2nd) would be inappropriate. Both initial hospital visits and discharge day management codes are billed “per day” (and are valued as being “per day”). Allowing a physician to bill for two “per day” services, delivered to the same patient in the same setting in less than an 8-hour period results in duplicative payment. This also may create an incentive for patients to be kept in the hospital past midnight, just to get to a second calendar date in which a practitioner is able to bill for two services rather than one. We also note that CPT codes 99234, 99235, and 99236 are valued to include physician time spent admitting, caring for, and discharging the patient. These codes are billed for stays longer than 8 hours to acknowledge the increased resources inherent to caring for a patient during a longer hospital stay. For another illustration of why relying solely on the calendar date of admission to determine the billing date is misguided, Patient A is admitted at 11 a.m. on April 1st and discharged at 11 p.m. on April 1st. Patient B is admitted at 11 p.m. on April 1st and discharged at 11 a.m. on April 2nd. Both patients are in the hospital for 12 hours. The practitioner treating Patient A would bill for a same-day discharge service, CPT code 99234 through 99236. It would not be appropriate to allow the practitioner treating Patient B to bill separately for an initial visit (CPT codes 99221 through 99223) and a separate discharge day management service (CPT codes 99238 or 99239) simply because Patient B's visit happened to span two calendar days and Patient A's did not. Under the proposed 8 to 24-hour rule, the practitioner treating Patient B would also bill for a same-day discharge service, CPT code 99234 through 99236. We believe that by tying billing to the length of hospital stay rather than the calendar date, the 8 to 24-hour rule avoids confusion and the potential for overpayment of multiple E/M visits improperly billed for the same period of service. c. Proposed Definition of Initial and Subsequent Hospital Inpatient or Observation VisitAccording to the 2023 CPT Codebook (citation forthcoming), an “initial” service may be reported when “the patient has not received any professional services from the physician or other qualified health care professional or another physician or other qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice during the stay. When advanced practice nurses and physician assistants are working with physicians they are in the exact same specialty and subspecialty as the physician.” The revised CPT codes 99231 through 99233 describe subsequent hospital inpatient or observation care services similarly. According to the 2023 CPT Codebook (citation forthcoming), a “subsequent” service is reported when the patient has received any professional services from the physician or other qualified health care professional or another physician or other qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice during the stay. As we do not recognize subspecialties, we propose slightly amended definitions of “initial” and “subsequent” service:
These are the same definitions that we propose for “initial” and “subsequent” in the context of nursing facility visits below. We are also proposing that for both initial and subsequent visits, when advanced practice nurses and physician assistants are working with physicians, they are always classified in a different specialty than the physician (see section II.F.2. of this proposed rule). Start Printed Page 45991 d. Transitions Between Settings of Care and Multiple Same-Day Visits for Hospital Patients Furnished by a Single PractitionerWe propose to retain our current policy that for the purposes of reporting an initial hospital inpatient or observation care service, a transition from observation status to inpatient status does not constitute a new stay. (Refer to Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.8.D.) For instance, if a practitioner places a beneficiary in observation status on one date of service (and bills an initial observation visit to be described under CPT code 99221 through 99223), and then determines later in the stay that the beneficiary should be admitted to the hospital as an inpatient, the practitioner would not bill a second initial visit for the hospital inpatient stay. Rather, the practitioner would bill the work done on the inpatient admission day as a subsequent visit (CPT codes 99231, 99232, or 99233). This policy aligns with language in the 2023 CPT Codebook instructions (citation forthcoming.) We also propose to retain our policy that if a patient is seen in a physician's office on one date and receives care at a hospital (for inpatient or observation care) on the next date from the same physician, both visits are payable to that physician, even if less than 24 hours has elapsed between the visit and the hospital inpatient or observation care. (Refer to Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.1.B.) We also propose, however, to retain our current policy that when a patient is admitted to outpatient observation or as a hospital inpatient via another site of service (such as, hospital ED, physician's office, nursing facility), all services provided by the physician in conjunction with that admission are considered part of the initial hospital inpatient or observation care when performed on the same date as the admission. (Refer to the Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.1.A.) This policy differs somewhat from the instructions provided in the 2023 CPT Codebook (citation forthcoming.) We believe it is important to retain both policies, as they promote appropriate payment in situations in which the beneficiary visits the practitioner in a non-hospital setting before the practitioner determines that hospital admission is necessary. The codes for initial hospital inpatient or observation visits (CPT codes 99221 through 99223) are billed “per day” and include all work furnished by the practitioner on the day of admission. The initial hospital inpatient and observation care codes do not include work furnished by the practitioner prior to the date of admission. Thus, under our proposal, for example, if a practitioner sees a beneficiary in an office setting at 5 p.m. on April 1st and the practitioner then oversees the beneficiary's admission to the hospital at 7 a.m. on April 2nd, these would be separately billable payments because initial hospital inpatient or observation care codes (CPT code 99221 through 99223) billed for April 2nd would not retroactively cover the work furnished on April 1st. However, if the practitioner sees the beneficiary in the office setting at 7 a.m. on April 1st and then oversees the beneficiary's admission at 9 p.m. on April 1st, all time the practitioner spent furnishing services to that beneficiary would be reportable under the initial hospital inpatient or observation care code (CPT code 99221 through 99223). We also propose to retain our current billing policy in the Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.1.A. that a physician may bill only for an initial hospital or observation care service if the physician sees a patient in the ED and decides to either place the patient in observation status or admit the patient as a hospital inpatient. For discussion of additional policy proposals regarding patients seen in both the ED and the hospital, refer to the next section, “Emergency Department Services.” We propose to preserve our current billing policies for patients in swing beds, which are as follows: If the inpatient care is being billed by the hospital as inpatient hospital care, the hospital care codes (CPT codes 99221 through 99223 and 99231 through 99239) apply. (Refer to Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.D.) If the inpatient care is being billed by the hospital as nursing facility care, then the nursing facility codes (CPT codes 99304 through 99316) apply. Refer to the section below on Nursing Facility Care Services for additional discussion of billing hospital inpatient or observation care and nursing facility care. e. Impact of Changes to Hospital Inpatient or Observation Codes on Billing and Claims Processing PoliciesWe propose that starting in CY 2023, hospital inpatient and observation care by physicians will be billed using the same CPT codes, CPT codes 99221 through 99223, 99231 through 99233, and 99238 and 99239. (We note that currently, both hospital inpatient and observation care are already billed under CPT codes 99234 through 99236 for same-day discharge.) Therefore, though the current observation care codes (CPT codes 99218 through 99220 and 99224 through 99226) are being deleted, practitioners will still be able to furnish and bill for observation services. We solicit feedback from the public on potential challenges to billing or claims processing policies for hospital inpatient or observation care as reflected in the Medicare Claims Processing Manual (Medicare Claims Processing Manual, IOM 100-04, Chapter 12), including possible impact on: billing for patients during a global period (Medicare Claims Processing Manual, IOM 100-04, Chapter 12, Sections 30.6.8.E and 30.6.9.2.A.); documentation requirements (Medicare Claims Processing Manual, IOM 100-04, Chapter 12, Sections 30.6.8.C and 30.6.9.1.D.); modifiers associated with hospital inpatient or observation care claims (Medicare Claims Processing Manual, IOM 100-04, Chapter 12, Section 30.6.9.1.F); and any other issues not otherwise discussed in this proposed rule that may need to be addressed through additional guidance. f. Prolonged Services for Hospital Inpatient or Observation CareAs part of its E/M revisions, the CPT Editorial Panel made several changes to prolonged codes that previously could be billed with inpatient or observation codes. In February 2021, the CPT Editorial Panel deleted Prolonged Service with Direct Patient Contact (Except with Office or Other Outpatient Services), including CPT code 99356 ( Prolonged service in the inpatient or observation setting, requiring unit/floor time beyond the usual service; first hour; List separately in addition to code for inpatient or observation Evaluation and Management service) and CPT code 99357 ( each additional 30 minutes), effective January 1, 2023. Prior CPT Codebook instructions indicated that CPT codes 99356 and 99357 could be applied to hospital inpatient or observation care (CPT codes 99218 through 99236). (Refer, for example, to instructions on pages 41-42 of the 2022 CPT Codebook.) To replace deleted CPT codes 99356 and 99357, the CPT Editorial Panel created CPT code 993X0 ( Prolonged inpatient or observation evaluation and management service(s) time with or without direct patient contact beyond the required time of the primary service when the primary service level has been selected using total time, each 15 minutes of total time.) (List separately in addition to the code of the inpatient and Start Printed Page 45992 observation Evaluation and Management services ). Additional guidance from the 2023 CPT Codebook states, “Code 993X0 is used to report prolonged total time (that is, combined time with and without direct patient contact) provided by the physician or other qualified health care professional on the date of an inpatient service (that is, 99223, 99233, 99236, 99255, 99306, 99310). Prolonged total time is time that is 15 minutes beyond the time required to report the highest-level primary service.” (2023 CPT Codebook citation forthcoming.) We do not propose to adopt CPT code 993X0, as we believe that the billing instructions for CPT code 993X0 will lead to administrative complexity, potentially duplicative payments, and limit our ability to determine how much time was spent with the patient using claims data; these reasons are discussed in further detail below. We are instead proposing to create a single G-code that describes a prolonged service, and that applies to CPT codes 99223, 99233, and 99236. This G-code would be GXXX1: • GXXX1 Prolonged hospital inpatient or observation care evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99223, 99233, and 99236 for hospital inpatient or observation care evaluation and management services). (Do not report GXXX1 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 993X0, 99415, 99416). (Do not report GXXX1 for any time unit less than 15 minutes). We are proposing that the GXXX1 prolonged code can only be applied to the highest-level hospital inpatient or observation care visit codes (CPT codes 99223, 99233, and 99236), and can only be used when selecting the E/M visit level based on time. In other words, we propose that a prolonged code would only be applied once the greatest amount of time for initial, subsequent, or same-day discharge visits has been exceeded. We note that this proposed policy mirrors the policy the CPT Editorial Panel will apply to CPT code 993X0 (although we are not proposing to use CPT code 993X0). We are proposing to use GXXX1 instead of CPT code 993X0 because we disagree with the CPT instructions regarding the point in time at which the prolonged code should apply. According to the 2023 CPT Codebook, CPT code 993X0, which represents a 15-minute interval, would apply to: CPT code 99223 when a practitioner reaches 90 minutes; CPT code 99233 when 65 minutes is reached; and CPT code 99236 when 100 minutes is reached. Each of these times represent only 15 minutes more than the codes' descriptor times. We disagree with this instruction, and we believe that a prolonged code is only applicable after both the total time described in the base E/M code descriptor is complete and the full 15-minutes described by the prolonged code are complete as well. We do not believe that the CPT instructions for CPT code 993X0 align with our payment policy. Additionally, we note that CPT code 99236, per the RUC-recommended times, includes not only 85 minutes of intraservice time (performed on the date of encounter) but an additional 12 minutes of post-service time. The RUC based this recommendation on a survey timeframe which was within 3 days of the date of encounter. We are concerned that the CPT instructions for CPT code 993X0, as it applies to CPT code 99236, would result in duplicative payment, since the 12-minute post-service time was factored into the proposed valuation of CPT code 99236. It would be inappropriate to pay for a prolonged code based on post-service time that is already accounted for in the base code. We believe that the instruction for when to apply CPT code 993X0 to base code CPT code 99236 does not accurately account for this post-service time. We propose that the prolonged service period described by GXXX1 can begin 15 minutes after the total times (as established in the Physician Time File) for CPT codes 99223, 99233, and 99236 have been met. Additionally, we propose that the proposed GXXX1 prolonged code would be for a 15-minute increment, and the entire 15-minute increment must be completed in order to bill GXXX1. Note that for administrative simplicity, we propose to round the time when the prolonged service period begins to the nearest 5 minutes. For the times below, CPT code 99223, which has a RUC-proposed total time of 74 minutes, would be treated as though it has 75 total minutes. CPT code 99233, which has a RUC-proposed total time of 52 minutes, would be treated as though it has 50 total minutes; and CPT code 99236, which has a RUC-proposed total time of 97 minutes will be treated as though it has 95 total minutes. The rounding here is solely for the purpose of calculating a proposed prolonged period, and would not affect the total times for these CPT codes in the Time File. Thus, a practitioner could bill GXXX1 for base code CPT code 99223 when 105 minutes is reached for an initial visit on the date of encounter. For the purposes of applying the proposed prolonged code, the CPT code 99223 total time is rounded to 75 minutes on the date of encounter. The prolonged service period would begin at 90 minutes, 15 minutes beyond 75 minutes. A practitioner would bill GXXX1 once the 15-minute increment for GXXX1 is completed, at minute 105. A practitioner could bill GXXX1 for the base code CPT code 99233 when 80 minutes is reached for a subsequent visit on the date of encounter. For the purposes of applying the prolonged code, the CPT code 99233 total time is rounded to 50 minutes on the date of encounter. The prolonged service period would begin at 65 minutes, 15 minutes beyond 50 minutes. A practitioner would bill GXXX1 once the 15-mimute increment for GXXX1 is completed, at minute 80. A practitioner could bill GXXX1 for base code CPT code 99236 at 125 minutes for same-day discharge. For the purposes of applying the prolonged code, the CPT code 99236 total time is rounded to 95 minutes completed within 3 calendar days of the encounter. The prolonged service period would begin at 110 minutes, 15 minutes beyond 95 minutes. A practitioner could bill GXXX1 once the 15-minute increment for GXXX1 is completed, at minute 125. Refer to summary Table 18 in the section “Prolonged Services Valuation” (section II.F.11.e. of this proposed rule) for a chart showing the proposed billing timeframe for GXXX1. We are also proposing that the proposed GXXX1 would apply to both face-to-face and non-face-to-face time spent on the patient's care within the survey timeframe. For CPT codes 99223 and 99233, this would be time spent on the date of encounter. For CPT code 99236, this would be time spent within 3 calendar days of the encounter. Because we are proposing that prolonged services without direct patient contact would be reportable under GXXX1, we are also proposing that CPT codes 99358 ( Prolonged evaluation and management services before and/or after direct patient care, first hour) and 99359 ( each additional 30 minutes) cannot be billed for base codes CPT codes 99221 through 99223 and 99231 through 99236. Direct patient care, as currently described by CPT codes 99358 and 99359, will be reportable under GXXX1. Allowing both GXXX1 and CPT codes 99358 and 99359 would cause confusion and invite Start Printed Page 45993 duplicative billing for prolonged direct patient care. This is consistent with our final policy for O/O E/M visits, which requires the use of prolonged 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) for prolonged O/O E/M services. We continue to be concerned about program integrity, duplicative payments for time counted in both E/M base codes and prolonged E/M services codes, the administrative complexity of having multiple prolonged service codes, and our ability to tell how much time was spent with the patient using claims data (see our previous discussion of these issues in our CY 2020 PFS final rule at 84 FR 62849 through 62850). If we proposed to adopt the CPT codes for prolonged inpatient and observation E/M visits, we would not be able to identify the time spent with patients in the claims data alone, because we might not know which primary service is the companion code to the prolonged service code(s) due to the wide service timespan (for prolonged services without direct patient contact) and non-specific care settings within the prolonged CPT code descriptors. g. Valuation of Hospital Inpatient or Observation Care ServicesThe revised hospital inpatient or observation care codes (CPT codes 99221 through 99223 and 99231 through 99236) were surveyed for the October 2021 RUC meeting. The survey times captured the total time on the date of encounter by calendar date. In October 2021, the RUC referred these services to be resurveyed because the survey did not include a request for distinct time before and after floor/unit time, and therefore could not be compared to previous RUC surveys of these services. The RUC reviewed the resurveyed inpatient and observation services for the January 2022 RUC meeting. We propose to accept the RUC recommendations for work RVUs and times for CPT codes 99221 (work RVU 1.63, intraservice time 40 minutes, total time 40 minutes); 99222 (work RVU 2.60, intraservice time 55 minutes, total time 55 minutes); 99223 (work RVU of 3.50, intraservice time 74 minutes, total time 74 minutes); 99231 (work RVU 1.00, intraservice time 25 minutes, total time 25 minutes), 99232 (work RVU 1.59, intraservice time 36 minutes, total time 36 minutes); 99233 (work RVU 2.40, intraservice time 52 minutes, total time 52 minutes); 99234 (work RVU 2.00, intraservice time 45 minutes, total time 50 minutes); 99235 (work RVU 3.24, intraservice time 68 minutes, total time 76 minutes); and 99236 (work RVU 4.30, intraservice time 85 minutes, total time 97 minutes). There are no PE inputs for these codes. 4. Hospital or Observation Discharge Day Management (CPT Codes 99217, 99238 and 99239)a. Coding Changes to Hospital Inpatient or Observation Discharge Day Management ServicesEffective January 1, 2023, the CPT Editorial Panel deleted the observation discharge code, CPT code 99217 ( Observation care discharge day management) and revised the two hospital discharge day management codes, CPT codes 99238 ( Hospital inpatient or observation discharge day management; 30 minutes or less) and CPT code 99239 ( more than 30 minutes) so that CPT codes 99238 and 99239 may be billable for discharge of hospital inpatient or observation patients. We propose to adopt the revised CPT codes 99238 and 99239. We also propose to retain our current hospital inpatient policy outlined in the Medicare Claims Processing Manual, Chapter 12, 30.6.9.2.A and 30.6.9.2.E, and expand it to include observation care. Specifically, we are proposing that CPT codes 99238 and 99239 are to be billed by the practitioner who is personally responsible for discharge service (or, in the case of the death of the patient, the physician who personally performs the death pronouncement); services furnished by other practitioners, including: instructions to the patient, communication with the family/caregiver, and coordination of post discharge services would be reported as subsequent hospital inpatient or observation care with CPT codes 99231, 99232, and 99233. (Refer to the Medicare Claims Processing Manual, IOM 100-04, Chapter 12, Manual, IOM 100-04, Chapter 12, 30.6.9.2.A and 30.6.9.2.E.) This policy aligns with instructions in the 2023 CPT Codebook (citation forthcoming). We propose to retain our related policy that the same physician may not bill a hospital discharge CPT code 99238 or 99239 on the same day as a subsequent visit CPT codes 99231 through 99233. (Refer to Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.2.C.) b. Prolonged Services and Hospital Inpatient or Observation Discharge Day ManagementAs we discussed in section II.F.3. of this proposed rule, as part of its E/M revisions, effective January 1, 2023, the CPT Editorial Panel deleted CPT code 99356 ( Prolonged service in the inpatient or observation setting, requiring unit/floor time beyond the usual service; first hour) and CPT code 99357 ( each additional 30 minutes) and replaced them with CPT code 993X0 ( Prolonged inpatient or observation evaluation and management service(s) time with or without direct patient contact beyond the required time of the primary service when the primary service level has been selected using total time, each 15 minutes of total time). CPT codes 99356 and 99357 were not previously billable with discharge day management CPT codes 99238 or 99239. (Refer to, for example, instructions on pages 41-42 of the 2022 CPT Codebook.) Additionally, according to 2023 CPT Codebook instructions, the CPT code 993X0 is not billable with CPT codes 99238 and 99239. (2023 CPT Codebook citation forthcoming.) We propose that a practitioner would not be able to bill prolonged services for hospital discharge (CPT code 99238 or 99239). This means that CPT codes 993X0, 99358 ( Prolonged evaluation and management services before and/or after direct patient care, first hour) and 99359 ( each additional 30 minutes), and the proposed GXXX1 code (discussed in section II.F.3. of this proposed rule) would not be payable where the discharge day management code is CPT codes 99238 or 99239. We believe the code descriptors for CPT codes 99238 and 99239 do not allow for additional payment of prolonged services. The descriptor for CPT code 99238 provides for hospital discharge day management, “30 minutes or less.” If a practitioner spends more than 30 minutes on a hospital discharge service for a patient, the practitioner would be able to bill CPT code 99239, which is defined in the code descriptor as “30 minutes or more.” Thus, a prolonged code (including CPT codes 993X0, 99358, 99359, and our proposed GXXX1) would not be appropriate for CPT code 99238, because CPT code 99239 accounts for services that exceed 30 minutes. The descriptor for CPT code 99239 states that the code is for “30 minutes or more” of hospital discharge day management services. When the RUC surveyed this code, the surveyed timeframe was within 3 calendar days of the encounter. In other words, the Start Printed Page 45994 descriptor time is 30 minutes or more, completed within 3 calendar days of the encounter. Neither the descriptor nor the CPT billing instructions provide an upper limit on how many minutes can be reported within the 3-day timeframe for CPT code 99239. All face-to-face and non-face-to-face activities performed by the practitioner during the date of encounter and within 3 calendar days from the date of encounter may be counted toward CPT code 99239, as applicable. Prolonged codes CPT codes 993X0, 99358, 99359 and our proposed GXXX1 code are intended to pay for time not included in the base E/M codes during the surveyed timeframe; as it appears that CPT code 99239 already includes all services furnished during the surveyed timeframe, we do not believe it is appropriate to allow any prolonged codes to be billed with CPT code 99239 as a base code. c. Valuation of Hospital Inpatient or Observation Discharge Day ManagementThe revised discharge day management codes (CPT codes 99238 through 99239) were surveyed for the January 2022 RUC meeting. We propose to accept the RUC recommendations for CPT codes 99238 (work RVU 1.50, intraservice time 28 minutes, total time 38 minutes); and 99239 (work RVU 2.15, intraservice time 45 minutes, 64 minutes total time). We are proposing the RUC-recommended direct PE inputs for CPT codes 99238 and 99239 without refinement. 5. Emergency Department Visits (CPT Codes 99281-99285)a. CodingWe have revalued the ED visit codes under the PFS four times: in 1997, 2007, 2020, and most recently in 2021 as part of the update for O/O E/M visits. In the past, consistent with AMA RUC recommendations, we revalued these services such that the values of levels 1 through 3 of the ED visits were equal to levels 1 through 3 new patient O/O E/M visits, and the levels 4 and 5 ED visits were valued higher than the levels 4 and 5 new patient O/O E/M visits to reflect higher typical intensity. In addition, in the CY 2018 PFS final rule (82 FR 53018), we finalized a proposal to nominate all five ED visit codes as potentially misvalued, based on information suggesting that the work RVUs for ED visits may not appropriately reflect the full resources involved in furnishing these services. Specifically, some impacted parties expressed concerns that the work RVUs for these services have been undervalued given the increased acuity of the patient population and the heterogeneity of the sites, such as freestanding and off-campus EDs, where ED visits are furnished. Accordingly, the RUC resurveyed and reviewed these five codes for the April 2018 RUC meeting, and provided a recommendation to CMS for consideration in CY 2020 rulemaking. In the CY 2020 PFS final rule (84 FR 62796), we finalized the RUC-recommended increases to the work RVUs of 0.48 for CPT code 99281, a work RVU of 0.93 for CPT code 99282, a work RVU of 1.42 for 99283, a work RVU of 2.60 for 99284, and a work RVU of 3.80 for CPT code 99285. The RUC did not recommend, and we did not finalize, any change in direct PE inputs for the codes in this family. We note that the RUC submitted these recommended values to CMS prior to the submission of the RUC-recommended revaluation of the O/O E/M visit code family. In response to our finalizing of the RUC-recommended values for the ED visits, and to our comment solicitation in the CY 2020 PFS proposed rule regarding whether we should revalue certain services commensurate with increases to the O/O E/M visits (84 FR 62859 through 62860), a commenter submitted a public comment stating that relativity between the ED visits and O/O E/M visits should be maintained, and submitted a specific recommendation for CPT codes 99283-99285 that was higher than the RUC-recommended values. The commenter stated we should preserve the relationship between the ED and O/O E/M visit code sets that was established in prior years and that they believe would have likely been maintained had the O/O E/M visits been reviewed prior to the ED visits. In order to avoid the rank order anomaly whereby an ED visit would be valued lower than the analogous O/O E/M visit, we proposed and eventually finalized the values recommended by this commenter in the CY 2021 PFS final rule (85 FR 84562). This final policy increased the work RVU from 1.42 to 1.60 for CPT code 99283, from 2.60 to 2.74 for CPT code 99284, and from 3.80 to 4.00 for CPT code 99285. Following the implementation of the revisions to the O/O E/M visits for the CPT 2021 code set, the CPT/RUC Workgroup on E/M standardized the rest of the E/M sections in the CPT code set. In February 2021, the CPT Editorial Panel revised the five ED visit codes to align with the principles included in the E/M office visit services by documenting and selecting level of service based on medical decision making, effective January 1, 2023. The descriptor for CPT code 99281 was revised such that the code may not require the presence of a physician or other qualified health care professional. The CPT Editorial Panel also revised the MDM level in the descriptor for CPT code 99282 from “low” to “straightforward” complexity, and from “moderate” to “low” complexity for CPT code 99283. These five codes were resurveyed and reviewed at the April 2021 RUC meeting with recommendations submitted to CMS for the CY 2023 PFS rulemaking cycle. b. Sites of Service and Multiple Same-Day E/M Visits for Emergency Department PatientsAs we discussed in the previous section (Hospital Inpatient or Observation Care (CPT codes 99218-99236)) the CPT Editorial Panel has revised CPT codes 99221 through 99223 to include both inpatient hospital and observation care services. (Note our proposal in that section regarding billing policy for transitions between ED and hospital inpatient or observation care.) We also propose to modify our policy regarding when to bill ED codes CPT codes or hospital inpatient care (CPT codes 99221 through 99223), as further described in the Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.11.E., to clarify that these policies apply to observation care billed under CPT codes 99221 through 99223 as well. We are proposing that if a physician advises their own patient to go to an ED of a hospital for inpatient care or observation and the physician subsequently is asked by the ED physician to come to the hospital to evaluate the patient and to advise the ED physician as to whether the patient should be admitted to the hospital, placed in observation status, or sent home, the physicians should bill as follows:
• If the ED physician, based on the advice of the patient's personal physician who came to the ED to see the patient, sends the patient home, then the ED physician shall bill the Start Printed Page 45995 appropriate level of ED service. The patient's personal physician shall also bill the level of ED code that describes the service they provided in the ED. If the patient's personal physician does not come to the hospital to see the patient, but only advises the ED physician by telephone, then the patient's personal physician may not bill the ED codes. Similarly, we propose that if the ED physician requests that another physician evaluate a given patient, the other physician should bill an ED visit code. We are also proposing that if the patient is admitted by the second physician performing the evaluation, that physician shall bill an initial hospital inpatient or observation care code (CPT codes 99221 through 99223, as appropriate), and not an ED visit code. This policy appears in the Medicare Claims Processing Manual, (Pub. 100-04) Chapter 12, 30.6.11.F., and we are clarifying that this policy applies to both hospital inpatient and observation care billed under CPT codes 99221 through 99223. Finally, we note that the 2023 CPT Codebook provides instructions that critical care and ED services may be billed on the same day under certain circumstances. We refer readers to the CY 2022 PFS final rule (86 FR 65163), where we finalized our policy that critical care and ED visits may be billed on the same day if performed by the same physician, or by physicians in the same group and specialty if there is documentation 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, and that practitioners may bill for both services. Practitioners must use modifier -25 on the claim when reporting these critical care services. This policy is also in the Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.12.6. Refer to the next section, “Nursing Facility Services” for discussion of policies regarding patients seen in the ED and the nursing facility on the same day. c. ValuationWe are proposing the RUC-recommended work RVU for four of the five codes in the ED Visits family. We are proposing a work RVU of 0.25 for CPT code 99281 ( Emergency department visit for the evaluation and management of a patient, that may not require the presence of a physician or other qualified health care professional), a work RVU of 0.93 for CPT code 99282 ( Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward medical decision making), a work RVU of 1.60 for CPT code 99283 ( Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and low level of medical decision making), and a work RVU of 4.00 for CPT code 99285 ( Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making). We disagree with the RUC-recommended work RVU of 2.60 for CPT code 99284 ( Emergency department visit for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making) and we are proposing to maintain the current work RVU of 2.74. The survey conducted for CPT code 99284 maintained unchanged a work time of 40 minutes, and the level of medical decision making in the code's descriptor also remains unchanged at “moderate” complexity. Therefore, we continue to believe that the levels 4 and 5 ED visits are more accurately valued higher than the levels 4 and 5 new patient O/O E/M visits to reflect their higher typical intensity. This has been the historic relationship between these codes, and we previously finalized a proposal in the CY 2021 PFS final rule, increasing the work RVU from 2.60 to 2.74 for CPT code 99284. Given that there has been no change in the surveyed work time or level of MDM for this service, we continue to believe that the work RVU of 2.74 that we finalized in the CY 2021 rule cycle remains the most accurate valuation for CPT code 99284 (85 FR 84562). The RUC did not recommend and we are not proposing any direct PE inputs for these five ED visit codes. d. Prolonged ServicesWe are proposing that the prolonged services described by HCPCS codes GXXX1-GXXX3 would not be reportable in conjunction with ED visit codes, because the ED visit codes are not reported based on the amount of time spent with the patient. This proposal is reflected in summary Table 18 in section II.F.11.e. of this proposed rule. 6. Nursing Facility Visits (CPT Codes 99304-99318)a. Coding OverviewThe codes in the Nursing Facility (NF) services family are used to report E/M services primarily to patients in nursing facilities and skilled nursing facilities. Following the implementation of the revisions to the O/O E/M visits (CPT codes 99201 through 99215) for the CPT 2021 code set, the CPT/RUC Workgroup on E/M met to standardize the rest of the E/M sections in the CPT code set. We have received valuation recommendations from the AMA RUC for the Nursing Facility Visit codes (CPT codes 99304 through 99318) following completion of its survey and revaluation process for these codes. In April 2021, the RUC provided us the results of its review, and recommendations for work RVUs, practice expense inputs, and physician time (number of minutes) for the revised Nursing Facility Visits E/M code set. Therefore, we are proposing changes in coding and values for the revised Nursing Facility Visits E/M code set. This code set is effective beginning in CY 2023, and the proposed values, if finalized, would go into effect with those codes as of January 1, 2023. In February 2021, the CPT Editorial Panel deleted CPT code 99318, the annual nursing facility assessment code and revised the remaining nursing facility code to better align with the principles included in the E/M office visit services by documenting and selecting level of service based on total time or MDM. The remaining codes, initial and subsequent daily visits and nursing facility discharge day management codes were revised. Similar to what was done for the office visit codes, for CY 2023, we are proposing when total time on the date of encounter is used to select the appropriate level of a nursing facility visit service code, both the face-to-face and non-face-to-face time personally spent by the physician (or other qualified health care professional that is reporting the office visit) assessing and managing the patient are summed to select the appropriate code to bill. Additionally, the codes have new descriptor times, assigned for when time is used to select visit level. (We note that we are not adopting the CPT Codebook instructions regarding the application of prolonged codes to CPT codes 99306 and 99310; see additional discussion under the subsection “Prolonged Codes for NF Care” in this section.) Initial nursing facility care (CPT codes 99304 through 99306) may be used once per admission, per practitioner, regardless of the length of Start Printed Page 45996 stay in the SNF/NF. (2023 CPT Codebook citation forthcoming.) These nursing facility visits are noted by the RUC to be typically performed in the skilled nursing facility which requires a higher level of care than the nursing facility. The survey time captured includes pre-service time 1 day before the date of encounter, intra-service time is all the time on the date of encounter, and post-service time is 3 days after the date of encounter. The RUC's recommendations for this code family are consistent with the 25th percentile of the survey results and is based on a comparison of the survey codes with the selected the O/O CPT codes as a crosswalk to the key reference services. While we have thoroughly reviewed the times and descriptors for all the codes in this family, and we are proposing to accept the RUC recommendations as explained below, we would like to note our concerns regarding instances of inconsistencies and errors where the time described in certain CPT code descriptors does not correctly relate to the time that would be used to select visit level for the Nursing Facility visit, for example CPT code 99306 and 99310 have the same times noted in the descriptors where one is an initial visit and one is a subsequent visit. In general, the specialty societies and the RUC have advocated for increasing the work RVUs for the Nursing Facility visits, as compared to their previous values, regardless of some of the survey times, on the basis that values for these Nursing Facility visit codes should be valued the same as the values for the comparable O/O E/M visits. We considered the survey results, especially reductions in pre, intra, and post service time and note that the comparison to O/O E/M visits is not accurate. These code families are incomparable for a few reasons, including, but not limited to: (1) the two families have a different number/stratification of levels for the visits, thus a one-to-one crosswalk is not possible; (2) times in the code descriptors detailing the typical time spent at the patient's bedside or hospital unit vary significantly; and (3) the patient populations differ substantially when considering typical patients who require nursing facility services versus those in the general beneficiary community. Additional reasons are laid out in our overview section above. We do not believe that a comparison of these two code families can technically be made on a code-by-code basis. However, given the recent changes to the O/O E/M visit values that we finalized in the CY 2020 PFS final rule (84 FR 62846), and our interest in maintaining continuity in the overall code set, we are proposing to accept the RUC recommendations for the work time values and work RVUs for these Nursing Facility visit codes and are seeking public comment on our concerns for some of the codes as noted below in this section. We are proposing to adopt a number of billing policies reflected in our current Medicare Claims Processing Manual, Chapter 12, section 30.6.13:
A practitioner who bills an initial NF visit (CPT codes 99304 through 99306) for the initial comprehensive assessment required under § 483.30(c)(4) may bill subsequent NF visits (CPT codes 99307 through 99310), if the practitioner furnishes medically necessary face-to-face and non-face-to-face care that meets the requirements in the NF services code descriptors (CPT codes 99307 through 99310) to the beneficiary prior to the completion of the initial comprehensive assessment required under § 483.30. We are proposing to allow for an initial or subsequent NF visit to be furnished and billed by the appropriate practitioner (physician, physician assistant, nurse practitioner, or clinical nurse specialist as specified in § 483.30 for the type of visit furnished) regardless of whether the initial comprehensive assessment was performed.
We note that the Medicare Claims Processing Manual also states that ED visits provided on the same day as a comprehensive nursing facility assessment are not paid, regardless of whether the ED and nursing facility visits are by the same or different practitioners. We are proposing to retain this policy as well. We note that the 2023 CPT Codebook does not limit the number of visits that can be billed (citation forthcoming.) We are proposing that more than one ED and nursing facility visit could not be billed if both visits are furnished by the same practitioner on the same date of service.
b. ValuationFor CPT codes 99304 through 99310, we are proposing to adopt the RUC-recommended work RVUs for all of the nursing facility codes given the new times surveyed by the RUC and specialty societies. Specifically, we are proposing a work RVU of 1.50 for CPT code 99304 ( Initial nursing facility care, per day, for the evaluation and management of a patient, which Start Printed Page 45997 requires a medically appropriate history and/or examination and straightforward or low level of medical decision making. When using total time on the date of the encounter for code selection, 25 minutes must be met or exceeded. ), a work RVU of 2.50 for CPT code 99305 ( Initial nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 35 minutes must be met or exceeded.), a work RVU of 3.50 for CPT code 99306 ( Initial nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 45 minutes must be met or exceeded.), a work RVU of 0.70 for CPT code 99307 ( Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward medical decision making. When using total time on the date of the encounter for code selection, 10 minutes must be met or exceeded.), a work RVU of 1.30 for CPT code 99308 ( Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and low level of medical decision making. When using total time on the date of the encounter for code selection, 15 minutes must be met or exceeded.), a work RVU of 1.92 for CPT code 99309 ( Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 30 minutes must be met or exceeded.), and a work RVU of 2.80 for CPT code 99310 ( Subsequent nursing facility care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 45 minutes must be met or exceeded.). We are proposing the RUC-recommended direct PE inputs for all the codes in the family, CPT codes 99305 through 99310. While we are proposing to accept the RUC recommendations for CPT code 99306, we considered maintaining the current work RVU of 3.06, since there was no change in the overall time. To support their recommendation, the RUC cited the survey key reference service, CPT code 99205 ( Office or other outpatient visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using time for code selection, 60-74 minutes of total time is spent on the date of the encounter), which has a much higher time noted in the descriptor and does not seem to be a valid comparison or support the increase in value to the RUC survey 25th percentile. There was no change in time for this service, and the code the RUC used for comparison has a higher total time. Therefore, we request comment on the accuracy of the time noted in the descriptor for CPT code 99306. We note that it is not clear to us why CPT code 99306 would have the same descriptor time and medical decision making as CPT code 99310, which is a subsequent visit, thus appearing like they are the same service. We are seeking clarification, especially with regard to the vast similarities of these two descriptors noted for these services. For CPT code 99308, we are proposing to accept the RUC recommendations; however, we considered maintaining the current work RVU of 1.16 given there was a decrease in the total time for the service and no change in the descriptor time. We are soliciting comment regarding the RUC recommendations that the total time be rounded down to 15 minutes instead of rounding up to twenty minutes, when using total time on the date of the encounter for code selection (minutes must be met or exceeded), and are seeking clarification on this difference. In light of the changes made to the O/O E/M visits, however, we are proposing the RUC-recommended work RVU of 1.30 for CPT code 99308, but would appreciate comments regarding rounding. For CPT code 99309, we are proposing a work RVU of 1.92. When compared to CPT code 99214 ( Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using time for code selection, 30-39 minutes of total time is spent on the date of the encounter), we are acknowledging the increase in time required to bill CPT code 99309. We note that the descriptor time for CPT code 99309 went up since these codes were last revalued. We are focusing on the time in the descriptor, and if there is a change in the level of MDM. In light of recent changes made to the O/O E/M visits, however, we are proposing the RUC-recommended work RVU of 1.92 for CPT code 99309. Although we are proposing to adopt all the RUC-recommended work RVUs and times for this code family as explained above, we are seeking comment regarding the discrepancies in times, which have implications both for valuation of individual codes (and for PFS ratesetting in general), since the intraservice times and total times are used as references for valuing many other services under the PFS. After reviewing the RUC recommendations, in conjunction with the revised code descriptors and documentation guidelines for CPT codes 99304 through 99310, we are proposing to accept the RUC-recommended work and time values for the revised nursing facility visit codes with the PE refinements noted by the RUC for CY 2023. c. Prolonged ServicesWe are proposing that prolonged nursing facility services by a physician or NPP would be reportable under GXXX2, which would be used when the total time (in the time file) is exceeded by 15 or more minutes to account for the additional time spent. The long descriptor would be GXXX2 ( Prolonged nursing facility evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99306, 99310 for nursing facility evaluation and management services). (Do not report GXXX2 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 993X0). (Do not report GXXX2 for any time unit less than 15 minutes)). We propose that the practitioner would include any prolonged service time spent within the surveyed timeframe, which includes the day before the visit, the day of the visit, and up to and including 3 days after the visit (please see summary Table 18 in section II.F.11.e. of this proposed rule). We are proposing that prolonged physician or NPP NF services would be reportable when the total time (in the physician time file) is exceeded by 15 or more minutes which would be once 95 minutes are spent for initial NF visits, and once 85 minutes are spent for subsequent NF visits, and for each additional 15 minutes furnished thereafter. Consistent with CPT coding Start Printed Page 45998 guidance as indicated below, there would not be any frequency limitation; therefore, we are proposing that physicians and NPPs would be able to bill GXXX2 for each additional 15-minute increment of time beyond the total time for CPT codes 99306 and 99310. Since GXXX2 includes time without direct patient contact, there would no longer be a need to use CPT codes 99358 and 99359 (prolonged E/M visit without direct patient contact) in conjunction with NF visits. Therefore, we are proposing to change the payment status for CPT codes 99358 and 99359 to “I” ( Not valid for Medicare purposes. Medicare uses another code for reporting of, and payment for, these services). This is consistent with our final policy for O/O E/M visits, where prolonged time can no longer be reported using CPT codes 99358 and 99359. We continue to be concerned about program integrity, counting time that was not included in the surveyed timeframe, and the administrative complexity of having multiple prolonged service codes associated with a given primary service (see our previous discussion of these issues in our CY 2020 PFS final rule at 84 FR 62849 through 62850). As we stated in that rule, many other codes are available to report prolonged E/M work associated with an E/M visits that occurs outside of the timeframe included in the visit, such as CCM, TCM, PCM, behavioral health integration (BHI), and other care management service codes. We designed these codes to be used to report time spent outside the direct patient contact (but still in management/consideration of that given patient's case) on dates other than the E/M visit. While these care management codes are not identical to the prolonged visit codes, they can be used to report a number of similar activities. Additional information about those codes can be found on our PFS Care Management website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management. We also direct the reader to section II.E of this proposed rule, where we propose additional care management service codes for pain management and BHI. When prolonged nursing facility services are furnished by a physician or NPP, they would be reportable under GXXX2. We believe that allowing practitioners to report CPT code 993X0 after the minimum time requirement for the highest level subsequent visit is met and then exceeded by at least 15 minutes would result in double counting time. As a specific example, CPT code 99310 requires that 45 minutes must be met or exceeded up to 60 minutes. If the reporting practitioner spent 55 minutes of time, those 55 minutes would be billed and are included in the services described by CPT code 99310. After 60 minutes has been met, any additional time should be counted toward the 15 minutes required to report the add on CPT code for the prolonged service. Similar to the policy we finalized in the CY 2020 PFS final rule for the O/O E/M visits (84 FR 62849), which states that when the time of the reporting physician or NPP is used to select O/O E/M visit level, HCPCS code G2212 could be reported when the maximum time for the level 5 O/O E/M visit is exceeded by at least 15 minutes on the date of service. In addition, we note that the CPT code descriptor for CPT code 993X0 does not include nursing facility. Further, the timeframes do not align for CPT codes 993X0, 99358, and 99359. The survey time for CPT code 993X0 is for time on the date of service, and when the nursing facility visit codes were resurveyed by the RUC, the survey time included the day before, the day of, and up to and including 3 days post the date of service. We are proposing Medicare-specific coding in order to avoid duplicative counting of time, administratively simplify prolonged service coding, and better enable us to determine how much total time was spent with the patient. If we proposed to merely accept the CPT prolonged service coding changes, we would not be able to identify the time spent with patients in the claims data alone. This is because we might not know which primary service is the companion code to the prolonged service code(s) due to the wide service timespan (for prolonged services without direct patient contact) and non-specific care settings within the prolonged CPT code descriptors. Consistent with CPT's approach, we are proposing that practitioners and NPPs would only be able to report the prolonged services code for NF (GXXX2) in conjunction with the highest level codes in the family (CPT code 99306 and 99310). This would also be consistent with our policy for O/O E/M visits (see (84 FR 62849). 7. Nursing Facility Discharge Management (CPT Codes 99315-99316)a. CodingCPT codes 99315 ( Nursing facility discharge day management; 30 minutes or less) and 99316 ( Nursing facility discharge day management; more than 30 minutes) were identified for RUC review in October 2021 and were then postponed so that they could be reviewed at the same time as the inpatient hospital and observation care codes, in January 2022. Due to changes in physician work, changes in technology, patient population, and length of stay, the RUC determined that the nursing facility discharge services could be reviewed separately from the inpatient hospital discharge day services. The nursing facility discharge day management codes are used to report the total duration of time spent by a physician or other qualified health care professional for the final nursing facility discharge of a patient. The codes include, as appropriate, final examination of the patient and discussion of the NF stay, even if the time spent on that date is not continuous. Instructions are given for continuing care to all relevant caregivers, as well as for preparation of discharge records, prescriptions, and referral forms. These services require a face-to-face encounter, which may be performed on a calendar date prior to the actual discharge date. The time of the face-to-face encounter performed on a date prior to the discharge date is counted toward CPT code 99315 and CPT code 99316 and not reported separately. We propose to retain our policy that CPT codes 99315 and 99316 (as appropriate) shall be reported for a face-to-face visit with the patient provided by the physician or the qualified NPP, which is required in order to report the SNF/NF discharge day management service. The NF discharge day management visit shall be reported for the date of the actual visit by the physician or qualified NPP, even if the patient is discharged from the facility on a different calendar date. (Refer to Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.13.I.) Additionally, we are proposing that a physician or qualified NPP may report CPT codes 99315 or 99316 for a patient who has expired only if the physician or qualified NPP personally performed the death pronouncement. b. ValuationWe are proposing the RUC-recommended work RVU of 1.50 for CPT code 99315. We considered maintaining the current work RVU of 1.28 for CPT code 99315, based on the total time ratio between the current time of 40 minutes and the recommended time established by the survey of 40 minutes. Utilizing our total time ratio methodology this ratio equals 100 percent, and 100 percent of the current Start Printed Page 45999 work RVU of 1.28, which indicates there is no change to the physician service and no change in the physician total time. We believe that since the two components of work are time and intensity, significant decreases in time should be reflected in decreases to work RVUs. In this case, there was no change in total time. However, maintaining CPT code 99315 at the current value of a work RVU of 1.28 would cause a rank order anomaly with CPT code 99308. Also, given the remaining NF codes were revised to align with the principles included in the O/O E/M visit services by documenting and selecting level of service based on total time or MDM, we concluded that the increase of the work RVU to 1.50 for CPT code 99315 would be appropriate. We are proposing the RUC-recommended work RVU of 2.50 for CPT code 99316. We considered proposing a work RVU of 2.22 based on the total time ratio between the current time of 54 minutes and the recommended time established by the survey of 63 minutes. When we reviewed CPT code 99316, we found that the recommended work RVU was higher than nearly all of the other global XXX codes with similar time values, and we do not believe that this code would have an anomalously high intensity. As we stated earlier, in light of changes made to the O/O E/M visits and the changes to include documenting and selecting level of service based on total time or MDM, we are proposing the RUC-recommended work RVU of 2.50 for CPT code 99316. We are proposing the RUC-recommended direct PE inputs for CPT code 99315 and the RUC-recommended direct PE inputs for CPT code 99316. c. Prolonged ServicesCPT code 99315 and CPT code 99316, the two codes for nursing facility discharge management, are set up as a base code with an add-on code with no ceiling of time. Since time on any day can be included when billing CPT code 99315 or 99316, there is no need for a prolonged service code for either of these two codes. Allowing for a prolonged service code for either of these two codes could result in double counting a physician or NPP's time spent during a nursing facility discharge, which would not be appropriate. Additionally, CPT code 993X0 does not include Nursing Facility in the descriptor. Therefore, we are proposing that prolonged services would not be reportable in conjunction with CPT codes 99315 and 99316 (NF discharge day management). 8. Annual Nursing Facility Assessment (CPT Code 99318)a. CodingCPT code 99318 ( Evaluation and management of a patient involving an annual nursing facility assessment, which requires these 3 key components: A detailed interval history; A comprehensive examination; and Medical decision making that is of low to 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 stable, recovering, or improving. Typically, 30 minutes are spent at the bedside and on the patient's facility floor or unit) was recommended for deletion by CPT for 2023. In February 2021, the CPT Editorial Panel deleted CPT code 99318 and revised seven nursing facility codes to align with the principles included in the O/O E/M visits by documenting and selecting level of service based on total time or MDM. We are proposing to accept CPT's deletion of CPT code 99318. Our longstanding manual guidance states that an annual nursing facility assessment visit code may substitute as meeting one of the required physician visits, as specified in 42 CFR 483.30 (c)(1), if the code requirements for CPT code 99318 are fully met (Medicare Claims Processing Manual (Pub. 100-04) chapter 12, section 30.6.13 (B)). Due to the longstanding nature of the manual section, we believe some provisions may be outdated, and it is possible to satisfy this requirement through other codes. We are seeking comment on whether there is a need to keep this code for Medicare purposes. As we consider accepting the CPT's deletion of CPT code 99318, we are concerned that the absence of a similar code could cause an unwarranted increase in valuation of other services under the PFS, and CMS would not have a means of tracking how often these visits are occurring. While CPT code 99308, CPT code 99309, and CPT code 99310 could be used to report the required annual visit, if we were to accept deletion of CPT code 99318, we believe most of the utilization for that former code would instead be reported under CPT code 99309, with a RUC-recommended work RVU of 1.92 which is described in the valuation section below. b. ValuationAfter considering the utilization and the need for the service described by CPT code 99318, we are proposing to accept the CPT's deletion of CPT code 99318. Given the proposed deletion for CPT code 99318, the RUC recommends that 10 percent of the CPT code 99318 utilization would go to CPT code 99308, with a work RVU of 1.16; 85 percent of the utilization would go to CPT code 99309, with a work RVU of 1.55; and 5 percent of the utilization would go to CPT code 99310, with a work RVU of 2.35. 9. Home or Residence Services (CPT Codes 99341, 99342, 99344, 99345, 99347-99350)a. CodingIn February 2021, the CPT Editorial Panel deleted the nine CPT codes in the Domiciliary, Rest Home (for example, Boarding Home), or Custodial Care Services code family (CPT codes 99324-99328, and 99334-99337), and one CPT code in the Home Services family (CPT code 99343), to merge these services with the eight remaining home visit services. The eight remaining home services CPT codes (99341, 99342, 99344, 99345, and 99347-99350) were revised to describe Home or Residence Services to align with the principles of the O/O E/M visit codes by allowing physicians and NPPs to document and select the level of service based on total practitioner time or MDM level. For CY 2023, the home and domiciliary E/M code family will be revised by the CPT to include services provided in assisted living facilities, group homes, custodial care facilities, and residential substance abuse treatment facilities, as well as a patient's home. These changes include combining the domiciliary and rest home CPT codes with the home visit CPT codes, resulting in a single family of CPT codes that describe these types of services. In addition, CPT revised the descriptors to allow reporting that is based on time or MDM level—in alignment with the O/O E/M visit CPT codes. The RUC survey time includes pre-service time 3 days before the date of encounter, intraservice time on the date of encounter, and post-service time that includes 7 days after the date of encounter. These eight CPT codes were reviewed at the October 2021 RUC meeting with recommendations submitted to CMS for the CY 2023 rule cycle. The RUC recommended the survey 25th percentile value for all CPT codes in the Home or Residence Services code family, except for CPT code 99350, for which the RUC recommended the median value. Start Printed Page 46000 b. ValuationWe are proposing the RUC-recommended work RVU for all eight CPT codes in the Home or Residence Services CPT code family. We are proposing a work RVU of 1.00 for CPT code 99341 ( Home or residence visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and straightforward medical decision making), a work RVU of 1.65 for CPT code 99342 ( Home or residence visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and low level of medical decision making), a work RVU of 2.87 for CPT code 99344 ( Home or residence visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making), a work RVU of 3.88 for CPT code 99345 ( Home or residence visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and high level of medical decision making), a work RVU of 0.90 for CPT code 99347 ( Home or residence visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination straightforward medical decision making), a work RVU of 1.50 for CPT code 99348 ( Home or residence 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), a work RVU of 2.44 for CPT code 99349 ( Home or residence visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making), and a work RVU of 3.60 for CPT code 99350 ( Home or residence visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and high level of medical decision making). We are proposing the RUC-recommended direct PE inputs for CPT codes 99345, and 99347-99350 without refinement. For CPT codes 99341 and 99342, we are refining the direct PE inputs by removing supply item SK062 (patient education booklet). For CPT code 99344, we are refining the direct PE inputs by removing supply items SK062 (patient education booklet), SJ053 (swab-pad, alcohol), and SJ061 (tongue depressor). Per the PE Summary of Recommendations provided by the RUC, CPT codes 99341, 99342, 99344, and 99347 would typically have procedures performed on the same date of service. For those CPT codes, the RUC stated that they removed supplies that would be duplicative, such as gloves, alcohol wipes, booklet, and tongue depressor. However, we found that not all of these duplicative supplies had been removed from CPT codes 99341, 99342, and 99344 by the RUC. Therefore, we are proposing to remove these duplicative supplies from CPT codes 99341, 99342, and 99344, and accept the remaining RUC-recommended direct PE inputs without refinement. c. Prolonged Services for Home or Residence ServicesWe are proposing that prolonged home or residence services by a physician or NPP would be reportable under GXXX3 ( Prolonged home or residence evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99345, 99350 for home or residence evaluation and management services). (Do not report GXXX3 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 99417). (Do not report GXXX3 for any time unit less than 15 minutes)). Code GXXX3 would be reportable when the total time (in the time file) is exceeded by 15 or more minutes. Prolonged services (whether on the same date or another date within the surveyed timeframe) would be reportable as an add-on code to CPT codes 99345 or 99350 once the practitioner spends 15+ minutes beyond the total time finalized for the primary service (in time file). We would allow the physician or NPP to include any prolonged service time spent within the surveyed timeframe for the home or residence services code family, which includes pre-service time 3 days before the date of encounter, intraservice time on the date of encounter, and post-service time that includes 7 days after the date of encounter. This means that for CPT code 99345, assuming we finalize the RUC-recommended total time of 126 minutes, prolonged services would be reportable once 141 or more minutes are spent by a physician or NPP providing home or residence services. Likewise, for CPT code 99350, assuming we finalize the RUC-recommended total time of 97 minutes, prolonged services would be reportable once 112 or more minutes are spent by a physician or NPP providing home or residence services. See Table 18 in section II.F.11.e. of this proposed rule for a table summarizing this information. Since we are proposing that prolonged services with or without direct patient contact would be reportable under GXXX3, we are also proposing that CPT codes 99358 ( Prolonged evaluation and management service before and/or after direct patient care; first hour), 99359 ( Prolonged evaluation and management service before and/or after direct patient care; each additional 30 minutes (List separately in addition to code for prolonged service)), and 99417 ( Prolonged outpatient evaluation and management service(s) time with or without direct patient contact beyond the required time of the primary service when the primary service level has been selected using total time, each 15 minutes of total time (List separately in addition to the code of the outpatient Evaluation and Management services)) cannot be billed for CPT codes 99345 and 99350. We are proposing to change the status indicator for CPT codes 99358 and 99359 to “I,” which indicates that these codes are not valid for Medicare purposes, and that Medicare uses another code for reporting of, and payment for, these services. We continue to be concerned about program integrity, duplicative time, counting time that was not included in the surveyed timeframe, the administrative complexity of having multiple prolonged service codes, and our ability to determine how much time was spent with the patient using claims data. If we proposed to merely accept the CPT coding for prolonged home or residence E/M visits, we would not be able to identify the time spent with patients in the claims data alone. This is because we might not know which primary service is the companion code to the prolonged service code(s) due to the wide service timespan (for prolonged services without direct patient contact) and non-specific care settings within the prolonged CPT code descriptors. See our previous discussion of these issues in our CY 2020 PFS final rule at 84 FR 62849 through 62850. As we stated in that rule, many other codes are available to report prolonged E/M work associated with an E/M visits that occurs outside of the timeframe included in the visit, such as CCM, TCM, PCM, behavioral health integration (BHI), and other care management service codes. We designed these codes to be used to report time spent outside the direct patient contact on dates other than the E/M visit. While Start Printed Page 46001 these care management codes are not identical to the prolonged visit codes, they can be used to report a number of similar activities. Additional information about those codes can be found on our PFS Care Management web page on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management. We also direct the reader to section II.E. of this proposed rule where we propose additional care management service codes for pain management and BHI. 10. Cognitive Assessment and Care Planning (CPT Code 99483)a. Coding and ValuationIn February 2021, the CPT Editorial Panel revised CPT code 99483 to replace “50 minutes” from its descriptor with a revised time value determined by the RUC survey to align with the principles underlying the O/O E/M CPT codes. The 2023 descriptor time for CPT code 99483 will be 60 minutes typical time instead of 50 minutes typical time. Due to the increase in the valuation for O/O E/M visits in the CY 2021 PFS final rule (85 FR 84556), we finalized a proposal to increase the value of CPT code 99483 from 3.44 to 3.80 work RVUs as a service that is analogous to the O/O E/M visits, because CPT code 99483 includes a high-level O/O E/M visit. We stated that 99483 includes an evaluation of a patient's cognitive functioning and requires collecting pertinent history and current cognitive status, all of which require MDM of moderate or high complexity. To not create a rank order anomaly with CPT code 99205 ( Office or other outpatient visit for the evaluation and management of a new patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using time for code selection, 60-74 minutes of total time is spent on the date of the encounter) we increased 99483 by using the ratio of the increase between the CY 2020 and CY 2021 values for 99205 to commensurate with the increase to CPT code 99205. We are not proposing the RUC-recommended work RVU of 3.50, because we continue to believe that this service is appropriately valued more highly than the analogous O/O E/M visit code, CPT code 99205. Given what we view as the appropriate rank order among these services, we do not believe a reduction in work RVU, especially with a ten-minute increase in physician time, is warranted. In the interest of supporting access to this service, we are instead proposing a slight increase from the current 3.80 to 3.84 to account for the increase in physician time with use of a total time ratio: we divide the RUC-recommended total time of 86 by the current total time of 85 and then multiply the product by the current work RVU of 3.80 to arrive at 3.84. We are proposing the RUC-recommended PE inputs without refinement. b. Prolonged ServicesWe are proposing that prolonged services would not be reportable in conjunction with CPT code 99483, because it has a typical time in its descriptor, which is not necessarily the actual time spent. Accordingly, we would not know when the prolonged services exceeded the service time. 11. Prolonged Services Valuationa. Prolonged Services With Direct Patient Contact (CPT Codes 99354-99357)The CPT Editorial Panel is deleting CPT codes 99354-99357 ( prolonged services with direct patient contact (except with office or other outpatient services)). These codes are currently used to report prolonged E/M visit time involving direct patient contact, by physicians or NPPs, beyond the usual service, in settings other than O/O settings. We are proposing to accept this deletion, since this work would be reported instead under the Medicare-specific codes that we are proposing for prolonged physician/NPP time, discussed in each family's section above. b. Prolonged Services on a Different Date Than the E/M (CPT Codes 99358-99359)We note that the RUC resurveyed and provided recommendations to revalue these codes. However, we are proposing to assign an inactive status to these codes for purposes of PFS payment as discussed above. c. Prolonged Services Clinical Staff Services (CPT Codes 99415 and 99416)CPT code 99415 was created to describe the first hour of prolonged clinical staff services provided in addition to an office E/M visit, while CPT code 99416 was created to describe each additional 30 minutes beyond that first hour of prolonged clinical staff service time that was provided in addition to the O/O E/M visit. For these codes, we are proposing the RUC-recommended direct PE inputs without refinement. d. Valuation of Prolonged Other E/M Services (HCPCS Codes GXXX1, GXXX2 and GXXX3)As discussed above in the Overview section, we do not agree that there is inherently greater complexity of patient need or intensity of work for E/M visits furnished in non-office settings (for example, inpatient, ED, and home settings) compared to the office settings. Therefore, we believe it would be more accurate to make payment based on the same time increment of physician work in these various settings. We are proposing that the three prolonged visit HCPCS G codes GXXX1-GXXX3 (discussed above under each applicable family) be valued identically across settings, based on the RUC recommended value for CPT code 99417. Therefore, we are proposing a work RVU of 0.61 for these codes with a crosswalk to CPT code 99417. We are likewise proposing direct PE inputs for these three codes that are identical to the RUC-recommended PE inputs for CPT code 99417. For the purposes of ratesetting, our utilization for these services will include the assumption that one third of the services currently reported with 99356 will be reported with each of HCPCS codes GXXX1, GXXX2, and GXXX3, and one third of the services currently reported with 99357 will be reported with each of HCPCS codes GXXX1, GXXX2, and GXXX3. We will continue to use HCPCS code G2212 previously finalized in lieu of CPT code 99417. e. Summary of Proposed Time Thresholds To Report Other E/M Prolonged ServicesTable 18 summarizes the proposed rules for reporting Other E/M prolonged services by physicians or NPPs (See each family section above for detailed proposal information). Start Printed Page 46002 12. Consultations (CPT Codes 99241-99255)The RUC revised code descriptors, deleted two codes, and revalued the RVUs of the consultation codes during its October 2021 and January 2022 RUC meetings. We did not review the RUC recommendations for the eight revised consultation codes (CPT codes 99242, 99243, 99244, 99245, 99252, 99253, 99254, and 99255). We note that CMS stopped paying for the consultation codes beginning in CY 2010. We refer readers to 74 FR 61767 through 61775 where we discuss our payment policy for these services. 13. Payment for Multiple Same-Day VisitsOur manuals include many longstanding policies regarding when more than one Other E/M visit can be billed by the same practitioner for the same patient on the same date of service, particularly when a patient is being transferred among multiple care settings (see the Medicare Claims Processing Manual (Pub. 100-04), Chapter 12, which is available on our website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf). In contrast, CPT reporting instructions do not place any limitations on the number of visits that can be billed. We are proposing our longstanding manual policies for same-day visits (at Pub. 100-04, chapter 12, et al, per topic section), and refer the reader to the sections above regarding its application to each individual Other E/M family. 14. Split (or Shared) ServicesThe split (or shared) “substantive portion” policy for services furnished in facility settings was reflected in subregulatory guidance until it was withdrawn in May of 2021, in response to a petition under the Good Guidance regulation. In the CY 2022 PFS final rule (86 FR 65150 through 65159) we finalized a policy for E/M visits furnished in a facility setting, to allow payment to a physician for a split (or shared) visit (including prolonged visits), where a physician and NPP provide the service together (not necessarily concurrently) and the billing physician personally performs a substantive portion of the visit. Commenters were generally supportive of our proposals with some divide with regard to our proposed definition of substantive portion. Some commenters preferred the use of MDM or one of the three key visit components as opposed to time for purposes of defining what is the substantive portion of the service. a. BackgroundA split (or shared) visit refers to an E/M visit performed by both a physician and an NPP in the same group practice. In the non-facility (for example, office) setting, the rules for “incident to” billing apply under this circumstance. However, “incident to” services are not available for services furnished in a facility setting. Longstanding CMS policy has been that, for split (or shared) visits in the facility (for example, hospital) setting, the physician can bill for the services if they perform a substantive portion of the encounter. Section 1833(a)(1)(N) of the Act specifies that payment is made for services furnished and billed by a physician at 100 percent of the PFS rate, while under section 1833(a)(1)(O)(i) of the Act, NPPs are paid for the services they furnish and bill for at a reduced PFS rate (85 percent of the PFS). We defined substantive portion in the CY 2022 PFS final rule (86 FR 65152 through 65156) and provided for billing of split (or shared) visits in certain settings (86 FR 65156 through 65157) and for certain patient types (new and established) (86 FR 65156). After consideration of the public comments on the CY 2022 PFS proposed rule, we finalized a phased in approach to this policy (86 FR 65153). For CY 2022, we finalized the definition substantive portion as one of the following: history, or exam, or MDM, or more than half of total time. In the CY 2022 PFS final rule (86 FR 65152 and 65153), we finalized Start Printed Page 46003 that for CY 2023, the definition of substantive portion as being more than half of total time. As part of our ongoing engagement with interested parties, we are hearing continued concern about the implementation of our phased in approach with regard to using only more than half of the total time to define the substantive portion of the visit, and continue to receive requests that we continue to recognize MDM as the substantive portion. Many of these concerns relate to practice patterns where the physician does not spend half or more of the time with the patient, as well as possible adjustments needed to the practice's internal processes or information systems to track visits based on time, rather than MDM. After consideration, we are proposing to delay implementation of our definition of the substantive portion as more than half of the total time until January 1, 2024. We continue to believe it is appropriate to define the substantive portion of a split (or shared) service as more than half of the total time, and propose that this policy will be effective beginning January 1, 2024. While we continue to believe that the definition of substantive portion we finalized in the CY 2022 PFS final rule is appropriate, delaying implementation of this aspect of our policy would also allow for the changes in the coding and payment policies for Other E/M visits to take effect for CY 2023, and allows for a one-year transition for providers to get accustomed to the new changes and adopt their workflow in practice. Additionally, this delay allows interested parties another opportunity to comment on this policy, and gives us time to consider more recent feedback and evaluate whether there is a need for additional rulemaking on this aspect of our policy. To reflect the proposed delay, we are proposing to amend our regulations text at 42 CFR 415.140 to revise the definition of substantive portion, and note the current definition of substantive portion applies for visits other than critical care visits furnished in CY 2022 and CY 2023. We are amending § 415.140 by adding to paragraph (a) “and 2023” after the phrase “For visits other than critical care visits furnished in calendar year 2022”. Therefore, the proposed paragraph would specify, for visits other than critical care visits furnished in calendar year 2022 and 2023, substantive portion means 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. 15. Technical Correction to the Conditions for Payment: Split (or Shared) VisitsIn the CY 2022 PFS final rule (86 FR 64996), we finalized our definition of split (or shared) visits as proposed, and codified it in a new section of our regulations at § 415.140. We established regulation text for this definition of split (or shared) visits. We subsequently discovered an inadvertent typographical error in the instructions we used to codify the new regulation at § 415.140. Specifically, we added the regulation text for § 415.140 under Subpart D, Physician Services in Teaching Settings, rather than Subpart C, Part B Carrier Payments for Physician Services to Beneficiaries in Providers. Because this regulation was inadvertently included with policies relating to teaching physician services, and is more appropriately placed with other policies relating to payment for physicians' services to beneficiaries in providers, we propose to revise our regulation to correct this error. As such, we propose to amend part 415 subpart D by removing the regulation at § 415.140 and relocating that section to subpart C, such that subpart D will then begin at § 415.150. 16. Technical Correction for Split (or Shared) Critical Care ServicesIn the CY 2022 PFS final rule, starting at 86 FR 65159, we finalized a number of billing policies for critical care 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). At 86 FR 65162, we stated in error, “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 intended to state that CPT code 99292 could be billed after 104, not 75, or more cumulative total minutes were spent providing critical care. As correctly stated elsewhere in the CY 2022 PFS final rule (regarding critical care furnished by single physicians at 86 FR 65160, and regarding concurrent care furnished by multiple practitioners in the same group and the same specialty to the same patient at 86 FR 65162), our policy is that CPT code 99291 is reportable for the first 30-74 minutes of critical care services furnished to a patient on a given date. CPT code 99292 is reportable for additional, complete 30-minute time increments furnished to the same patient (74 + 30 = 104 minutes). We clarify that our policy is the same for critical care whether the patient is receiving care from one physician, multiple practitioners in the same group and specialty who are providing concurrent care, or physicians and NPPs who are billing critical care as a split (or shared) visit. G. Geographic Practice Cost Indices (GPCIs)1. BackgroundSection 1848(e)(1)(A) of the Act requires us to develop separate Geographic Practice Cost Indices (GPCIs) to measure relative cost differences among localities compared to the national average for each of the three fee schedule components (that is, work, practice expense (PE), and malpractice (MP)). We discuss the localities established under the PFS below in this section. Although the statute requires that the PE and MP GPCIs reflect full relative cost differences, section 1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only one-quarter of the relative cost differences compared to the national average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI floor for services furnished in Alaska beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor for services furnished in Frontier States (as defined in section 1848(e)(1)(I) of the Act) beginning January 1, 2011. Additionally, section 1848(e)(1)(E) of the Act provides for a 1.0 floor for the work GPCIs, which has been extended by many successive amendments to the statute. The 1.0 floor for the work GPCI under section 1848(e)(1)(E) of the Act was most recently extended by section 101 of the Consolidated Appropriations Act of 2021 (Pub. L. 116-260, enacted December 27, 2020) through CY 2023 (that is, for services furnished no later than December 31, 2023). Therefore, the proposed CY 2023 work GPCIs and summarized GAFs reflect the 1.0 work floor. Additionally, as required by sections 1848(e)(1)(G) and (I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for Frontier States are permanent, and therefore, reflected in the CY 2023 proposed GPCIs. Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last previous GPCI adjustment, the adjustment to be applied in the first year of the next Start Printed Page 46004 adjustment shall be 1/2 of the adjustment that otherwise would be made. Therefore, since more than 1 year has passed since the previous GPCI update was implemented in CY 2020 and 2021, we are proposing to phase in 1/2 of the proposed GPCI adjustment in CY 2023 and the remaining 1/2 of the adjustment for CY 2024. We have completed our review of the GPCIs and are proposing new GPCIs beginning for CY 2023 in this proposed rule. We also calculate a geographic adjustment factor (GAF) for each PFS locality. The GAFs are a weighted composite of each PFS locality's proposed work, PE and MP expense GPCIs using the national GPCI cost share weights. While we do not actually use GAFs in computing the fee schedule payment for a specific service, they are a useful metric for purposes of comparing overall costs and payments across fee schedule areas. The actual effect of GPCIs on payment for any actual service would deviate from the GAF to the extent that the proportions of work, PE and MP RVUs for the service differ from those reflected in the GAF. As noted above, section 101 of the Consolidated Appropriations Act of 2021 extended the 1.0 work GPCI floor for services furnished through December 31, 2023. Therefore, the proposed CY 2023 work GPCIs and summarized GAFs reflect the 1.0 work floor. Additionally, as required by sections 1848(e)(1)(G) and (I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for Frontier States are permanent, and therefore, reflected in the CY 2023 proposed GPCIs. See Addenda D and E to this proposed rule for the CY 2023 proposed GPCIs and summarized GAFs. These Addenda are available on the CMS website under the supporting documents section of the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. 2. Payment Locality BackgroundPrior to 1992, Medicare payments for physicians' services were made under the reasonable charge system. Payments under this system largely reflected the charging patterns of physicians, which resulted in large differences in payment for physicians' services among types of services, physician specialties and geographic payment areas. Local Medicare carriers initially established 210 payment localities, to reflect local physician charging patterns and economic conditions. These localities changed little between the inception of Medicare in 1967 and the beginning of the PFS in 1992. In 1994, we undertook a study that culminated in a comprehensive locality revision (based on locality resource cost differences as reflected by the GPCIs) that we implemented in 1997. The development of the current locality structure is described in detail in the CY 1997 PFS final rule (61 FR 34615) and the subsequent final rule with comment period (61 FR 59494). The revised locality structure reduced the number of localities from 210 to 89, and increased the number of Statewide localities from 22 to 34. Section 220(h) of the Protecting Access to Medicare Act (PAMA) (Pub. L. 113-93, enacted April 1, 2014) required modifications to the payment localities in California for payment purposes beginning with 2017. As a result, in the CY 2017 PFS final rule (81 FR 80265 through 80268) we established 23 additional localities, increasing the total number of PFS localities from 89 to 112. The current 112 payment localities include 34 Statewide areas (that is, only one locality for the entire State) and 75 localities in the other 16 States, with 10 States having two localities, two States having three localities, one State having four localities, and three States having five or more localities. The remainder of the 112 PFS payment localities are comprised as follows: the combined District of Columbia, Maryland, and Virginia suburbs; Puerto Rico; and the Virgin Islands. We note that the localities generally represent a grouping of one or more constituent counties. The current 112 fee schedule areas, also referred to as payment localities, are defined alternatively by State boundaries (Statewide areas for example, Wisconsin), metropolitan areas (for example, Metropolitan St. Louis, MO), portions of a metropolitan area (for example, Manhattan), or rest-of-State areas that exclude metropolitan areas (for example, Rest of Missouri). This locality configuration is used to calculate the GPCIs that are in turn used to calculate geographically adjusted payments for physicians' services under the PFS. As stated in the CY 2011 PFS final rule with comment period (75 FR 73261), changes to the PFS locality structure would generally result in changes that are budget neutral within a State. For many years, before making any locality changes, we have sought consensus from among the professionals whose payments would be affected. We refer readers to the CY 2014 PFS final rule with comment period (78 FR 74384 through 74386) for further discussion regarding additional information about locality configuration considerations. 3. GPCI UpdateAs required by the statute, we developed GPCIs to measure relative cost differences among payment localities compared to the national average for each of the three fee schedule components (that is, work, PE, and MP). The changes to the proposed CY 2023 GPCIs for each locality reflect the updated resource cost data in each area to better adjust PFS payments for geographic cost differences compared to national average costs. We note that the changes in the proposed GPCIs reflect the statutory floors and limitations on variation discussed above that may advantage some rural localities. We describe the data sources and methodologies we use to calculate each of the three GPCIs below in this section. Additional information on the CY 2023 GPCI update is available in an interim report, “Interim Report for the CY 2023 Update of GPCIs and MP RVUs for the Medicare PFS,” on our website located under the supporting documents section for the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. a. Work GPCIsThe work GPCIs are designed to reflect the relative cost of physician labor by Medicare PFS locality. As required by statute, the work GPCI reflects one quarter of the relative wage differences for each locality compared to the national average. To calculate the work GPCIs, we use wage data for seven professional specialty occupation categories, adjusted to reflect one-quarter of the relative cost differences for each locality compared to the national average, as a proxy for physicians' wages. Physicians' wages are not included in the occupation categories used in calculating the work GPCI because Medicare payments are a key determinant of physicians' earnings. Including physician wage data in calculating the work GPCIs would potentially introduce some circularity to the adjustment since Medicare payments typically contribute to or influence physician wages. That is, including physicians' wages in the physician work GPCIs would, in effect, make the indices, to some extent, dependent upon Medicare payments. The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based on professional earnings data from the 2000 Census. However, for the CY 2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage and earnings data were not available from the more Start Printed Page 46005 recent Census because the “long form” was discontinued. Therefore, we used the median hourly earnings from the 2006 through 2008 Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) wage data as a replacement for the 2000 Census data. The BLS OES data meet several criteria that we consider to be important for selecting a data source for purposes of calculating the GPCIs. For example, the BLS OES wage and employment data are derived from a large sample size of approximately 200,000 establishments of varying sizes nationwide from every metropolitan area and can be easily accessible to the public at no cost. Additionally, the BLS OES is updated regularly, and includes a comprehensive set of occupations and industries (for example, 800 occupations in 450 industries). For the CY 2014 GPCI update, we used updated BLS OES data (2009 through 2011) as a replacement for the 2006 through 2008 data to compute the work GPCIs; for the CY 2017 GPCI update, we used updated BLS OES data (2011 through 2014) as a replacement for the 2009 through 2011 data to compute the work GPCIs; and for the CY 2020 GPCI update, we used updated BLS data (2014 through 2017) as a replacement for the 2011 through 2014 data to compute the work GPCIs. Because of its reliability, public availability, level of detail, and national scope, we believe the BLS OES data continue to be the most appropriate source of wage and employment data for use in calculating the work GPCIs (and as discussed below, the employee wage component and purchased services component of the PE GPCI). Therefore, for the CY 2023 GPCI update, we used updated BLS OES data (2017 through 2020) as a replacement for the 2014 through 2017 data to compute the proposed work GPCIs. b. Practice Expense (PE) GPCIsThe PE GPCIs are designed to measure the relative cost difference in the mix of goods and services comprising PEs (not including MP expenses) among the PFS localities as compared to the national average of these costs. Whereas the physician work GPCIs (and as discussed later in this section, the MP GPCIs) are comprised of a single index, the PE GPCIs are comprised of four component indices (employee wages; purchased services; office rent; and equipment, supplies and other miscellaneous expenses). The employee wage index component measures geographic variation in the cost of the kinds of skilled and unskilled labor that would be directly employed by a physician practice. Although the employee wage index adjusts for geographic variation in the cost of labor employed directly by physician practices, it does not account for geographic variation in the cost of services that typically would be purchased from other entities, such as law firms, accounting firms, information technology consultants, building service managers, or any other third-party vendor. The purchased services index component of the PE GPCI (which is a separate index from employee wages) measures geographic variation in the cost of contracted services that physician practices would typically buy. For more information on the development of the purchased service index, we refer readers to the CY 2012 PFS final rule with comment period (76 FR 73084 through 73085). The office rent index component of the PE GPCI measures relative geographic variation in the cost of typical physician office rents. For the medical equipment, supplies, and miscellaneous expenses component, we believe there is a national market for these items such that there is not significant geographic variation in costs. Therefore, the equipment, supplies and other miscellaneous expense cost index component of the PE GPCI is given a value of 1.000 for each PFS locality. For the previous update to the GPCIs (implemented in CY 2020), we used 2014 through 2017 BLS OES data to calculate the employee wage and purchased services indices for the PE GPCI. As discussed previously in this section, because of its reliability, public availability, level of detail, and national scope, we continue to believe the BLS OES is the most appropriate data source for collecting wage and employment data. Therefore, in calculating the proposed CY 2023 GPCI update, we used updated BLS OES data (2017 through 2020) as a replacement for the 2014 through 2017 data for purposes of calculating the employee wage component and purchased service index component of the PE GPCI. In calculating the proposed CY 2023 GPCI update for the office rent index component of the PE GPCI, we used the 2015 through 2019 American Community Survey (ACS) 5-year estimates as a replacement for the 2013 through 2017 ACS data. The 2016 through 2020 5-year estimates were supposed to be released in December 2021, but the release date was delayed to March 17, 2022. Therefore, the recent 2015 through 2019 5-year estimates, which preceded any COVID-19 impacts, were used in the CY 2023 GPCI update, rather than the 2016 through 2020 ACS data, which were not publicly released in time for the development of this proposed rule. The Census Bureau noted that COVID-19 impacted data collection for the 2020 ACS, and the resulting challenges have the potential to affect the quality of the data. In particular, the Census Bureau noted that there were lower response rates, and nonresponse bias was found in the data collected for 2020.[71] We will analyze the ACS data collected in 2020 and subsequent years that occurred during the COVID-19 pandemic, and consider using those data for the next GPCI update after we better understand their integrity and validity for our purposes. Because the office rent index is based on 5-year estimates, we expect minimal impact from the non-response bias in the CY 2020 data on the next GPCI update, but we will examine the subsequent years' ACS data that could be similarly impacted by conditions during the COVID-19 pandemic. Because the 2020 ACS data were not released in time for us to use them in the development of this proposed rule, and the public would not have an opportunity to comment on the use of those data if we were to adjust our proposed GPCIs in the final rule to reflect the 2020 ACS data, we will not consider using the 2020 ACS data for the CY 2023 final GPCIs. c. Malpractice Expense (MP) GPCIsThe MP GPCIs measure the relative cost differences among PFS localities for the purchase of professional liability insurance (PLI). To ensure that premium data are homogenous and comparable across geographic areas, data were collected for policies with uniform coverage limits of $1 million per occurrence and $3 million aggregate ($1 million/$3 million). The MP GPCIs are calculated based on insurer rate filings of premium data for $1 million/$3 million mature claims-made policies (policies for claims made rather than losses occurring during the policy term). For the CY 2020 GPCI update, we used premium data presumed in effect as of December 10, 2017. The proposed CY 2023 MP GPCI update reflects premium data presumed in effect no later than December 31, 2020. We note that we finalized a few technical refinements to the MP GPCI methodology in CY 2017, and refer readers to the CY 2017 PFS final rule (81 FR 80270) for additional discussion of those. d. GPCI Cost Share WeightsFor the CY 2023 GPCIs, we are proposing to continue to use the current 2006-based MEI cost share weights for Start Printed Page 46006 determining the proposed PE GPCI values. Specifically, we use the cost share weights to weight the four components of the PE GPCI: employee compensation, office rent, purchased services, and medical equipment, supplies, and other miscellaneous expenses, as shown in Table 22. We refer readers to the CY 2014 PFS final rule with comment period (78 FR 74382 through 74383), for further discussion regarding the 2006-based MEI cost share weights revised in CY 2014 that we also finalized for use in the CY 2017 and CY 2020 GPCI updates. We note that we are proposing to rebase and revise the MEI cost share weights for CY 2023, and we refer readers to the detailed discussion in section II.M. of this proposed rule, but we are proposing to maintain the use of the current 2006-based MEI cost share weights for the CY 2023 GPCIs, thus delaying the implementation of the rebased and revised MEI cost share weights for this purpose. We refer readers to our discussion about using the proposed rebased and revised MEI cost share weights for purposes of proportioning the work, PE, and MP RVU pools in PFS ratesetting and for the purposes of updating the GPCIs for CY 2023 in sections II.B. and VII. of this proposed rule. In those sections, we discuss our considerations for updating the MEI cost share weights for the RVUs and the GPCIs and the potential redistributive impact that making such a change would have on PFS payments. We have historically updated the GPCI cost share weights to make them consistent with the most recent update to the MEI, which was most recently done for CY 2014 (78 FR 74382 through 74383). However, in light of the overall impacts of making this change and in the interest of maintaining stability in payments, we are proposing to maintain the use of the current 2006-based MEI cost share weights for the CY 2023 proposed PE GPCIs. We believe that doing so will allow interested parties the opportunity to review and comment on the proposed rebased and revised MEI cost share weights discussed in section II.M. of this proposed rule and their potential impacts before we actually use such rebased and revised MEI cost share weights for purposes of proportioning the work, PE, and MP RVU pools in PFS ratesetting and updating the GPCIs. This approach would maintain consistency in the data used to update both the GPCI and PFS ratesetting inputs for CY 2023; delaying implementation of the rebased and revised MEI cost share weights is consistent with our efforts to balance payment stability and predictability with incorporating new data through more routine updates. We refer readers to section VII. of this proposed rule for additional discussion on this issue and impacts as it relates to PFS ratesetting and the GPCI update for CY 2023. We also refer readers to the comment solicitation in section II.B. of this proposed rule, where we discuss our ongoing efforts to update data inputs for PE to aid stability, transparency, efficiency, and data adequacy. In addition, we direct readers to the CY 2011 PFS final rule (75 FR 73256) where we similarly delayed implementation of updated MEI cost share weights in response to commenters' concerns about ongoing analysis that would inform future GPCI changes and the reallocation of labor-related costs from the medical equipment and supplies and miscellaneous component to the employee compensation component of the PE GPCI. In the CY 2011 PFS final rule (75 FR 73256), we acknowledged that we typically update the GPCI cost share weights concurrently with the most recent MEI rebasing and revision, but in consideration of the commenters' concerns in response to the proposed rule, we did not use the revised cost share weights for the CY 2011 GPCIs and instead finalized the implementation of the rebased and revised MEI cost share weights through subsequent rulemaking. We invite comments on the delay in implementation of the MEI cost share weights for purposes of the CY 2023 GPCIs and PFS ratesetting, given the impacts discussed in section VII. of this proposed rule. We are also soliciting comments on how best to proceed with implementation of the rebased and revised MEI cost share weights in the future. More specifically, we are seeking comment on how best to incorporate the MEI cost share weights into the PE GPCI if we were to implement them outside the statutorily required triennial update in which we phase in all aspects of the GPCI update through the previously discussed 2-year ( 1/2 in each year) phase-in required by section 1848(e)(1)(C) of the Act. Section 1848(e)(1)(C) of the Act requires that, if more than one year has elapsed since the date of the last GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be 1/2 of the adjustment that otherwise would be made. Therefore, specifically, we are soliciting comment on potentially incorporating the rebased and revised MEI cost share weights into the CY 2024 GPCIs. Notably, we would not be required by statute to phase in the adjustment over 2 years as specified in section 1848(e)(1)(C) of the Act because, in CY 2024, no more than one year would have elapsed since the last GPCI adjustment. Therefore, we are also seeking comment on whether it would be appropriate to use a multi-year transition to incorporate the rebased and revised MEI cost share weights for purposes of the PE GPCI and PFS ratesetting as we have done in the past when incorporating other new data into the PFS payment methodology (for example, the clinical labor update), or if, because the MEI cost share weights only impact the composition of the PE GPCI, such a transition would not be warranted. If we were to instead apply the rebased and revised MEI cost share weights for purposes of the PE GPCI and PFS ratesetting for CY 2025 or later, we would be required under section 1848(e)(1)(C) of the Act to phase in the GPCI adjustments over 2 years. We are seeking comments on whether, in that case, it would be appropriate to similarly apply a transition to implement the MEI cost share weights for purposes of PFS ratesetting as well, and refer readers to section II.B and VII. of this proposed rule for more discussion regarding the alternatives considered and impacts of a phase-in of the rebased and revised MEI cost share weights in PFS ratesetting. The proposed CY 2023 GPCI cost share weights are displayed in Table 19. We note that the proposed rebased and revised cost share weights discussed in detail in section II.M. of this proposed rule are also displayed in Table 19 for awareness and for comment solicitations regarding potential future rulemaking and GPCI updates. Start Printed Page 46007 e. PE GPCI Floor for Frontier StatesSection 10324(c) of the Affordable Care Act added a new subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0 PE GPCI floor for physicians' services furnished in Frontier States effective January 1, 2011. In accordance with section 1848(e)(1)(I) of the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for physicians' services furnished in States determined to be Frontier States. In general, a Frontier State is one in which at least 50 percent of the counties are “frontier counties,” which are those that have a population per square mile of less than 6. For more information on the criteria used to define a Frontier State, we refer readers to the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75 FR 50160 through 50161). There are no changes in the States identified as Frontier States for the CY 2023 PFS proposed rule. The qualifying States are: Montana; Wyoming; North Dakota; South Dakota; and Nevada. In accordance with statute, we will apply a 1.0 PE GPCI floor for these States in CY 2023. f. Methodology for Calculating GPCIs in the U.S. TerritoriesPrior to CY 2017, for all the island territories other than Puerto Rico, the lack of comprehensive data about unique costs for island territories had minimal impact on GPCIs because we used either the Hawaii GPCIs (for the Pacific territories: Guam; American Samoa; and Northern Mariana Islands) or used the unadjusted national averages (for the Virgin Islands). In an effort to provide greater consistency in the calculation of GPCIs given the lack of comprehensive data regarding the validity of applying the proxy data used in the States in accurately accounting for variability of costs for these island territories, in the CY 2017 PFS final rule (81 FR 80268 through 80270), we finalized a policy to treat the Caribbean Island territories (the Virgin Islands and Puerto Rico) in a consistent manner. We do so by assigning the national average of 1.0 to each GPCI index for both Puerto Rico and the Virgin Islands. We refer readers to the CY 2017 PFS final rule for a comprehensive discussion of this policy. g. California Update to the Fee Schedule Areas Used for Payment Under Section 220(h) of the Protecting Access to Medicare ActSection 220(h) of the PAMA added a new section 1848(e)(6) to the Act that modified the fee schedule areas used for payment purposes in California beginning in CY 2017. Prior to CY 2017, the fee schedule areas used for payment in California were based on the revised locality structure that was implemented in 1997 as previously discussed. Beginning in CY 2017, section 1848(e)(6)(A)(i) of the Act required that the fee schedule areas used for payment in California must be Metropolitan Statistical Areas (MSAs) as defined by the Office of Management and Budget (OMB) as of December 31 of the previous year; and section 1848(e)(6)(A)(ii) of the Act required that all areas not located in an MSA must be treated as a single rest-of-State fee schedule area. The resulting modifications to California's locality structure increased its number of fee schedule areas from 9 under the current locality structure to 27 under the MSA-based locality structure; although for the purposes of payment, the actual number of fee schedule areas under the MSA-based locality structure is 32. We refer readers to the CY 2017 PFS final rule (81 FR 80267) for a detailed discussion of this operational decision. Section 1848(e)(6)(D) of the Act defined transition areas as the counties in fee schedule areas for 2013 that were in the rest-of-State locality, and locality 3, which was comprised of Marin County, Napa County, and Solano County. Section 1848(e)(6)(B) of the Act specified that the GPCI values used for payment in a transition area are to be phased in over 6 years, from 2017 through 2022, using a weighted sum of the GPCIs calculated under the new MSA-based locality structure and the GPCIs calculated under the PFS locality structure that was in place prior to CY 2017. That is, the GPCI values applicable for these areas during this transition period were a blend of what the GPCI values would have been for California under the locality structure that was in place prior to CY 2017, and what the GPCI values would be for California under the MSA-based locality structure. For example, in CY 2020, which represented the fourth year of the transition period, the applicable GPCI values for counties that were previously in the rest-of-State locality or locality 3 and are now in MSAs were a blend of 2/3 of the GPCI value calculated for the year under the MSA-based locality structure, and 1/3 of the GPCI value calculated for the year under the locality structure that was in place prior to CY 2017. The proportions continued to shift by 1/6 in each subsequent year so that, by CY 2021, the applicable GPCI values for counties within transition areas were a blend of 5/6 of the GPCI value for the year under the MSA-based locality structure, and 1/6 of the GPCI value for the year under the locality structure that was in place prior to CY 2017. Beginning in CY 2022, the applicable GPCI values for counties in transition areas were the values calculated solely under the new MSA-based locality structure; therefore, the phase-in for Start Printed Page 46008 transition areas is complete. Additionally, section 1848(e)(6)(C) of the Act establishes a hold harmless requirement for transition areas beginning with CY 2017; whereby, the applicable GPCI values for a year under the new MSA-based locality structure may not be less than what they would have been for the year under the locality structure that was in place prior to CY 2017. There are 58 counties in California, 50 of which were in transition areas as defined in section 1848(e)(6)(D) of the Act. The eight counties that were not within transition areas are: Orange; Los Angeles; Alameda; Contra Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties. We note that while the phase-in for transition areas is no longer applicable, the hold harmless requirement is not time-limited, and therefore, is still in effect. For the purposes of calculating budget neutrality and consistent with the PFS budget neutrality requirements as specified under section 1848(c)(2)(B)(ii)(II) of the Act, we finalized the policy to start by calculating the national GPCIs as if the fee schedule areas that were in place prior to CY 2017 are still applicable nationwide; then, for the purposes of payment in California, we override the GPCI values with the values that are applicable for California consistent with the requirements of section 1848(e)(6) of the Act. This approach to applying the hold harmless requirement is consistent with the implementation of the GPCI floor provisions that have previously been implemented—that is, as an after-the-fact adjustment that is made for purposes of payment after both the GPCIs and PFS budget neutrality have already been calculated. Additionally, section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be 1/2 of the adjustment that otherwise would be made. For a comprehensive discussion of this provision, transition areas, and operational considerations, we refer readers to the CY 2017 PFS final rule (81 FR 80265 through 80268). (1) Proposed refinement to number of unique fee schedule areas in California. In the CY 2020 final rule (84 FR 62622), a commenter indicated that some of the distinct fee schedule areas that were used during the period between CY 2017 and CY 2018 are no longer necessary. Specifically, with regard to the Los Angeles-Long Beach-Anaheim MSA, which contains 2 counties (across two unique locality numbers, 18 and 26) that are not transition areas, we acknowledge that we only needed more than one unique locality number for that MSA for payment purposes in CY 2017, which was the first year of the implementation of the MSA-based payment locality structure. Neither of the counties in the Los Angeles-Long Beach-Anaheim MSA (Orange County and Los Angeles County) are transition areas under section 1848(e)(6)(D) of the Act. Therefore, the counties were not subject to the aforementioned GPCI value incremental phase-in (which is no longer applicable) or the hold-harmless provision at section 1848(e)(6)(C) of the Act. Similarly, the San Francisco-Oakland-Berkeley MSA contains four counties—San Francisco, San Mateo, Alameda, and Contra Costa counties—across three unique locality numbers, 05, 06, and 07. These counties are not transition areas and will receive the same GPCI values, for payment purposes, going forward. In response to the comment, we acknowledged that we did not propose any changes to the number of fee schedule areas in California, but would consider the feasibility of a technical refinement to consolidate into fewer unique locality numbers, and if we determined that consolidation was operationally feasible, we would propose the technical refinement in future rulemaking. This refinement would ultimately change the number of distinct fee schedule areas for payment purposes in California from 32 to 29. In light of the foregoing, for CY 2023 we are proposing to identify the Los Angeles-Long Beach-Anaheim MSA, containing Orange County and Los Angeles County, by one unique locality number, 18, as opposed to two, thus retiring locality number 26, as it is no longer needed. Similarly, we are proposing to identify the San Francisco-Oakland-Berkeley MSA containing San Francisco, San Mateo, Alameda, and Contra Costa counties by one unique locality number, 05, as opposed to four, thus retiring locality numbers 06 and 07, as they are no longer needed. Additionally, we would modify the MSA names as follows: the San Francisco-Oakland-Berkeley (San Francisco Cnty) locality (locality 05) would become San Francisco-Oakland-Berkeley (San Francisco/San Mateo/Alameda/Contra Costa Cnty), and Los Angeles-Long Beach-Anaheim (Los Angeles Cnty) locality (locality 18) would become Los Angeles-Long Beach-Anaheim (Los Angeles/Orange Cnty). We note that because Marin County is in a transition area and subject to the hold harmless provision at section 1848(e)(6)(C) of the Act, we need to retain a unique locality number for San Francisco-Oakland-Berkeley (Marin Cnty), locality 52. We are seeking comment on the proposed technical refinements to consolidate unique fee schedule areas and their locality numbers in California where the unique localities are not operationally necessary. We note that these changes, if finalized, would not have any payment implications under the PFS. h. Refinements to the GPCI MethodologyIn the process of calculating GPCIs for the purposes of this proposed rule, we identified four technical refinements to the methodology that we are proposing because they would yield improvements over the current method; these refinements are applicable to the work and MP GPCIs, the employee wage index component of the PE GPCI, and the GAFs. We conducted a thorough review of the BLS OES occupation codes within each of the seven occupation groups used in past updates to track and document the changes over time. As new BLS OES data are released, the availability of specific occupation codes is subject to change, and it is possible that new codes can be added, changed, or removed over time; therefore, we believe it is important to periodically review and update the occupation groups and codes based on our review during the GPCI updates. We reviewed the occupation codes and groups used to capture geographic variation in professional wages to assess other potential codes and groups that could be used in addition to the current selections to calculate the work GPCI, with significant consideration given to the extent to which the data exist in the file (data existence) and how well the occupation codes are represented in the data (data sufficiency). Based on our review, we are proposing the addition of two new occupation groups (and their corresponding occupation codes), Management Occupations and Business and Financial Operation Occupations, to the preexisting seven occupation groups for CY 2023, as shown in Table 20. Start Printed Page 46009 We are also proposing to add four occupation codes to the Computer, Mathematical, Life, and Physical Science group, and three occupation codes to the Social Science, Community and Social Service, and Legal group, for Start Printed Page 46010 CY 2023, as shown in Table 21. The practical effect of the proposed inclusion of these occupation groups and codes on the work GPCI would be minimal because the statute at section 1848(e)(1)(A)(iii) of the Act requires that the work GPCI reflect only one quarter of cost differences, but their inclusion adds meaningful data regarding the geographic variation in professional wages for CY 2023. We are proposing to modify the list of occupation codes used within the first PE GPCI component, Employee Wages, to conform more closely to the clinical labor categories used in PFS ratesetting. Specifically, six occupation codes listed as sources for clinical labor rates used to establish practice expense RVUs in PFS ratesetting that were previously inadvertently excluded in the Employee Wage Index calculation are now included in the proposed CY 2023 Employee Wage Index (29-1126, 29-1124, 19-3031, 29-1031, 29-1181, 29-1127). Lastly, we are proposing a technical refinement to the method used to calculate each locality's GAF. The GAFs are calculated as the weighted average of the three GPCIs (work, PE, and MP), essentially representing the net geographic adjustment that would be made to a theoretical standard service. Instead of the 2006-based MEI cost share weights, which were used to calculate GAFs in previous updates to the GPCIs, we calculated the CY 2023 GAFs using weights that reflect the share of total RVUs that each component (work, PE, and MP) accounts for, based on Medicare utilization data from CY 2020. The GAFs are not used for payment under the PFS but are a useful measure to illustrate the overall effect of geographic adjustments under the PFS across Medicare fee schedule areas. We believe that using the share of RVUs reflected in recent Medicare utilization data as weights when calculating the CY 2023 GAFs results in GAFs that more accurately reflect the composite effect of geographic adjustment on payment, year over year, as compared to the GAFs calculated using the 2006-based MEI cost share weights. This change also allows the use of current Medicare utilization data that are available each year as opposed to the MEI cost share weights that are not updated as frequently. The proposed weights used to calculate the CY 2023 GAFs are displayed in Table 22. These four proposed methodological refinements, including changes to: (1) the occupation group; (2) occupation codes; (3) occupation codes used for the Employee Wage Index; and (4) the GAF weighting adjustment, will yield improved mathematical precision in the proposed CY 2023 GPCIs and GAFs by providing for a more accurate, full Start Printed Page 46011 landscape of occupations that should be accounted for in the work and PE GPCIs, and by aligning the GAF equation weights to use routinely available data Additional information on the GPCI methodology and the proposed refinements are available in the interim report, “Interim Report for the CY 2023 Update of GPCIs and MP RVUs for the Medicare PFS” on our website located under the supporting documents section of the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. i. Alternatives Considered Related to the Use of the American Community Survey (ACS) Data for Office Rent IndexCommenters often express concern about the use of residential rents as a proxy for physician office space costs for purposes of updating the PE GPCIs, and state that CMS should collect commercial rent data and use it either as the basis for measuring geographic differences in physician office rents, or if this is not feasible, use it to validate the residential rents as a proxy for physician office rents. In the past, commenters have requested that CMS provide a specific explanation of the barriers to obtaining better commercial rent data and that we reevaluate existing databases to find or develop a nationwide measure of commercial office rents for use in calculating PE GPCIs. For each GPCI update, we have noted that our efforts are ongoing to identify a publicly-available, robust, nationally representative commercial rent data source that could be made available to CMS for this purpose. We have welcomed opportunities to discuss such data sources with impacted parties and to incorporate such data, as appropriate in the GPCI calculation process, through our annual rulemaking process. Because Medicare is a national program, and section 1848(e)(1)(A) of the Act requires us to establish GPCIs to measure relative cost differences among localities compared to the national average, we believe it is important to use the best data source that is available on a nationwide basis, that is regularly updated, and retains consistency area-to-area, year-to-year. The ACS is administered by the United States Census Bureau, which is a leading source of national, robust, high quality, publicly available data. We agree that a data source for commercial office rents that provided for adequate representation of urban and rural areas nationally would be preferable to a residential rent data source as a proxy for commercial rents. We have previously discussed in the CY 2005, CY 2008, CY 2011, and CY 2017 (69 FR 66262, 72 FR 66376, 75 FR 73257, and 81 FR 80265, respectively) final rules that we recognize that apartment rents may not be a perfect proxy for physician office rent. We have conducted searches for commercial rent data sources for consideration as an alternative to the ACS data in the past and have not found or received public comments with suggestions of reliable data sources that meet our needs. For CY 2023, we have conducted another search for reliable commercial rent data sources that are publicly available for the CY 2023 update and did not find any reliable data sources that would meet our needs. The principal characteristic of any substitute data source for the ACS data would be that it captures geographic variation in the office space cost for physician practices. We primarily investigated sources that report data on commercial real estate, but we also considered a few residential rent data sources and one data source that reports on a type of property that would be unable to house a physician practice—U.S. Post Office (P.O.) box rentals. Because the underlying property in which the P.O. boxes are located is commercial in nature, the rental rates may reflect the underlying geographic variation in facility cost. Because this source has other features that are important for creating a geographic index, we have included it for consideration. Although impacted parties may prefer a database focused on the types of properties that physicians would use for offices (that is, a commercial rent database), the identified potential data alternatives discussed below failed to meet one or more of five criteria that we believe are critical to the creation of an appropriate geographic index. We used the following five criteria to analyze the potential data sources for this search: (1) applicability to planned use; (2) standardization of the measure; (3) potential bias; (4) geographic scope, distribution, and granularity of the data; and (5) availability, continuity, and price of the data. Our review revealed challenges with the commercial real estate market data in several of these criteria. Under the first criterion, there are two sub-criteria that present problems with the type of real estate data reported when we considered their use for creating a geographic index: (1A) leases versus sales of commercial real estate, and (1B) comparables versus listings versus assessments of commercial real estate. For the first sub-criterion, the commercial and residential real estate markets can be subdivided into markets for leases and sales. Terms for commercial leased properties are often varied and not readily available. Commercial sales, especially of office condominiums, may be more readily available and require less adjustment for use in a geographic index. The availability of different arrangements—leasing versus owning—may vary geographically, affecting the underlying stability and representativeness of an index based on either. Under the second sub-criterion, an important distinction is whether the data in the alternative data source represents closed transactions (known as “comparables” or “comps”) or asking prices (known as “listings”), regardless of whether the source is reporting data for leased or sales of commercial property. Because asking prices are often aspirational, professional real estate appraisers rely on comparable transactions in order to estimate a price for sale or lease. Therefore, comparables provide the most reliable substitute dataset for consideration for use in creating a geographic index. Assessments are the estimated values of real property set by the tax assessors in each State, which are generally intended to reflect full cash value of the property, though there may be State-specific laws and regulations that interfere (that is, by limiting the percentage increase in a property from year to year if it has not been transferred). Assessments for commercial properties often rely heavily on the “income method” of valuation, which capitalizes the net income the property does or could receive if rented. The advantage of assessments for use in creation of a geographic index is their existence for every property in the United States. The second criterion is that appropriate adjustments need to be made to reduce variation for other factors, or the standardization of the data reported by a considered alternative data source. The primary data adjustment is to standardize the size of the property. For commercial space, conversion to a price per square foot (price/SF) value allows for direct comparison between properties. There are other factors involved in standardizing commercial rents and sale prices. The Building Owners and Managers Association (BOMA) groups buildings into three property classes: • Class A: Most prestigious buildings competing for premiere office users with rents above market average for the area. These buildings have high quality standard finishes, state of the art building systems and amenities, Start Printed Page 46012 exceptional accessibility, and a definite market presence.
• Class C: Buildings competing for tenants requiring functional space at rents below average for the market.[72] A dataset of commercial rentals or sales must include the building class information so properties can be appropriately compared to each other, similar to the way that CMS currently only compares ACS rent data for two-bedroom apartments. For leases, the dataset would also need to specify lease type (Single Net, Double Net, Triple Net, Bondable Net, Full Service Gross, Modified Gross, and or Percentage).[73] The same property rented under a type of Net lease would be expected to have a lower rent than if it were rented under a Full-Service lease because the lessee would pay some amount towards operating expenses. Although a dataset may contain an indication of the type of lease, it may not include the amount of operating expenses paid by the lessee that would be necessary to standardize the rent or other terms that affected the final transaction price. There are often considerable privacy considerations with respect to commercial transactions in order to maintain competitive advantage, so accurate information is often difficult to obtain. Typically, the sale price for a leased property, assuming an arms-length transaction, accounts for the detailed lease terms applicable to the property and likely would not require adjustment for this factor. Another consideration is the effective date of the transaction. Market prices for leases and sales can change rapidly or slowly, and even transactions occurring within the same calendar year may or may not require adjustment in order to be reflective of the market at the intended point in time, and therefore, the transaction date is critical for professional appraisals. Markets are also localized, so even data reported for areas in relatively close proximity may not experience the same price fluctuations. The third criterion is that potential bias is limited in a considered alternative data source. Our search to date was unable to locate any scientifically designed national survey of commercial property costs. Many of the data sources are intended to facilitate the sale of commercial property and provide listings, rather than comparables. They also may only contain a fraction of the listings on the market and have been selected by brokers to advertise for sale, rather than to represent the entire market, resulting in substantial bias. Even the most comprehensive and detailed data sources for verified transactions are designed to support valuation of individual properties. These databases reflect the mix of properties that are either currently available or have been sold or leased during a defined period. The aggregate data are not intended to produce an unbiased estimate of the average cost per square foot in a particular geographic area, whereas, the ACS is a scientifically designed and implemented national housing survey created by the U.S. Census Bureau that has been designed to reduce bias in the statistics it creates. The fourth criterion is that the alternate data source would need to be national in scope and sufficiently granular to capture the characteristics of highly localized real estate markets. The ACS data have been consistently available in each year for the majority of counties in the nation. Although some of the commercial data sources may range nationwide and provide property-level data, there may be a much higher proportion of areas with missing data. An important consideration for the office rent index is that it sufficiently captures data in both urban and rural areas. Rural areas may have a less active commercial real estate market than urban areas, in which case there may be few transactions to use in a geographic index. Lastly, the fifth criterion is that the data source be publicly available, consistently available for CMS' GPCI update years, and/or reasonably priced in order to facilitate transparency and administrative efficiency. Proprietary databases can only be accessed by those who sign up for the service, and use of the data is governed by Terms of Service (TOS) that may preclude its use in derivative works, such as the creation of a geographic index, or dissemination of the data. Public databases are more likely to be accessible and able to be used for derivative work, such as the creation of the GPCIs. Any change in the data source we use in the creation of the index is likely to cause changes in index values, and possibly invoke critique if the resulting changes are significant. If CMS were to consider a change in data source, the change would need to be sustainable over time, and therefore, the data must be consistently accessible for subsequent GPCI updates, and data sources must maintain consistency over time in order to avoid any potential dramatic changes and/or the need to refine the adjustments to a dataset each update year, which would introduce unnecessary variation in the index. If the data source changes or discontinues the dataset, CMS would need to find a replacement data source, possibly within a short time period. This would likely introduce the possibility of dramatic changes and variation in the index that does not reflect the real geographic changes between update years—stemming from the use of different data sources. Additionally, the price to obtain and make necessary adjustments to the data discussed above may be prohibitive for use in the GPCIs. The Federal Government already paid for the construction of the ACS, the ACS provides the data in a very usable form, CMS can consistently and freely access the data, and relatively minor processing is required to turn it into an index. Every proprietary database is likely to charge substantial amounts to access the data as it is currently provided, which will be geared to uses very different from the creation of an office rent index. There may be substantial work required to gather and process the data and TOS conditions imposed by the database owners may not allow even free data to be used for the intended purpose. In all cases, it is likely that CMS would need to negotiate the terms for utilizing any proprietary sources. We identified eight data sources for analysis as potential alternatives to the ACS, but all failed to meet one or more of the five key criteria discussed above that would allow us to better reflect geographic cost variation for the office rent component of the PE GPCI that is currently measured using the ACS. We specifically identified the following potential data sources: (1) REIS® Real Estate Solutions by Moody's Analytics®; (2) CompStak; (3) CoStarTM; (4) Zillow® Assessor and Real Estate Database (ZTRAX); (5) U.S. Postal Service (USPS®) P.O. Box Rental; (6) GSA® Lease Inventory; (7) Reonomy®; and (8) SMR Research. Three of the eight data sources had substantial costs associated with obtaining the data, and we were unable to obtain pricing information for an additional two of the eight without extensive discussions with a sales representative. Two of the eight sources lacked necessary building class information, and many of the eight sources presented challenges with TOS restrictions, representativeness of rural Start Printed Page 46013 areas, small or undisclosed sample sizes, sample sizes that differed from year to year, and/or a large number of geographic areas with missing data. While we determined that none of these data sources are appropriate substitutes for the ACS data we currently use, based on their failure to meet one or more of the five key criteria discussed above, some of the sources possess useful qualities that allowed for further preliminary research into the correlation between commercial and residential rent that fell within the confines of our contractual restrictions. To investigate whether the use of ASC residential rents captures geographic variation in office rents, as discussed above, we identified a few data alternatives above for further research and examined their correlation with the ACS residential rent data in effort to evaluate the validity of the ACS data as a proxy for determining geographic variation in office rents. Overall, our ongoing analysis shows that the ACS residential rent data are highly correlated with commercial rents across areas. Therefore, we have concluded that the continued use of the ACS data for the office rent component of the PE GPCI is appropriate. We considered the use of USPS P.O. Box Rental data for preliminary analysis, as it is free, publicly available, and national in scope (in all zip codes where P.O. Boxes are available), but resource and time constraints limited us from considering this for the CY 2023 update. P.O. Box rent data is available online, but it is not formatted in an easy-to-use dataset that we could readily analyze without conducting resource-intensive data extraction and preparation. Considering that the P.O. Box rent data would have required significant resources, and that expending such resources was not feasible for the CY 2023 proposed rule, we identified the GSA Lease Inventory data source as the next best alternative data source to use to evaluate the correlation between residential and commercial rents because it is publicly available, free, and accessible in an easy-to-use format that required limited adjustments to allow analysis. To get a comparative sense of the rents per square foot that would be suggested for a specific geographic area, we chose to compare the GSA Lease Inventory data and the ACS data for available counties in the State of Maryland. As shown in Table 23, the GSA Lease Inventory data are missing for approximately half of the counties in Maryland. For those counties with available GSA data, the rent per square foot of the GSA leased facilities is shown in Table 23 and can be compared to the corresponding ACS residential rent data for that county. Start Printed Page 46014 Figure 1 shows a rank order test for the counties in Maryland where both GSA Lease Inventory data and ACS data are available. Allegany County has the lowest rent per square foot in the GSA Lease Inventory data and the lowest residential rent in the ACS data. Anne Arundel County has the highest residential rent data and the second highest GSA Lease Inventory data. Analysis shows that the rank order of the available counties in the GSA Lease Inventory data follow a relatively similar pattern (positive, linear relationship) to the same counties in the ACS data. We expanded the comparison of the GSA Lease Inventory data with the ACS residential rent data from available counties in Maryland to all available counties nationwide by creating a rent per square foot measure for all GSA Lease Inventory records using the January 2017 GSA Leased Inventory data. The comparison was done by condensing the GSA Lease data to the county level, merging it with the ACS data (for counties where GSA data were available), and aggregating it to the Medicare locality level, weighting by county population. We performed two rank order tests for both ACS (median two-bedroom rent) and GSA (rent per SF) measures in all available localities where at least 50 percent, and 75 percent, subsequently, of the locality population was represented in the county-level GSA data file. Similar to our findings from the initial analysis of Maryland counties, the expanded comparisons generally show a positive, linear relationship between rank of ACS (median two-bedroom rent) and rank of GSA (rent per SF) measures. Because the GSA Lease Inventory data are not geographically complete, our analyses were limited. GSA Lease Inventory data are sparse or nonexistent in some counties, therefore, we calculated the percent of the locality population and only included localities in our analysis with county-level data where at least 50 percent (and 75 percent for the second analysis) of the locality population was represented in the county-level GSA data file. For example, Locality A includes county 1 and county 2. If the GSA data includes county 1 (with a population of 1,000), but not county 2 (population of 50), we included Locality A in the analysis, as it met the 50 percent and 75 percent thresholds. In contrast, if the GSA data includes county 2 (population of 50), but not county 1 (population of 1,000), we did not perform analysis on Locality A. The January 2017 GSA data file includes information on approximately 8,200 GSA leases across the country, which were then aggregated to the county level, and then to the Medicare locality level for our analysis. After these two aggregations, we had enough GSA Lease Inventory data to perform two rank order tests on 52 Medicare localities, one rank order test for counties where at least 50 percent of the locality population was represented and a second rank order test for counties where 75 percent of the locality population was represented. We further analyzed the outlier localities (where the ACS rank differs from the GSA rank by ±30 ranks) and found that when the population threshold increased from 50 percent to 75 percent, we see a reduction in outliers from 13 to only two localities, indicating that more Start Printed Page 46015 complete data (that is, 75 percent of the locality population represented in GSA lease data) yields higher correlation between the median two-bedroom rent in the ACS data and the rent per square foot in the GSA data. This correlative effect supports the continued use of ACS data in the GPCI update for CY 2023, as it indicates that GSA lease data (a commercial rent data source) and ACS residential rents varied similarly across geographic areas. It is important to note that we use the ACS data to create an index to measure cost differences, and not as a direct proxy for commercial office rents. Rather, the ACS data are used to measure geographic variation in residential rents, which is used as a proxy for the geographic variation in commercial office rent. Based on our limited analyses comparing the GSA and ACS data, which showed that commercial and residential rents varied similarly across geographic areas, and the lack of any identified alternative data source that meets all five of the criteria discussed above, we believe that it is appropriate to continue use of the ACS data. With regard to the suggestion that CMS should collect commercial rent data, we note that we discussed this issue in the CY 2012 PFS final rule with comment period (76 FR 73088) and stated that the development and implementation of a survey could take several years if CMS were to survey physicians directly to gather data to compute the office rent index. Additionally, we have historically not sought direct survey data from physicians related to the GPCI to avoid issues of circularity and self-reporting bias. In the CY 2011 PFS final rule with comment period (75 FR 73259), we solicited public comments regarding the benefits of utilizing physician cost reports to potentially achieve greater precision in measuring the relative cost difference among Medicare localities. We also asked for comments regarding the administrative burden of requiring physicians to routinely complete these cost reports and whether this should be mandatory for physicians' practices. We did not receive any feedback related to that comment solicitation during the open public comment period for the CY 2011 PFS final rule with comment period. We reiterate that the GPCIs are not an absolute measure of practice costs. Rather they are a measure of the relative cost differences for each of the three GPCI components. The U.S. Census Bureau is a Federal agency that specializes in data collection, accuracy, and reliability, and we continue to believe that where such a publicly available resource exists that can provide useful data to assess geographic cost differences in office rent, even though it is a proxy for the exact data we seek, that we should utilize that available resource. In addition to reviewing alternative data sources, we also explored whether there are alternative ways of using the ACS data that could improve geographic representation or improve impacted parties' confidence in it as a reasonable way to capture geographic variation in office rent, including consideration of alternative ways to handle counties where we are missing ACS data, as well as using alternative variables within the ACS data to assess whether there are other similar variables that have more complete data than median gross rent for two-bedroom residences. Our research indicates that using alternatives within the ACS would likely result in minimal changes to the resulting index and would likely not address commenters' concerns regarding use of residential rent data as a proxy for office rent. Our research also suggests that the variation captured by the two-bedroom measure is highly correlated with the geographic variation in one-bedroom and three-bedroom units. The high correlation coefficient strengthens the support for using the ACS two-bedroom measure to capture office rent variation across areas. We explored the continued use of the ACS data to see if there are other available variables that have a lower count of missing observations. The data includes variables on the median gross rent for no bedrooms, one bedroom, two bedrooms, three bedrooms, four bedrooms, five or more bedrooms, and the total median gross rent. Table 24 shows the number of observations that are missing for each of the median gross rent variables in the 2017 5-year ACS data. Based on the 2017 5-year ACS data, total median gross rent and median gross rent for three bedrooms are two available alternative variables that have fewer missing county-level ACS data than the currently used median gross rent for two bedrooms. However, it is important to note that the number of missing observations for each variable could change over time. While the median gross rent for two bedrooms has a relatively low count for missing observations, it could be substituted with the total median gross rent, which has the smallest count of missing observations. In future years of ACS data, there could be more or fewer missing observations for this list of variables. Moving to use of the median gross rent for three bedrooms would result in slightly fewer missing observations in the 2017 ACS 5-Year Estimates, but this may not be the case for all update years. There are also alternative ways of handling counties that are missing data. In the CY 2020 update, we imputed county-level rent estimates using the average value for a given county's MSA. Other options include using the average value for contiguous counties, using an average value for the county's State or removing the missing observation from Start Printed Page 46016 the calculation. However, we note that the current method of handling counties that are missing data is a reasonable approach and any alternative would not likely affect the calculation materially. Additionally, since there are so few counties that are missing data (less than one percent), these alternatives (even if we had reason to prefer one of them) would likely have no impact on the resulting index. Table 25 shows the correlation coefficients between the available residential rent variables in the ACS. The variation captured by the two-bedroom measure is highly correlated with the geographic variation in one-bedroom and three-bedroom units (approximately 0.9). This relationship is similar, but not quite as prominent for the other residential measures. The correlation coefficient between three-bedroom and four-bedroom rent measures is also approximately 0.9. Based on our research, the geographic variation in residential rents is consistent regardless of specific measure used, and therefore, a change in the ACS variable used or a change in the way of handling counties that are missing data would likely result in minimal changes to the resulting index. Given its national representation, reliability, high response rate and frequent updates, and based on the rank order comparison of GSA and ACS data and high correlation coefficients for the ASC residential rent variables discussed above, we continue to believe the ACS residential rent data is the most appropriate data source available at this time for the purposes of calculating the rent index of the PE GPCI. We undertook a comprehensive analysis of alternatives to the ACS data and concluded that there is still no acceptable national data source available for physician office or other comparable commercial rents, and therefore, we propose to continue to use county-level residential rent data from the ACS as a proxy for the relative cost differences in commercial office rents for the proposed CY 2023 update, and have done so in calculating the CY 2023 proposed GPCIs. j. Proposed GPCI Update SummaryAs explained in the Background section above, section 1848(e)(1)(C) of the Act mandates the periodic review and adjustment of GPCIs. For each periodic review and adjustment, we publish the proposed GPCIs in the PFS proposed rule to provide an opportunity for public notice and comment, and allow us to consider whether any revisions in response to comments are warranted prior to implementation. The CY 2023 updated GPCIs that we propose for the first and second year of the 2-year phase-in, along with the GAFs, are displayed in Addenda D and E to this proposed rule available on our website under the supporting documents section of the CY 2023 PFS proposed rule web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. H. Determination of Malpractice Relative Value Units (RVUs)1. OverviewSection 1848(c) of the Act requires that valuations for each service under the PFS be composed of three components: work, practice expense (PE), and malpractice (MP) expense. As required by section 1848(c)(2)(C)(iii) of the Act, beginning in CY 2000, MP RVUs are resource based. Section 1848(c)(2)(B)(i) of the Act also requires that we review, and if necessary adjust, RVUs no less often than every 5 years. In the CY 2015 PFS final rule with comment period (79 FR 67591 through 67596), we implemented the third review and update of MP RVUs. For a comprehensive discussion of the third review and update of MP RVUs, see the CY 2015 PFS proposed rule (79 FR 40349 through 40355) and final rule with comment period (79 FR 67591 through 67596). In the CY 2018 PFS proposed rule (82 FR 33965 through 33970), we proposed to update the specialty-level risk factors, used in the calculation of MP RVUs, prior to the next required 5-year update (CY 2020), using the updated MP premium data that were used in the eighth Geographic Practice Cost Index (GPCI) update for CY 2017; however, the proposal was ultimately not finalized for CY 2018. We consider the following factors when we determine MP RVUs for individual PFS services: (1) specialty-level risk factors derived from data on specialty-specific MP premiums incurred by practitioners; (2) service-level risk factors derived from Medicare claims data of the weighted average risk factors of the specialties that furnish each service; and (3) an intensity/complexity of service adjustment to the service-level risk factor based on either the higher of the work RVU or clinical labor portion of the direct PE RVU. Prior to CY 2016, MP RVUs were only updated once every 5 years, except in the case of new and revised codes. As explained in the CY 2011 PFS final rule with comment period (75 FR 73208), MP RVUs for new and revised codes effective before the next 5-year review of MP RVUs were determined either by a direct crosswalk from a similar source code or by a modified crosswalk to account for differences in work RVUs between the new/revised code and the source code. For the modified crosswalk approach, we adjusted (or scaled) the MP RVU for the new/revised code to reflect the difference in work RVU between the source code and the new/revised work RVU (or, if greater, the difference in the clinical labor portion of the fully implemented PE RVU) for the new code. For example, if the proposed work RVU for a revised code was 10 percent higher than the work RVU for its source code, the MP RVU for the revised code would be increased by 10 percent over the source code MP RVU. Under this approach, the same risk factor (RF) was Start Printed Page 46017 applied for the new/revised code and source code, but the work RVU for the new/revised code was used to adjust the MP RVUs for risk. In the CY 2016 PFS final rule with comment period (80 FR 70906 through 70910), we finalized a policy to begin conducting annual MP RVU updates to reflect changes in the mix of practitioners providing services (using Medicare claims data), and to adjust MP RVUs for risk for intensity and complexity (using the work RVU or clinical labor RVU). We also finalized a policy to modify the specialty mix assignment methodology (for both MP and PE RVU calculations) to use an average of the 3 most recent years of data instead of a single year of data. Under this approach, for new and revised codes, we generally assign a specialty-level risk factor to individual codes based on the same utilization assumptions we make regarding specialty mix we use for calculating PE RVUs and for PFS budget neutrality. We continue to use the work RVU or clinical labor RVU to adjust the MP RVU for each code for intensity and complexity. In finalizing this policy, we stated that the specialty-level risk factors would continue to be updated through notice and comment rulemaking every 5 years using updated premium data, but would remain unchanged between the 5-year reviews. Section 1848(e)(1)(C) of the Act requires us to review, and if necessary, adjust the GPCIs at least every 3 years. In the CY 2020 PFS final rule with comment period, we implemented the fourth review and update of MP RVUs, and we also conducted the statutorily required 3-year review of the GPCIs. For a comprehensive discussion of the fourth review and update of MP RVUs, see the CY 2020 PFS proposed rule (84 FR 40504 through 40510) and final rule with comment period (84 FR 62606 through 62615). The MP premium data used to update the MP GPCIs are the same data used to determine the specialty-level risk factors, which are used in the calculation of MP RVUs. Therefore, for the CY 2020 update of MP RVUs we finalized a policy to align the update of MP premium data with the update to the MP GPCIs to increase efficiency. Effective beginning in CY 2020, our policy is to review, and if necessary update, the MP RVUs at least every 3 years, similar to our review and update of the GPCIs. 2. Methodology for the Proposed Revision of Resource-Based Malpractice (MP) RVUsa. General DiscussionWe calculated the MP RVUs that we are proposing for CY 2023 using updated MP premium data obtained from State insurance rate filings. We used a calculation methodology for the CY 2023 review and update of resource-based MP RVUs that largely parallels the process used in the CY 2020 update; however, we are proposing to incorporate some methodological refinements, which are described below. The MP RVU calculation requires us to obtain information on specialty-specific MP premiums that are linked to specific services, and using this information, we derive relative risk factors (RFs) for the various specialties that furnish a particular service. Because MP premiums vary by State and specialty, the MP premium information must be weighted geographically and by specialty. The MP RVUs that we are proposing were calculated using four data sources:
We used the higher of the CY 2022 final work RVUs or clinical labor portion of the direct PE RVUs in our calculation to develop the CY 2023 proposed MP RVUs while maintaining overall PFS budget neutrality. Similar to the CY 2020 update, the proposed MP RVUs were calculated using specialty-specific MP premium data because they represent the expense incurred by practitioners to obtain MP insurance as reported by insurers. For CY 2023, the most current MP premium data available, with a presumed effective date of no later than December 31, 2020, were obtained from insurers with the largest market share in each State. We identified insurers with the largest market share using the National Association of Insurance Commissioners (NAIC) market share report. This annual report provides State-level market share for entities that provide premium liability insurance (PLI) in a State. Premium data were downloaded from the System for Electronic Rates & Forms Filing Access Interface (SERFF) (accessed from the NAIC website) for participating States. For non-SERFF States, data were downloaded from the State-specific website (if available online) or obtained directly from the State's alternate access to filings. For SERFF States and non-SERFF States with online access to filings, the 2020 market share report was used to select companies. These were the most current data available during the data collection and acquisition process. MP insurance premium data were collected from all 50 States, and the District of Columbia. Efforts were made to collect filings from Puerto Rico; however, no recent filings were submitted at the time of data collection, and therefore, filings from the previous update were used. Consistent with the CY 2020 update, no filings were collected for the other U.S. territories: American Samoa; Guam; Virgin Islands; or Northern Mariana Islands. MP premiums were collected for coverage limits of $1 million/$3 million, mature, claims-made policies (policies covering claims made, rather than those covering losses occurring, during the policy term). A $1 million/$3 million liability limit policy means that the most that would be paid on any claim is $1 million and the most that the policy would pay for claims over the timeframe of the policy is $3 million. Adjustments were made to the premium data to reflect mandatory surcharges for patient compensation funds (PCF, funds used to pay for any claim beyond the State's statutory amount, thereby limiting an individual physician's liability in cases of a large suit) in States where participation in such funds is mandatory. Premium data were included for all physician and nonphysician practitioner (NPP) specialties, and all risk classifications available in the collected rate filings. Although premium data were collected from all States, the District of Columbia, and previous filings for Puerto Rico were utilized, not all specialties had distinct premium data in the rate filings from all States. In the CY 2020 PFS final rule (84 FR 62607 through 62610), we finalized methodological improvements that expanded the specialties and amount of filings data used to develop the proposed risk factors, which are used to develop the proposed MP RVUs. b. Proposed Methodological RefinementsFor the CY 2023 update, we are proposing the following methodological improvements to the development of MP premium data: (1) Improving our current imputation strategy to develop a more comprehensive data set when CMS specialty names are not distinctly identified in the insurer filings, which Start Printed Page 46018 sometimes use unique specialty names or do not include all CMS specialties. In instances where insurers report data for some (but not all) specialties that explicitly corresponded to a CMS specialty, where those data were missing, we finalized in the CY 2020 final rule (84 FR 62607 through 62610) to use partial imputation based on available data to establish what the premiums would likely have been had that specialty been delineated in the filing. In instances where there were no data corresponding to a CMS specialty in the filing, we finalized a policy to use total imputation to establish premiums for that specialty. We are proposing to further refine our strategy for imputing risk factor values for specialties that have incomplete data during the data collection process by using rates mapped from the more commonly reported specialty within risk class as opposed to excluding underrepresented filing data. For example, Hospice and Palliative Care is typically assigned the same risk class as Internal medicine. Rather than excluding Hospice and Palliative Care because there is insufficient filing data, we would use Internal Medicine rates in filings that did not explicitly report Hospice and Palliative Care. For the CY 2020 update, commenters requested that we continue to improve our data collection process to ensure that as much specialty-specific data as possible are used to calculate risk factors. Therefore, we are proposing to utilize this small improvement for collecting risk value input data in the future, as this retains as much data as possible and maps specialties more intentionally. (2) Creation of a risk index for the calculation of MP RVUs. We are proposing to utilize a true MP risk index as opposed to derived risk factors when calculating MP RVUs. Historically, we have used risk factors, which is a ratio of a specialty's national average premium to a single referent specialty's national average premium. This denominator has typically been based on the national average premium for the Allergy/Immunology specialty, which has had the lowest average premium for 2017 and 2020. The proposed risk index would be calculated as a ratio of the specialty's national average premium to the volume-weighted national average premium across all specialties. We believe this change will increase consistency with the calculation of MP RVUs, so that changes in the MP risk index reflect changes in payment, as opposed to changes relative only to the specialty with the lowest national average premium. We believe that this definitional change to risk index does not impact the pricing of services in the PFS since it does not change relative risk across specialties, and MP RVUs are rescaled for purposes of budget neutrality to be equal to the overall pool of MP RVUs. Readers can refer to the section of this proposed rule entitled, “Application of BN to Adjustments of RVUs” for a discussion of our budget neutrality process. c. Steps for Calculating Malpractice RVUsCalculation of the proposed MP RVUs conceptually follows the specialty-weighted approach used in the CY 2015 PFS final rule with comment period (79 FR 67591), along with the above proposed methodological improvements. The specialty-weighted approach bases the MP RVUs for a given service on a weighted average of the risk index of all specialties furnishing the service. This approach ensures that all specialties furnishing a given service are reflected in the calculation of the MP RVUs. The steps for calculating the proposed MP RVUs are described below. Step (1): Compute a preliminary national average premium for each specialty. Insurance rating area MP premiums for each specialty are mapped to the county level. The specialty premium for each county is then multiplied by its share of the total U.S. population (from the U.S. Census Bureau's 2015-2019 American Community Survey (ACS) 5-year estimates). This is in contrast to the method used for creating national average premiums for each specialty in the 2015 update; in that update, specialty premiums were weighted by the total RVU per county, rather than by the county share of the total U.S. population. We refer readers to the CY 2016 PFS final rule with comment period (80 FR 70909) for a discussion of why we have adopted a weighting method based on share of total U.S. population. This calculation is then divided by the average MP GPCI across all counties for each specialty to yield a normalized national average premium for each specialty. The specialty premiums are normalized for geographic variation so that the locality cost differences (as reflected by the 2022 GPCIs) would not be counted twice. Without the geographic variation adjustment, the cost differences among fee schedule areas would be reflected once under the methodology used to calculate the MP RVUs and again when computing the service specific payment amount for a given fee schedule area. Step (2): Determine which premium service risk groups to use within each specialty. Some specialties had premium rates that differed for surgery, surgery with obstetrics, and non-surgery. These premium classes are designed to reflect differences in risk of professional liability and the cost of MP claims if they occur. To account for the presence of different classes in the MP premium data and the task of mapping these premiums to procedures, we calculated a distinct risk index for surgical, surgical with obstetrics, and nonsurgical procedures where applicable. However, the availability of data by surgery and non-surgery varied across specialties. Historically, no single approach accurately addressed the variability in premium class among specialties, and we previously employed several methods for calculating average premiums by specialty. These methods are discussed below. Developing Distinct Service Risk Groups: We determined that there were sufficient data for surgery and non-surgery premiums, as well as sufficient differences in rates between classes for 17 specialties (there were 15 such specialties in the CY 2020 update). These specialties are listed in Table 26. The CY 2023 update uses the same structure of specialty/service risk group as the previous update except that Unknown Physician Specialty (99) is now divided into surgery and non-surgery groups. We were able to collect an expanded amount of premium data for this specialty relative to the previous update, and this service risk group structure change is reflective of the patterns observed in the most current premium data. For all other specialties (those that are not listed in Table 26) that typically do not distinguish premiums as described above, a single risk index value was calculated, and that specialty risk index value was applied to all services performed by those specialties. For further discussion of the information contained in Table 26, refer to “Interim Report for the CY 2023 Update of GPCIs and MP RVUs for the Medicare Physician Fee Schedule” Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices. Start Printed Page 46019 Step (3): Calculate a risk index for each specialty. The relative differences in national average premiums between specialties are expressed in our methodology as a specialty-level risk index. These risk index values are calculated by dividing the national average premium for each specialty by the volume-weighted national average premium across all specialties. For specialties with sufficient surgical and non-surgical premium data, we calculated both a surgical and non-surgical risk index value. Similarly, for specialties with rate filings that distinguished surgical premiums with obstetrics, we recognized that service-risk subgroup of the specialty and calculated a separate surgical with obstetrics risk index value. Table 27 shows the risk index values by specialty type and service risk group. Start Printed Page 46020 Start Printed Page 46021 Step (4): Calculate MP RVUs for each CPT/HCPCS code. Resource-based MP RVUs were calculated for each CPT/HCPCS code that has work or PE RVUs. The first step was to identify the percentage of services furnished by each specialty for each respective CPT/HCPCS code. This percentage was then multiplied by each respective specialty's risk index value as calculated in Step 3. The products for all specialties for the CPT/HCPCS code were then added together, yielding a specialty-weighted service specific risk Start Printed Page 46022 index reflecting the weighted MP costs across all specialties furnishing that procedure. The service specific risk index was multiplied by the greater of the work RVU or clinical labor portion of the direct PE RVU for that service, to reflect differences in the complexity and risk-of-service between services. Impacts of expanded data collection: As we discussed previously in this proposed rule, we are proposing important methodological improvements to our process for calculating MP RVUs. These improvements are in response to comments from interested parties suggesting that we continue to improve data collection to ensure that we use as much specialty-specific data as possible to reflect the most accurate trends in malpractice premiums. When we do not have sufficient premium data for a specialty, our practice has been to use the data from the specialty with the lowest premium. We now have specialty-specific data for many more specialties. However, although the newly captured specialty-specific premium data are more accurate, the new data produce premiums and risk index values that are significantly lower for some specialties than the ones we applied in the absence of sufficient specialty-specific data. We acknowledge that this reduction in premiums and risk index value is expected to negatively impact payment for services furnished by those specialties that are affected by the improved data collection process. Based on our analyses of the new risk index data, we identified an impact threshold to guide how we could integrate the new information into our calculations and minimize the impact on affected specialties. Specifically, we identified a reduction of approximately 1/3 to the risk index calculated for specialties based on the new specialty-specific premium data compared to the information we had previously used. To mitigate the negative impact on affected specialties, promote payment stability, and prevent potential reductions in access to services for beneficiaries, for specialties for which the use of newly available premium data would result in a 30 percent or greater reduction in the risk index for CY 2023 as compared to the current risk index value for CY 2022, we are proposing to phase in the reduction in MP RVUs over the 3 years that precedes the next update, by 1/3 of the change in MP RVUs for those specialties in each year that have a 30 percent or more threshold reduction in risk index value as a result of the update. For a detailed explanation of how the phase-in will be applied per specialty, a file is available on our website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This proposed phase-in is similar to the 2-year phase-in required under section 1848(e)(1)(C) of the Act for changes to the GPCIs when it has been more than one year since the last changes. We propose to phase in the reduction in MP RVUs over 3 years rather than 2 years because the MP risk index values are updated every 3 years. The list of specialties that would be subject to the phase-in under this proposed policy, and the corresponding risk index values for each specialty is available on our website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Low volume service codes: As we discuss above in this proposed rule, for low volume service codes, we use the list of expected specialties who may perform a service instead of the claims-based specialty mix when calculating MP RVUs. We finalized this approach in the CY 2018 PFS final rule to address concerns from interested parties about the year-to-year variability in PE and MP RVUs for low volume services (which also includes no volume services). (82 FR 53000 through 53006). Low volume codes are codes that have 100 or fewer allowed services for a year. These service-level overrides are used to determine the expected specialty for low volume procedures for both PE and MP. In the CY 2018 PFS final rule (82 FR 53000 through 53006), we also finalized our proposal to eliminate general use of an MP-specific specialty-mix crosswalk for new and revised codes. However, we indicated that we would continue to consider, in conjunction with annual recommendations, specific recommendations regarding specialty mix assignments for new and revised codes, particularly in cases where coding changes are expected to result in differential reporting of services by specialty, or where the new or revised code is expected to be low-volume. Absent such information, the specialty mix assumption for a new or revised code would derive from the analytic crosswalk in the first year, followed by the introduction of actual claims data, which is consistent with our approach for developing PE RVUs. For CY 2023, we are soliciting public comment on the list of expected specialties. The proposed list of codes and expected specialties is available on our website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Step (5): Rescale for budget neutrality. The statute requires that changes to fee schedule RVUs must be budget neutral. Thus, the last step is to adjust for relativity by rescaling the proposed MP RVUs so that the total proposed resource-based MP RVUs are equal to the total current resource-based MP RVUs scaled by the ratio of the pools of the proposed and current MP and work RVUs. This scaling is necessary to maintain the work RVUs for individual services from year to year while also maintaining the overall relationship among work, PE, and MP RVUs. Specialties Excluded from Ratesetting Calculation: In section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units, we discuss specialties that are excluded from ratesetting for the purposes of calculating PE RVUs. We are proposing to treat those excluded specialties in a consistent manner for the purposes of calculating MP RVUs. We note that all specialties are included for purposes of calculating the final BN adjustment. The list of specialties excluded from the ratesetting calculation for the purpose of calculating the PE RVUs that we proposed to also exclude for the purpose of calculating MP RVUs is available in section II.B. of this final rule, Determination of Practice Expense Relative Value Units. The resource-based MP RVUs are shown in Addendum B, which is available on the CMS website under the downloads section of the CY 2023 PFS rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. Because a different share of the resources involved in furnishing PFS services is reflected in each of the three fee schedule components, implementation of the resource-based MP RVU update will have much smaller payment effects than implementing updates of resource-based work RVUs and resource-based PE RVUs. On average, work represents about 50.9 percent of payment for a service under the fee schedule, PE about 44.8 percent, and MP about 4.3 percent. Therefore, a 25 percent change in PE RVUs or work RVUs for a service would result in a change in payment of about 11 to 13 percent. In contrast, a corresponding 25 percent change in MP values for a service would yield a change in payment of only about 1 percent. Start Printed Page 46023 Estimates of the effects on payment by specialty type is detailed in section VII. of this proposed rule, the Regulatory Impact Analysis. Additional information on our methodology for updating the MP RVUs is available in the “Interim Report for the CY 2023 Update of GPCIs and MP RVUs for the Medicare Physician Fee Schedule,” which is available on the CMS website under the downloads section of the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices. I. Non-Face-to-Face Services/Remote Therapeutic Monitoring (RTM) ServicesRemote Therapeutic Monitoring (RTM) is a family of five codes created by the CPT Editorial Panel in October 2020, valued by the RUC at its January 2021 meeting, and finalized for Medicare payment in the CY 2022 PFS final rule (86 FR 65114 through 65117). The RTM codes include three PE-only codes and two professional work, treatment management codes. In the CY 2022 PFS final rule, we finalized refinements to payment 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 valued the three PE-only codes by: (1) cross-walking CPT code 98975 to the PE RVU value of CPT code 99453 ( Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education on use of equipment); and by (2) cross-walking CPT codes 98976 and 98977 to the PE RVU of comparable CPT code 99454 ( Remote monitoring of physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days), a code that includes payment for the medical device used to collect and transmit data. For the two RTM treatment management codes, we finalized 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)). We also finalized the RUC-recommended direct PE inputs for the two treatment management codes without refinement. The direct PE for these two codes includes clinical labor. According to the supporting materials in the RUC recommendations that we accepted, CPT code 98980 includes 40 minutes of activities performed by clinical staff while CPT code 98981 includes 20 minutes of activities performed by clinical staff as direct practice expenses (PE). The RUC materials describe the activities of clinical staff who perform the clinical labor involved in each of these codes as including: communicating with the patient throughout the month, resolving technology or data transmission concerns, reviewing data with the billing practitioner, updating and modifying care plans, and addressing lack of patient improvement. These activities performed by clinical staff of the billing practitioner would be considered services provided incident to the services of the billing practitioner. For more information about “incident to” services, see § 410.26. We expressed concern in the CY 2022 PFS final rule (86 FR 65116) about the treatment management codes as described by the CPT and RUC. In particular, we expressed concern about the inclusion of clinical labor in codes that could be billed by qualified nonphysician healthcare professionals because Medicare Part B does not include a benefit for services furnished “incident to” the services of some types of qualified nonphysician healthcare professionals including CSWs, CRNAs, PTs, OTs, and SLPs. Commenters on the CY 2022 PFS proposed rule (86 FR 65116) agreed with our assessment and suggested that we consider developing new coding to resolve the issue. In the CY 2022 PFS final rule, we finalized a policy that permitted therapists and other qualified healthcare practitioners to bill the RTM codes. We stated that where the practitioner's Medicare benefit does not include services furnished incident to their professional services, the services described by the codes must be furnished directly by the billing practitioner or, in the case of a PT or OT, by a therapy assistant under the billing PT's or OT's supervision. The commenters also expressed concern about another issue with the RTM coding that also relates to the clinical labor in the direct PE for the two treatment management codes (86 FR 65116). The commenters acknowledged that the clinical labor involved in these codes, that is, the portion of these services performed by clinical staff incident to the services of the billing clinician, requires direct supervision by the billing practitioner. The commenters stated that direct supervision of clinical staff performing these activities was burdensome, and suggested that physicians and nonphysician practitioners who can bill for “incident to” services would be unlikely to use the codes if direct supervision were required. The commenters suggested that we designate CPT codes 98980 and 98981 as care management services or alternatively, that we develop HCPCS G codes that would allow the “incident to” clinical labor portions of the services to be furnished under general supervision of the billing physician or nonphysician practitioner. Since the CY 2022 PFS final rule was issued, we have remained in communication with interested parties. Conversations continue to revolve around the two concerns detailed above related to the clinical labor in the direct PE for the two RTM treatment management codes, CPT codes 98980 and 98981. Thus, for CY 2023 we are proposing to create four new HCPCS G codes with one pair of codes aimed at increasing patient access to remote therapeutic monitoring services and the second pair aimed at reducing physician and NPP supervisory burden. We note that we also considered requests from interested parties to develop a generic device code for RTM. We have decided to wait to develop a generic RTM device code and instead will seek comment to inform any new coding relating to devices. Thus, we are seeking comment about RTM devices that are used to deliver services that meet the “reasonable and necessary” standard under section 1862(a)(1)(A) of Start Printed Page 46024 the Act. We seek information related to the types of data collected using RTM devices, how the data that are collected solve specific health conditions and what those health conditions are, the costs associated with RTM devices that are available to collect RTM data, how long the typical episode of care by condition type might last, and the potential number of beneficiaries for whom an RTM device might be used by the health condition type. Proposal to develop two HCPCS G codes that allow certain qualified nonphysician healthcare professionals to furnish RTM services. In our ongoing dialogue with interested parties, we have heard that a primary reason for developing the RTM codes was to increase beneficiary access to remote monitoring services by allowing the services to be furnished by a broad array of qualified nonphysician healthcare professionals. However, concerns with the CPT coding structure related to the inclusion of clinical labor integral to the professional services have complicated the achievement of those goals. In the CY 2022 PFS final rule, we finalized a policy that permitted therapists and other qualified healthcare practitioners to bill the RTM codes, though we expressed some concerns about the ability of therapists to bill for these codes because the Medicare benefit does not include services provided incident to the services of a therapist (86 FR 65116). We stated that where the practitioner's Medicare benefit does not include services furnished incident to their professional services, the services described by the codes must be furnished directly by the billing practitioner or, in the case of a PT or OT, by a therapy assistant under the billing PT's or OT's supervision. We said that these practitioners could bill CPT codes 98980 and 98981 even when the practitioner's Medicare benefit category did not include services furnished incident to their professional services as long as the services were furnished directly by the billing practitioner. For CY 2023, as a means of increasing beneficiary access to RTM services, as well as more clearly defining the services of RTM for qualified nonphysician healthcare practitioners whose Medicare benefit category does not include services provided incident to their own services, we are proposing two codes that would expressly facilitate RTM services furnished by qualified nonphysician healthcare professionals who cannot bill under Medicare Part B for services furnished incident to their professional services. These codes would not include “incident to” activities in the PE. Neither of the two proposed new codes include clinical labor inputs in the direct PE. We are proposing to make the current CPT codes 98980 and 98981 codes non-payable by Medicare. The two proposed HCPCS G codes are: • GRTM3 ( Remote therapeutic monitoring treatment assessment services, first 20 minutes furnished personally/directly by a nonphysician qualified health care professional over a calendar month requiring at least one interactive communication with the patient/caregiver during the month). • GRTM4 ( Remote therapeutic monitoring treatment assessment services, additional 20 minutes furnished personally/directly by a nonphysician qualified health care professional over a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month (List separately in addition to code for primary procedure)). For CY 2023, we are proposing a work RVU of 0.62 for the base code, HCPCS code GRTM3, which is the RUC-recommended work RVU we established for CPT code 98980 in the CY 2022 PFS final rule. Similarly, for the add-on code, HCPCS code GRTM4, we are proposing a work RVU of 0.61, which is the RUC-recommended value we established for CPT code 98981. We are proposing to remove the clinical labor inputs in the direct PE for both codes, which will facilitate the use of these codes by qualified nonphysician healthcare practitioners who cannot bill under Medicare Part B for services furnished incident to their professional services. See Table 28: Summary of Proposed HCPCS G Codes for Remote Therapeutic Monitoring Services for more detailed information about the codes. Additionally, we note that all the RTM codes including proposed HCPCS codes GRTM3 and GRTM4 would be designated as “sometimes therapy” codes, which means that the services could be billed outside a therapy plan of care by physicians and certain NPPs. When the services described by proposed HCPCS codes GRTM3 and GRTM4 are furnished by PTs, OTs, or SLPs, the services would always need to be furnished under a therapy plan of care. We remind readers that RTM services that relate to devices specific to therapy services should always be furnished under a therapy plan of care regardless of who provides them. See the Medicare Benefit Policy Manual Chapter 15, Section 230 for more information about the practice of PT, OT, and SLP. Proposal to develop two HCPCS G codes allowing general supervision of auxiliary personnel. As we described previously in this proposed rule, since the CY 2022 PFS final rule was published, we have continued to hear concerns from interested parties that, as for most “incident to” services, the clinical labor activities described in the direct PE of CPT codes 98980 and 98981 must be furnished under the direct supervision of the billing practitioner, which imposes burden on physicians and NPPs who are delivering services to other patients. Thus, for CY 2023, we are proposing to create two HCPCS G codes, one base code and one add-on code, that include clinical labor activities (that is, incident to services such as communicating with the patient, resolving technology concerns, reviewing data, updating and modifying care plans, and addressing lack of patient improvement) that can be furnished by auxiliary personnel under general supervision. These two new G codes, GRTM1 and GRTM2, will include physician work and direct PE inputs as currently described in CPT codes 98980 and 98981 but will allow general supervision of the clinical labor found in the direct PE inputs. See Table 28: Summary of Proposed HCPCS G Codes for Remote Therapeutic Monitoring Services for more detailed information about the codes and use of the codes. The two proposed HCPCS G codes are described as follows: • HCPCS code GRTM1 ( Remote therapeutic monitoring treatment management services, physician or NPP professional time over a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month; first 20 minutes of evaluation and management services). • HCPCS code GRTM2 ( Remote therapeutic monitoring treatment management services, physician or NPP professional time over a calendar month requiring at least one interactive communication with the patient/caregiver over a calendar month; each additional 20 minutes of evaluation and management services during the calendar month (List separately in additional to code for primary procedure). For CY 2023, we are proposing a work RVU of 0.62 for HCPCS code GRTM1, which reflects the work RVU for CPT code 98980 that we finalized in the CY 2022 PFS final rule. For HCPCS code GRTM2, we are proposing a work RVU of 0.61, which is the RUC-recommended Start Printed Page 46025 value we finalized for the similar CPT code 98981. We are proposing the direct PE inputs associated with CPT codes 98980 and 98981 without refinement for HCPCS codes GRTM1 and GRTM2, respectively. As stated previously, we are proposing to make the current CPT codes 98980 and 98981 codes non-payable by Medicare. Start Printed Page 46026 Review of New RTM Device Code: Cognitive Behavioral Therapy Monitoring (CPT Code 989X6)During its October 2021 meeting, the CPT Editorial Panel replaced two Category III codes: 0702T ( Remote therapeutic monitoring of a standardized online digital cognitive behavioral therapy program ordered by a physician or other qualified health care professional; supply and technical support, per 30 days) and 0703T ( Remote therapeutic monitoring of a standardized online digital cognitive behavioral therapy program ordered by a physician or other qualified health care professional; management services by physician or other qualified health care professional per calendar month) ( e.g., respiratory system status, musculoskeletal system status, cognitive behavioral therapy, therapy adherence, therapy response) with the Category 1 CPT code 989X6, Cognitive Behavioral Therapy Monitoring ( Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, cognitive behavioral therapy, therapy adherence, therapy response); initial set-up and patient education on use of equipment; device(s) supply with scheduled (e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor cognitive behavioral therapy, each 30 days). The CPT Editorial Panel created 989X6 for CY 2023 and deleted Codes 0702T and 0703T. Also, during the October 2021 meeting, the CPT Editorial Panel revised the code descriptors for the PE-only RTM codes (that is, CPT codes 98975, 98976, and 98977) that CMS finalized in the CY 2022 PFS final rule (86 FR 65114 through 65117) to include “cognitive behavioral therapy” as another example of the type of service described by the coding. The RUC indicated that it considered this revision to be editorial. During the January 2022 RUC review, the definition of new CPT code 989X6 was further refined to read Remote therapeutic monitoring (e.g., therapy adherence, therapy response); device(s) supply with scheduled (e.g., daily) Start Printed Page 46027 recording(s) and/or programmed alert(s) transmission to monitor cognitive behavior therapy, each 30 days). During the RUC review of CPT code 989X6, specialty societies indicated that the technologies for this service are still evolving. As a result, there were no invoices for devices specific to the cognitive behavioral therapy monitoring services described by the code that could be shared. In response, the RUC recommended that CPT code 989X6 be contractor priced. Given the anticipatory nature of this code, we agree with the RUC recommendation that this new code should be contractor priced until we learn more about the devices being used to furnish the service. Thus, we are proposing to accept the RUC recommendation to contractor price CPT code 989X6, a PE-only device code. There is no professional work associated with the code. We will work with our Medicare Administrative Contractors (MACs) to better understand the kinds of devices and device costs they are encountering as they review claims for payment for the new cognitive behavioral monitoring code, CPT code 989X6. We thank last year's commenters and the many others who have contacted us with their questions and ideas. We appreciate the continuing dialogue about the remote monitoring codes and welcome comments including any additional information that the medical community and other members of the public believe may provide further clarity on how remote patient monitoring services are used in clinical practice, and how they would be most appropriately coded, billed and valued under the Medicare PFS. J. Payment for Skin Substitutes1. BackgroundIn the CY 2022 PFS final rule, we finalized an approach for payment of synthetic skin substitutes in the physician office setting. We also announced that we had established a unique HCPCS code for each of ten products for which we had received a HCPCS Level II coding application, and we finalized that those products would 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® SynPathTM, Restrata® Wound Matrix, SymphonyTM, InnovaMatrixTM AC, Mirragen® Advanced Wound Matrix, bio-ConneKt® Wound Matrix, TheraGenesis®, XCelliStem®, Microlyte® Matrix, and Apis® (86 FR 65121). After, the CY 2022 PFS Final rule was released, we deleted the “A” code that was established for bio-ConneKt Wound Matrix after subsequent determination that a HCPCS Level II code was already established for this product. We note that since we issued the CY 2022 PFS final rule, we have received additional HCPCS Level II coding applications for similarly situated 510(k) cleared wound care management products. Those products have been issued unique HCPCS “A” codes and are also payable in the physician office setting as contractor priced products that are billed separately from the procedure to apply them. We also received several comments in response to our finalized policies expressing concern about potential inconsistencies in our policies for synthetic and non-synthetic skin substitutes. We indicated we would take these concerns into future consideration. 2. Key Objectives/Roadmap for Consistent Treatment of Skin SubstitutesWe believe outlining our HCPCS Level II coding and payment policy objectives in this proposed rule will be beneficial for interested parties, as we work to create a consistent approach for treatment of the suite of products we have referred to as skin substitutes. We have a number of objectives related to refining our Medicare policies in this area, including: (1) ensuring a consistent payment approach for skin substitute products across the physician office and hospital outpatient department setting; (2) ensuring that all skin substitute products are assigned an appropriate HCPCS code; (3) using a uniform benefit category across products within the physician office setting, regardless of whether the product is synthetic or comprised of human or animal based material, so we can incorporate payment methodologies that are more consistent; and (4) maintaining clarity for interested parties on CMS skin substitutes policies and procedures. Interested parties have asked CMS to address what they have described as inconsistencies in our payment and coding policies, indicating that treating clinically similar products (for example, animal-based and synthetic skin products) differently for purposes of payment is confusing and problematic for healthcare providers and patients. These concerns exist specifically within the physician office setting; however, interested parties have also indicated that further alignment of our policies across the physician office and hospital outpatient department settings would reduce confusion. Interested parties have suggested that all skin substitutes, regardless of the inclusion of human, animal or synthetic material in the product should be treated as drugs and biological products. Furthermore, they believe all skin substitute products should receive product-specific “Q” codes and receive separate payment under the ASP+6 methodology. They have expressed confusion regarding our assignment of HCPCS Level II “A” codes to the 10 skin substitute products in accordance the policy finalized in the CY 2022 PFS final rule, which we typically assign to identify ambulance services and medical supplies, instead of “Q” codes, which we typically assign to identify drugs, biologicals, and medical equipment or services not identified by national HCPCS Level II codes. They have indicated that the use of “A” HCPCS codes has caused confusion, not only for interested parties, but also for the A/B MACs, who the interested parties assert, have inconsistently processed submitted claims, in part because they are assigned HCPCS “A” codes that are treated as supplies which are subject to contractor pricing under the PFS. Additionally, interested parties have expressed concern that physicians and practitioners are hesitant to use the products associated with “A” codes because they are unsure if they will be paid appropriately for using those products. When considering potential changes to policies involving skin substitutes, we believe it would be appropriate to take a phased approach over the next 1 to 5 years, that allows CMS sufficient time to consider input from interested parties on coding and policy changes primarily through our rulemaking process, and to account for FDA's regulation of these products, with the goal of avoiding unintended impacts on access to medically necessary care involving the use of these products. We welcome comment on our policy objectives for creating a consistent approach for treatment of the suite of products we have referred to as skin substitutes. Additionally, we welcome feedback on our phased approach and associated timeline. To achieve our objective of creating a consistent approach for paying for skin substitutes across the physician office and hospital outpatient department setting, we are including similar proposed changes in the CY 2023 OPPS proposed rule, which will be issued near the time this proposed rule is issued. Start Printed Page 46028 3. Changing the Terminology of Skin SubstitutesAs we work to clarify our policies for these products, we believe that the existing terminology of “skin substitutes” is problematic as it is an overly broad misnomer. In the CY 2021 OPPS/ASC final rule with comment period, we revised our description of skin substitutes to refer to a category of biological and synthetic products that are most commonly used in outpatient settings for the treatment of diabetic foot ulcers and venous leg ulcers (85 FR 80605). We noted that skin substitute products are not a substitute for a skin graft as they do not actually function like human skin that is grafted onto a wound. Instead, these products are applied to wounds to aid wound healing and through various mechanisms of action they stimulate the host to regenerate lost tissue. We also clarified that our definition of skin substitutes does not include bandages or standard dressings, and that within the hospital outpatient department, these items cannot be assigned to either the high cost or low-cost skin substitute groups or be reported with either CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278. (85 FR 86066). While this definition has been updated to provide clarity that synthetic products are considered to be skin substitutes, there is still confusion with the usage of the term skin substitutes because as noted above in the definition, these skin substitute products are technically not a substitute for skin, but rather, a wound covering that is used to promote healing. We have used the current term “skin substitutes” to describe the suite of products that are currently referred to as skin substitutes. Additionally, the term “skin substitutes” is used within the Current Procedural Terminology (CPT®) code series 15271-8 as maintained by American Medical Association. Also, skin substitute products are generally regulated by the FDA as medical devices under section 510(k) of the Federal Food, Drug and Cosmetic (FD&C) Act and implementing regulations per 21 CFR part 807, or as HCT/Ps solely under section 361 of the PHS Act and the FDA regulations in 21 CFR part 1271. We believe that improving how we reference these products by using a more accurate and meaningful term will help address confusion among interested parties about how we describe these products, and further, how we pay for them. We are proposing to replace the term “skin substitutes” with the term “wound care management” or “wound care management products.” We believe this new term more accurately describes the suite of products that are currently referred to as skin substitutes while providing enough specificity to not include bandages or standard dressings, which as noted above, are not considered skin substitutes. We understand that our proposed terms contain the words “care management” which could be construed to implicate the care management series of AMA CPT codes (for example, 99424-99427, 99437, 99439, 99487, 99489, 99490-99491) that are commonly used by healthcare professionals. We also understand that the use of the word “management” in our proposed terms might be construed by some to implicate AMA CPT Evaluation or Assessment and Management (E/M) codes. We would like to clarify that the proposed terms “wound care management” and “wound care management products” would not implicate the care management series of AMA CPT codes (for example, 99424-99427, 99437, 99439, 99487, 99489, 99490-99491), or our own G-codes that describe care management services. Nor would our proposed terms relate to the AMA CPT E/M codes. Unlike “care management” or “evaluation and management” codes and services, the proposed terms would describe a category of items or products, not a type of services. Lastly, we also considered alternate terms such as wound coverings, wound dressings, wound care products, skin coverings and cellular and/or tissue-based products for skin wounds but believe the proposed terms are more technically accurate and descriptive for how these products are used than the alternative's considered. We solicit feedback on our proposal to change the terminology we use for the suite of products referred to as “skin substitutes” to instead use the term “wound care management” or “wound care management products,” and on the alternative terms we considered including wound coverings, wound dressings, wound care products, skin coverings and cellular and/or tissue-based products for skin wounds. We are particularly interested in how these products are referenced in current CPT coding and would appreciate feedback from the CPT Editorial Panel and other interested parties on how to address the challenges we discuss above. We also are interested in feedback on other possible terms that could be used to more meaningfully and accurately describe the suite of products currently referred to as skin substitutes. 4. Revising Payment for Skin SubstitutesIn 2003, the Medicare Modernization Act established the Average Sales Price (ASP) approach for drugs and biologicals as described under section 1847A of the Act. We generally considered skin substitute products to be biologicals in our initial implementation of the ASP methodology. However, with the introduction of synthetic skin substitutes products over the last several years, we are reviewing our categorization of these products, especially as we work to establish payment policies for these products across the various care settings. As explained above, we announced in the CY 2022 PFS final rule the establishment of product specific HCPCS Level II codes for certain products for which we had received a HCPCS Level II coding application. We also finalized that these products would be payable in the physician office setting as contractor priced products that are billed separately from the procedure to apply them (86 FR 65120). After we issued the CY 2022 PFS final rule, we assigned nine HCPCS “A” codes for the synthetic skin substitute products that were addressed in the rule. In the CY 2022 PFS final rule, we stated that we recognized there was no payment mechanism for synthetic skin substitute products within the PFS, and we acknowledged the need to reconcile the gap in payment for synthetic products in the physician office setting without delay (86 FR 65121). Additionally, as we described in the CY 2022 PFS final rule, a commenter stated that skin substitutes are a heterogenous group and there is an increasing intersection between biological, bioengineered, and synthetic components. This highlights that the current categorization of skin substitutes as either synthetic or non-synthetic is not mutually exclusive given the expansion of skin substitute products that may contain both biological and synthetic elements. The increasing overlap of both synthetic and non-synthetic skin substitute products emphasizes the importance of treating all skin substitute products in a similar manner in terms of coding and payment After further review, we agree with interested party recommendations that the suite of products referred to as skin substitutes should be treated in a uniform manner across different outpatient care settings. In terms of payment for these products within the office setting, we acknowledge the current variation between contractor Start Printed Page 46029 pricing for synthetic skin substitute products and payment based on ASP+6% for non-synthetic skin substitute products; and also the challenges to the clear categorization of products as synthetic or non-synthetic. As a result, we believe establishing a consistent framework for how these products are treated within the physician office and hospital outpatient settings will help ensure equitable access and appropriate payment for these services. As referenced in section II.J.3. of this proposed rule, we believe the term skin substitutes is not all-inclusive or particularly technically accurate, and therefore, we propose to replace the term skin substitutes with `wound care management products.' Additionally, the term `wound care management products' accurately reflects our belief that these products are more appropriately considered as supplies incident to a physician service. In order to ensure we treat skin substitutes consistently in terms of coverage, coding, and payment, we are proposing that skin substitute products that are commonly furnished in the physician office setting be considered as incident to supplies in accordance with section 1861(s)(2)(A) of the Act, effective January 1, 2024. “Incident to supplies” refers to supplies that are furnished as an integral, although incidental, part of the physician's personal professional services in the course of diagnosis or treatment of an injury or illness (§ 410.26). Under our proposal, in the office setting, we would no longer pay separately for skin substitute products under the ASP+6% payment methodology. By categorizing skin substitute products that are furnished in the office setting as incident to supplies, we would consider the cost of the supply used in furnishing a physicians' service through the physician fee schedule practice expense (PE) methodology. Treating these products as incident to supplies would mean that the resource costs for these products would be included in establishing PE relative value units (RVUs) for the associated physicians' service with which they would be furnished. For example, for CPT Code 15271 (application of skin substitute graft, leg or ankle), we establish the PE RVU by considering three separate categories of PE resource costs involved in furnishing the service: clinical labor, supplies, and equipment. Together, these costs are the total direct PE resource inputs. When considering these skin substitute products as a supply, we would add their associated cost to the direct PE inputs for the service with which the product is furnished. For a more detailed description of the PE RVU methodology, please refer to section II.B. of this proposed rule, Determination of Practice Expense Relative Value Units in the rule. We acknowledge that this proposed change to consider skin substitute products furnished in the office setting as incident to supplies would not be implemented immediately in CY 2023. Rather, we would need to transition toward consistent coding and payment for these products. Please refer to section III.O. of this proposed rule for our proposed changes to our process for assigning HCPCS Level II codes to wound care management products. In that section, we are proposing a deadline of 12 months after the effective date of the CY 2023 PFS final rule for applicants to submit HCPCS Level II applications for HCT/Ps . In order to move forward with the proposed changes toward uniform coding, we anticipate that the Q codes for all skin substitute products will be discontinued at the end of CY 2023. We further propose to establish “A” codes for all skin substitute products meeting the criteria for a HCPCS Level II code, and propose to contractor price these codes effective January 1, 2024. For CY 2023, skin substitute products that were previously assigned Q codes will continue to be paid under the current ASP+6 payment methodology. We believe it is necessary to establish an effective date of January 1, 2024, for the proposed payment of skin substitutes in the non-facility setting as incident to supplies in order to align with the HCPCS Level II coding proposals for wound care management products as described in section III.O., to ensure all interested parties have the same opportunity to effectively transition toward the coding and payment changes. Additionally, we intend to engage with interested parties via an open-door forum/listening session to receive feedback on this proposal. To summarize, we propose to treat skin substitutes (including synthetic skin substitutes) as incident to supplies as described under section 1861(s)(2)(A) of the Act when furnished in non-facility settings and to include the costs of these products as resource inputs in establishing practice expense RVUs for associated physician's services effective January 1, 2024. This proposal would mean skin substitutes are treated in the same manner for purposes of payment when furnished in non-facility settings, and would be consistently contractor priced through CY 2024. Given these significant changes, we believe maintaining the current treatment of these products for purposes of payment during CY 2023 will aid interested parties through the transition. We also propose to discontinue the use of the term skin substitutes beginning January 1, 2024 and to instead refer to this suite of products as “wound care management products.” We solicit feedback on our proposals. K. Proposal To Allow Audiologists To Furnish Certain Diagnostic Tests Without a Physician OrderAudiologists are recognized under Medicare Part B to provide certain diagnostic audiology services as defined at section 1861(ll)(3) of the Act. Specifically, the statute describes audiology services that include such hearing and balance assessment services as the audiologist is legally authorized to perform under State law, as would otherwise be covered if the services were furnished by a physician. The definition of qualified audiologist appears at section 1861(ll)(4)(B) of the Act. Currently, the only other provision in the Medicare statute that relates to audiology services is found at section 1862(a)(7) of the Act, which excludes payment for hearing aids and related examinations. This exclusion is codified at § 411.15(d)(1) which precludes payment for hearing aids or examinations for the purpose of prescription, fitting, and changing hearing aids. There are no other Medicare statutory provisions addressing audiologists or audiology services. Diagnostic tests are included as a Medicare Part B benefit under section 1861(s)(3) of the Act. For many diagnostic testing services, payment under the PFS can be made in two separate components of the service when parts of the services are furnished by two different physicians, practitioners, or other suppliers: the technical component (TC) and the professional component (PC). The TC is the portion of the service that involves the collection of information from the patient—for example, a radiological image, sample, specimen, or interrogatory study. When the TC is furnished separately, the “TC” modifier is used with the relevant HCPCS code to bill for the service under the PFS. The PC of a diagnostic test is the portion of the service involving the interpretation of the collected information by a physician or other practitioner. When the PC is furnished separately, the service is coded with modifier “26”. When the same physician or practitioner furnishes both the TC and PC of the service, the relevant HCPCS code (known as the “global”) is billed Start Printed Page 46030 without a modifier. We have established general requirements for furnishing and billing diagnostic tests at § 410.32. In the CY 1997 PFS final rule, we established in regulations at § 410.32(a), based on long-standing manual provisions, that all diagnostic tests, including audiology tests, must be ordered by the physician who is treating the beneficiary who will use the results to manage the beneficiary's care. We believed this requirement was necessary to ensure that the physician had a relationship with the beneficiary, and would ensure the tests were reasonable and medically necessary, as well as prevent patterns of abuse. At the same time, we finalized a regulatory provision at § 410.32(c) (later redesignated to § 410.32(a)(2)) to recognize as the treating practitioner for the purpose of ordering diagnostic tests certain nonphysician practitioners (NPPs) who are authorized under the statute to provide services that would be physician services if furnished by a physician when they are operating within the scope of their State license. The NPPs who can serve as the treating practitioner for purposes of ordering diagnostic tests include physician assistants (PAs), nurse practitioners (NPs), and clinical nurse specialists (CNSs) (defined in sections 1861(s)(2)(K)(i) and (ii) of the Act, respectively), certified nurse-midwives (defined in section 1861(gg) of the Act), qualified psychologists (defined in section 1861(ii) of the Act), and social workers (defined in section 1861(hh) of the Act)) (61 FR 59497 through 59498). We note that all of these NPPs are included as practitioners who must accept Medicare payment on an assignment-related-basis under section 1842(b)(18)(C) of the Act. As such, these NPPs can only collect any applicable cost-sharing from the patient, and cannot balance bill the patient for additional amounts above the Medicare payment amount. The regulation reflecting the ordering requirements for diagnostic tests has not been substantively amended since that time, except to add an exception to the treating practitioner ordering requirement for screening mammography and, in response to the PHE for COVID-19 to add a limited exception for a single, otherwise-covered COVID-19 diagnostic test (and one otherwise covered diagnostic laboratory test for flu or similar respiratory condition needed to diagnose COVID-19) per patient per year during the PHE. In the CY 1998 final rule (62 FR 59057 through 59070), we also amended § 410.32(a) to clarify that the ordering requirement is based on the exclusion in section 1862(a)(1)(A) of the Act and contained in § 411.15(k)(1); that is, diagnostic testing services that do not meet the ordering requirements in § 410.32(a) are considered not reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member. We explained that we found tests not demonstrably reasonable and medically necessary if they are not ordered by the beneficiary's treating physician or practitioner who will use the test results to manage the beneficiary's condition or symptom. Also in the CY 1998 PFS final rule, while we continued to require physician supervision for most diagnostic tests, we amended our regulation to except diagnostic tests personally furnished by audiologists (as well as psychologists and certain physical therapists board-certified in electrophysiology) from the physician supervision requirement. As explained above, all of the NPPs that we recognize as treating practitioners in § 410.32(a)(2) for purposes of the diagnostic test order requirement who must accept Medicare payment on an assignment-related basis can only collect any applicable cost-sharing from the patient and cannot balance bill the patient for additional amounts. Audiologists are not NPPs as defined by the statute (that is, they are not listed at section 1842(b)(18)(C) of the Act). However, beginning in 2008, we allowed audiologists to enroll in the Medicare program so that they could independently bill for their audiology services rather than relying on physicians or other enrolled practitioners to bill on their behalf. As such, audiologists are not required to accept payment on an assignment-related basis. Over the past several years, interested parties have requested that CMS eliminate the treating physician or other practitioner order requirement for the hearing and balance assessment services furnished by audiologists. They have suggested that CMS has the administrative authority to eliminate the order requirement for audiology services via notice and comment rulemaking, and that doing so would enable greater access to these important services. The interested parties believe that an order from the treating physician or practitioner is not required by the statute, and that audiology services are covered unless they are otherwise excluded, such as because they are not reasonable and necessary in a particular circumstance. To support their points, these interested parties shared with us a report prepared in 2020 by a consultant concluding that removal of the treating physician or practitioner ordering requirement for audiology hearing and balance assessment services would result in an estimated savings to Medicare over a 10-year period of approximately $108 million, which includes a savings of $36 million in beneficiary copayments. These savings estimates are based on projected Medicare payments and beneficiary copayments that would not occur if Medicare beneficiaries directly accessed the audiology hearing and balance services furnished by an audiologist without the order of a treating physician or other practitioner. In addition, we have heard from interested parties that an order is not required for audiology services by certain other public or private health insurers including Medicare Advantage plans, Medicaid, plans under the Federal Health Benefit Program, and the Veterans Administration. We do not know the scope of services that are covered by these plans or insurers when furnished by audiologists, including whether these health insurers cover only hearing and balance assessment services (as the Medicare program does in accordance with the statute) or also hearing aid examinations for the prescription, fitting, and programming of hearing aids or other services excluded from payment under Medicare Part B and/or whether only some or all of the plans allow payment directly to audiologists for some or all of the covered services without a physician/NPP order. Additionally, we note that some of these health insurance programs involve closed systems with greater levels of interprofessional communication and control (for example, within certain accountable care organizations (ACOs), managed care plan networks, or through various Veterans Affairs medical centers). In contrast, the physicians and practitioners furnishing care under the fee-for-service Medicare Part B program often practice independently from each other, which can pose barriers to communication and coordination of care between health care professionals such as audiologists and the treating physicians or other practitioners. In addition, the nature of audiology services personally furnished by audiologists is such that these services are often billed based on the audiologist's reassignment of billing rights by an entity other than the furnishing audiologist, so we are currently unable to determine the number of audiologists furnishing these services or the full scope of beneficiary Start Printed Page 46031 utilization of these services in those settings. While we believe that CMS has the administrative authority to remove the treating physician or practitioner order requirement for audiology hearing and balance assessment services via notice and comment rulemaking, we do not agree with the suggestions of interested parties that audiologists should be considered in the same way as the NPPs we recognized as treating practitioners for purposes of the order requirement under § 410.32(a)(2). Specifically, we allowed the NPPs (including PAs, NPs, and CNSs) to order diagnostic tests for the beneficiaries they treat, and we continued to require that the results of the tests be used in the management of the patient's specific medical problem. In these cases, the relationship of the patient to the NPP who orders diagnostic tests and uses the results in managing the beneficiary's medical condition serves to provide assurance that the services are medically necessary. In contrast, audiologists are not recognized under Medicare Part B to treat or manage patients. We consider audiologists' services to be more specialized that those of other physicians and NPPs who provide diagnostic services. That is, their diagnostic tests are more limited and focused in scope than others furnishing services under the Medicare Part B benefit for diagnostic tests at section 1861(s)(3) of the Act. Unlike PAs, NPs or CNSs who may bill for E/M services, and for whom Medicare Part B covers services and supplies incident to their own professional services as provided in the regulation at § 410.26, the scope of audiology services under the Medicare Part B statute includes only diagnostic hearing and balance assessment services. We are concerned that removal of the order requirement for hearing and balance services furnished by audiologists could lead to the furnishing and payment of services that are not used by a treating physician or practitioner in the management of the patient's medical condition, and thus, not medically necessary. We are also concerned about patient safety if Medicare beneficiaries seek hearing and balance services directly from audiologists without the involvement of a treating physician or practitioner. For example, the beneficiary could have an acute condition or symptom such as acute sensorineural hearing loss resulting from a viral neuronitis that needs to be diagnosed and treated by a physician or practitioner on an emergent basis, and that care could be delayed if the beneficiary first sought care directly from an audiologist. As an additional example, disequilibrium has many possible causes, including potentially life threatening cardiologic (for example, arrythmias, heart attack or cardiac ischemia) and neurologic etiologies (for example, migraines, TIAs (transient ischemic attacks), strokes). The wide variety of possible causes of disequilibrium with some of these in both categories being potentially life threatening (for example, stroke, heart attack, arrythmias) speaks to the importance of a physician or NPP being involved in the initial patient assessment. Such an assessment would include a careful history, a physical examination, and immediate office-based testing (for example, EKG) to look for some of the more critical possible causes of disequilibrium, and the physician or NPP would determine the plan for the progression of the outpatient workup. That is to say, the physician or NPP would decide, given the history and clinical exam, whether the evaluation should continue along cardiologic, neurologic, or vestibular perspectives—the latter of which could possibly result in an order/referral to an audiologist for balance assessments using the vestibular dysfunction testing codes. For these reasons, we believe patients with disequilibrium would be best served by seeing a physician or NPP before being referred to an audiologist as appropriate. Furthermore, as previously noted, audiologists are not required to accept Medicare payment on an assignment-related basis, and therefore, can balance bill the beneficiary. We are concerned that the removal of the treating physician or practitioner ordering requirement, and potentially increased volume of audiology services, could lead to unnecessary costs to beneficiaries. In addition, in the absence of a required order of the treating physician or practitioner, we are concerned that the direct access to audiologists might incentivize changes in behavior and practice patterns among audiologists that could lead to overutilization of audiology services. We have carefully considered the interested parties' requests to remove the treating physician or practitioner order requirement for diagnostic audiology hearing and balance assessment services. We believe it would be appropriate to provide a limited exception to the order requirement for diagnostic hearing testing services furnished by audiologists in order to broaden patient access to these services. In response to the requests of interested parties, we are proposing to amend our regulation by adding a paragraph at § 410.32(a)(4) to remove the order requirement under certain circumstances for certain audiology services furnished personally by an audiologist for non-acute hearing conditions. These non-acute hearing conditions would not include balance assessments that are used for patients with disequilibrium, because as we explained above, the physician/NPP needs to first evaluate the patient clinically due to the many serious medical conditions the beneficiary might have, and ensure the patient is cleared medically before setting them on track to receive vestibular function tests, possibly from an audiologist. The list of audiology services for which Medicare payment can be made when an audiologist personally performs them on the order of the treating physician or NPP can be found on the Medicare physician fee schedule web page under the link titled “Audiology Services” at https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched. We propose to permit the services described by the codes listed in Table 29 to be furnished under the proposed exception without the order of the treating physician or NPP. We note that Table 29 does not include the codes for vestibular function tests in the code ranges of 92517-92519 and 92537-92549 because, as discussed above, we believe it is in the clinical interest of the beneficiary to be assessed by a treating physician or NPP for potentially serious medical implications of disequilibrium symptoms, including cardiologic and neurologic etiologies before they can be cleared and referred for vestibular function tests. Start Printed Page 46032 We are proposing to create HCPCS code GAUDX ( Audiology service(s) furnished personally by an audiologist without a physician/NPP order for non-acute hearing assessment unrelated to disequilibrium, or hearing aids or examinations for the purpose of prescribing, fitting, or changing hearing aids; (service may be performed once every 12 months) to describe these audiology services furnished personally by an audiologist without the order of the treating physician or other practitioner. We believe that limiting the audiology services that can be furnished without an order to include only hearing conditions that are non-acute in onset and balance services (patients with disequilibrium symptoms) by removing the CPT codes for vestibular dysfunction would be appropriate to address our patient safety concerns. We also propose to specify in the code descriptor for HCPCS code GAUDX that the audiology services can be performed only once every 12 months. We believe this limitation is appropriate to avoid potential program integrity issues, such as audiologists billing for GAUDX with a greater frequency, or providing services that are not reasonable and necessary for the treatment of the patient's illness or injury. We selected once every 12 months, rather than every 6 months, for two reasons. The first is because 6 months did not seem long enough for a new, non-acute hearing condition to arise, and if an acute hearing condition were to onset, it would necessitate an evaluation with a physician/NPP. The second reason is that, at any time, the beneficiary may always elect to see their physician/NPP for any hearing conditions—acute or non-acute—or for conditions with disequilibrium symptoms. Under this proposal, an audiologist would be able to bill code GAUDX once every 12 months for a beneficiary. The GAUDX code would include and be used to bill for any number of audiology services furnished in that particular Start Printed Page 46033 encounter with the beneficiary. Since the proposed GAUDX code is generic, the tests provided could include those that are split into PC/TC and those that are not. As with all services, the actual tests provided and their results would need to be documented in the medical record, for purposes of medical review. Further, we propose that no more than one unit of code GAUDX could be billed—that means “1” is inserted in the “days or units” block 24G on the CMS 1500 professional claim form. We are also concerned that beneficiaries may receive services billed as code GAUDX from more than one audiologist in the 12-month period and/or be mistaken or misled into thinking that code GAUDX represents a screening/preventive service which Medicare does not cover. To avoid the potential for inappropriate use of HCPCS code GAUDX, we plan to establish system edits through our usual change management process to ensure that GAUDX is only paid once every 12 months, per each beneficiary. We note that the code descriptor proposed for GAUDX could be billed for patients seeking care for non-acute hearing conditions, and that the furnished audiology services would still have to be medically necessary. Under our proposal, after receiving audiology services from an audiologist accessed directly without the order of a treating physician or practitioner, the beneficiary would have to wait a full 12 months before receiving additional diagnostic tests from an audiologist without a physician/NPP order. The beneficiary would remain free to seek care from a treating physician (or/NPP) if needed, and that care could potentially include a referral with an order for further diagnostic testing furnished by an audiologist. To value HCPCS code GAUDX, we propose to use the combined values of CPT codes 92557 ( Comprehensive audiometry threshold evaluation and speech recognition (92553 and 92556 combined)) and 92567 ( Tympanometry (impedance testing)), which we believe would represent a typical service provided by audiologists. We chose CPT Codes 92557 and 92567 as typical because they make up 72 percent of all billings for audiologists; and, when all physician and practitioner specialties are considered, including audiologists, code 92557 is billed with code 92567 over 60 percent of the time and code 92567 is billed with code 92557 over 83 percent of the time in the same clinical encounter, according to Medicare claims data. Thus, we propose a total work RVU of 0.8 for GAUDX, calculated by combining the 0.60 work RVU for CPT code 92557 and 0.20 work RVU for CPT code 92567. We are proposing to establish the PE value for GAUDX by combining the unduplicated PE of CPT codes 92557 and 92567. Specifically, we propose to include the following direct practice expense (PE) inputs for supply items: two SD046 (Ear tip, tympanometry probe), two SJ053 (Swab pad, alcohol), one SM0251 (Specula tips, otoscope), one (SK059) sheet of recording paper, and two SD047 (Ear tip insert with sound tube); and the following direct PE inputs for equipment: EQ054 (Audiometric soundproof booth (exam and control room)) for 20 minutes, EQ053 (Audiometer, clinical, diagnostic) for 20 minutes, and EQ244 (Tympanometer with printer) for 4 minutes. We also propose to apply the same provisions for code GAUDX as those set for 92557 and 92567 (for example, PC/TC indicator, bilateral indicator, physician supervision indicator, etc.), as they now appear in the PFS Relative Value file found at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Relative-Value-Files. We believe that proposed HCPCS code GAUDX, if finalized, will allow us to better understand the scope of beneficiary access to these services with or without the order requirement. We also believe that proposed HCPCS code GAUDX, if finalized, will allow us to better assess possible burdens to the beneficiary when attempting to access these services. Given the makeup and intended use of proposed code GAUDX, we would like to increase our understanding about how and where these audiology services would be provided without the order of a treating physician or practitioner. We are also requesting comments from interested parties about what settings might represent the typical places of service and which institutional providers might bill for HCPCS code GAUDX. L. Proposals and Request for Information on Medicare Parts A and B Payment for Dental Services1. Background on Medicare Payment for Dental ServicesSection 1862(a)(12) of the Act generally precludes payment under Medicare Parts A or B for any expenses incurred for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth. (Collectively here, we will refer to “the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth” as “dental services.”) That section of the statute also includes an exception to allow payment to be made under Medicare Part A for inpatient hospital services in connection with the provision of such dental services if the individual, because of their underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services. Our regulation at 42 CFR 411.15(i) similarly excludes payment for dental services except for inpatient hospital services in connection with dental services when hospitalization is required because of: (1) the individual's underlying medical condition and clinical status; or (2) the severity of the dental procedure. However, under our current policy, we make payment under both Medicare Part A and Part B for certain dental services in circumstances where the services are not considered to be in connection with dental services within the meaning of section 1862(a)(12) of the Act or our regulation at § 411.15(i). We make payment when a doctor of dental medicine or dental surgery (hereinafter referred to as a “dentist”) furnishes dental services that are an integral part of the covered primary procedure or service furnished by another physician treating the primary medical illness. In these limited circumstances, Medicare payment can be made for dental services such as, but not limited to, the wiring of teeth when done in connection with a reduction of a jaw fracture, the extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease, and/or an oral or dental examination on an inpatient basis performed as part of a comprehensive workup prior to renal transplant surgery. (See Medicare Benefit Policy Manual (IOM Pub 100-02, Chapter 15, section 150); and Medicare National Coverage Determinations Manual Chapter 1, Part 4 (IOM Pub 100-03, Chapter 1, Part 4, section 260.6)). Medicare Administrative Contractors (MACs) make claim-by-claim determinations as to whether a patient's circumstances do or do not fit within the terms of the preclusion and exception specified in section 1862(a)(12) of the Act and § 411.15(i) of our regulations, and in accordance with the CMS manual provisions. We have received feedback from interested parties suggesting that our interpretation of section 1862(a)(12) of the Act is unnecessarily restrictive, which may contribute to inequitable distribution of dental services for Medicare beneficiaries. Additionally, a recent report from the National Start Printed Page 46034 Institutes of Health, “Oral Health in America Advances and Challenges,” discusses how unequal distribution of dental services and prohibitive costs, particularly for older adults who are at the highest risk for poor oral health, can lead to and further complicate the treatment of other medical conditions (for more information, see https://directorsblog.nih.gov/2022/06/14/using-science-to-solve-oral-health-inequities/). The interested parties also suggest that there are instances where dental services are directly related to the clinical success of an otherwise covered medical service under Medicare Parts A and B, and that the regulation at § 411.15(i) should be amended to reflect that Medicare payment is available in these circumstances. Recognizing that there may be instances where medical services necessary to diagnose and treat the individual's underlying medical condition and clinical status may require the performance of certain dental services, we believe that there are instances where dental services are so integral to other medically necessary services that they are not in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth within the meaning of section 1862(a)(12) of the Act. Rather, such dental services are inextricably linked to the clinical success of an otherwise covered medical service, and therefore, are instead substantially related and integral to that primary medical service. We also believe that there are circumstances where the dental services are in direct connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, and are not inextricably linked to the clinical success of a covered medical service. In these instances, we continue to believe that Medicare payment is precluded by section 1862(a)(12) of the Act except when, due to the patient's underlying medical condition and clinical status, or the severity of the dental procedure, hospitalization is required; and that in those instances, the Medicare Part A exception provided under section 1862(a)(12) of the Act would apply. To provide greater clarity to our current policies and respond to issues raised by interested parties, as described in section II.L.2 of this proposed rule, we are: (1) proposing to clarify our interpretation of section 1862(a)(12) of the Act and codify certain of our current Medicare FFS payment policies for medically necessary dental services; (2) proposing and seeking comment on payment for other dental services, such as dental examinations, including necessary treatment, performed as part of a comprehensive workup prior to organ transplant surgery, or prior to cardiac valve replacement or valvuloplasty procedures, that are similarly inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services; (3) requesting comments on other types of clinical scenarios where the dental services may be inextricably linked to, and substantially related and integral to the clinical success of, other covered medical services; (4) requesting comments on the potential establishment of a process to identify for our consideration and review submissions of additional dental services that are inextricably linked and substantially related and integral to the clinical success of other covered medical services; (5) requesting comment on other potentially impacted policies; and (6) requesting comment on potential future payment models for dental and oral health care services. We welcome public comments on these areas. 2. Proposals To Clarify the Interpretation of Section 1862(a)(12) of the Act and Codify Current Payment Policies for Certain Dental Services and Request for Commenta. Proposed Payment for Inpatient Hospital Dental Services and Request for CommentAs explained above, under our interpretation of the statute and our current regulation, and as reflected in our regulation and manuals, items and services furnished in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting the teeth generally are not covered, and no payment may be made for them under either Medicare Part A or Part B. Section 1862(a)(12) of the Act and our regulation at § 411.15(i) includes an exception to allow Medicare Part A payment to be made for inpatient hospital services in connection with the provision of dental services if the individual, because of their underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services. We believe that there are instances in which a Medicare beneficiary may require dental services that are in direct connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth such that the application of the Medicare Part A payment exception would apply when hospitalization is required because of: (1) a patient's underlying medical condition and clinical status; or (2) the severity of the dental procedure. Under these circumstances, we would continue to apply the exception under section 1862(a)(12) of the Act, and make payment for inpatient hospital services. We are interested in receiving public comments on what professional services, including, but not limited to dental services, may occur during and prior to the patient's hospitalization or procedure requiring hospitalization under this exception. We may consider finalizing, based on our review of public comments, additional payment policies in this area. b. Proposal To Clarify the Interpretation of Section 1862(a)(12) of the Act and Codify Current Payment Policies for Certain Dental ServicesAs explained above, Medicare payment can be made for inpatient hospital services associated with dental services that fall within the statutory exception under section 1862(a)(12) of the Act. However, under our current policy, if a dental service and other related services (for example, anesthesia or imaging services) are performed as incident to and as an integral part of a covered procedure or service performed by a dentist, the total service performed by the dentist is covered, and payment can be made under Medicare Parts A and B as appropriate. This policy is based on the idea that some dental services that would ordinarily be excluded by statute from payment are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. When that is the case, then we believe those dental services are not in connection with dental services within the meaning of section 1862(a)(12) of the Act, but are instead inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. As such, we propose to interpret the statute under section 1862(a)(12) of the Act to permit Medicare payment under Parts A and B for dental services where the dental service is inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services and allow payment to be made, regardless of whether the services are furnished in an inpatient or outpatient setting. Under these circumstances, we propose that the exclusion under section 1862(a)(12) of the Act would not apply, because the service is not in connection with the Start Printed Page 46035 care, treatment, filling, removal, or replacement of the teeth or structures supporting the teeth, but instead is inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. As described in section II.L.1. of this proposed rule, in a limited number of circumstances, Medicare Part B currently pays for dental services under the PFS when a dentist furnishes a service(s) that is integral to the covered primary procedure or service rendered when treating the primary medical illness. Our current payment policies for dental services are contained in manual provisions (The Medicare Benefit Policy Manual Chapter 15 (IOM Pub 100-02, Chapter 15, section 150) and Medicare National Coverage Determinations Manual Chapter 1, Part 4 (IOM Pub 100-03, Chapter 1, Part 4, section 260.6)) that reflect the proposed interpretation of section 1862(a)(12) of the Act discussed above. Our payment policy contained in Medicare National Coverage Determinations Manual Chapter 1, Part 4 (IOM Pub 100-03, Chapter 1, Part 4, section 260.6) [74] (herein “the NCD Manual”) provides for payment of an oral or dental examination performed on an inpatient basis as part of a comprehensive workup prior to renal transplant surgery. We believe Medicare payment is permitted under this manual provision for such a dental or oral examination prior to renal transplant surgery, because the examination is inextricably linked to, and substantially related and integral to the clinical success of, the renal transplant procedure. As such, we believe such services are not subject to the payment preclusion under section 1862(a)(12) of the Act. However, we believe that comprehensive workups prior to renal transplant surgery, including related dental examinations, can occur in either the inpatient and outpatient setting. As such, we are proposing to provide Medicare payment for oral or dental examinations performed as part of a comprehensive workup prior to renal transplant surgery when these services occur in either the inpatient or outpatient setting, and revise our regulation at § 411.15(i) accordingly. The NCD Manual goes on to state that, when performing a dental or oral examination, a dentist is not recognized as a physician under section 1861(r) of the Act. We believe this statement is based on an unnecessarily narrow reading of section 1861(r) of the Act, and is also not consistent with other manual provisions. The statutory definition of physician includes a doctor of dental surgery or of dental medicine in section 1861(r)(2) of the Act, and a similar definition of physician is included in our IOM Pub 100-1, Section 70.2 [75] when dental or oral examinations, and specific treatments, are within the State scope of practice for the dentist. As such, we are proposing to amend § 411.15(i) to clarify that Medicare Part B coverage and payment can be made for such a dental or oral examination prior to renal transplant surgery when performed by a doctor of dental surgery or dental medicine as defined in section 1861(r)(2) of the Act. The Medicare Benefit Policy Manual Chapter 15 (IOM Pub 100-02, Chapter 15, section 150) (herein “the MBP Manual”) states that if an otherwise noncovered procedure or service is performed by a dentist as incident to and as an integral part of a covered procedure or service performed by the dentist, the total service performed by the dentist on such an occasion is covered.[76] The MBP Manual continues by providing several specific examples where CMS would pay for dental services:
Specifically, in the MBP Manual, we describe that the reconstruction of a ridge performed primarily to prepare the mouth for dentures is a noncovered procedure and therefore would not generally be eligible for payment. However, when the reconstruction of a ridge is performed as a result of and at the same time as the surgical removal of a tumor (for other than dental purposes), the totality of surgical procedures is a covered service. In the case of the procedure of ridge reconstruction occurring in conjunction with the surgical removal of a tumor, we believe that the dental services are inextricably linked to, and substantially related and integral to the clinical success of, the other covered medical services, that is, the removal of a tumor; and therefore, Medicare Part A and Part B payment could be made. Additionally, the MBP Manual explains that Medicare makes payment for the wiring of teeth when this is done in connection with the reduction of a jaw fracture. Once again, we believe that the dental services of wiring of the teeth are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services, which in this case is the reduction of a jaw fracture, and therefore, Medicare Part A and Part B payment could be made. Likewise, the MBP Manual states that the extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease is also currently covered. We continue to believe that in this clinical scenario the dental services related to teeth extraction are inextricably linked to, and substantially related and integral to the clinical success of, the radiation treatment of neoplastic disease; and therefore, Medicare Part A and Part B payment could be made. The Manual also describes a specific situation in which certain dental services may be considered a covered service, depending on whether the underlying medical condition is deemed to be covered. The Manual explains that dental splints used to treat a dental condition are generally excluded from coverage under section 1862(a)(12) of the Act, but if the treatment is determined to be a covered medical condition (that is, dislocated upper/lower jaw joints), then the splint can be covered. We believe that dental splint services could be covered and paid, because the dental services could be inextricably linked to, and substantially related and integral to the clinical success of, a covered medical service, such as treatment of a dislocated jaw. Therefore, we are proposing to clarify and modify the regulations text at § 411.15(i) to include this scenario of dental splints used in the treatment of a covered medical condition. We seek comments on this aspect of the proposal. Therefore, we are proposing to codify and clarify in the regulation at § 411.15(i) that payment can be made under Medicare Part A and Part B for dental services that are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services, including (1) reconstruction of a ridge when it is performed as a result of and Start Printed Page 46036 at the same time as the surgical removal of a tumor; (2) the wiring or immobilization of teeth when done in connection with the reduction of a jaw fracture; (3) the extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease; and (4) a dental splint only when used in conjunction with covered treatment of a medical condition. This proposal would constitute a clarification to existing policy, as we are codifying in regulation existing manual provisions. The MBP Manual states that payment can be made under Medicare Parts A and B for a covered dental procedure regardless of where the service is performed, noting that the hospitalization or non-hospitalization of a patient has no direct bearing on the coverage, payment, or exclusion of a given dental procedure in specific circumstances. As such, dental services that are not excluded from Medicare payment under section 1862(a)(12) of the Act could be appropriately furnished in inpatient or outpatient settings. We propose to clarify in the regulation at § 411.15(i) that payment for dental services that do not fall within the scope of section 1862(a)(12) of the Act, and that are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services, could be made regardless of whether the services are furnished on an inpatient or outpatient basis. We seek comments on whether it is clinically appropriate for these services to be furnished in inpatient or outpatient settings. The MBP Manual further states that the coverage of services such as the administration of anesthesia, diagnostic x-rays, and other related procedures depends upon whether the primary procedure being performed by the dentist is itself covered. The MBP Manual explains that an x-ray taken in connection with the reduction of a fracture of the jaw or facial bone is covered, while a single x-ray or x-ray survey taken in connection with the care or treatment of teeth or the periodontium is not covered. In order to clarify and codify this current policy, we propose to amend our regulation at § 411.15(i) to provide that payment can be made for dental services provided in conjunction with medical services that are inextricably linked to, and substantially related and integral to the clinical success of, covered medical services, such as X-rays, administration of anesthesia, and use of the operating room. The MBP Manual also specifies that payment can be made for services and supplies furnished incident to other dental services for which Medicare payment can be made, for example, services furnished incident to the dentist's professional services by a dental technician or registered nurse under the dentist's direct supervision. Medicare payment policy for services furnished incident to the services of the billing practitioner are contained in § 410.26 of our regulations. Additionally, the MBP Manual provides that when an excluded service is the primary procedure involved, dental services are not covered, regardless of complexity or difficulty. The MBP Manual describes an example of the extraction of an impacted tooth as not covered, and goes on to state that certain procedures, including an alveoplasty (the surgical improvement of the shape and condition of the alveolar process) and a frenectomy, are excluded from coverage when either of these procedures is performed in connection with an excluded service, for example, the preparation of the mouth for dentures. Additionally, the MBP Manual states that the removal of a torus palatinus (a bony protuberance of the hard palate) may be a covered service, but notes that it is often provided in connection with an excluded service (that is, the preparation of the mouth for dentures), and in that event, Medicare does not pay for this procedure. We are not proposing to modify this policy. No payment is made for dental services when an excluded service is the primary procedure involved. Our interpretation of section 1862(a)(12) of the Act allows for Medicare payment when dental services are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. Therefore, no payment is made when dental services are related to medical services that are not covered, even if the dental services are inextricably linked to, and substantially related and integral to the clinical success of, the non-covered services. The proposed amendment to § 411.15(i) would specify that, in order for Medicare payment to be made, the dental services must be inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. Under our proposal to clarify and codify our current payment policy for dental services, section 1862(a)(12) of the Act does not apply only when dental services are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services, such that the standard of care for that medical service would be compromised or require the dental services to be performed in conjunction with the covered medical services. When such medically necessary dental services are furnished by a physician or practitioner, including a dentist, Medicare Part A or B payment can be made for the dental services and other services integral or incident to those dental services. Specifically, such services include:
• The extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease (such as services described by Current Dental Terminology (CDT) [77] codes D7140 and D7210 for ICD-10 C41.1 Malignant neoplasm of mandible),
We propose that Medicare Part A and B payment for these dental services can be made, because the services are inextricably linked to, and substantially related and integral to the clinical success of, the other covered medical services. We further seek comment on whether, given current clinical advances, the descriptions of these dental services are clinically accurate and appropriate. For example, we are interested in whether the phrase “wiring of the teeth” is still clinically accurate or if other terminology would be more appropriate. Given that such dental services would not be subject to the preclusion on payment under section 1862(a)(12) of the Act, Medicare would make payment to the furnishing dentist or another physician or practitioner for the professional dental services. As described in the MBP Manual, payment may also be made for services and supplies furnished incident to those dental services furnished by the dentist or other physician or practitioner, and for other ancillary services integral to the dental services. For example, Medicare payment could be made for services furnished incident to the professional dental services by auxiliary personnel, such as a dental hygienist, Start Printed Page 46037 dental therapist, or registered nurse who is under the direct supervision of the furnishing dentist or other physician or practitioner, if they meet the requirements for “incident to” services as described in § 410.26 of our regulations. When such dental services are furnished in a facility setting, such as an inpatient acute care hospital or hospital outpatient department, payment for the facility or ancillary services would be made under the applicable payment system. In summary, we are proposing to amend § 411.15(i) to codify that payment can be made under Medicare Part A and Part B for dental services that are inextricably linked to, and substantially related and integral to the clinical success of, an otherwise covered medical service. We further propose to amend § 411.15(i) to include examples of services for which payment can be made under Medicare Parts A and B on that basis. Specifically, we propose to include as examples the following dental services for which payment is permitted under our current policy: (1) dental or oral examination as part of a comprehensive workup prior to a renal organ transplant surgery; (2) reconstruction of a dental ridge performed as a result of and at the same time as the surgical removal of a tumor; (3) wiring or immobilization of teeth in connection with the reduction of a jaw fracture; (4) extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease; and (5) dental splints only when used in conjunction with medically necessary treatment of a medical condition. We further propose that Medicare payment would be made for these dental services regardless of whether the services are furnished in an inpatient or outpatient setting, and we propose that payment can also be made for services that are ancillary to these dental services, such as x-rays, administration of anesthesia, use of an operating room, other facility services. We seek comment on all aspects of this proposal. If finalized, we note that we will make conforming changes to the MBP Manual to reflect changes or clarifications, and to remove any text that is no longer applicable. We will also make conforming changes to other Manual provisions or National Coverage Decision policies as necessary. As discussed, MACs may determine on a claim-by-claim basis whether a patient's circumstances do or do not fit within the terms of the preclusion or exception specified in section 1862(a)(12) of the Act and § 411.15(i). The proposed policies outlined in this section of this proposed rule would not prevent a MAC from making a determination that payment can be made for dental services in other circumstances not specifically addressed within this proposed rule and the proposed amendments to § 411.15(i). c. Proposed Update to Current Payment Policies for Dental ServicesAs discussed in section II.L.2 of this proposed rule, we are proposing that payment can be made under Medicare Parts A and B for dental services such as the reconstruction of a dental ridge performed as a result of and at the same time as the surgical removal of a tumor, the wiring or immobilization of the teeth when done in connection with a reduction of a jaw fracture, the extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease, dental splints only when used in conjunction with covered treatment of a medical condition, and an oral or dental examination performed as part of a comprehensive workup prior to renal transplant surgery. We believe, after further review of current medical practice, through consultations with interested parties and our medical officers, that there are additional circumstances that are clinically similar to these examples, and where Medicare payment for the service could be made, because the dental services are inextricably linked to, and substantially related and integral to the clinical success of, the other covered medical service(s). For example, after further review, we believe that if a patient requiring an organ transplant has an oral infection, the success of that transplant could be compromised if the infection is not properly diagnosed and treated prior to the transplant surgery. Without an oral or dental examination to identify such an infection, and the necessary treatment, such as restorative dental services, to eradicate it prior to the transplant procedure, the patient's ability to accept the organ transplant could be seriously complicated or compromised. Examples of restorative dental services to eradicate infection could include: extractions (removal of the entire infection, such as pulling of teeth—for example, CDT D7140, D7210), restorations (removal of the infection from tooth/actual structure, such as fillings—for example, CDT D2000-2999), periodontal therapy (removal of the infection that is surrounding the tooth, such as scaling and root planning—for example, CDT D4000-4999, more specifically D4341, D4342, D4335 and D4910), or endodontic therapy (removal of infection from the inside of the tooth and surrounding structures, such as root canal—for example, CDT D3000-3999). If such an infection is not treated prior to transplant, and immunosuppressant therapy is initiated to preserve the transplant, then there is an increased likelihood for morbidity and mortality resulting from spreading of the local infection to sepsis. Similarly, without a dental or oral exam and necessary diagnosis and treatment of any presenting infection of the mouth prior to a cardiac valve replacement [78] or valvuloplasty procedures, an undetected, non-eradicated oral or dental infection could lead to bacteria seeding the valves, seeding surrounding cardiac muscle tissues involved with the surgical site, and conceivably leading to systemic infection or sepsis, all of which increase the likelihood of unnecessary and preventable acute and chronic complications for the patient. Because an oral or dental infection can present substantial risk to the success of these procedures, such that the standard of care would be to not proceed with the procedure when there is a known oral or dental infection present, we believe dental services furnished to identify, diagnose, and treat oral or dental infections prior to organ transplant, cardiac valve replacement, or valvuloplasty procedures are not in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, but instead are inextricably linked to, and substantially related and integral to the clinical success of, these other covered medical services. We note that, in these circumstances, the necessary treatment to eradicate an infection may not be the totality of recommended dental services for a given patient. For example, if an infected tooth is identified in a patient requiring an organ transplant, cardiac valve replacement, or valvuloplasty procedure, the necessary treatment would be to eradicate the infection, which could result in the tooth being extracted. Additional dental services, such as a dental implant or crown, may not be considered immediately necessary to eliminate or eradicate the infection or its source prior to surgery. Therefore, such additional services would not be inextricably linked to, and substantially related and integral to the clinical success of, the organ transplant, cardiac valve replacement, or valvuloplasty services. As such, no Medicare payment would be made for Start Printed Page 46038 the additional services that are not immediately necessary prior to surgery to eliminate or eradicate the infection. As discussed, we believe that there are circumstances where the clinical success of medical or surgical services required for a successful organ transplantation, cardiac valve replacement, and valvuloplasty procedure may require the performance of certain dental services. As such, we propose to amend our regulation at § 411.15(i)(3) to provide that dental services that are inextricably linked to, and substantially related and integral to the clinical success of, a certain covered medical service are not subject to the exclusion under section 1862(a)(12) of the Act; and that payment can be made under Medicare Parts A and B for such dental services. We are proposing to amend § 411.15(i) to include examples of payable services under Medicare Parts A and B, as: (1) the dental or oral examination as part of a comprehensive workup prior to an organ transplant, cardiac valve replacement, or valvuloplasty procedure; and (2) the necessary dental treatments and diagnostics to eliminate the oral or dental infections found during a dental or oral examination as part of a comprehensive workup prior to an organ transplant, cardiac valve replacement, or valvuloplasty procedure. We believe that clinical practice is such that these services can occur within the inpatient hospital or outpatient setting, and we further propose that Medicare Parts A and B would make payment for these dental services, as applicable, regardless of whether the services are furnished in an inpatient or outpatient setting. Furthermore, we propose that payment under the applicable payment system could also be made for services that are ancillary to these dental services, such as x-rays, administration of anesthesia, and use of the operating room. We seek comment on this proposed policy and our proposed amendments to § 411.15(i)(3) to specify that payment under Medicare Parts A and B can be made for an oral or dental examination, and medically necessary diagnostic and treatment services to eliminate an oral or dental infection, prior to an organ transplant, cardiac valve replacement, or valvuloplasty procedure. We propose to continue to contractor price the dental services for which payment is made currently, and for the dental services that can be made under the proposed amendments to § 411.15(i)(3) for CY 2023, or until we have further data to establish prospective payment rates. We also seek public comment on the expected utilization of these services. We solicit comment on these proposals. i. Other Clinical Scenarios for Dental Services Integral to Other Covered Medical ServicesIn addition to the examples of dental services for which payment is made under our current policy, and dental services to avoid risk of an oral or dental infection prior to organ transplant, cardiac valve replacement, or valvuloplasty procedures, we believe there may be other clinical scenarios where dental services may not be in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, but instead are inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. These could include certain dental exams and medically necessary diagnostic and treatment services prior to treatments for head and neck cancers, such as radiation therapy with or without chemotherapy, or the initiation of immunosuppressant therapy, such as those used during cancer treatments, where the standard of care is such that it is clinically advisable to eliminate the source of infection prior to proceeding with the necessary medical care, or the standard of care for the primary medical condition would be significantly materially compromised if the dental services are not performed. As with any assessment of patient health prior to initiating immunosuppressant therapy, it may be necessary to eradicate all sites of infection, including oral infections, prior to suppressing the immune system, regardless of the reason for prescribing an immunosuppressant. We also note some medications may have an immunosuppressant effect, even though they are not prescribed principally to suppress the immune system. We believe, in these circumstances, eradicating oral or dental infection prior to beginning a medication that has been found to have a suppressant effect on that part of the immune system required to eradicate infectious agents could be necessary to the clinical success of the medication therapy. Similarly, in joint replacement surgery (such as total hip and knee arthroplasty surgery) we believe there may be risks to the outcome of the procedure if an oral infection is not treated. There is evidence that some joint replacement patients have significant dental pathology found before their surgery.[79] Given the incidence of dental pathology in joint replacement patients, there may be some joint replacement patients who would experience a clinically significant benefit from a pre-operative dental exam and medically necessary treatment of oral pathology(ies). As in transplant surgery, patients having joint replacement surgery are at risk for surgical site infection, and there may be an increased risk for those patients with significant dental pathology. The presence of an overlooked oral infection may increase the risk for acute and chronic surgical site infection.[80] [81] We acknowledge there is other clinical evidence that does not support the need for a dental exam and necessary treatment prior to total joint replacement surgery, specifically total hip and knee arthroplasty.[82 83] Rather, there is evidence that further study is needed to determine whether pre-operative dental exams and treatments are necessary and clinically beneficial.[84] Therefore, we are interested in public comment providing systematic clinical evidence as to whether there is an inextricable link between dental service(s) and joint replacement surgery such that the dental services are substantially related and integral to the clinical success of the surgical procedures. We note that if we receive compelling clinical evidence, we may finalize in this final rule additional clinical scenarios, such as dental services prior to joint replacement surgery (for example, total hip and knee arthroplasty surgery), where payment could be made under Medicare Part A or Part B. We are seeking comment on whether there is a significant quality-of-care detriment if certain dental services are not provided prior to joint replacement surgery (such as total hip and knee arthroplasty surgery), and if so, we request a description of that systematic evidence. Specifically, we are looking for medical evidence that Start Printed Page 46039 the provision of certain dental services leads to improved healing, improved quality of surgery, and the reduced likelihood of readmission and/or surgical revisions, because an infection has interfered with the integration of the implant and interfered with the implant to the skeletal structure. Evidence needs to be clinically meaningful and represent a material difference that results in some level of persistence in the clinical success of the procedure to support that pre-operative dental services are similarly inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services, and therefore in connection with, and substantially related and integral to that primary covered medical service. If commenters are able to provide us with compelling evidence to support that a dental exam and necessary treatment prior to joint replacement procedures such as total hip and knee arthroplasty surgery would result in clinically significant improvements in quality and safety outcomes, for example, fewer revisions, fewer readmissions, more rapid healing, quicker discharge, quicker rehabilitation for the patient, then we would consider whether such dental services may be inextricably linked to, and substantially related and integral to the clinical success of, the joint replacement surgery. We also believe there may be other clinical scenarios involving dental services that we have not yet considered, where certain dental services may be similarly inextricably linked to, and substantially related and integral to the clinical success of, certain otherwise covered medical service such that the exclusion under section 1862(a)(12) of the Act would not apply. For example, we are proposing to codify current policy that Medicare payment can be made for the wiring of teeth when done in connection with the reduction of a jaw fracture. We request comment on whether there are other dental services associated with stabilizing and/or repairing the jaw after accidental injury or trauma and similarly that similarly would not be subject to the exclusion under section 1862(a)(12) of the Act, and for which we should consider providing Medicare payment. We solicit comment on our current approach to payment for dental services that we have already identified under our current and proposed policies as inextricably linked to, and substantially related and integral to the clinical success of, certain covered services, as well as those services we may yet identify, and other operational topics we should consider further. We acknowledge that there may be other clinical circumstances we have not yet identified where dental services may not be in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, and instead are similarly inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services. There may be other clinical scenarios involving physiologic or anatomic conditions in which dental services could be a medically critical precondition to the clinical success of other services, such as certain surgical procedures or cancer treatments. For these reasons, we solicit comment on whether there are other clinical scenarios for medical or surgical services where the standard of care is such that the performance of certain dental services (for example, an exam, and certain diagnostic and treatment services) is considered to be a critical clinical precondition to proceeding with the primary medical procedure and/or treatment, and therefore may be similarly inextricably linked to, and substantially related and integral to the clinical success of, a certain covered service, and therefore, not subject to the exclusion under section 1862(a)(12) of the Act. If we were to finalize our proposed policies as discussed under sections II.L.2.a. and II.L.2.b. of this proposed rule, we may consider finalizing, based on our review of public comments, these additional examples of dental services that may not be subject to the payment exclusion under section 1862(a)(12) of the Act because they are similarly inextricably linked to, and substantially related and integral to the clinical success of, covered medical services. If we were to finalize such additional examples of dental services, we would list those services as examples under the regulation at § 411.15(i)(3), as discussed in section II.L.2.c. of this proposed rule. Lastly, as discussed above, we recognize that the dental services we have identified for which Medicare payment could be made under our proposed policies would occur either prior to, or contemporaneously with, the covered medical service. We are also interested in comments on whether, on the same basis, there are clinical circumstances under which Medicare payment could be made for dental services furnished after the covered medical procedure or treatment. ii. Establishment of a Process To Consider Additional Clinical Scenarios for Future UpdatesAs discussed, we believe there may be clinical scenarios where dental services are not in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, and instead are inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services. We believe there may be additional clinical scenarios we have not yet identified under which Medicare payment could be made for certain dental services on this basis. To ensure we are appropriately considering other potential clinical scenarios that may involve such dental services, we believe it may be appropriate to establish a process whereby interested parties can share recommendations for our consideration, review and analysis for potential inclusion on the list of dental services for which payment can be made under § 411.15(i)(3) through future rulemaking. If an interested party believes that there is a clinical scenario in which certain dental services are similarly inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services, we invite interested parties to submit information about the clinical scenario and the medical evidence to support that the standard of care for the medical service is such that one would not proceed with the medical procedure or service without performing the dental services, because the covered medical services would or could be significantly and materially compromised, or where dental services are a clinical prerequisite to proceeding with the primary medical procedure and/or treatment. The interested party should explain why the particular dental services should not be subject to the general preclusion on payment for dental services under section 1862(a)(12) of the Act, because they are inextricably linked to, and substantially related and integral to the clinical success of, covered medical services, and provide the medical evidence to support that conclusion. To ensure a thorough review can occur, we encourage interested parties to include relevant medical literature, clinical guidelines or generally accepted standards of care, and other supporting documentation to support our review and consideration of the clinical scenario involving dental services. To facilitate our consideration of interested parties' recommendations within an annual rulemaking cycle, we would Start Printed Page 46040 request that interested parties submit this information by February 10th of that year at . Submissions received outside of the public comment period for a PFS proposed rule will be considered for possible inclusion in future notice and comment rulemaking cycles. Recommendations received by February, 10th of a calendar year would be reviewed for consideration and potential inclusion within the PFS proposed rule for the subsequent calendar year. For example, information received by February 10, 2024 would be reviewed for consideration and potential inclusion within the CY 2025 PFS proposed rule. We encourage interested parties to engage with us and provide medical evidence to support their recommendations for additional clinical scenarios where dental services may not fall within the scope of the payment preclusion under section 1862(a)(12) of the Act. As discussed previously, we may consider finalizing a change, after reviewing public comments, in the CY 2023 PFS final rule to revise the list of examples of dental services for which Medicare payment can be made. Furthermore, we solicit feedback on: (1) whether there are additional clinical circumstances we should consider where dental services are inextricably linked to, and substantially related and integral to the clinical success of, covered medical services; and (2) the establishment of a process to review additional clinical scenarios identified by the public, which we may consider finalizing, after review of public comments received, in this final rule. iii. Request for Comment on Dental Services Integral to Covered Medical Services Which Can Result in Improved Patient OutcomesAs described in section II.L.2 of this proposed rule, we believe there are clinical scenarios where the standard of care is such that there is an immediate need for certain dental services as the necessary clinical prerequisite to an otherwise covered medical service. We believe there may be other clinical scenarios, however, where the ongoing disease management of the patient receiving the medically necessary procedure may have an improved outcome or see a clinical benefit from the performance of dental services, but that the dental service may not be inextricably linked to, or substantially related and integral to the clinical success of, the otherwise covered medical service. For example, we believe there may be certain circumstances where the clinical benefit of medical care or treatment of a diabetic patient could be improved if certain dental services are furnished. We are interested in public feedback on whether certain dental services (for example, a dental exam, necessary treatment of a dental condition such as the extraction of an infected and mobile tooth) should be considered so integral to the standard of care for an otherwise covered medical service that the preclusion on Medicare payment under section 1862(a)(12) of the Act does not apply. Additionally, we are interested in comments on whether the success of a given surgery is dependent upon eradication of dental or oral infection. As noted in section II.L.2.c., we believe surgeries dealing with organ transplants, cardiac valve replacement, or valvuloplasty procedures may require a dental exam and treatment prior to the surgery because the services to identify and eradicate dental or oral infection are inextricably linked to, and substantially related and integral to the success of, these otherwise covered medical services. However, we are interested in feedback on whether there are other types of surgery for which certain dental services would meet this threshold. We invite public comment on whether there are other clinical scenarios involving acute or chronic conditions that would have an improved patient outcome if dental services are furnished, and if so, whether we should consider these services as inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services. 3. Request for Comment on Other Potentially Impacted PoliciesAs discussed in section II.L.2.a-b of this proposed rule, we are proposing to codify and clarify our current payment policies for dental services. We recognize that under these policies there may be instances where multiple health care providers may need to coordinate the performance of certain medical and dental services based on the patients' chronic conditions and/or serious illnesses. We continue to consider improvements to our payment policies for care management services as health care delivery models evolve. As such, we seek comment on whether our current policies for care management services make clear that time spent by physicians or non-physician practitioners coordinating care with dentists regarding the performance and outcomes of services as proposed under section II.L.2 of this proposed rule, may be counted for purposes of applicable care management codes. We are also interested in whether existing care management codes adequately describe and account for time spent coordinating with dentists and their clinical staff. We are also interested in comments regarding the impact of changes in how health care is delivered, and whether an increased integration and coordination of care among health care providers should also be taken into account in considering dental services that may be inextricably linked to, and substantially related and integral to the clinical success of, a primary medical service. Additionally, we are interested in whether, and to what extent, the proposed policies as described in section II.L.2 of this proposed rule would address any inequitable distribution of dental services for Medicare beneficiaries. Finally, we recognize that many Medicare beneficiaries have separate or supplemental dental coverage, such as through a Medigap plan or other plan offering. If we were to finalize in the CY 2023 PFS final rule our proposed policies as described further in section II.L.2 of this proposed rule, we seek comment on how current coordination of dental benefits operates, and where improvements could be provided. Additionally, we seek comment on what aspects of coordinating benefits among supplemental dental providers we should consider if we were to finalize the proposed policies as specified under section II.L.2 of this proposed rule. 4. Request for Comment on Potential Future Payment Models for Dental and Oral Health Care ServicesOur waiver authority under section 1115A(d)(1) of the Act provides broad authority for the Secretary to waive such requirements of title XVIII of the Act, which pertain to Medicare, as may be necessary solely for purposes of carrying out section 1115A of the Act with respect to testing models described in section 1115A(b) of the Act. In 2014, the Health Care Innovation Awards (HCIA) Round 2, a limited time grant initiative, included awards with the goal to improve the health of populations through activities focused on engaging beneficiaries, prevention, wellness, and comprehensive care that extended beyond the clinical service delivery setting. Several participants used their HCIA Round 2 funds to test models of clinical care that included payment for dental and oral care services. For further information regarding the success of these awards as applied to dental and oral care services please review the HCIA Round 2 Final Start Printed Page 46041 Awardee Evaluation Report (2014-2018).[85] We are seeking comment on additional ways to integrate the payment for dental and oral health care services within existing and future payment models using the Innovation Center's waiver authority in existing or future service delivery models, including models focused on equity, care coordination, total cost of care and specific disease conditions. M. Rebasing and Revising the Medicare Economic Index (MEI)1. BackgroundThe Medicare Economic Index (MEI) is authorized under section 1842(b)(3) of the Act, which relates to the reasonable charge-based payment methodology that was in place for physicians' services prior to the PFS. That section states that prevailing charge levels beginning after June 30, 1973 may not exceed the level from the previous year except to the extent that the Secretary finds, on the basis of appropriate economic index data, that such higher level is justified by year-to-year economic changes. CMS began calculating the MEI for this purpose on July 1, 1975, and continues to do so today for several statutory and other purposes. The MEI reflects the weighted-average annual price change for various inputs involved in furnishing physicians' services. The MEI is a fixed-weight input price index comprised of two broad categories: (1) Physicians' own time (compensation); and (2) physicians' practice expense (PE). Additionally, it includes an adjustment for the change in economy-wide, private nonfarm business total factor productivity (previously referred to as multifactor productivity).[86] The U.S. Department of Labor's Bureau of Labor Statistics (BLS) publishes the official measures of productivity for the U.S. economy. We note that previously the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private nonfarm business multifactor productivity. Beginning with the November 18, 2021 release of productivity data, BLS replaced the term multifactor productivity (MFP) with total factor productivity (TFP). BLS noted that this is a change in terminology only and will not affect the data or methodology. The current form of the MEI was described in the November 25, 1992 Federal Register (57 FR 55896) and was based in part on the recommendations of a Congressionally-mandated meeting of experts held in March 1987. Since that time, the MEI has been updated or revised on five instances. First, the MEI was rebased in 1998 (63 FR 58845), which moved the cost structure of the index from 1992 data to 1996 data. Second, the methodology for the productivity adjustment was revised in the CY 2003 PFS final rule with comment period (67 FR 80019) to reflect the percentage change in the 10-year moving average of economy-wide private nonfarm business total factor (multifactor) productivity. Third, the MEI was rebased in the CY 2004 PFS final rule with comment period (68 FR 63239), which moved the cost structure of the index from 1996 data to 2000 data. Fourth, the MEI was rebased in 2011 (75 FR 73262), which moved the cost structure of the index from 2000 data to 2006 data. Subsequently, in the CY 2014 PFS final rule with comment period (78 FR 74264), the MEI cost share weights were revised based on recommendations from the MEI technical advisory panel (MEI-TAP). From May 2012 through September 2012, the MEI Technical Advisory Panel conducted a technical review of the MEI, including analyses of the inputs, input weights, price-measurement proxies, and productivity adjustment. Details regarding the Panel's work and documents such as transcripts, meeting summaries, presentations, and the final report with recommendations to the Secretary of Health and Human Services are available at https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/MEITAP and in the FY 2014 PFS proposed rule (78 FR 43311) which provides details related to how the MEI TAP panel recommendations were implemented into the revised 2006-based MEI. The current 2006-based MEI relies on data collected from the American Medical Association (AMA) for self-employed physicians from the Physician Practice Information Survey (PPIS). The AMA has not fielded another survey since that 2006 data collection effort and so the MEI has continued to be based on 2006-based costs. In its August 28, 2012 report, the MEI-TAP expressed concern regarding the representativeness and availability of data to support the MEI, and provided two recommendations regarding the data sources to update the MEI in the future. Recommendation 2.1 stated that CMS should research whether using self-employed physician data for the MEI cost weights continues to be the most appropriate approach given the trend toward larger, physician-owned practices, as well as movement from physician-owned practices toward hospital-owned practices. Recommendation 2.2 stated that CMS should scan for and research additional data sources that may allow for more frequent updates to the MEI's cost categories and their respective weights.[87] Updates to the PFS conversion factor (CF) were previously calculated based on a prescribed statutory formula that used a combination of the MEI and a “sustainable growth rate”; for details about this formula, we refer readers to the CY 2015 PFS final rule with comment period (79 FR 67741 through 67742). Section 101 of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 115-05, April 16, 2015) repealed the previous statutory update formula and specified the update adjustment factors for calendar years 2015 and beyond. Therefore, effective beginning for CY 2015, the MEI was no longer used in calculating the annual update to the PFS CF. The annual growth in the MEI continues to be used to update the following: the Medicare telehealth originating site facility fee under section 1834(m)(2)(B)(i) of the Act, the KX Modifier Thresholds (formerly the therapy caps) under section 1833(g)(2) of the Act, targeted medical review (MR) threshold amounts (beginning in 2029) under section 1833(g)(7)(B)(ii) of the Act, Rural Health Clinic Payment Limits under section 1833(f)(2) of the Act, and the annual update to the non-drug portion of the Opioid Treatment Program payment as finalized in the CY 2020 PFS final rule (84 FR 62668 and 62669). While the MEI annual percentage change increase is not directly used in determining the update to the PFS CF, the MEI cost weights have historically been used to update the GPCI cost share weights to weigh the four components of the practice expense GPCI (employee compensation, the office rent, purchased services, and medical equipment, supplies, and other miscellaneous expenses), as discussed in detail in section II.G. of this proposed rule, and to recalibrate the relativity adjustment to ensure that the total pool of aggregate PE RVUs remains relative to the pool of work and MP RVUs, as discussed in section II.B. and section VII. of this proposed rule. The most recent recalibration was done for the CY 2014 RVUs, when the MEI was last Start Printed Page 46042 updated. As described in the CY 2014 PFS final rule (78 FR 74236 through 74237, and 74241), in steps 3 and 10, we adjusted the aggregate pool of PE costs in proportion to the change in the PE share in the revised MEI cost share weights. These adjustments were consistent with our longstanding practice to make adjustments to match the RVUs for the PFS components with the MEI cost share weights for the components, including the adjustments described in the CY 1999 PFS final rule (63 FR 58829), CY 2004 PFS final rule (68 FR 63246 and 63247), and CY 2011 PFS final rule (75 FR 73275). Therefore, we believe that the MEI cost weights need to be updated to reflect more current market conditions faced by physicians in furnishing physicians' services, but note that we are proposing to delay the implementation of the proposed rebased and revised MEI cost weights for both PFS ratesetting and the proposed CY 2023 GPCIs. We believe that doing so will allow interested parties the opportunity to review and comment on the proposed rebased and revised MEI cost share weights discussed in section II.M. of this proposed rule and their potential impacts before we use such rebased and revised MEI cost share weights for purposes of proportioning the work, PE, and MP RVU pools in PFS ratesetting and updating the GPCIs. We refer readers to our discussion about using the proposed rebased and revised MEI cost share weights for purposes of proportioning the work, PE, and MP RVU pools in PFS ratesetting and for the purposes of updating the GPCIs for CY 2023 in sections II.B. and VII. of this proposed rule. In those sections, we discuss our considerations for updating the MEI cost share weights for the RVUs and the GPCIs and the potential redistributive impact that making such a change would have on PFS payments. We are soliciting comments on the proposed delay and potential use of the proposed updated MEI cost weights in future years to recalibrate the RVU shares and to update the GPCI cost share weights, which were last realigned to the revised MEI weights in the CY 2014 PFS final rule (78 FR 74380 through 74391). The terms “rebasing” and “revising,” while often used interchangeably, actually denote different activities. Rebasing refers to moving the base year for the structure of costs of an input price index, while revising relates to other types of changes such as using different data sources, cost categories, or price proxies in the input price index. Effective with this CY 2023 PFS rulemaking cycle, we are proposing to rebase and revise the MEI based on a methodology that uses publicly available data sources for input costs that represent all types of physician practice ownership; that is, not limited to only self-employed physicians. In the following sections of this proposed rule, we detail our proposals regarding derivation of the cost categories and associated cost share weights, selection of the price proxies in the MEI, and the results of the proposed 2017-based MEI as compared to the current 2006-based MEI. 2. Developing the Cost Weights for Use in the MEIThe 2006-based MEI was last rebased in the CY 2011 PFS final rule with comment period (75 FR 73262 through 73275) and subsequently revised in the CY 2014 PFS final rule with comment period (78 FR 74264 through 74278). The proposed 2017-based MEI cost weights are derived predominantly from the annual expense data from the U.S. Census Bureau's Services Annual Survey (SAS, https://www.census.gov/programs-surveys/sas.html). Other data sources that were considered and analyzed as potential sources of expense data for Physician Offices included the BEA Benchmark Input-Output data, the Internal Revenue Services (IRS) Statistics of Income data for sole proprietors, and Medical Group Management Association (MGMA) cost and revenue data. While each of these data sources provided information on physician input price expenses, we found the SAS data to be the most technically appropriate data source available based on various factors including public availability, level of detail of expense categories, and sample representativeness of the universe. The SAS data are publicly available data that provide annual receipts estimates for the service industries. Collected data include sources of revenue and expenses by type for selected industries and selected industry-specific items. Specifically, we propose to use the 2017 SAS data from Table 5, Estimated Selected Expenses for Employer Firms for NAICS 6211 (Office of Physicians). The survey data collection in 2018 and 2019 were scaled back and therefore, data by expense category was limited. For example, the SAS expense data for lease and rental payments, professional and technical services, repair and maintenance services, and detailed utility cost were unavailable in 2018 and 2019. The 2020 data included a return to the more comprehensive collection of expense data; however, the presence of the PHE for COVID-19 raised questions regarding the representativeness and stability of the data given impacts on the utilization of physicians' services and associated expenses. Therefore, we propose to use the 2017 SAS data for the proposed 2017-based MEI because it is the most recently available and complete data. We are proposing to supplement the 2017 SAS expense data by using several data sources for further disaggregation of compensation costs and all other residual costs, including: the 2017 Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS), the 2012 Bureau of Economic Analysis (BEA) Benchmark Input-Output data (I/O), the 2006 AMA PPIS, and the 2020 AMA Physician Practice Benchmark Survey. Table 30 lists the set of mutually exclusive and exhaustive cost categories and weights for the proposed 2017-based MEI compared to the 2006-based MEI. Start Printed Page 46043 Total costs equal the sum of the costs for Physician Compensation and Practice Expenses. The development of the cost weights for each cost category in the proposed 2017-based MEI is described, in detail, as follows. a. Physician's CompensationThe component of the MEI that reflects physician work is represented by the estimated portion of compensation expenses attributable to physicians. The proposed 2017 cost weight associated with the physician's work (otherwise referred to as the Physician Compensation cost weight) is based on the estimated share of 2017 SAS expenses for total compensation associated with physician compensation. Since the compensation expense in the SAS data is only reported as an aggregate for all employees, we propose to split the compensation expenses between physicians (including nonphysician practitioners that can bill independently such as nurse practitioners (NPs), physician assistants (PAs), and other clinical personnel) and all other workers using the following process. Step 1: Total compensation costs are calculated by summing the reported expenses in the SAS for gross annual payroll, employer costs for fringe benefits (including health insurance, defined benefit and defined contribution plans, payroll taxes, employer paid insurance premiums, and all other benefits), and temporary staff and leased employees as reported in the 2017 SAS data for NAICS 6211 (Office of Physicians). Step 2: Determine the ratio of physician (including nonphysician practitioners that can bill independently such as NPs, PAs, and other clinical personnel) wage costs to total wage costs. This ratio is calculated using data from the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) May 2017 National Industry-Specific Occupational Employment and Wage Estimates for Offices of Physicians (NAICS 6211). This data reports the number of employees by occupational category based on the Standard Occupational Classification System (SOC) and the mean hourly wage for each occupation. For each occupation, we multiply the number of employees by the mean hourly wage to estimate the total mean hourly wage expense. The sum of each occupation category represents total mean hourly wage expenses for all occupations in NAICS 6211. Then to derive the total mean hourly wage expenses for physicians (including nonphysician practitioners that can bill independently such as NPs, PAs, and other clinical personnel) we sum the following occupations: Physicians and Surgeons (29-1060); Chiropractor (29-1011); Optometrist (29-1041); Podiatrist (29-1081); Physical Therapist (29- Start Printed Page 46044 1123); Dieticians & Nutritionists (29-1031); Physician Assistants (29-1071); Nurse Practitioners (29-1171); and All Other Diagnosing & Treating Occupations (29-11XX) to estimate OEWS expenses for physicians. The ratio of physician total mean hourly wage costs to total mean hourly wage costs is 63.2 percent. Step 3: We multiply the total compensation expenses from Step 1 by the ratio determined in Step 2 to derive estimated Employed Physician Compensation Expenses, which in 2017 are estimated to account for 42.4 percent of total costs. Next, since the expenses estimated above reflect only employed physician compensation, we propose to add an estimate of compensation costs to account for physician practice owners that are not classified as employees but instead would be included in the net income of the practice. The net income physician compensation costs are estimated by the following methodology. This amount is determined in three steps: Step 1: Subtract total expenses from total revenue as reported in the 2017 SAS data for NAICS 6211. Step 2: Estimate the share of owners versus employees of physician practices for 2017 based on the average share of “owners” for 2016 and 2018 as reported in Exhibit 1 of the 2020 AMA Physician Practice Benchmark Survey. This estimated share for 2017 is 46.5 percent (and reflects the average of the share for 2016 and 2018). Step 3: Multiply the share determined in step 2 by the amount determined in step 1, which represents the estimated expenses for net income for owners of physician practices and are 4.845 percent of total costs in 2017. The proposed aggregate 2017-based Physician Compensation cost weight is the sum of Employed Physician Compensation cost weight (42.416 percent) and Estimated Net Income for Physician Practice Owners cost weight (4.845 percent), or 47.261 percent. By comparison, the 2006-based Physician Compensation cost weight is 50.866 percent and reflects the net income for self-employed physicians and the expenses for nonphysician clinical staff that can bill Medicare independently. The proposed 2017-based MEI cost weight for Physician Compensation is 3.6 percentage points lower than the 2006-based MEI cost weight. This difference is due to two key factors: (1) any changes that occurred in the cost to provide physician services between 2006 and 2017, and (2) the SAS data reflects relative costs for all physician ownership practices while the 2006 AMA PPIS data reflected relative costs only for self-employed physician practices. We propose to split the Physician Compensation cost weight into two cost categories: Physician Wages and Salaries, and Physician Benefits. The Physician Wages and Salaries cost weight is calculated by multiplying the total Physician Compensation weight by the ratio of the gross payroll to the sum of gross payroll and employer's cost for fringe benefits in the 2017 SAS data, which is 83 percent. The Physician Benefits cost weight is calculated by multiplying the total physician compensation weight by the ratio of the employee benefits to the sum of gross payroll and employer's cost for fringe benefits in the 2017 SAS data, which is 17 percent. As a result, the proposed Physician Wages and Salaries cost weight is 39.226 percent and the proposed Physician Benefits cost weight is 8.034 percent in the 2017-based MEI. b. Practice ExpensesThe Practice Expenses cost weight reflects all remaining operating costs other than physician compensation. We propose to determine the remaining Practice Expense cost weights in the 2017-based MEI using the 2017 SAS Expense data for NAICS 6211 expressed as a percentage of total costs. The explanations for the derivation of the individual cost weights under Practice Expenses are detailed below. (1) Non-Physician CompensationWe propose to estimate the cost weight for Non-physician Compensation using the 2017 SAS data for these expenses. As mentioned previously, since the compensation expenses in the SAS data are only reported as an aggregate for all employees, we are proposing to multiply the 2017 SAS total compensation expenses for NAICS 6211 by 36.8 percent, which is the residual of the 63.2-percent share determined for physicians (including nonphysician practitioners that can bill independently such as NPs, PAs, and other clinical personnel). Then, we multiply the total compensation expenses by the ratio of nonphysician compensation expenses to total compensation expenses. This results in the proposed Non-physician Compensation cost weight of 24.716 percent in the proposed 2017-based MEI. Next, we propose to split the Non-physician Compensation cost weight into two cost categories: Non-physician Wages and Salaries, and Non-physician Benefits. The Non-physician Wages and Salaries cost weight is calculated by multiplying the total Non-physician Compensation cost weight by ratio of the gross payroll to the sum of gross payroll and employer's expense for fringe benefits in the 2017 SAS data, which is 83 percent. The Non-physician Benefits cost weight is calculated by multiplying the total Non-physician Compensation weight by the ratio of the employee benefits to the sum of gross payroll and employer's expenses for fringe benefits in the 2017 SAS data, which is 17 percent. As a result, the proposed Non-physician Wages and Salaries cost weight is 20.514 percent in the proposed 2017-based MEI and the proposed Non-physician Benefits cost weight is 4.202 percent. For comparison purposes, the 2006-based MEI cost weights are 11.885 percent and 4.668 percent, respectively. We are also proposing to disaggregate the Non-physician Wages and Salaries cost weight into two categories: (1) Health-related, non-physician and (2) Nonhealth, non-physician Wages and Salaries. Of the 36.8 percent of total SAS compensation costs associated with non-physicians, 14.7 percent points are determined to be associated with The Health-related, non-physician Wages and salaries. This percentage reflects the mean hourly wages to total mean hourly wages from the 2017 OEWS data for the following occupations: Health Technologists and Technicians (29-2000); Other Healthcare Practitioners and Technical (29-9000); and Healthcare Support (31-0000). Applying this share (40 percent) to the Non-physician wages cost weight results in a proposed weight of 8.208 percent for the health-related, non-physician Wages and Salaries cost weight for the proposed 2017-based MEI. The remaining approximately 60 percent are associated with Nonhealth, non-physician Wages and salaries (Salary 22.1 percentage points of the 36.8 percent). This percentage reflects the mean hourly wages to total mean hourly wages from the 2017 OEWS data for the following occupations: Management (11-0000); Business and Financial Operations (13-0000); Computer and Mathematical (15-0000); Architecture and Engineering (17-0000); Life, Physical, and Social Science (19-0000); Community and Social Service (21-0000); Legal (23-0000); Education, Training, and Library (25-0000); Arts, Design, Entertainment, Sports, and Media (27-0000); Protective Service (33-0000); Food Preparation and Serving Related (35-0000); Building and Grounds Cleaning and Maintenance (37-0000); Personal Care and Service (39-0000); Sales and Related (41-0000); Start Printed Page 46045 Office and Administrative Support (43-0000); Construction and Extraction (47-0000); Installation, Maintenance, and Repair (49-0000); Production (51-0000); and Transportation and Material Moving (53-0000). Applying this share (60 percent) to the non-physician wages cost weight results in a proposed weight of 12.306 percent for the Nonhealth, non-physician Wages and Salaries cost weight for the proposed 2017-based MEI. Next, since the non-health, non-physician wages represent various types of occupations that may experience different wage inflation pressures, we propose to disaggregate the Non-health, non-physician Wages and Salaries cost weight of 12.306 percent into four occupational subcategories. To arrive at a distribution for these separate occupational categories (Professional Related (PR) workers, Managers, Clerical workers, and Service workers), we determined an estimate of annual earnings for each using the Standard Occupational Classification (SOC) system. The professional and related wages salaries consist of the following occupational categories: Business and Financial Operations (13-0000); Computer and Mathematical (15-0000); Architecture and Engineering (17-0000); and Life, Physical, and Social Science (19-0000). The Clerical wages salaries consist of the occupational category Office Administrative Support (43-0000). The Services wages salaries consist of the following occupational categories: Community and Social Service (21-0000); Arts, Design, Entertainment, Sports, and Media (25-0000); Protective Service (33-0000); Food Preparation and Serving Related (35-0000); Building and Grounds Cleaning and Maintenance (37-0000); Personal Care and Service (39-0000); Sales and Related (41-0000); Construction and Extraction (47-0000); Installation, Maintenance, and Repair (49-0000); Production (51-0000); and Transportation and Material Moving (53-0000). The Non-health, non-physician Wages and Salaries cost weight of 12.306 percent is multiplied by the relative share of each category to arrive at the detailed distribution. The occupational distribution in the proposed 2017-based MEI, as well as the distribution for the 2006-based MEI is presented in Table 31. (2) Other Practice ExpensesWe propose that the remaining aggregate Other Practice Expenses would be derived using the 2017 NAICS 6211 SAS expense data and calculated as the sum of the expenses for the detailed categories expressed as a percentage of total expenses. The aggregate Other Practice Expenses include all SAS expenses other than gross annual payroll, fringe benefits, and temporary staff and leased employee expenses. Additionally, we propose to remove the estimated expenses for drugs and separately billable supplies (which are paid outside of the PFS system) from total expenses in order to be consistent with the PFS. The Other Practice Expenses share of total costs in the proposed 2017-based MEI is 28.023 percent compared to a cost weight of 32.582 percent in the 2006-based MEI. We further propose to use the 2017 SAS data for NAICS 6211 to disaggregate the Other Practice Expenses into the following ten cost categories: Utilities; All Other Products; Telephone; Administrative Support & Waste Services; All Other Services; Professional, Scientific, and Technical; Fixed Capital; Moveable Capital; Professional Liability Insurance; and Medical Supplies. Table 32 shows the 10 detailed cost weights for the Other Practice Expenses for the 2017-based MEI, which is 6 fewer categories than the 2006-based MEI. The major differences are: (1) we propose to have one cost category for All Other Products in the proposed 2017-based MEI instead of having separate cost categories for Chemicals, Paper, Rubber and Plastics, and Other Miscellaneous Products as done for the 2006-based MEI, (2) we propose to eliminate the separate cost category for Postage as the cost weight was small (less than 0.2 percentage point) and include the expenses for postage in the proposed All Other Products cost weight, and (3) we propose to eliminate the cost category for Medical Equipment as the cost weight for the Moveable Capital in the proposed 2017-based MEI includes the expenses for all types of machinery and equipment, including medical equipment; we do not have a data source available to split the expenses between Medical Equipment and All Other Equipment in the SAS or I/O data. Start Printed Page 46046 As previously mentioned, we are proposing to make one adjustment to the medical supplies expenses as reported on the SAS data to exclude estimated expenses associated with drugs and separately billable supplies. We propose to make this adjustment in order to exclude the expenses that are paid outside of the PFS and to be consistent with the expenses that were also excluded in the 2006-based MEI. Finally, we propose to use the BEA 2012—Benchmark I/O data aged to 2017 to determine the split between All Other Products and All Other Services that are captured in the residual “all other expenses” line in the 2017 SAS data. The BEA 2012—Benchmark I/O data can be accessed at https://www.bea.gov/industry/input-output-accounts-data#supplemental-estimate-tables. We note that this method of splitting residual expenses is similar to the methodology used in the 2006-based MEI where the 2002 Benchmark I/O data was aged to 2006 to further disaggregate the residual expense from the AMA PPIS. The following is a description of the types of expenses included in each of the detailed categories under Other Practice Expenses: (a) UtilitiesThe proposed weight for Utilities was calculated using the 2017 SAS expense data expressed as a percentage of total expenses. Utilities expenses are calculated as the sum of the expenses from SAS for: (1) purchased electricity, (2) purchased fuels (except motor fuels), and (3) water, sewer, refuse removal, and other utility payments. The SAS survey questionnaire defines the purchased electricity expenses as costs paid for electricity. The SAS survey questionnaire defines the purchased fuels (except motor fuels) as the costs for fuel for heating, power, or generating electricity ( e.g., natural gas, propane, oil, coal). The SAS survey questionnaire defines the water, sewer, refuse removal, and other utility payments as the costs for hazardous waste removal. If the utility payments for any of these expenses are included with lease and rental payments then they are captured in the SAS question for lease and rental payments for land, building, structures, storage spaces, or offices. The proposed cost weight for Utilities in the 2017-based MEI is 0.366 percent. (b) Telephone ServicesThe Telephone cost weight in the proposed 2017-based MEI includes 2017 SAS expenses reported for purchased communication services. The SAS survey questionnaire defines purchased communication services as telephone, cellular, and fax services; computer-related communications (for example, internet, connectivity, online), and other wired and wireless communication services. The proposed cost weight for Telephone Services is 0.471 percent. (c) All Other ProductsThe proposed cost weight for All Other Products for the proposed 2017-based MEI was calculated in two steps. First, all other operating expenses are calculated as a percentage of total expenses from the 2017 SAS, which was 9.158 percent. The SAS survey questionnaire defines the All other operating expenses as operating expenses not reported or captured by any other survey expense question or specifically excluded in the general instructions. These expenses specifically excluded in the general instructions are: transfers made within the company, capitalized expenses, interest, bad debt, impairment, and income tax. Second, All Other Products expenses are calculated as the estimated percentage of expenses from SAS for all other operating expenses using Benchmark I/O data. In order to split the aggregate all other operating expenses, which reflects both products and services, we propose to rely on the 2012 Benchmark I/O data for NAICS 6211, Offices of Physicians aged to 2017 for the NAICS categories that align with expenses in the SAS all other operating expenses. The process for doing this is explained step by step as follows: Step 1: We crosswalked the NAICS categories in the 2012 Benchmark I/O data to the expense questions in the 2017 SAS data. This process allowed for all Benchmark I/O costs to be grouped into similar buckets as the SAS Expenses as closely as possible Step 2: We aged the 2012 Benchmark I/O costs to 2017 for each of the following major buckets of expenses: Physician Compensation, Non-Physician Compensation, Capital-related expenses (fixed and moveable), PLI, Professional Services, Other Products, Other Services, Utilities, and Medical Supplies using the growth of Start Printed Page 46047 the various price proxies used for these cost categories in the 2006-based MEI. Step 3: The share of each of the aged 2012 I/O expenses were calculated as a percentage of the total aged 2012 I/O expenses. The aged 2012 I/O categories of other products and other services were estimated to account for about 9.6 percent of total costs. This share is similar to the SAS residual cost share weight of 9.158 percent The following Table 33 shows the Benchmark I/O NAICS categories that were crosswalked to the SAS all other operating expenses for all other product expenses. Start Printed Page 46048 Start Printed Page 46049 Step 4: The share of expenses for the aged 2012 Benchmark I/O all other products to the aged total all other operating expenses in the Benchmark I/O were calculated. This resulted in products accounting for 22.4 percent and services accounting for 77.6 percent of the I/O expenses classified as all other costs. We then multiplied the SAS all other operating expenses (9.158 percent) by 22.4 percent to estimate expenses for the all other products . Step 5: Lastly, we divided the estimated all other products SAS expenses by the total SAS expenses and the resulting proposed 2017-based MEI cost weight for All Other Products is 2.055 percent. (d) Administrative Support and Waste ServicesThe proposed weight for Administrative Support and Waste for the proposed 2017-based MEI is based on a portion of the 2017 SAS all other operating expenses (Residual). Similar to the methodology to calculate the All Other Products cost weight we follow a similar process for the Administrative Support Waste Services cost weight and the All Other Services cost weight discussed in the next section. First, we estimated the total SAS residual expenses associated with other services by multiplying the SAS all other operating expenses by 77.6 percent, or a cost weight of 7.103 percent accounting for the SAS residual expenses associated with services rather than products. Next, we carved out a portion of these all other services expenses that we identified as Administrative Support and Waste Services from the I/O categories as shown in Table 34 below. These categories accounted for about 26 percent of All other operating expenses. Finally, we divided the estimated Administrative Support and Waste Services expenses by the Total SAS Expenses and the resulting proposed 2017-based MEI cost weight for Administrative Support and Waste Services is 2.341 percent. (e) All Other ServicesThe proposed weight for All Other Services for the proposed 2017-based MEI was determined in two steps. First, as was done for other products, we identified I/O categories (as shown in Table 35) associated with other services that would crosswalk to the 2017 SAS data for all other operating expenses. Next, we carved out a portion of these all other services expenses that were not assigned to Administrative Support and Waste Services from the I/O categories, the categories assigned to all other services are shown in Table 35. Using this information, we determined that All Other Services accounted for 52 percent of the SAS expenses for other operating expenses, or a weight of 4.762 percent. Start Printed Page 46050 Second, we also propose to include the expenses directly reported on the SAS survey for purchased repairs and maintenance to machinery and equipment in the other services category. The SAS survey questionnaire defines these expenses to include expensed repair and maintenance services to machinery, vehicles, equipment, and computer hardware. These expenses accounted for 0.461 percent of total expenses, and when added to the 4.762 percent calculated above, results in a proposed 2017-based MEI cost weight for All Other Services of 5.223 percent. (f) Professional, Scientific, and Technical ServicesThe Professional, Scientific and Technical Services cost weight includes the sum of the 2017 SAS expenses for three categories: (1) data processing and other purchased computer services, (2) purchased advertising and promotional services, and (3) purchased professional and technical services. The SAS survey questionnaire defines data processing and other purchased computer services to include expenses for web hosting, computer facilities management services, computer input preparation, data storage, computer time rental, optical scanning services, and other computer-related advice and services (including training). The SAS survey questionnaire defines purchased advertising and promotional services to include marketing and public relations services. The SAS survey questionnaire defines purchased professional and technical services to include management consulting, accounting, auditing, bookkeeping, legal, actuarial, payroll processing, architectural, engineering, and other professional services. The cost weight for Professional, Scientific, and Technical Services is 6.350 percent in the proposed 2017-based MEI. (g) Fixed CapitalThe Fixed Capital cost weight includes the sum of the 2017 SAS expenses for four categories: (1) purchased repairs and maintenance to buildings, structures, and offices, (2) lease and rental payments for land, buildings, structures, store spaces, and offices, (3) an estimated portion of depreciation and amortization charges, and (4) governmental taxes and license fees. The SAS survey questionnaire defines purchased repairs and maintenance to buildings, structures, and offices as repair and maintenance to integral parts of buildings (for example, elevators, heating systems). The SAS survey questionnaire defines lease and rental payments for land, buildings, structures, store spaces, and offices to include the rental or lease expenses paid for these items including any penalties incurred for broken leases. The SAS survey questionnaire defines depreciation and amortization charges to include depreciation charges taken against tangible assets owned and used by this firm, tangible assets owned and used by this firm within leaseholds, tangible assets obtained through capital lease agreements, and amortization charges against intangible assets (patents, copyrights). We propose to include the share of the depreciation expenses applicable to only the structures by multiplying the total Start Printed Page 46051 depreciation expenses by the share of total lease and rental payments that were associated with land, buildings, structures, store spaces, and offices as reported on the SAS, which is 89 percent. The SAS survey question defines governmental taxes and license fees as payments to government agencies for taxes and licenses including business and property taxes. The proposed cost weight for Fixed Capital for the proposed 2017-based MEI is 5.527 percent. (h) Moveable CapitalThe Moveable Capital cost weight includes the sum of the 2017 SAS expenses for five categories: (1) expensed equipment, (2) expensed purchases of other materials, parts, and supplies, (3) expensed purchases of software, (4) an estimated portion of depreciation and amortization charges, and (5) lease and rental payments for machinery, equipment, and other tangible items. The SAS survey questionnaire defines expensed equipment as expensed computer hardware and other equipment (for example, copiers, fax machines, phones, shop and lab equipment, CPUs, monitors). The SAS survey questionnaire defines depreciation and amortization charges to include depreciation charges taken against tangible assets owned and used by this firm, tangible assets owned and used by this firm within leaseholds, tangible assets obtained through capital lease agreements, and amortization charges against intangible assets (patents, copyrights). We propose to include the share of the depreciation expenses applicable to only the machinery equipment by multiplying the total depreciation expenses by the share of total lease and rental payments associated with machinery equipment as reported on the SAS, which is 11 percent. The SAS survey question defines lease and rental payments for machinery, equipment, and other tangible items as lease and rental of transportation equipment without operators including penalties incurred for broken lease agreements. The proposed cost weight for Moveable Capital for the proposed 2017-based MEI is 2.221 percent. (i) Professional Liability Insurance (PLI)The Professional Liability Insurance (PLI) cost weight includes 2017 SAS expenses reported for professional liability insurance. The SAS survey questionnaire defines professional liability insurance as the premiums paid for professional liability insurance and the amounts set aside for self-insurance. The proposed cost weight for PLI is 1.398 percent in the proposed 2017-based MEI. (j) Medical SuppliesThe Medical Supplies cost weight includes 2017 SAS expenses reported for Medical supplies with an adjustment to remove the estimated expenses for drugs and separately billable medical supplies. The SAS survey questionnaire defines medical supplies as the materials and supplies used to provide medical services to others (except for medical equipment). Since the reported expenses in the SAS would include the expenses for drugs and biologicals, as well as the expenses for supplies that generally are paid separately under Medicare we propose to remove the expenses for these two items from the SAS expenses reported using the following methodology: Step 1: To remove the separately billable drug expenses, we rely on the reported expenses for separately billable drugs from the 2006 AMA PPIS data. We inflate the reported AMA PPIS expenses for separately billable drugs to 2017 using the growth in Medicare Part B physician-administered drug spending. Using this method, we inflate the 2006 AMA PPIS expenses for separately billable drugs to 2017 by an increase factor of 1.784 (or 78.4 percent). Step 2: To remove the non-separately billable drug expenses, we rely on a similar method where we start with the reported expenses for non-separately billable drugs from the 2006 AMA PPIS data. We inflate the reported AMA PPIS expenses for non-separately billable drugs to 2017 using the growth in the PPI for prescription drugs. Using this method, we inflate the 2006 AMA PPIS expenses for non-separately billable drugs to 2017 by an increase factor of 2.122 (or 112.2 percent). Step 3: To remove the non-separately billable supply expenses, we start with the reported expenses for non-separately billable supplies from the 2006 AMA PPIS data. We inflate the reported AMA PPIS expenses for non-separately billable supplies to 2017 using the growth in the Medical supplies price proxy in the 2006-based MEI (a 50/50 blend of the PPI—Commodity—Medical and surgical appliances and supplies and the CPI—Medical equipment and supplies). Using this method, we inflate the 2006 AMA PPIS expenses for non-separately billable supplies to 2017 by an increase factor of 1.048 (or 4.8 percent). Step 4: We then calculate the share of estimated 2017 expenses for all drugs and separately billable supplies from steps 1-3 as a percentage of total drugs and medical supplies expenses from the 2017 SAS for NAICS 6211. This share is 80 percent. Step 5: We multiply the SAS 2017 total medical supplies expenses by a factor of 0.2 (or 1−0.8) in order to estimate the 2017 SAS expenses for non-separately billable medical supplies only. Taking the 2017 estimated expenses for non-separately billable medical supplies as a ratio of total expenses as reported on the 2017 SAS for NAICS 6211 results in a proposed Medical Supplies cost weight of 2.071 percent in the proposed 2017-based MEI. 3. Selection of Price Proxies for Use in the MEITo select prices proxies for the proposed 2017-based MEI cost categories, most of the proxy measures we considered are based on BLS data and are grouped into one of the following four categories: • Producer Price Indices (PPIs): PPIs measure the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services ( https://www.bls.gov/ppi/). • Consumer Price Indices (CPIs): CPIs measure the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services ( https://www.bls.gov/cpi/). CPIs are only used when the purchases are similar to those of retail consumers rather than purchases at the producer level, or if no appropriate PPIs are available or if the particular expenditure category is likely to contain purchases made at the final point of sale.
• Reliability: Reliability indicates that the index is based on valid statistical Start Printed Page 46052 methods and has low sampling variability. Widely accepted statistical methods ensure that the data were collected and aggregated in a way that can be replicated. Low sampling variability is desirable because it indicates that the sample reflects the typical members of the population. (Sampling variability is variation that occurs by chance because only a sample was surveyed rather than the entire population.)
a. Physician Compensation(1) Physician Wages and SalariesWe propose to continue to use the ECI for Wages and Salaries for Professional and Related Occupations (Private Industry) (BLS series code CIU2020000120000I) to measure price growth of this category in the proposed 2017-based MEI. We believe this price proxy reflects the wage pressures faced by physicians in that it captures wage trends in labor markets of skilled professional workers without being directly affected by trends in physician income that may be influenced by the ownership structure of physician practices. This price proxy also follows the recommendation of the MEI-TAP that the price proxy would maintain consistency with the guidance provided in the 1972 Senate Finance Committee report titled “Social Security Amendments of 1972,” which stated that the index should reflect changes in practice expenses and “general earnings”. This is the same proxy used in the 2006-based MEI. (2) Physician BenefitsWe propose to continue to use the ECI for Benefits for Professional and Related Occupations (Private Industry) to measure price growth of this category in the proposed 2017-based MEI. The ECI for Benefits for Professional and Related Occupations is derived using BLS's Total Compensation for Professional and Related Occupations (BLS series ID CIU2010000120000I) and the relative importance of wages and salaries within total compensation. We believe this series is technically appropriate because it better reflects the benefit trends for professionals requiring advanced training. This is the same proxy used in the 2006-based MEI. b. Practice Expense(1) Non-Physician, Non-Health-Related Wages and Salaries
(2) Non-Physician, Health-Related Wages and SalariesWe propose to continue to use the ECI for Wages and Salaries for Hospital Workers (Private Industry) (BLS series code CIU2026220000000I) to measure the price growth of this cost category in the proposed 2017-based MEI. The ECI for Hospital workers has an occupational mix that approximates that of physicians' offices. This is the same proxy used in the 2006-based MEI. (3) Non-Physician BenefitsWe propose to continue using a composite ECI for non-physician employee benefits in the proposed 2017-based MEI. The weights and price proxies for the composite benefits index are shown in Table 36, which lists the five ECI series and corresponding weights used to construct the proposed composite benefit index for nonphysician employees in the proposed 2017-based MEI. We note the ECI benefits series are derived based on BLS published data from the applicable Total Compensation ECI and Wages & Salaries ECI as BLS does not publish the ECI Benefit Indexes directly. Start Printed Page 46053 (4) Other Practice Expense(a) UtilitiesWe propose to continue using the CPI for Fuel and Utilities (BLS series code CUUR0000SAH2) to measure the price growth of this cost category. This is the same proxy used in the 2006-based MEI. (b) All Other ProductsWe propose to use the PPI—Final demand—Finished goods less foods and energy (BLS series code WPUFD413) as the price proxy for this category. We believe that the expenses that physician purchase for use in providing physicians services are better reflected by purchases at the wholesale or producer level rather than at the consumer level and the growth in overall prices less food and energy provides a good approximation for the inflation pressures experienced for these expenses. The 2006-based MEI used several PPI and CPI series to proxy the price growth for the products reflected in this category. (c) TelephoneWe propose to continue using the CPI for Telephone Services (BLS series code CUUR0000SEED) to measure the price growth of this cost category in the proposed 2017-based MEI. This is the same proxy used in the 2006-based MEI. (d) Professional, Scientific, and Technical ServicesWe propose to continue to use the ECI for Total Compensation for Professional, Scientific, and Technical Services (Private Industry) (BLS series code CIU2015400000000I) to measure the price growth of this cost category in the proposed 2017-based MEI. This is the same proxy used in the 2006-based MEI. (e) Administrative and Support ServicesWe propose to continue to use the ECI for Total Compensation for Administrative, Support, Waste Management, and Remediation Services (Private Industry) (BLS series code CIU2015600000000I) to measure the price growth of this cost category in the 2017-based MEI. This is the same proxy used in the 2006-based MEI. (f) All Other ServicesWe are proposing to continue to use the ECI for Compensation for Service Occupations (Private Industry) (BLS series code CIU2010000300000I) to measure the price growth of this cost category. (g) Fixed CapitalWe propose to continue to use the PPI for Lessors of Nonresidential Buildings (BLS series code PCU531120531120) to measure the price growth of this cost category in the proposed 2017-based MEI. This is the same proxy used in the 2006-based MEI. (h) Moveable CapitalWe propose to continue to use the PPI for Machinery and Equipment (series code WPU11) to measure the price growth of this cost category in the proposed 2017-based MEI. This is the same proxy used in the 2006-based MEI. (i) Professional Liability InsuranceUnlike the other price proxies based on data from BLS and other public sources, the proxy for PLI is based on data collected directly by CMS from a sample of commercial insurance carriers. The MEI-TAP discussed the methodology of the CMS PLI index, as well as considered alternative data sources for the PLI price proxy, including information available from BLS and through State insurance commissioners. As detailed in the CY 2014 PFS final rule (78 FR 74271), the MEI-TAP “believes the current index appropriately reflects the price changes in premiums throughout the industry.” Accordingly, we propose to continue using the CMS Physician PLI index to measure the price growth of this cost category in the proposed 2017-based MEI. This is the same proxy used in the 2006-based MEI. (j) Medical SuppliesWe propose to continue using a blended index comprised of 50/50 blend of the PPI for Surgical Appliances (BLS series code WPU156301) and the CPI-U for Medical Equipment and Supplies (BLS series code CUUR0000SEMG). This is the same proxy used in the 2006-based MEI. Table 37 shows the proposed 2017-based MEI cost categories, weights and price proxies. Start Printed Page 46054 4. Productivity Adjustment to the MEIThe MEI has been adjusted for changes in productivity since its inception. In the CY 2003 PFS final rule with comment period (67 FR 80019), we implemented a change in the way the MEI was adjusted to account for changes in productivity. The MEI used for the 2003 physician payment update incorporated changes in the 10-year moving average of private nonfarm business (economy-wide) total factor productivity (previously referred to as multifactor productivity) that were applied to the entire index. Previously, the index incorporated changes in productivity by adjusting the labor portions of the index by the 10-year moving average of economy-wide private nonfarm business labor productivity. The MEI-TAP's Finding 5.1 states that, “[t]he Panel reviewed the basis for the current economy-wide multifactor productivity adjustment (Private Start Printed Page 46055 Nonfarm Business Multifactor Productivity) in the MEI and finds such an adjustment continues to be appropriate. This adjustment prevents “double counting” of the effects of productivity improvements, which would otherwise be reflected in both (i) the increase in compensation and other input price proxies underlying the MEI, and (ii) the growth in the number of physician services performed per unit of input resources, which results from advances in productivity by individual physician practices.” We propose to continue to use the current method of applying a productivity adjustment to the full MEI increase factor in the proposed 2017-based MEI. As described in the CY 2003 PFS final rule with comment period, we believe this adjustment is appropriate because it explicitly reflects the productivity gains associated with all inputs (both labor and non-labor). We believe that using the 10-year moving average percent change in economy-wide total factor productivity is appropriate for deriving a stable measure that helps alleviate the influence that the peak (or a trough) of a business cycle may have on the measure. The adjustment will be based on the latest available historical economy-wide nonfarm business total factor productivity data as measured and published by BLS. 5. Results of Proposed Rebasing and Revising of the MEITable 38 illustrates the results of the proposed update to the MEI cost weights for Physician Compensation, Practice Expenses (excluding PLI), and PLI from a 2006-based cost distribution to the proposed 2017-based cost distribution, including all the proposals as specified. Table 39 shows the average calendar year percent change for CY 2016 to CY 2023 for both the 2006-based MEI and proposed 2017-based MEI. The proposed 2017-based MEI annual percent changes differ from the 2006-based MEI annual percent changes by 0.1 to 0.2 percentage point for any given year. As shown in Table 39, the percent change of the proposed 2017-based MEI for the CY 2023 is an increase of 3.8 percent, one tenth of a percentage point higher than the 2006-based MEI for the same period based on the current expectation from the IGI 2022Q1 forecast with historical data through 2021Q4. The CY 2023 MEI increase factors for the 2006-based MEI and the proposed 2017-based MEI will be updated to reflect historical data available (through 2022Q2) for the CY 2023 PFS final rule. III. Other Provisions of the Proposed Rule A. Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs To Provide Refunds With Respect to Discarded Amounts §§ 414.902 and 414.940) 1. BackgroundDrugs and biologicals payable under Medicare Part B fall into three general categories: those furnished incident to a physician's service (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(s)(10)(A) and (B) of the Act). Payment limit amounts for most drugs and biologicals separately payable under Medicare Part B are determined using the methodology Start Printed Page 46056 in section 1847A of the Act, and in many cases, payment is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on. Most drugs payable under Part B are covered 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. Many drugs and biologicals (hereafter referred to as a drugs) payable under Medicare Part B are dosed in a variable manner such that the entire amount identified on the vial or package is not administered to the patient. For example, many drugs are dosed based on the patient's body weight or body surface area (BSA). Often times, these drugs are available only in single-dose containers. As stated in U.S. Food and Drug Administration (FDA) guidance for industry,[88] a single-dose container is designed for use with a single patient as a single injection or infusion. The FDA-approved labeling for a drug packaged in a single-dose container typically states that any extra amount of the drug remaining after the dose is administered must be discarded. When a provider must discard the amount of drug that was unused (that is, the discarded amount) from a single-dose container or other single-use package of a drug after administering a dose to a Medicare beneficiary, the program provides payment for the unused and discarded amount as well as the dose administered, up to the amount of the drug indicated on the vial or package labeling. On a Medicare Part B claim, the JW modifier (Drug amount discarded/not administered to any patient) is a Healthcare Common Procedure Coding System (HCPCS) Level II modifier used to report the amount of a drug that is discarded and eligible for payment. Beginning on January 1, 2017, CMS revised the JW modifier policy to require the uniform use of the modifier for all claims for separately payable drugs with discarded drug amounts from single use vials or single use packages payable under Part B in order to more effectively identify and monitor billing and payment for discarded amounts of drugs.[89 90] The policy does not apply to drugs that are not separately payable, such as packaged hospital outpatient prospective payment system (OPPS) drugs or those administered in the Federally qualified health centers (FQHC) or rural health clinics (RHC) setting. Additional details about this policy can be found in Chapter 17 of the Medicare Claims Processing Manual [91] and in the JW modifier frequently asked questions (FAQ) document.[92] Medicare Part B data for discarded amounts of drug (based on the JW modifier) have been published on the CMS website annually for calendar years beginning in 2017.[93] Data for 2020 shows that Medicare paid nearly $720 million for discarded amounts of drugs from a single-dose container or single-use package (hereafter referred to as single-dose container) paid under Part B with claims identifying the discarded amounts with the JW modifier. JW modifier data from 2020 is the most recent available at the time of this analysis. This data is comparable to 2017-2019 with regards to percentage of discarded amounts and total Medicare spending for discarded drugs each year, which ranged from approximately $700-750 million each year during that time. More than half of Medicare spending for discarded amounts in 2020 represents about 40 billing and payment codes (that is, HCPCS codes), for which 10 percent or more of the total charges for the drug were for discarded units. A large proportion of single source drugs with 10 percent or more discarded units are dosed based on patient's body weight or BSA. We note that the JW modifier data published on the CMS website is limited to only billing and payment codes that are published on the ASP Drug Pricing File.[94] There are likely additional billing and payment codes payable under Medicare Part B available in single-dose containers that would be subject to the JW modifier policy and are not reflected in the data discussed above. When the calculated dose (based on weight or BSA) is drawn from one or more vials and any remaining amount of the drug is discarded. For example, if labeled dose of a drug is 20 mg/m2 , the dose for a patient with a BSA of 1.9 m2 (the approximate average BSA of an adult male) would be 38 mg. If the drug is available in single-dose 60-mg vials, then 38 mg would be administered to the patient and 22 mg (36.67 percent) would be discarded. If the ASP payment limit amount (typically, ASP plus 6 percent) for this drug for a given quarter is $190 per 1 mg, the total payment for the amount of drug that was administered to the beneficiary would be $7,220 and for the amount of drug that was discarded would be $4,180. Both the amount of drug administered and the amount discarded (consistent with the discarded drug policy) are subject to the deductible and coinsurance. For a beneficiary who has already met the deductible, the coinsurance for the entire 60-mg vial would be $2280. Since the vial in this example contains enough drug to provide a 20 mg/m2 dose to an individual with a BSA of 3 m2 , the full amount of drug labeled on the vial would be used in a small subset of patients. Section 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117-9, November 15, 2021) (hereinafter is referred to as “the Infrastructure Act”) amended section 1847A of the Act to redesignate subsection (h) as subsection (i) and insert a new subsection (h), which requires manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The refund amount is the amount of discarded drug that exceeds an applicable percentage, which is required to be at least 10 percent, of total charges for the drug in a given calendar quarter. A refundable single-dose container or single-use package drug does not include a radiopharmaceutical or imaging agent, certain drugs requiring filtration, and certain new drugs. We are proposing implementation of section 90004 of the Infrastructure Act below including: how discarded amounts of drugs are determined; a definition of which drugs are subject to refunds (and exclusions); when and how often CMS will notify manufacturers of refunds; when and how often payment of refunds from manufacturers to CMS is required; refund calculation methodology (including applicable percentages); a dispute resolution process; and enforcement provisions. We are proposing regulatory changes to implement new section 1847A(h) of the Act at 42 CFR part 414, subpart K. 2. Discarded AmountsThe JW modifier has existed since 2003, and since 2017 its use has been required on claims for separately payable Part B drugs that include discarded amounts of single use vials or Start Printed Page 46057 single use packages. Currently, there are no other modifiers to measure discarded units of Part B drugs. On the claim form, the amount of drug administered is billed on one line (reflected as billing units in the unit field); discarded amounts are billed on a separate line with the JW modifier (reflected as billing units in the unit field). The term “billing unit” is defined in section 1847A(b)(6)(B) of the Act as the identifiable quantity associated with a billing and payment code, as established by the Secretary. For example, in a circumstance where a single-dose container is labeled to contain 200 mg and the established billing unit for the billing and payment code is 2 mg, then there are 100 billing units in the vial. If 95 billing units (190 mg) are administered to the patient and 5 billing units (10 mg) are discarded, the 95 billing units are billed on one line, and the discarded 5 billing units are billed on another line using the JW modifier. Both line items are processed for payment. The JW modifier must not be used to report discarded amounts of overfill, which is any amount of drug greater than the amount identified on FDA-approved labeling. Additional information on the overfill policy is available in the Physician Fee Schedule Final Rule published in the November 29, 2010 Federal Register (75 FR 73466 through 70). Contents of a vial or package that are considered overfill are not included in the total billing units contained in the vial or package and also do not count toward the number of billing units that are discarded. Section 1847A(h) of the Act specifies that discarded amounts of refundable single-dose container or single-use package drugs are to be determined using a mechanism such as the JW modifier used as of the date of enactment of the Infrastructure Act or any successor modifier that includes such data as determined appropriate by the Secretary. For consistency with our current billing procedures and to minimize burden, we propose to use the JW modifier or any successor modifier that includes the same data to determine the total number of billing units of a billing and payment code (that is, the identifiable quantity associated with a billing and payment code, as established by CMS) of a refundable single-dose container or single-use package drug (defined in the next section), if any, that were discarded for dates of service during such quarter. We propose to use the JW modifier (or any successor modifier that includes the same data) to identify discarded billing units of a billing and payment code for the purpose of calculating the refund amount as described in section 1847A(h)(3) of the Act. Currently, under the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System, hospital outpatient departments (HOPDs) and ASCs use the JW modifier to identify all separately payable drugs and biologicals for which there is an unused or discarded amount. For consistency with our current billing procedures we propose that HOPDs would be required to report the JW modifier or any successor modifier to identify discarded amounts of refundable single-dose container or single-use package drugs described by HCPCS codes that are assigned status indicator “K” (Nonpass-Through Drugs and Nonimplantable Biologicals, Including Therapeutic Radiopharmaceuticals) or status indicator “G” (Pass-Through Drugs and Biologicals) under the OPPS. Specifically, we propose that the JW modifier would be used to determine the total number of billing units of the HCPCS code (that is, the identifiable quantity associated with a HCPCS code, as established by CMS) of a refundable single-dose container or single-use package drug (defined in the next section), if any, assigned status indicator “K” or “G” that were discarded for dates of service during such quarter for the purpose of calculating the refund amount described in section 1847A(h)(3) of the Act. Similarly, we propose that ASCs would be required to report the JW modifier or any successor modifier to identify discarded amounts of refundable single-dose container or single-use package drugs described by HCPCS codes assigned payment indicator “K2” (‘Drugs and biologicals paid separately when provided integral to a surgical procedure on ASC list; payment based on OPPS rate) under the ASC payment system. Specifically, we propose that ASCs would be required to report the JW modifier or any successor modifier that includes the same data to determine the total number of billing units of the HCPCS code (that is, the identifiable quantity associated with a HCPCS code, as established by CMS) of a refundable single-dose container or single-use package drug (defined in the next section), if any, assigned status indicator “K2” that were discarded for dates of service during such quarter. Consistent with section 1847A(h)(1)(C) of the Act, which excludes units that are packaged into the payment amount for an item or service and not separately payable, as well as current HOPD and ASC use of the JW modifier, we propose that the JW modifier would not be required to identify discarded amounts of drugs that are not separately payable, such as drugs for which payment is packaged under the OPPS or ASC payment system or drugs administered in the FQHC or RHC setting. Specifically, in HOPD setting and the ASC setting, the JW modifier does not apply to drugs that are described by HCPCS codes assigned status indicator “N” (Items and Services Packaged into APC Rates) under the OPPS or assigned to a payment indicator of “N1” (Packaged service/item; no separate payment made) under the ASC payment system. Similarly, we propose to exclude from the refund amount those units of drugs for which payment is packaged into payment for a comprehensive ambulatory payment classification (C-APC) service under the OPPS. We propose to exclude such drugs when payment is packaged into a C-APC service which is assigned to an OPPS status indicator of “J1” (Hospital Part B Services Paid Through a Comprehensive APC) or “J2” (Hospital Part B Services That May Be Paid Through a Comprehensive APC). For example, if a drug under the OPPS is assigned to status indicator “K”, reports the JW or similar modifier, but is then packaged into a C-APC service assigned to a status indicator of “J1” or “J2”, we would exclude from the refund those units associated with the packaged drug. For a complete list of all proposed OPPS status indicator and ASC payment indicator descriptors, please see the addendum D1 and addendum DD1 to the CY 2023 OPPS/ASC proposed rule, which we expect to issue at around the same time as this proposed rule. As described in the section III.A.1 of this proposed rule (Background) and also in section III.A.6 of this proposed rule, section 1847A(h) of the Act requires manufacturers to provide refunds for discarded amounts of refundable single-dose container or single-use package drugs for which payment is made under Part B exceeding an applicable percentage of 10 percent of the estimated total allowed charges for such a drug (less the amount paid for packaged drugs) during the quarter. Under our current discarded drug policy, no modifier is required when there are no discarded amounts from a single use vial or single use package drug. However, we are aware that the JW modifier is often omitted on claims, and it is unclear whether the absence of the JW modifier on a claim for a single-dose container drug indicates that there were no discarded amounts or that the modifier was incorrectly omitted from the claim. This Start Printed Page 46058 has led to incomplete data describing quantities of discarded amounts and the associated Medicare payments. There are a number of possible reasons why the modifier might be incorrectly omitted on the claim form, including provider burden for documentation or lack of awareness of the policy. In addition, there may not be strong incentive for appropriate JW modifier use because Medicare pays for administered and discarded amounts of the drug. For instance, if a provider administers a portion and discards a portion of a single-use vial, but bills for the entire vial as administered (incorrectly omitting the JW modifier), the provider payment and beneficiary coinsurance amounts would be the same as if the provider had correctly billed for the administered amounts and the discarded amounts (using the JW modifier). The JW modifier FAQs state that claims that do not use the modifier correctly may be subject to review, but we do not have quantifiable numbers regarding how often the modifier is omitted or how many discarded units are not accounted for because of such omissions. Because JW modifier data is incomplete and because refund amounts would rely on this data, we propose that for dates of service on or after January 1, 2023, the JW modifier be required on claims for all single-dose container or single use drugs for which any amount is discarded (as reflected in our current policy and proposed above), and a separate modifier be required on claims for these drugs when there are no discarded amounts. Specifically, we propose to require the use of a separate modifier, the JZ modifier, to attest that there were no discarded amounts. To align with the JW modifier policy, the JZ modifier would be required when there are no discarded amounts from single use vials or single use packages payable under Part B for which the JW modifier would be required if there were discarded amounts. So, on all claims for single use vials or single use packages payable under Part B, either the JW modifier would be used (on a separate line) to identify any discarded amounts or the JZ modifier (on the claim line with the administered amount) would be present to attest that there were no discarded amounts. We believe the proposed JZ modifier requirement would not increase burden on the provider because under the current JW modifier policy, the provider already needs to determine whether or not there are any discarded units from a single use vial or package, record discarded amounts in the patient medical record, and specify administered and discarded amounts on the claim form. We welcome comments on these proposals. 3. Refundable Single-Dose Container or Single-Use Package DrugSection 90004 of the Infrastructure Act added section 1847A(h)(8) of the Act, which defines in subparagraph (A) of such section the term “refundable single-dose container or single-use package drug” as a single source drug or biological (as defined in section 1847A(c)(6)(D) of the Act) or a biosimilar biological product (as defined in section 1847A(c)(6)(H) of the Act) for which payment is made under Part B and that is furnished from a single-dose container or single-use package. For the purposes of section 1847A(h) of the Act, we propose that the definition of “refundable single-dose container or single-use package drug” would apply to drugs paid under Medicare Part B (that is, under any payment methodology) that are described as being supplied in a “single-dose” container or “single-use” package based on FDA-approved labeling or product information. This definition also includes drugs described in FDA-approved labeling as a “kit” that is intended for a single dose or single use. As discussed above in the background, we note that the JW modifier data published on the CMS website is limited to only billing and payment codes that are published on the ASP Drug Pricing File. Therefore, there are likely billing and payment codes payable under Medicare Part B that would meet the proposed definition of refundable single-dose container or single-use package drug that are not found on the ASP drug pricing file or the JW modifier data published on the CMS website. In our analysis of drugs that meet this definition, there may be a need to revise existing billing and payment codes or establish a new billing and payment codes for the purposes of implementing these provisions because estimated total number of units discarded and total allowed charges must be determined at the billing and payment code level for the purpose of calculating refund amounts (described below in section III.A.6. of this proposed rule). For example, if there is a drug that meets the definition of refundable single-dose container or single-use package drug that does not have a unique billing and payment code, a new code may be needed for the purposes of estimating the total number of units that were discarded during such quarter and the total allowed charges. There may be drugs for which there are national drug codes (NDCs) of single-dose containers and NDCs of multiple-dose containers under the same FDA approval, and these NDCs are assigned to the same billing and payment code. We propose that for a drug to meet the definition of “refundable single-dose container or single-use package drug,” all NDCs assigned to the drug's billing and payment code must be single-dose containers or single-use packages, as described in each product's labeling. Section 1847A(h)(8)(B) of the Act specifies that the term “refundable single-dose container or single-use package drug” excludes drugs that are either radiopharmaceuticals or imaging agents, drugs that require filtration during the drug preparation process, and drugs approved on or after the date of enactment of the Infrastructure Act (that is, November 15, 2021) for which payment under Part B has been made for fewer than 18 months. Our proposals for implementing this definition and its exclusions are discussed below. a. Exclusions for Radiopharmaceuticals and Imaging AgentsSection 1847A(h)(8)(B)(i) of the Act excludes a drug or biological that is either a radiopharmaceutical or an imaging agent. We propose to identify radiopharmaceuticals (including therapeutic or diagnostic radiopharmaceuticals) and imaging agents (including contrast agents [95] ) for purposes of the exception at section 1847A(h)(8)(B)(i) of the Act by language describing them as such in FDA-approved labeling. We propose to codify the exclusion of radiopharmaceuticals and imaging agents from the definition of “refundable single-dose container or single-use package drug” at § 414.902. b. Exclusions for Drugs Requiring FiltrationSection 1847A(h)(8)(B)(ii) of the Act excludes from the definition of refundable single-dose container or single-use package a drug approved by FDA for which dosage and administration instructions included in the labeling require filtration during the drug preparation process, prior to dilution and administration, and require that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process. As the statute states, for the purposes of this exclusion, the filtration must occur prior to dilution and administration. Therefore, for example, Start Printed Page 46059 the definition excludes those drugs requiring filtration in order to remove the product from a vial, such as drugs contained within ampules or certain liposomal products that require filtration when removing the product from the manufacturer's vial consistent with FDA labeling. However, drugs that require in-line filters only as part of the drug administration process would not meet this exclusion. We propose that, consistent with section 1847A(h)(8)(B)(ii) of the Act, requirement for filtration must be present on FDA labeling in order for the drug to be excluded. Additionally, consistent with our longstanding interpretation of the distinction between multiple source drugs and single source drugs (see program instructions available at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf), we are proposing if there is any NDC under a single New Drug Application (NDA) or Biologics License Application (BLA) that requires filtration as described in section 1847A(h)(8)(B)(ii) of the Act, then all NDCs of such drug or biological (that is, any billing and payment code to which any such NDCs are assigned) would be excluded from the definition of refundable single-dose container or single-use package drug, even if other products under the relevant approval and assigned to that billing and payment code do not require such filtration. We believe this is appropriate because drugs and biologicals payable under Medicare Part B are billed at the level of the billing and payment code (not with the NDC of the individual product). If some products that require filtration and some products that do not require filtration are assigned to the same billing and payment code, we would not be able to distinguish (based on JW modifier data) which discarded amounts were from the filtered product and which were from the non-filtered product. c. Exclusions for Drugs for Which Payment Under Medicare Part B Has Been Made for Fewer Than 18 MonthsSection 1847A(h)(8)(B)(iii) of the Act excludes from the definition of refundable single-dose container or single-use package drugs approved by FDA on or after November 15, 2021 and for which payment has been made under Part B for fewer than 18 months. Typically, if their use is reasonable and necessary and all other coverage requirements are met, FDA-approved drugs become payable under Medicare Part B on the date which they are marketed in the United States. However, we are not able to reliably determine the exact date on which the first Part B claim was paid for a particular new drug because they are usually first billed using an unclassified drug or biological billing and payment code. Therefore, our ability to accurately determine when payment for a new drug has been made under Part B for 18 months is exceedingly limited. Because of the operational challenges with identifying the date of when the first Part B claim was paid for a new drug and because this exclusion would be operationally difficult to implement if the 18-month period ends in the middle of a calendar quarter, we believe it is appropriate to measure the 18-month period using the first day of the calendar quarter following the date of first sale as reported to CMS, which is a required field for reporting ASP data.[96] That is, for purposes of this exclusion, we propose to consider the 18-month period to begin on the first day of the calendar quarter following the date of first sale as reported to CMS for the drug. Because 18 months is the equivalent of six calendar quarters, under our proposed approach, refundable single-dose container or single-use package drugs approved or licensed by FDA on or after November 15, 2021 would be excluded from the definition of refundable single-dose container or single-use package, and thus, not subject to a refund, for the first 6 full calendar quarters following the date of first sale for any NDCs of such drug. Thereafter, that is, beginning with dates of service after the last day of the sixth full sales quarter, the drug would no longer be excluded from the definition of refundable single-dose container or single-use package drug. For example, if a drug that would otherwise meet the definition of refundable single-dose container or single-use package drug is approved by FDA in June 2023 and the first date of sale is June 20, 2023, the first day of the calendar quarter following the date of first sale for such drug would be sales occurring in the third calendar quarter of 2023 (July 1, 2023 through September 30, 2023), and we would consider the drug to be excluded from the definition for the next six quarters (that is, through December 31, 2024). As of January 1, 2025, the drug would no longer be excluded from the definition of refundable single-dose container or single-use package drug and would be subject to applicable refunds. We propose that exclusion would apply only once for a drug. That is, it would apply for the first NDC of such drug assigned to a billing and payment code and paid under Medicare Part B. If additional NDCs in the same billing and payment code, such as a new vial size or ready-to-use syringe, were subsequently approved under the same FDA approved application (for example, under the same approved NDA or BLA number), marketed, and paid under Part B, these subsequent NDCs would not start a new 18-month exception period. We believe this proposed approach is appropriate to prevent a drug from periodic or continual exemption from reports and refunds due to new NDCs that are marketed under the same FDA-approval. We propose to add a new definition at § 414.902 of “refundable single-dose container or single-use package drug,” which would be defined to mean a single source drug or biological or a biosimilar biological product for which payment is made under this part and that is furnished from a single-dose container or single-use package based on FDA-approved labeling or product information, except as otherwise specified. We welcome comment on the proposed implementation of these statutory exclusions. 4. Provision of Information to ManufacturersSection 1847A(h)(1) of the Act requires the Secretary to provide each manufacturer of a refundable single-dose container or single-use package drug (as defined in section 1847A(h)(8) of the Act) with a report, for each calendar quarter beginning on or after January 1, 2023, that includes the following information:
We propose to use the definition of manufacturer at section 1847A(c)(6)(A) of the Act, which is codified at § 414.802 and defines manufacturer as any entity that is engaged in the following (this term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law): Start Printed Page 46060 (1) Production, preparation, propagation, compounding, conversion or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis. (2) The packaging, repackaging, labeling, relabeling, or distribution of prescription drug products. We propose to identify the manufacturer responsible for the provision of refunds by the labeler code of the refundable single-dose container or single-use package drug. If such product does not have an NDC, we propose to use manufacturer information included on the ASP data submission for the product. We propose that there be a lag between the date of service quarter and the date we send reports to manufacturers to allow for claims maturity from the date of service. To operationalize reports to manufacturers, we must consider the timing with regards to the availability of JW modifier data. Providers and suppliers have a 12-month period to submit Medicare Part B claims, including claims for drugs payable under Part B, so a lag exists between the date of service when a drug is administered and when the claim is submitted and adjudicated. Because of this lag in finalized claims, there may also be a lag in available JW modifier data for any given date of service quarter. An evaluation of July 2010 Medicare Part B claims in the Physician/Supplier-Carrier setting showed that 91.68, 96.84, and 98.32, and 99.13 percent of claims were final at 3, 6, 9, and 12 months, respectively, following the date of service. At 24 and 48 months, 99.83 and 100 percent of the claims, respectively, were considered to be final. Section 1847A(h)(1) of the Act does not specify the interval by which reports for each calendar quarter must be sent to manufacturers. We propose that CMS provide an annual report to manufacturers with information for each calendar quarter. Sending reports (with information for each calendar quarter) annually would reduce the operational resources needed to implement this provision and would streamline the dispute resolution process as described in section III.A.7 of this proposed rule. We propose to send reports to manufacturers no later than October 1 of each year. We propose that the report reflect claims data that is finalized by the end of the second calendar quarter (that is, June 30) of the year in which the report is sent. This will allow time for CMS to analyze the data and calculate refund amounts (as discussed in section III.A.5 of this proposed rule) to provide reports to manufacturers no later than October 1. In addition, we propose that annual reports would include any additional lagged claims data not included for the quarters first reflected in the prior year's report. In an effort to implement this provision in a timely manner, we propose to send the first report to manufacturers no later than October 1, 2023. Under our proposal, this first report would contain information only for the first calendar quarter of 2023, because that would be the only quarter for which we would have a substantial amount of claims data that is finalized by the end of the second calendar quarter of the year in which the report is sent. We propose to send the second annual report no later than October 1, 2024, and this report would include information for the second, third, and fourth quarters of 2023 and the first calendar quarter of 2024. It also would include any additional lagged claims for dates of service in the first calendar quarter of 2023 that were not included in the first report. Subsequent annual reports would be done in this manner, meaning that they would provide the information required under section 1847A(h)(1) of the Act for the last 3 quarters of the prior year, the first quarter of the current year, and lagged claims data not reflected for the last three quarters of the year that is two years prior and the first quarter of the prior year (that is, the quarters first reflected in the previous year's report). This means that reports (except for those in 2023 and 2024) would include information for eight calendar quarters: four new calendar quarters and four quarters with additional information for claims that were not yet finalized for those dates of service in the previous year's report. In this proposed approach, we would expect to capture JW modifier data and total allowed charges from over 99 percent of claims for dates of service in a given quarter. For example, the report sent to manufacturers in 2025 would include information for dates of service in the second, third, and fourth quarters of 2024 and the first quarter of 2025 plus additional lagged claims that were not included in the report sent in 2024 (that is, information for dates of service in the second, third, and fourth quarters of 2023 and the first quarter of 2024). When lagged claims data is evaluated, any changes in the refund amount owed for those quarters and not already accounted for in the previous year's report would be calculated as described below in section III.A.6. of this proposed rule. 5. Manufacturer Provision of RefundSection 1847A(h)(2) of the Act states that for each calendar quarter beginning on or after January 1, 2023, the manufacturer of a refundable single-dose container or single-use package drug shall, for such drug, provide to the Secretary a refund for such quarter. As described in the previous section, we propose to issue reports for each calendar quarter on an annual basis. Section 1847A(h)(4) of the Act states that refunds under section 1847A(h)(2) of the Act must be paid in regular intervals as determined appropriate by the Secretary. We propose that refunds be paid in 12-month intervals (that is, annually) to align with our proposal to issue reports for each calendar quarter on an annual basis. Additionally, we believe requiring refunds to be paid on an annual basis is operationally optimal because it allows for some claims runout while administering reports in a timely manner following the date of service and leaves more time for dispute resolution (discussed below in section III.A.6. of this proposed rule), which we believe will be important for refund calculation accuracy. Including lagged claims data from the previous year's report allows more time for claims to be finalized for a given calendar quarter, subsequently represent a more accurate estimate of discarded units, and result in a more accurate refund calculation. Therefore, we propose to specify that the regular interval for the payment of refunds is annual and that refund amounts for the quarters reported in an annual report must be paid no later than December 31 of the year in which the report was sent to the manufacturer except in circumstances where a dispute is pending. In the case of a dispute, payment of the refund is due no later than 30 days after the resolution of the dispute. As discussed in more detail in the next section, we believe December 31 is an appropriate deadline because it would allow manufacturers to review their annual reports and initiate dispute resolution if needed. We propose to require manufacturers owing refunds to transmit payment in a form and manner specified by CMS. We propose to reflect these provisions at § 414.940. 6. Refund AmountSection 1847A(h)(3) of the Act provides, with respect to a refundable single-dose container or single-use package drug of a manufacturer assigned to a billing and payment code for a calendar quarter beginning on or after Start Printed Page 46061 January 1, 2023, that the refund for which the manufacturer is liable is the amount equal to the estimated amount (if any) by which:
++ The total number of units of the billing and payment code for such drug that were discarded during such quarter; and ++ The payment limit amount for the refundable single-dose container or single-use package drug;
Section 1847A(h)(3) of the Act specifies that the applicable percentage is 10 percent, but authorizes us to increase this percentage as appropriate, through notice and comment rulemaking, in the case of a refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product as that described in section 1847A(h)(8)(B)(ii) of the Act (discussed above in section III.A.3. of this proposed rule). We propose to calculate the refund required under section 1847A(h)(1) of the Act using the number of discarded units for dates of services in the same calendar quarter to which the payment limit amount applies. We propose to estimate the total allowed charges during the quarter by multiplying the drug's payment limit amount for the quarter by the total number of units of the billing and payment code of such drug that were subject to JW modifier reporting (as described above in sections III.A.1. and 2. of this proposed rule) including those for which the JZ modifier would be required if no units were discarded. As specified in section 1847A(h)(1)(C) of the Act, the total number of units of the billing and payment code of a refundable single-dose container furnished during a calendar quarter for purposes of subparagraph (A)(i), and the determination of the estimated total allowed charges for the drug in the quarter for purposes of paragraph (3)(A)(ii), exclude such units that are packaged into the payment amount for an item or service and are not separately payable. To illustrate how the refund would be calculated, if 2,000 units of a billing and payment code for a given drug were unused and discarded during dates of service in the first calendar quarter of 2023, that number would be multiplied by the drug's payment limit amount for the first calendar quarter of 2023. If the payment limit amount was $100, that would be multiplied by 2,000 (the number of discarded units) to equal $200,000. If Medicare paid for 15,000 units of the billing and payment code subject to the JW modifier with dates of service in the first quarter of 2023, that would be multiplied by the same payment limit amount ($100) to determine the total allowed charges during the quarter ($1,500,000). Then, the applicable percentage (in this example, 10 percent) of those total allowed charges ($150,000) would be subtracted out to determine the refund amount. For the sake of this example, that would be $200,000 (the amount described in section 1847A(h)(3)(A)(i) of the Act) minus $150,000 (the amount described in section 1847A(h)(3)(A)(ii) of the Act) to equal a refund amount of $50,000 for the first calendar quarter of 2023. Section 1847A(h)(3)(A) of the Act states that the refund amount is equal to an estimated amount and that the determination of amount that exceeds the applicable percentage of the estimated total allowed charges for a refundable single-dose container or single-use package drug during a given quarter. Exact amounts are likely not attainable for these numbers because of, for example, lagged claims data, appeals, or reversals in the case of an audit. To obtain the most accurate estimates possible, we propose above in section III.A.2 to provide information and determine any refund amount for discarded refundable single-dose container or single-use package drugs annually, and to include additional lagged claims data not included in the previous year's report. Based on claims maturity data, we expect this approach would capture over 99 percent of claims for a given date of service quarter in an effort to make the most accurate estimates possible for the purposes of calculating refund amounts. If the assessment of lagged claims data increases the refund amount for a quarter, the manufacturer would be liable for that additional refund amount, which would be reflected in the report. If the assessment of lagged claims data decreases the refund amount for a quarter, we propose that any overpayment be corrected. In the event that an assessment of lagged claims data for a calendar quarter causes the product of total discarded units and the payment limit amount to fall below the applicable percentage, which would result in no refund due from that manufacturer for the given quarter, we propose that any overpayment be corrected. We solicit comments on the operational process of overpayment correction. We propose to reflect these provisions at § 414.940. a. Increased Applicable Percentage for Drugs With Unique CircumstancesSection 1847A(h)(3)(B)(ii) of the Act provides that, in the case of a refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product as that described in section 1847A(h)(8)(B)(ii) of the Act, the Secretary may increase the applicable percentage otherwise applicable as determined appropriate by the Secretary. At this time, we do not propose an increase of the applicable percentage for any drugs with unique circumstances. We expect that for most drugs supplied in single-dose containers, the amount of drug indicated on the vial or container reflects the amount of drug that could potentially be administered to a patient. This is consistent with FDA regulations at 21 CFR 201.51(g), which provide that for drugs in ampules or vials intended for injection, the declaration of net quantity of contents on the label is considered to express the minimum quantity of contents and that variation above the stated measure must comply with the excess volumes set forth in the United States Pharmacopeia (USP). FDA guidance for industry [97] explains that USP General Chapter 1151 Pharmaceutical Dosage Forms provides excess volume recommendations for mobile and viscous liquids in a range of fill volumes, noting that the excess volumes recommended are usually sufficient to permit withdrawal and administration of the labeled volumes. In this guidance, FDA recommends that single-dose vials should not contain a significant volume beyond what would be considered a usual or maximum dose for the expected use of the drug product. We recognize there may be very rare cases in which, as part of a drug's FDA-approved preparation and administration in labeling, the amount of drug identified on the package or labeling far exceeds the amount administered to a patient, thus leading to a substantial percentage of drug that is discarded. For example, in the case of a drug that is reconstituted with a hydrogel and administered via ureteral catheter or nephrostomy tube into the kidneys, there is substantial amount of reconstituted hydrogel that adheres to Start Printed Page 46062 the vial wall during preparation.[98] In this instance, the drug adhering to the vial wall (and not able to be extracted from the vial) must be discarded, which leads to a higher percentage of discarded units billed with the JW modifier. If the labeled amount of the package is 80 mg and the maximum extracted amount from the vial guarantees delivery of the maximum dose of 60 mg, then there would be at least 25 percent discarded units. In the case that a patient does not require the maximum dose, the percent of discarded units would be even higher. In this circumstance, an applicable percentage of 35 percent may be appropriate because it would allow for the amount drug diluted in hydrogel that adheres to the vial wall (25 percent) plus an additional 10 percent to align with the applicable percentage for drugs without a unique circumstance. We are considering whether we should adopt a higher applicable percentage for a drug in this circumstance. We welcome comments on specifying a higher applicable percentage for drugs that are diluted in hydrogel and administered via the pyelocaliceal route, and we welcome comments on whether an applicable percentage of 35 percent would be appropriate in this circumstance. We welcome comments on whether there are other drugs with unique circumstances as described under section 1847A(h)(3)(B)(ii) of the Act that may warrant an increase in the applicable percentage. 7. Dispute ResolutionAs a part of implementing this provision, we recognize the need for establishing a dispute resolution process because of the nature of determining the estimated total allowed charges for a given calendar quarter and the methods by which the estimated refund amount is determined. Although a dispute resolution process is not expressly required by section 1847A(h) of the Act, we believe that proactively establishing such a process will aid in the successful implementation of this provision. We propose that each manufacturer have an opportunity to dispute the report by submitting an error report as described in this section. We propose that to assert that there have been one or more errors in a report, a manufacturer must submit a dispute with each asserted error. We propose that the dispute must include the following information: (1) Manufacturer name and address; (2) The name, telephone number, and email address of one or more employees or representatives of the manufacturer with whom the Secretary may discuss the claimed errors; (3) For a mathematical calculation error, the specific calculation element(s) that the manufacturer disputes and its proposed corrected calculation; and (4) For any other asserted error, an explanation of the nature of the error, how the error affects the refund calculation, an explanation of how the manufacturer established that an error occurred, the proposed correction to the error, and an explanation of why CMS should use the proposed corrected data. We propose that in order to dispute a report, manufacturers must assert any basis for contesting its refund calculation during the 30-day period following the issuance of the report. We would evaluate error reports and would decide whether the information (such as number of discarded billing units or refund amount calculation) requires correction based on the information provided. We propose that we would provide manufacturers who have submitted a dispute a response to each dispute and inform manufacturers of the final refund amount no later than 30 days after receipt of the dispute. We propose that if we find that a different refund amount is owed than what was stated on the report, we would issue a new report with updated discarded amounts and/or refund. We propose that if we disagree with the dispute, we would notify the manufacturer that refund amount on the report is still owed and should be paid as described above in section 5 (no later than December 31 of the year in which the report was sent). We welcome comment on whether CMS should develop an appeal mechanism, which we will consider for future rulemaking. We propose to codify the dispute resolution process at § 414.940. 8. Enforcementa. AuditsSection 1847A(h)(6)(A)(i) of the Act requires that we perform periodic audits on each manufacturer of a refundable single-dose container or single-use package drug that is required to provide a refund under section 1847A(h) of the Act with respect to such drug and such refunds. We propose to specify at 414.940(e) that we periodically audit manufacturers of refundable single-dose container or single-use package drugs consistent with this requirement. We welcome comments about what such audits should entail, which we will consider for future rulemaking. Section 1847A(h)(6)(A)(ii) of the Act requires us to conduct periodic audits of claims submitted under Medicare Part B with respect to refundable single-dose container or single-use package drugs in accordance with the authority under section 1833(e) of the Act. Under the JW modifier policy, claims for drugs furnished on or after January 1, 2017 containing billing for discarded drugs that do not use the JW modifier may be subject to review.[99] We propose that our review contractors would periodically review Part B medication claims to ensure the JW modifier, JZ modifier (if adopted), and discarded drug amounts are billed appropriately consistent with our normal claims audit policies and protocols. b. Civil Money PenaltyProvisions in section 1847A(h)(6)(B) of the Act give the Secretary authority to impose a civil money penalty on a manufacturer of a refundable single-dose container or single-use package drug who fails to comply with the requirement under section 1847A(h)(2) of the Act for such drug for a calendar quarter. As set forth in section 1847A(h)(6)(B) of the Act, the civil money penalty would be an amount equal to the sum of—
We propose to codify the civil money penalty at § 414.940. B. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)1. Backgrounda. RHC and FQHC Payment MethodologiesAs provided 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 Start Printed Page 46063 health agencies. Transitional Care Management (TCM) services can also be paid by Medicare as an RHC or FQHC visit. In addition, Diabetes Self-Management Training (DSMT) or Medical Nutrition Therapy (MNT) sessions furnished by a certified DSMT or MNT program may also be considered FQHC visits 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 new payment limits on the AIR, and this limit will be determined for each RHC in accordance with section 1833(f) of the Act. 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 the 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. b. Care Management Services in RHCs and FQHCsWe have been engaged in a multi-year examination of coordinated and collaborative care services in professional settings, and as a result established codes and separate payment in the PFS to separately recognize and pay for these important services. The care coordination included in services, such as office visits, do not always adequately describe the non-face-to-face care management work involved in primary care. Payment for office visits may not reflect all the services and resources required to furnish comprehensive, coordinated care management for certain categories of beneficiaries, such as those who are returning to a community setting following discharge from a hospital or skilled nursing facility (SNF) stay. A separate payment was established in the CY 2016 PFS final rule with comment period (80 FR 71080 through 71088) for RHCs and FQHCs that furnish Chronic Care Management (CCM) services. We believe the non-face-to-face time required to coordinate care is not captured in the RHC AIR or the FQHC PPS payment, particularly for the rural and/or low-income populations served by RHCs and FQHCs. Allowing separate payment for CCM services in RHCs and FQHCs is intended to reflect the additional resources necessary for the unique components of CCM services. In the CY 2018 PFS final rule with comment period (82 FR 53169 and 53180), we finalized revisions to the payment methodology for CCM services furnished by RHCs and FQHCs and established requirements for general Behavioral Health Integration (BHI) and psychiatric Collaborative Care Management (CoCM) services furnished in RHCs and FQHCs, beginning on January 1, 2018. 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. In the CY 2019 PFS final rule (83 FR 59683), we explained for CY 2018 the payment amount for HCPCS code G0511 was set at the average of the 3 national non-facility PFS payment rates for the CCM and general BHI codes and updated annually based on the PFS amounts. That is, for CY 2018 the 3 codes that comprised G0511 were CPT 99490 (20 minutes or more of CCM services), CPT 99487 (60 minutes or more of complex CCM services), and CPT 99484 (20 minutes or more of BHI services). We also explained that another CCM code was introduced for practitioners billing under the PFS, 99491, which would correspond to 30 minutes or more of CCM furnished by a physician or other qualified health care professional and is similar to CPT codes 99490 and 99487 (83 FR 56983). Therefore, for RHCs and FQHCs, we added CPT code 99491 as a general care management service and included it in the calculation of HCPCS code G0511. Starting on January 1, 2019, RHCs and FQHCs were paid for HCPCS code G0511 based on the average of the national non-facility PFS payment rates for CPT codes 99490, 99487, 99484, and 99491 (83 FR 59687). In the CY 2020 PFS final rule with comment (84 FR 62692), we established a separate payment for Principle Care Management (PCM) services under the PFS. PCM services include comprehensive care services for a single high-risk disease or complex condition, typically expected to last at least 3 months and may have led to a recent hospitalization, and/or placed the patient at significant risk of death. Beginning January 1, 2020, practitioners billing under the PFS can bill for PCM services using HCPCS codes G2064 or G2065. HCPCS code G2064 is for at least 30 minutes of PCM services furnished by physicians or nonphysicians during a calendar month. HCPCS code G2065 is for at least 30 minutes of PCM services furnished by clinical staff under the direct supervision of a physician or non-physician during a calendar month. In the CY 2021 PFS final rule (85 FR 84697 through 84699), we explained that since the requirements for the new PCM codes were similar to the requirements for the services described by HCPCS code G0511, we added HCPCS code G2064 and G2065 to G0511 as a general care management service for RHCs and FQHCs starting January 1, 2021. The payment rate for HCPCS G0511 for CY 2021 was the average of the national non-facility PFS payment rate for the RHC and FQHC care management and general behavioral health codes (CPT codes 99490, 99487, 99484, and 99491), and PCM codes (HCPCS G2064 and G2065). Finally, we note that in the CY 2022 PFS final rule (86 FR 65118), HCPCS codes G2064 and G2065 were replaced by CPT codes 99424 and 99435. Therefore, for CY 2022 the current payment rate for HCPCS G0511 is the average of the national non-facility PFS payment rate for the RHC and FQHC care management and general behavioral health codes (CPT codes 99490, 99487, Start Printed Page 46064 99484, and 99491), and PCM codes (CPT codes 99424 and 99425). Additional information on care management requirements is available on the CMS Care Management Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management.html and on the CMS RHC and FQHC Web pages at https://www.cms.gov/Center/Provider-Type/Rural-Health-Clinics-Center.html and https://www.cms.gov/Center/Provider-Type/Federally-Qualified-Health-Centers-FQHC-Center.html. 2. New Care Management Codes for Chronic Pain Management (CPM) and General Behavioral Health Integration (GBHI)Consistent with the discussion earlier in section II.E.4 of this proposed rule, there are two new HCPCS codes proposed to describe CPM and the proposed CPM codes would be created to separately pay for a specified set of pain management and treatment services, specifically including the administration of validates rating scales, and a person-centered care plan that includes strengths, goals, clinical needs, and desired outcomes. (1) HCPCS codes GYYY1: Chronic pain management and treatment, monthly bundle including, diagnosis; assessment and monitoring; administration of a validated pain rating scale or tool; the development, implementation, revision, and maintenance of a person-centered care plan that includes strengths, goals, clinical needs, and desired outcomes; overall treatment management; facilitation and coordination of any necessary behavioral health treatment; medication management; pain and health literacy counseling; any necessary chronic pain related crisis care; and ongoing communication and care coordination between relevant practitioners furnishing care, e.g., physical therapy and occupational therapy, and community-based care, as appropriate. Required face-to-face visit at least 30 minutes provided by a physician or other qualified health professional; first 30 minutes personally provided by physician or other qualified health care professional, per calendar month. (When using GYYY1, 30 minutes must be met or exceeded.) and (2) HCPCS code GYYY2: Each additional 15 minutes of chronic pain management and treatment by a physician or other qualified health care professional, per calendar month). For GYYY1, CPM services, we are requiring an face-to-face visit of at least 30 minutes provided by a physician or other qualified health professional, per calendar month to a beneficiary who has a diagnosis of pain that has lasted more than 3 months, which could be the result of an underlying medical disease or condition. HCPCS code GYYY2 will apply to up to three units of an additional 15 minutes of CPM and treatment by a physician or other qualified health care professional, per calendar month (listed separately in addition to GYYY1). The new codes for CPM would be valued using crosswalks to the CY 2023 ratesetting inputs for the PCM services, CPT codes 99424 and 99425. The new coding and payment for general BHI services, as described in section II.E.4 of this proposed rule, would be a new HCPCS code (GBHI1): (Care management services for behavioral health conditions, at least 20 minutes of clinical psychologist or clinical social worker time, per calendar month, with the following required elements: initial assessment or follow-up monitoring, including the use of applicable validated rating scales; behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; facilitating and coordinating treatment such as psychotherapy, coordination with an/or referral to physicians and practitioners who are authorized by Medicare law to prescribe medications and furnish E/M services counseling and/or psychiatric consultation; and continuity of care with a designated member of the care team) describing general BHI services performed by clinical psychologists (CPs) and clinical social workers (CSWs). The payment rate for the new General BHI code would be based on the payment rate for the current general BHI code, 99484. CPs and CSWs are statutorily authorized to furnish services in RHCs and FQHCs (§ 405.2411(a)(6)). The requirements for the proposed CPM service (that is, HCPCS code GYYY1) are similar to the requirements for the general care management services furnished by RHCs and FQHCs and as such, we believe the non-face-to-face time required to coordinate care is not captured in the RHC AIR or the FQHC PPS payment, particularly for the rural and/or low-income populations served by RHCs and FQHCs. The pain management coordination included in services, such as office visits, do not always adequately describe the non-face-to-face pain management work involved in primary care. Payment for office visits may not reflect all the services and resources required to furnish comprehensive, coordinated pain care management described in the HCPCS code, such as the assessment and monitoring; administration of a validated pain rating scale or tool; the development, implementation, revision, and maintenance of a person-centered care plan that includes strengths, goals, clinical needs, and desired outcomes; overall treatment management; facilitation and coordination of any necessary behavioral health treatment; medication management; pain and health literacy counseling; any necessary chronic pain related crisis care. Allowing separate payment for CPM services in RHCs and FQHCs is intended to reflect the additional time and resources necessary for the unique components of care coordination services. We are not proposing to utilize the add-on HCPCS code GYYY2 for RHC/FQHC payments because RHCs and FQHCs do not pay their practitioners based on additional minutes spent by practitioners, as is the case for practitioners under the PFS. In an effort to be consistent with the new services that are being proposed for practitioners billing under the PFS, we are proposing to include CPM services in the general care management HCPCS code G0511 when these services are provided by RHCs and FQHCs. Since HCPCS code GYYY1 would be valued using a crosswalk to the PCM CPT code 99424, which is currently one of the CPT codes that comprise HCPCS code G0511, we propose no change to the average used to calculate the G0511 payment rate. In addition, since CPs and CSWs are considered practitioners that can provide services in RHCs/FQHCs, in this proposed rule we clarify that when CPs and CSWs provide the services described in HCPCS code GBHI1 in an RHC or FQHC, they can bill HCPCS code G0511. If finalized as proposed, RHCs and FQHCs that furnish the new CPM and GBHI services performed by CPs and CSWs would be able to bill these services using HCPCS code G0511, either alone or with other payable services on an RHC or FQHC claim for dates of service on or after January 1, 2023. The payment rate for HCPCS code G0511 would continue to be the average of the national non-facility PFS payment rates for the RHC and FQHC care management and general behavioral health codes (CPT codes 99484, 99487, 99490, and 99491) and PCM codes (CPT codes 99424 and 99425) and would be updated annually based on the PFS amounts for these codes. In future rulemaking, we may consider other approaches for Start Printed Page 46065 calculating the rate of HCPCS code G0511 as the number of services is growing each year. For example, we could value HCPCS code G0511 using a weighted average of the services that comprise HCPCS code G0511 or using the national average of the top three services comprising HCPCS code G0511. We welcome comments on potential methodologies. 3. Conforming Technical Changes to 42 CFR 405.2463Last year in the CY 2022 PFS final rule with comment (86 FR 65211), we finalized a policy 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. We revised the regulations under § 405.2463 to state that an RHC or FQHC mental health visit can also include encounters furnished through 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 noted that these changes aligned with similar mental health services furnished under the PFS. This change allows 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. In addition, we finalized a revision to the regulation under § 405.2463 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, unless, for a particular 12-month period, 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 (86 FR 65210 and 65211). We also finalized a revision to the regulation under § 405.2469, FQHC supplemental payments, to state 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. At § 405.2469, we also finalized a revision to paragraph (d) to describe the same in-person visit requirement referenced in § 405.2463. The Consolidated Appropriations Act, 2022 (Pub. L. 117-103) (CAA, 2022) was signed into law on March 15, 2022, and included extension of a number of Medicare telehealth flexibilities established during the PHE for a limited 151-day period beginning on the first day after the end of the public health emergency (PHE) for COVID-19. Specifically, section 303 of the CAA, 2022 amended section 1834(m)(8) of the Act to extend payment for telehealth services furnished by FQHCs and RHCs for the 151-day period beginning on the first day after the end of the COVID-19 PHE. Payment would continue to be made under the methodology established for telehealth services furnished by FQHCs and RHCs during the PHE, which is based on payment rates that are similar to the national average payment rates for comparable telehealth services under the PFS. We do not believe it necessary to conform the regulation to this temporary provision. However, another provision applicable to RHCs and FQHCs requires conforming regulatory text changes. Section 304 of the CAA, 2022 delayed the in-person requirements under Medicare for mental health services furnished through telehealth under the PFS and for mental health visits furnished by RHCs and FQHCs via telecommunications technology which requires conforming regulatory text changes. For RHCs and FQHCs, in-person visits will not be required until the 152nd day after the end of the PHE for COVID-19. We note that while the extensions of mental health telehealth visits under section 304 of the CAA, 2022 were placed into paragraphs of section 1834 of the Act applicable only to hospice patients served by RHCs and FQHCs, the overall intent of the amendments made by section 304 of the CAA, 2022 appear to be to provide an exception to the limitations otherwise in place on payment for mental health visits that are not in-person visits. Therefore, we are proposing to apply the 151-day extension of non-in-person visits to all RHC and FQHC mental health visits. Therefore, we are proposing to make conforming regulatory text changes to the applicable RHC and FQHC regulations in 42 CFR part 405, subpart X, specifically, at § 405.2463, “What constitutes a visit,” we propose to amend paragraph (b)(3) and at § 405.2469 “FQHC supplemental payments” we proposed to amend paragraph (d) to include the delay of the in-person requirements for mental health visits furnished by RHCs and FQHCs through telecommunication technology under Medicare until the 152nd day after the PHE for COVID-19. In addition, several other provisions of the CAA, 2022 would apply to telehealth services (those that are not mental health visits) furnished by RHCs and FQHCs. Section 301 of the CAA, 2022 amended section 1834(m)(4)(C) of the Act to add a new clause (iii) expand the originating site requirements to include any site in the U.S. at which the beneficiary is located, including an individual's home, for a 151-day period beginning on the first day after the end of the PHE for COVID-19. It also prohibits an originating site facility fee from being paid unless the site is a setting included on the originating site list in section 1834(m)(4)(C)(ii) of the Act, excluding the home of an individual. Section 305 of division P, title III, subtitle A of the CAA, 2022 amended section 1834(m) to extend coverage and payment of telehealth services that are furnished via audio-only telecommunications system for the 151-day period beginning on the first day after the end of the PHE for COVID-19. Section 309 of division P, title III, subtitle A of the CAA, 2022 authorized the Secretary to implement the Medicare telehealth provisions via program instruction or otherwise. Therefore, given that the end date of the PHE is not yet known and may occur prior to the provisions of this rule being finalized, we note that we intend to issue program instruction or other subregulatory guidance to implement the provisions of this section of this rule to ensure a smooth transition after the declared end of the PHE for COVID-19. 4. Specified Provider-Based RHC Payment-Limit Per-Visita. BackgroundBeginning April 1, 2021, provider-based RHCs that meet qualifications in section 1833(f)(3)(B) of the Act are entitled to the special payment rules Start Printed Page 46066 described in section 1833(f)(3)(A) of the Act. In order to have their payment limit established based on their applicable All-Inclusive Rate (AIR) and remain this way instead of being based on the national statutory payment limit as applicable in section 1833(f)(2) of the Act, RHCs must meet the following specified criteria:
++ 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. In accordance with section 1833(f)(3)(A)(i)(I) of the Act, 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 note, the MEI was last revised in the CY 2014 PFS final rule with comment period (78 FR 74264) and the proposal to rebase and revise the MEI for CY 2023 can be found in section II.N. of this proposed rule. 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. In accordance with section 1833(f)(3)(A)(i)(II) of the Act, beginning April 1, 2021, for provider-based RHCs that meet the specified criteria under section 1833(f)(3)(B) of the Act, 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. Once a provider-based RHC meets the qualifications of section 1833(f)(3)(B) of the Act, it will lose its designation if the hospital does not continue to have less than 50 beds, beyond the exemptions provided for the COVID-19 PHE. If this occurs the provider-based RHC would be subject to the statutory payment limit per visit applicable for such year and will not be able to regain the specified provider-based payment limit. In the CY 2022 PFS final rule (86 FR 65204), we discussed the provisions in section 1833(f) of the Act [100] and finalized conforming regulations under § 405.2462. On March 16, 2021, we issued Change Request 12185, Transmittal 10679, to instruct the Medicare Administrative Contractors (MACs) to establish the provider-based RHC payment limits per visit in accordance with section 1833(f)(3)(A), beginning April 1, 2021. Change Request 12185, Transmittal 10679, was rescinded and replaced by Transmittal 10780 issued on May 4, 2021.[101] Change Request 12489, Transmittal 11130, issued on November 19, 2021, implemented the RHC payment limits for CY 2022.[102] b. Clarification to the RHC Payment Limit for Specified Provider-Based RHCsAs we state above, section 1833(f)(3)(A) of the Act instructed CMS to set payment limits per visit for specified provider-based RHCs under certain payment rules. For specified provider-based RHCs that had a per visit payment amount (that is, an AIR) established for services furnished in 2020, beginning April 1, 2021, section 1833(f)(3)(A)(i)(I) of the Act requires the payment limit per visit to 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)(A) of the Act. For subsequent years, in accordance with section 1833(f)(3)(A)(ii) of the Act, the 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 or; (2) the statutory payment limit described in section 1833(f)(2) of the Act as applicable. For specified provider-based RHCs that did not have an AIR established for services furnished in 2020, beginning April 1, 2021, section 1833(f)(3)(A)(i)(II) of the Act requires 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 2021 or; (2) the statutory payment limit per visit as described in section 1833(f)(2)(A) of the Act. For subsequent years, in accordance with section 1833(f)(3)(A)(ii) of the Act, the payment limit per visit shall be set at an amount equal to the greater of: (1) the amount established in the previous year increased by the percentage increase in the MEI or; (2) the statutory payment limit described in section 1833(f)(2) of the Act as applicable. In the CY 2022 PFS final rule (86 FR 65201), we interpreted the “per visit payment amount” to align with the interim rate process the MACs use in determining an RHC's AIR.[103] That is, as explained in § 405.2464(a) the AIR is determined by the MAC using the most recently available cost report. Therefore, using the RHCs discussed in section 1833(f)(3)(A)(i)(I) of the Act as an example, we interpreted the term “services furnished in 2020” to mean the period at which the services were furnished in 2020 and that costs for those services were reported. We acknowledged that there may be more than one cost report that reports costs for services furnished in calendar year 2020 and explained that since section 1833(f)(3)(A)(i)(I)(aa) of the Act requires the “per visit payment amount” to be increased by the CY 2021 MEI, if a provider has a cost reporting period that differs from a calendar year time-period Start Printed Page 46067 (that is, January 1, 2020 through December 31, 2020) then the MACs should use data based on the relevant cost report period ending in 2020. In the CY 2022 PFS final rule (86 FR 65200), we received comments from interested parties expressing 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 did 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. In our response to these comments, we agreed, and stated that what the commenter described was 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 those 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 did not have an AIR established for services furnished in 2020 and received an interim rate until the MAC accepted and finalized the RHC's initial cost report, we again agreed with the commenter. We believed that what the commenter described also aligned 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, would 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 would 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. Since publication of the CY 2022 PFS final rule, interested parties requested clarification regarding the timing of cost reports, specifically if the payment limit could be set using a short cost report (less than 12 consecutive months). In the CY 2022 PFS final rule (86 FR 65198 through 65202), we did not specifically address requiring the cost report to span a full 12-consecutive month period or whether MACs, following their interim rate setting process, could establish the payment limit using a specified RHC's short period cost report (less than 12-consecutive months). Since many questions were raised subsequent to the publication of the CY 2022 PFS final rule regarding the use of short-period cost reports (less than 12 consecutive months) versus 12-consecutive month cost reports to establish the payment limit for specified provider-based RHCs, in this proposed rule, we are providing a discussion of this issue and providing clarification. For purposes of establishing the payment limit effective April 1, 2021 for specified provider-based RHCs defined in section 1833(f)(3)(A)(i)(I) of the Act, that is, had an AIR established for services furnished in 2020, we are proposing that MACs use the cost report ending in 2020 that reports costs for 12 consecutive months. If the RHC does not have a 12 consecutive month cost report ending in 2020, the MACs should use the next most-recent final settled cost report that reports cost for 12 consecutive months. This proposal would impact specified provider-based RHC's that had an established AIR for services furnished in 2020 but submitted a short cost report (less than 12 consecutive months) ending in 2020 since that period would have been used by MACs for determining the RHC's payment limit per Change Request 12185, Transmittal 10679. The payment limit per visit is based on each specified provider-based RHC's AIR determined from their final settled cost report ending in 2020 when such cost reporting period is for 12-consecutive months. If a 12-consecutive month cost report ending in 2020 is not available, the MAC should use the next available 12-consecutive month cost report that reports costs for RHC services furnished in 2020, (for example, a cost reporting period October 1, 2020 through September 30, 2021 would be acceptable). We considered the idea of combining cost report data that spans from the end of one year into the next year to equal a 12-consecutive month cost report (for example, a cost report that consists of three months ending December 31, 2020 plus a cost report that ends July 31, 2021) and prorating the rates from the time services were furnished in both years. We decided against combining cost report data to equal a 12-consecutive month cost report because prorating may result in an inaccurate AIR. We seek comment on whether we should combine cost report data that spans from one year into the next year to equal a 12-consecutive month cost report. Consequently, for purposes of establishing the payment limit effective April 1, 2021 for specified provider-based RHCs defined in section 1833(f)(3)(A)(i)(II) of the Act (that is, those that did not have an AIR established for services furnished in 2020), we are proposing that MACs use the cost report ending in 2021 that reports costs for 12 consecutive months. If the RHC does not have a 12-consecutive month cost report ending in 2021, the MACs should use the next most-recent final settled cost report that reports cost for 12 consecutive months. In addition, for those specified provider-based RHCs who did not have an AIR established for services furnished in 2020 the 2021 MEI percentage increase update would not be applied. As discussed in the CY 2022 PFS final rule (86 FR 65200), for those specified provider-based RHCs, the payment limit per visit would 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, and since the MEI is already built in the rate for services furnished in 2021 adding an MEI update would be duplicative. Therefore, those specified provider-based RHCs that did not have an AIR established for services furnished in 2020 would receive the CY 2023 percentage increase in the MEI, which will be based on the proposed 2017-based MEI update. We note that in section II. M. of this proposed rule, we are proposing to rebase and revise the MEI from a 2006-base year to a 2017-base year. We believe 12 consecutive months of cost report data will more accurately reflect the costs of providing RHC services and will establish a more accurate base from which the payment limits will be updated going forward. Start Printed Page 46068 We seek comment on this proposed interpretation. C. Clinical Laboratory Fee Schedule: Revised Data Reporting Period and Phase-In of Payment Reductions, and Proposals for Specimen Collection Fees and Travel Allowance for Clinical Diagnostic Laboratory Tests1. Background on the Clinical Laboratory Fee SchedulePrior to January 1, 2018, Medicare paid for clinical diagnostic laboratory tests (CDLTs) on the Clinical Laboratory Fee Schedule (CLFS), with certain exceptions, under section 1833(a), (b), and (h) of the Act. Under the previous payment system, CDLTs were paid based on the lesser of: (1) the amount billed; (2) the local fee schedule amount established by the Medicare Administrative Contractor (MAC); or (3) a national limitation amount (NLA), which is a percentage of the median of all the local fee schedule amounts (or 100 percent of the median for new tests furnished on or after January 1, 2001). In practice, most tests were paid at the NLA. Under the previous payment system, the CLFS amounts were updated for inflation based on the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), and reduced by a productivity adjustment and other statutory adjustments, but were not otherwise updated or changed. Coinsurance and deductibles generally do not apply to CDLTs paid under the CLFS. Section 1834A of the Act, as established by section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA), required significant changes to how Medicare pays for CDLTs under the CLFS. In the June 23, 2016 Federal Register (81 FR 41036), we published a final rule entitled Medicare Clinical Diagnostic Laboratory Tests Payment System (CLFS final rule), that implemented section 1834A of the Act at 42 CFR part 414, subpart G. Under the CLFS final rule, “reporting entities” must report to CMS during a “data reporting period” “applicable information” collected during a “data collection period” for their component “applicable laboratories.” The first data collection period occurred from January 1, 2016 through June 30, 2016. The first data reporting period occurred from January 1, 2017 through March 31, 2017. On March 30, 2017, we announced a 60-day period of enforcement discretion for the application of the Secretary's potential assessment of civil monetary penalties (CMPs) for failure to report applicable information with respect to the initial data reporting period.[104] In the CY 2018 PFS proposed rule (82 FR 34089 through 34090), we solicited public comments from applicable laboratories and reporting entities to better understand the applicable laboratories' experiences with data reporting, data collection, and other compliance requirements for the first data collection and reporting periods. We discussed these comments in the CY 2018 PFS final rule (82 FR 53181 through 53182) and stated that we would consider the comments for potential future rulemaking or guidance. As part of the CY 2019 Medicare PFS rulemaking, we finalized two changes to the definition of “applicable laboratory” at § 414.502 (see 83 FR 59667 through 59681, 60074; 83 FR 35849 through 35850, 35855 through 35862). First, we excluded Medicare Advantage (MA) plan payments under Part C from the denominator of the Medicare revenues threshold calculation, in an effort to broaden the types of laboratories qualifying as an applicable laboratory. Specifically, excluding MA plan payments could allow additional laboratories of all types serving a significant population of beneficiaries enrolled in Medicare Part C to meet the majority of Medicare revenues threshold and potentially qualify as an applicable laboratory (if they also meet the low expenditure threshold) and report data to CMS during the data reporting period. Because MA plan payments are now excluded from the total Medicare revenues calculation, the denominator amount (total Medicare revenues) would decrease. If the denominator amount decreases, the likelihood increases that a laboratory would qualify as an applicable laboratory. This is because the laboratory's PFS and CLFS revenues are being compared to a lower total Medicare payment amount than what they would have been compared to if MA plan payments remained in the denominator. Second, consistent with our goal of obtaining a broader representation of laboratories that could potentially qualify as an applicable laboratory and report data, we also amended the definition of applicable laboratory to include hospital outreach laboratories that bill Medicare Part B using the CMS-1450 14x Type of Bill. 2. Payment Requirements for Clinical Diagnostic Laboratory TestsIn general, under section 1834A of the Act, the payment amount for each CDLT on the CLFS furnished beginning January 1, 2018, is based on the applicable information collected during the data collection period and reported to CMS during the data reporting period, and is equal to the weighted median of the private payor rates for the test. The weighted median is calculated by arraying the distribution of all private payor rates, weighted by the volume for each payor and each laboratory. The payment amounts established under the CLFS are not subject to any other adjustment, such as geographic, budget neutrality, or annual update, as required by section 1834A(b)(4)(B) of the Act. Additionally, section 1834A(b)(3) of the Act, implemented at § 414.507(d), provides for a phase-in of payment reductions, limiting the amounts the CLFS rates for each CDLT (that is not a new advanced diagnostic laboratory test (ADLT) or new CDLT) can be reduced as compared to the payment rates for the preceding year. Under the provisions enacted by section 216(a) of PAMA, for the first 3 years after implementation (CY 2018 through CY 2020), the reduction cannot be more than 10 percent per year, and for the next 3 years (CY 2021 through CY 2023), the reduction cannot be more than 15 percent per year. Under section 1834A(a)(1) and (b) of the Act, as enacted by PAMA, for CDLTs that are not ADLTs, the data collection period, data reporting period, and payment rate update occur every 3 years. As such, the second data collection period for CDLTs that are not ADLTs occurred from January 1, 2019 through June 30, 2019, and the next data reporting period was scheduled to take place from January 1, 2020 through March 31, 2020, with the next update to the Medicare payment rates for these tests based on that reported applicable information scheduled to take effect as of January 1, 2021. Section 216(a) of PAMA established a new subcategory of CDLTs known as ADLTs, with separate reporting and payment requirements under section 1834A of the Act. The definition of an ADLT is set forth in section 1834A(d)(5) of the Act and implemented at § 414.502. Generally, under section 1834A(d) of the Act, the Medicare payment rate for a new ADLT is equal to its actual list charge during an initial period of 3 calendar quarters. After the new ADLT initial period, ADLTs are paid using the same methodology based on the weighted median of private payor rates as other CDLTs. However, under section 1834A(d)(3) of the Act, updates to the Medicare payment rates for ADLTs occur annually instead of every 3 years. Start Printed Page 46069 Additional information on the private payor rate-based CLFS is detailed in the CLFS final rule (81 FR 41036 through 41101) and is available on the CMS website.[105] 3. Previous Statutory Revisions to the Data Reporting Period and Phase-In of Payment ReductionsSection 105(a) of the Further Consolidated Appropriations Act, 2020 (FCAA) (Pub. L. 116-94, enacted on December 20, 2019), and section 3718 of the Coronavirus Aid, Relief, and Economic Security Act, 2020 (CARES Act) (Pub. L. 116-136, enacted on March 27, 2020), made revisions to the CLFS requirements for the next data reporting period for CDLTs that are not ADLTs under section 1834A of the Act. Additionally, the CARES Act made revisions to the phase-in of payment reductions under section 1834A of the Act. Specifically, section 105(a)(1) of the FCAA amended the data reporting requirements in section 1834A(a) of the Act to delay the next data reporting period for CDLTs that are not ADLTs by 1 year, so that data reporting would be required during the period of January 1, 2021 through March 31, 2021; the 3-year data reporting cycle for CDLTs that are not ADLTs would resume after that data reporting period. Section 105(a)(1) of the FCAA also specified that the data collection period that applied to the data reporting period of January 1, 2021 through March 30, 2021 would be the period of January 1, 2019 through June 30, 2019, which was the same data collection period that would have applied absent the amendments. In addition, section 105(a)(2) of the FCAA amended section 1834A(b)(3) of the Act regarding the phase-in of payment reductions to provide that payments may not be reduced by more than 10 percent as compared to the amount established for the preceding year through CY 2020, and for CYs 2021 through 2023, payment may not be reduced by more than 15 percent as compared to the amount established for the preceding year. These statutory changes were consistent with our regulations implementing the private payor rate-based CLFS at § 414.507(d) (81 FR 41036). Subsequently, section 3718 of the CARES Act further amended the data reporting requirements for CDLTs that are not ADLTs and the phase-in of payment reductions under the CLFS. Specifically, section 3718(a) of the CARES Act amended section 1834A(a)(1)(B) of the Act to delay the next data reporting period for CDLTs that are not ADLTs by one additional year, to require data reporting during the period of January 1, 2022 through March 31, 2022. As amended by the CARES Act, section 1834A(a)(1)(B) of the Act provided that in the case of reporting with respect to CDLTs that are not ADLTs, the Secretary shall revise the reporting period under subparagraph (A) such that: (i) no reporting is required during the period beginning January 1, 2020, and ending December 31, 2021; (ii) reporting is required during the period beginning January 1, 2022, and ending March 31, 2022; and (iii) reporting is required every 3 years after the period described in clause (ii). The CARES Act did not modify the data collection period that applied to the next data reporting period for these tests. Thus, under section 1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of the FCAA, the next data reporting period for CDLTs that are not ADLTs (January 1, 2022 through March 31, 2022) would have been based on the data collection period of January 1, 2019 through June 30, 2019. Section 3718(b) of the CARES Act further amended the provisions in section 1834A(b)(3) of the Act regarding the phase-in of payment reductions under the CLFS. First, it extended the statutory phase-in of payment reductions resulting from private payor rate implementation by an additional year, that is, through CY 2024. It further amended section 1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent for CY 2021 is 0 percent, meaning that the payment amount determined for a CDLT for CY 2021 shall not result in any reduction in payment as compared to the payment amount for that test for CY 2020. Section 3718(b) of the CARES Act further amended section 1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 15 percent will apply for CYs 2022 through 2024, instead of CYs 2021 through 2023. In the CY 2021 PFS rulemaking (85 FR 50210 through 50211 and 85 FR 84693 through 84694), in accordance with section 105(a) of the FCAA and section 3718 of the CARES Act, we proposed and finalized conforming changes to the data reporting and payment requirements at 42 CFR part 414, subpart G. Specifically, we finalized revisions to § 414.502 to update the definitions of both the data collection period and data reporting period, specifying that for the data reporting period of January 1, 2022 through March 31, 2022, the data collection period is January 1, 2019 through June 30, 2019. We also revised § 414.504(a)(1) to indicate that initially, data reporting begins January 1, 2017 and is required every 3 years beginning January 2022. In addition, we finalized conforming changes to our requirements for the phase-in of payment reductions to reflect the CARES Act amendments. Specifically, we finalized revisions to § 414.507(d) to indicate that for CY 2021, payment may not be reduced by more than 0.0 percent as compared to the amount established for CY 2020, and for CYs 2022 through 2024, payment may not be reduced by more than 15 percent as compared to the amount established for the preceding year. 4. Additional Statutory Revisions to the Data Reporting Period and Phase-In of Payment ReductionsSection 4 of the Protecting Medicare and American Farmers from Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, enacted on December 10, 2021) made additional revisions to the CLFS requirements for the next data reporting period for CDLTs that are not ADLTs and to the phase-in of payment reductions under section 1834A of the Act. Specifically, section 4(b) of PMAFSCA amended the data reporting requirements in section 1834A(a) of the Act to delay the next data reporting period for CDLTs that are not ADLTs by 1 year, so that data reporting would be required during the period of January 1, 2023 through March 31, 2023; the 3-year data reporting cycle for CDLTs that are not ADLTs would resume after that data reporting period. As amended by section 4 of PMAFSCA, section 1834A(a)(1)(B) of the Act now provides that in the case of reporting with respect to CDLTs that are not ADLTs, the Secretary shall revise the reporting period under subparagraph (A) such that—(i) no reporting is required during the period beginning January 1, 2020, and ending December 31, 2022; (ii) reporting is required during the period beginning January 1, 2023, and ending March 31, 2023; and (iii) reporting is required every 3 years after the period described in clause (ii). Section 4 of PMAFSCA does not modify the data collection period that applies to the next data reporting period for these tests. Thus, under section 1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of the FCAA, the next data reporting period for CDLTs that are not ADLTs (January 1, 2023 through March 31, 2023) will continue to be based on the data collection period of January 1, 2019 through June 30, 2019, as defined in § 414.502. Start Printed Page 46070 Section 4 of PMAFSCA further amends the provisions in section 1834A(b)(3) of the Act regarding the phase-in of payment reductions under the CLFS. First, it extends the statutory phase-in of payment reductions resulting from private payor rate implementation by an additional year, that is, through CY 2025. It further amends section 1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent for each of CY 2021 and 2022 is 0 percent, meaning that the payment amount determined for a CDLT for CY 2021 and 2022 shall not result in any reduction in payment as compared to the payment amount for that test for CY 2020. Section 4(a) of PMAFSCA further amends section 1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 15 percent will apply for CYs 2023 through 2025, instead of CYs 2022 through 2024. 5. Proposed Conforming Regulatory ChangesIn accordance with section 4(b) of PMAFSCA, we are proposing to make certain conforming changes to the data reporting and payment requirements at 42 CFR part 414, subpart G. Specifically, we are proposing to revise § 414.502 to update the definitions of both the “data collection period” and “data reporting period,” specifying that for the data reporting period of January 1, 2023 through March 31, 2023, the data collection period is January 1, 2019 through June 30, 2019. We are also proposing to revise § 414.504(a)(1) to indicate that initially, data reporting begins January 1, 2017 and is required every 3 years beginning January 2023. In addition, we are proposing to make conforming changes to our requirements for the phase-in of payment reductions to reflect the amendments in section 4(b) of PMAFSCA. Specifically, we are proposing to revise § 414.507(d) to indicate that for CY 2022, payment may not be reduced by more than 0.0 percent as compared to the amount established for CY 2021, and for CYs 2023 through 2025, payment may not be reduced by more than 15 percent as compared to the amount established for the preceding year. We note that the CYs 2022 and 2023 CLFS payment rates for CDLTs that are not ADLTs are based on applicable information collected in the data collection period of January 1, 2016 through June 30, 2016. Under current law, the CLFS payment rates for CY 2024 through CY 2026 will be based on applicable information collected during the data collection period of January 1, 2019 through June 30, 2019 and reported to CMS during the data reporting period of January 1, 2023 through March 31, 2023. 6. Laboratory Specimen Collection Fee and Travel Allowance ProposalsIn general, section 1833(h)(3) of the Act requires the Secretary to provide for and establish a nominal fee for specimen collection for laboratory testing and a fee to cover transportation and personnel expenses for trained personnel to collect specimens from homebound patients and inpatients (not in a hospital), in addition to the amounts provided under the Medicare CLFS. In this section of the proposed rule, we are proposing to codify our longstanding specimen collection fee policies at § 414.523(a)(1) and our travel allowance policies at § 414.523(a)(2), as well as proposing certain changes to modify or clarify those policies. a. Background on Laboratory Specimen Collection Fee PolicyMedicare Part B, which includes a variety of outpatient services, generally covers medically necessary CDLTs when a doctor or non-physician practitioner orders them. Medically necessary CDLTs are generally not subject to coinsurance or deductible. Section 1833(h)(3)(A) of the Act provides that, in addition to the amounts provided under fee schedules (for tests furnished before January 1, 2017) or under section 1834A of the Act (for tests furnished on or after January 1, 2017), the Secretary shall provide for and establish a nominal fee to cover the appropriate costs in collecting the sample on which a CDLTs was performed and for which payment is made under Medicare Part B, except that not more than one such fee may be provided with respect to samples collected in the same encounter. As detailed later in this section of the proposed rule, we provided manual instructions regarding payment of the nominal specimen collection fee in the Medicare Claims Processing Manual Pub. 100-04, chapter 16, section 60.1,[106] but we have not reflected these general policies in our regulations.[107] The HCPCS codes for the nominal specimen collection fees currently listed on the CLFS (HCPCS codes 36415, P9612, and P9615 [108] ) have a payment rate of $3. Neither the annual deductible nor the 20 percent coinsurance for Medicare apply to the specimen collection fees or travel allowance for laboratory tests. Section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93, enacted April 1, 2014) added section 1834A(b)(5) to the Act, which increases by $2 the nominal fee that would otherwise apply under section 1833(h)(3)(A) of the Act for a specimen collected from an individual in a skilled nursing facility (SNF) or by a laboratory on behalf of a HHA. Therefore, effective April 1, 2014, the nominal fee that would otherwise apply for a specimen collected from an individual in a SNF or by a laboratory on behalf of a HHA is $5, and the relevant HCPCS code is G0471.[109] We implemented this provision in our regulations at § 414.507(f). However, as we discuss below, we are proposing to codify our specimen collection fee policies in § 414.523(a)(1), including moving that provision from § 414.507(f) to § 414.523(a)(1)(iv). In the “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” interim final rule with comment period (IFC), which appeared in the Federal Register on April 6, 2020 (85 FR 19230), we established that Medicare would pay a nominal specimen collection fee and associated travel allowance to independent laboratories for the collection of specimens for COVID-19 CDLTs for homebound and non-hospital inpatients (85 FR 19256 through 19258). Under this policy, the nominal specimen collection fee for COVID-19 testing for homebound and non-hospital inpatients generally is $23.46 and for individuals in a SNF and individuals whose samples are collected by laboratory on behalf of an HHA is $25.46. We indicated in that IFC that this specimen collection fee policy was established for the duration of the PHE for COVID-19 (85 FR 19256) and noted in that IFC and subsequent rules (86 FR 39309; 86 FR 65327) that this policy will end once the PHE for the COVID-19 pandemic has ended. In the CY 2022 PFS proposed rule (86 FR 39310), we requested broad Start Printed Page 46071 comments on our policies for specimen collection fees for consideration for possible updates to those 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, and 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. In the CY 2022 PFS final rule (86 FR 65327 through 65328), we described the comments received and provided responses to those comments. We expressed appreciation for the comments regarding the nominal specimen collection fees for the collection of specimens for COVID-19 CDLTs and acknowledged that the types of resources utilized and supplies needed for specimen collection have been influenced by the PHE for COVID-19. We stated that although we would not extend the increased payment amount beyond the PHE, we would take the feedback received from the comment solicitation into consideration for possible future rulemaking and guidance. b. Longstanding Laboratory Specimen Collection Fee Policies and PracticesWe have longstanding policies and practices regarding the statutory requirements under section 1833(h)(3)(A) of the Act for the laboratory specimen collection fee, which are currently described in the Medicare Claims Processing Manual Pub. 100-04, chapter 16, § 60.1. However, we do not have corresponding regulations text related to the manual guidance and some of the manual guidance is no longer applicable. The manual guidance specifies when a specimen fee is allowed and not allowed. In particular, the manual provides guidance on the following topics: (1) specimen drawing by a physician; (2) specimen drawing by an independent laboratory; (3) specimen drawing for a dialysis patient; and (4) the coding requirements for specimen collection. We note that laboratory services, including specimen collection and travel for specimen collection, paid under the CLFS must be reasonable and necessary as required under section 1862(a)(1)(A) of the Act. Specifically, the guidance provides that a specimen collection fee is allowed in circumstances such as drawing a blood sample through venipuncture (that is, inserting into a vein a needle with syringe or vacutainer to draw the specimen) or collecting a urine sample by catheterization. A specimen collection fee is not allowed for a throat culture or a routine capillary puncture for clotting or bleeding time. Additionally, the specimen fee will not be paid to anyone who has not extracted the specimen. The manual guidance addresses the number of specimen collection fees allowed for each specimen type per patient encounter. The manual also addresses how to treat a series of specimens; when a series of specimens is required to perform a single test (for example, a glucose tolerance test), the series is treated as a single encounter. The Medicare Claims Processing Manual (chapter 16, § 60.1.1) describes specimen collection fees for physicians. Specifically, the manual states that Medicare allows a specimen collection fee for physicians only when: (1) it is the accepted and prevailing practice among physicians in the locality to make separate charges for drawing or collecting a specimen; and (2) it is the customary practice of the physician performing such services to bill separate charges for drawing or collecting the specimen. In reviewing the specimen collection criteria for physicians to be paid for this service, we had concerns regarding outdated terminology and the eligibility criteria for these suppliers to bill Medicare for a specimen collection fee. For example, we found that these criteria were established prior to January 1, 1992, which is when Medicare began to pay for physicians' services under section 1848 of the Act (56 FR 59502). Since that time, the provision of laboratory services and physicians' services have evolved. Therefore, we evaluated those criteria as they would apply today. In consideration of current standards of practice, we analyzed utilization of the specimen collection Current Procedural Terminology (CPT®) codes to determine if the physician office setting is billing for this fee. We found that, in 2019, office-based physician and nonphysician practitioners had 67.4 million claims billed with specimen collection, comprising 31.1 percent of all specimen collection claims. We also looked to the PFS to see if there are similar services that physicians and nonphysician practitioners can bill and be paid for under section 1848 of the Act. We found that there are codes available that address collection of blood, for example, CPT® codes 36410 (Venipuncture, age 3 years or older, necessitating the skill of a physician or other qualified health care professional (separate procedure), for diagnostic or therapeutic purposes (not to be used for routine venipuncture)). These findings confirm specimen collection occurs in the physician's office setting and there are coding options to bill for that service via the PFS when applicable. Therefore, we believe the criteria currently included in the manual for physician eligibility for the CLFS specimen collection fee no longer apply. We would not reflect those policies in regulation and would remove this section of the manual accordingly. The Medicare Claims Processing Manual (chapter 16, § 60.1.2) describes policies for specimen drawing by independent laboratories. Specifically, the manual states the following: Medicare allows separate charges made by laboratories for drawing or collecting specimens whether or not the specimens are referred to hospitals or independent laboratories. The laboratory does not bill for routine handling charges where a specimen is referred by one laboratory to another. Medicare allows payment for a specimen collection fee when it is medically necessary for a laboratory technician to draw a specimen from either a nursing home patient or homebound patient. Payment for the specimen collection fee is made based on the CLFS. The technician must personally draw the specimen, for example, venipuncture or urine sample by catheterization. Medicare does not allow a specimen collection fee to the visiting technician if a patient in a facility is: (1) not confined to the facility; or (2) the facility has personnel on duty qualified to perform the specimen collection. Medical necessity for such services exists, for example, where a laboratory technician draws a blood specimen from a homebound or an institutionalized patient. A patient need not be bedridden to be homebound. However, where the specimen is a type that would require only the services of a messenger and would not require the skills of a laboratory technician, for example, urine or sputum, a specimen pickup service would not be considered medically necessary. The manual then refers to the Medicare Benefit Policy Manual, Chapters 7 and 15 of Pub. 100-02, for a discussion of “homebound” and a more complete definition of a medically necessary laboratory service Start Printed Page 46072 to a homebound or an institutional patient. Under sections 1814(a) and 1835(a) of the Act, an individual shall be considered to be “homebound” or “confined to his home” if the individual has a condition, due to an illness or injury, that restricts the ability of the individual to leave his or her home except with the assistance of another individual or the aid of a supportive device (such as crutches, a cane, a wheelchair, or a walker), or if the individual has a condition such that leaving his or her home is medically contraindicated. While an individual does not have to be bedridden to be considered “confined to his home,” the condition of the individual should be such that there exists an inability to leave home such that leaving home requires a considerable and taxing effort by the individual. Moreover, § 424.22(a)(1)(ii) describes homebound for the purposes of the provision of Medicare home health services as home health services are or were required because the individual is or was confined to the home, as defined in sections 1835(a) and 1814(a) of the Act, except when receiving outpatient services. Additionally, chapter 15 of the Medicare Benefit Policy Manual [110] Section 60.4.1—“Definition of Homebound Patient Under the Medicare Home Health (HH) Benefit” describes the definition of homebound in that the patient is confined to his/her home, which has two criteria: (1) the patient must either, because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence; or (2) otherwise have a condition such that leaving his or her home is medically contraindicated. The patient must also meet two additional requirements defined in criterion two such that there must exist an inability to leave home; and leaving home must require a considerable and taxing effort. The Medicare Claims Processing Manual (chapter 16, § 60.1.2) also explains the information that must be included on an independent laboratory claim for specimen drawing. Specifically, the manual states that in addition to the usual information required on claim forms (including the name of the prescribing physician), all independent laboratory claims for such specimen drawing ordered by a physician should be appropriately annotated, for example, “patient confined to home,” “patient homebound,” or “patient in nursing home, no qualified person on duty to draw specimen.” The manual states that A/B MACs (B) must assure the validity of the annotation through scientific claims samples, as well as through regular bill review techniques. (This could be done by use of the information in A/B MAC (B) files, and where necessary, contact with the ordering physician.) If a physician requests an independent laboratory to obtain specimens in situations which do not meet, or without regard to whether they meet, medical necessity criteria in Medicare Benefit Policy Manual, Chapter 15, the manual provides that an educational contact with the ordering physician is warranted and, where necessary, corroborating documentation should be obtained on claims until the A/B MAC (B) is assured that the physician prescribes such services only when the criteria are met. The manual states that the specimen collection fee is paid based on the location of the independent laboratory where the test is performed and is billed in conjunction with a covered laboratory test. The Medicare Claims Processing Manual (chapter 16, § 60.1.3) describes specimen drawing for dialysis patients. It states that, with the implementation of the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS), effective for claims with dates of service on or after January 1, 2011, all ESRD-related laboratory services are included in the ESRD PPS base rate.[111] Clinical laboratory tests for dialysis patients can be performed individually or in predetermined groups on automated profile equipment. The manual states that a specimen collection fee determined by CMS will be allowed only in the following circumstances:
The manual provides that special rules apply when such services are furnished to dialysis patients. That is, the specimen collection fee is not separately payable for patients dialyzed in the ESRD facility or for patients dialyzed at home. A specimen collection fee is also not separately payable when an ESRD facility is collecting a specimen for transplant eligibility or other transplant requirements. Payment for specimen collection is included under the ESRD PPS, regardless of whether the laboratory test itself is designated as payable under the ESRD PPS as a renal dialysis service or is separately billable by the ESRD facility with the AY modifier (see Medicare Claims Processing Manual, chapter 16, § 40.6). Fees for taking specimens in the hospital setting, but outside of the dialysis unit, for use in performing laboratory tests not included in the ESRD PPS base rate, may be paid separately. We believe that the implementation of the ESRD PPS made the specimen collection provision for ESRD beneficiaries in the ESRD facility setting obsolete. That is, prior to the ESRD PPS, ESRD facilities could be paid for laboratory services furnished to ESRD beneficiaries that were considered to be separately payable. Under the prior composite rate system, ESRD facilities with the appropriate Clinical Laboratory Improvement Amendments (CLIA) certification could bill Medicare Part B directly and be paid based on the CLFS for certain laboratory tests, and when appropriate, for a specimen collection fee.[112] In implementing the ESRD PPS, we also implemented consolidated billing requirements in the CY 2011 ESRD PPS final rule (75 FR 49168 through 49173). In that ESRD PPS final rule, we stated that we established these consolidated billing requirements because the ESRD PPS provides an all-inclusive payment for renal dialysis services and home dialysis items and services and the ESRD facility is responsible for all of the renal dialysis services that its patients receive. We further explained that items and services that were paid separately under the basic case-mix adjusted composite rate (such as laboratory tests), would no longer be billed for by other entities (such as laboratories), and therefore, payment for these services would be made only to the ESRD facility so that duplicate payment is not made by Medicare (75 FR 49168). Additionally, section 1881(b)(14)(B)(i) and (iv) of the Act provides that items and services included in the prior composite rate and other diagnostic laboratory tests not reflected in the composite rate that are furnished to individuals for the treatment of ESRD are renal dialysis services that must be included as part of the ESRD PPS bundled payment. In the CY 2011 ESRD PPS final rule, we explained that Start Printed Page 46073 patients with ESRD often have comorbid conditions which would require many of the same laboratory tests as those required to monitor a patient's ESRD (75 FR 49168). In that ESRD PPS final rule, we acknowledged that it may be difficult to differentiate between a renal dialysis service laboratory test and tests ordered for non-renal dialysis service conditions. Therefore, to ensure proper payment in all settings, as part of the consolidated billing approach, we provided ESRD facilities and independent laboratories the ability to identify non-renal dialysis service laboratory tests, by using the AY modifier, which allows for separate payment under Medicare Part B (75 FR 49168 through 49169). While this longstanding policy permits ESRD facilities to be paid separately for the non-renal dialysis service laboratory tests, the specimen collection fee is no longer available since staff time used to collect specimens is considered to be a composite rate service (§ 413.171) and therefore payment for specimen collection is made through the ESRD PPS bundled payment to the ESRD facility. Therefore, we believe this section of the manual guidance describing specimen drawing for dialysis patients is no longer applicable, and we would not reflect this policy in regulation and would remove this section of the manual accordingly. We note when an ESRD beneficiary goes to an independent laboratory or a hospital setting, the same payment rules would apply for specimen collection as they would for a non-ESRD beneficiary for that setting. Lastly, the Medicare Claims Processing Manual (chapter 16, § 60.1.4) includes coding requirements for the specimen collection fees. Specifically, the following HCPCS codes and terminology must be used:
c. Proposal To Codify the Laboratory Specimen Collection Fee Policy in RegulationAs noted previously, most of our laboratory specimen collection fee policies are not reflected in the CLFS regulations. In this section of the proposed rule, we propose the laboratory specimen collection fee policies we would include in regulations. Section 1833(h)(3) of the Act specifies that payment amounts for the specimen collection fee and travel allowance are “in addition” to the payment amounts for CDLTs on the CLFS. As § 414.507 pertains to payment for CDLTs, we believe it is appropriate to create a separate regulation to more clearly reflect that payment for the specimen collection fee and travel allowance is in addition to payment for CDLTs. We are proposing to create a new § 414.523 titled Payment for laboratory specimen collection fee and travel allowance. We would specify in § 414.523(a) that in addition to the payment amounts provided for CDLTs, new CDLTs, and new ADLTs, CMS pays a specimen collection fee and a travel allowance. In § 414.523(a)(1), we would reflect the longstanding specimen collection fee policies described in the manual that continue to be applicable. As noted previously in this proposed rule, we would not reflect in the regulation the specimen collection fee policies that are no longer applicable—specifically, the policies relating to physician eligibility for specimen collection and specimen drawing for dialysis patients—and would remove those policies from the manual. First, we are proposing that § 414.523(a)(1) would specify that CMS will pay $3 for all specimens collected in one patient encounter. As previously stated in this proposed rule, section 1833(h)(3)(A) of the Act requires the Secretary to provide for and establish a “nominal fee to cover the appropriate costs in collecting the sample” for laboratory testing. We have paid $3 as the nominal specimen collection fee amount for several years and at this time we are proposing to maintain the $3 amount. First, the statute specifies that the amount is “nominal” and we believe $3 is an appropriate nominal amount to recognize the costs associated with specimen collection. Further, we believe that in enacting section 216(a) of PAMA, Congress recognized CMS's authority to establish the specific nominal fee amount as $3 when it added section 1834A(b)(5) of the Act to increase by $2 the nominal fee that would otherwise apply under section 1833(h)(3)(A) of the Act for a specimen collected from an individual in a SNF or by a laboratory on behalf of an HHA. We are soliciting comments on our proposal to maintain the $3 nominal specimen collection fee amount, including how this amount could be updated. Next, we are proposing to move and clarify the provision in our regulations regarding the increased specimen collection fee under section 1834A(b)(5) of the Act, as discussed in the previous paragraph. We implemented this PAMA requirement in a Medicare Change Request (CR) transmittal effective December 1, 2014 (Transmittal #R3056CP; CR #8837) and ultimately finalized this policy in § 414.507(f).[113] The CR provides that, in the case of a specimen collected from an individual in a SNF or from an individual by a laboratory on behalf of a HHA (billed using new HCPCS code, G0471 (Collection of venous blood by venipuncture or urine sample by catheterization from an individual in a skilled nursing facility (SNF) or by a laboratory on behalf of a home health agency (HHA))), the nominal fee that would otherwise apply under section 1833(h)(3)(A) of the Act shall be increased by $2, from $3 to $5, in accordance with section 216(a) of the PAMA. The specimen collection fee is raised from $3 to $5 only when the specimen is being collected by a laboratory technician and when the specimen is from an individual in either a SNF or HHA. We are proposing that this requirement, which is currently reflected in § 414.507(f), would be moved to § 414.523(a)(1)(iv) and would be revised to state that beginning April 1, 2014, for a specimen collected from a Medicare beneficiary in a SNF or on behalf of an HHA, the specimen collection fee otherwise paid under paragraph (a)(1) of § 414.523 is increased by $2. Next, we are proposing to include in regulation that one specimen collection fee would be allowed for each single patient encounter. This means that, if different types or multiple specimens are drawn from one patient, only one specimen collection fee would be allowed. We believe this policy is consistent with section 1833(h)(3)(A) of the Act, which provides that not more than one such fee may be provided under this paragraph with respect to samples collected in the same encounter. We propose to reflect this policy in § 414.523(a)(1) by indicating that CMS pays $3 for “all specimens collected in one patient encounter.” In § 414.523(a)(1)(i) through (iii), we propose to indicate the specimen collection requirements that must be met for a specimen collection fee to be payable are as follows and described in more detail below. The specimen is: Start Printed Page 46074 used to perform a CDLT paid under the CLFS regulations in 42 CFR part 414, subpart G; collected by a trained technician from a Medicare beneficiary who is homebound as described in 42 CFR 424.22(a)(1)(ii) or is a non-hospital inpatient, but only when no qualified personnel are available at the facility to collect the specimen; of the following type—blood specimen collected through venipuncture or a urine sample collected by catheterization. In § 414.523(a)(1)(ii) we are proposing to clarify the requirement that the specimen must be collected by a “trained technician.” Section 1833(h)(3) of the Act refers to staff providing specimen collection services as “trained personnel” whereas the Medicare Claims Processing Manual, chapter 16, § 60.2 refers to “the technician.” The United States Bureau of Labor Statistics (BLS) defines clinical laboratory technologists and technicians as workers who collect samples and also perform tests to analyze body fluids, tissue, and other substances.[114] The term “laboratory technician” may not apply to those staff that would generally be providing specimen collection services, as the staff collecting specimens may not also analyze the specimens. Therefore, for the purposes of our Medicare payment policies for specimen collection and travel allowance, we propose to use the phrase “trained technician” to refer to the staff providing specimen collection services. We believe this clarification would more closely align the regulatory text pertaining to specimen collection and travel allowance with the statute. As previously discussed in this proposed rule, Medicare allows payment of a specimen collection fee when it is medically necessary for a trained technician to draw a specimen from either a nursing home patient or homebound patient. Medicare does not allow a specimen collection fee for the technician if a patient in a facility is: (1) Not confined to the facility; or (2) the facility has qualified personnel available to perform the specimen collection. We are proposing to reflect in regulation that the specimen must be collected either from a Medicare beneficiary who is homebound as described in 42 CFR 424.22(a)(1)(ii), or from a non-hospital inpatient, but only when no qualified personnel are available at the facility to collect the specimen. We believe this proposed requirement regarding homebound beneficiaries would be consistent with Medicare policy which describes home health services requirements. We are proposing to clarify that payment for specimen collection would only be made to the laboratory when no qualified personnel are available at the inpatient facility to collect the specimen. We believe this proposed clarification would reflect the justification for “medical necessity” for purposes of section 1862(a)(1) of the Act. We would reflect this requirement in § 414.523(a)(1)(ii)(B) but would not explicitly state the term “medically necessary”. We are proposing to clarify that a specimen collected by a trained technician would have to be either blood collected through venipuncture or a urine collected by catheterization. We would reflect this requirement in § 414.523(a)(1)(iii), which would state that the specimen collection fees are permitted for only these two types of specimens: (1) Blood collected through venipuncture or (2) a urine sample by catheterization. We acknowledge that the manual guidance (described above) uses the terms “such as” and “example” to describe the types of specimens for which specimen collection fees are paid, which suggests that specimen collections of other than blood and urine are eligible for specimen collection fees. We note, however, that there are only two HCPCS codes for the two types of specimen collections, which means we do not pay, and have not been paying, specimen collection fees for any other types of specimens. Therefore, under our current policy and this proposal, a specimen collection fee would not be payable for any other specimen types, for example, a throat culture or a routine capillary puncture for clotting or bleeding time. We welcome public comment on the proposed codification and modification of these laboratory specimen collection fee policies. If finalized, we would make conforming changes to the Medicare Claims Processing Manual, Chapter 16, section 60 to reflect changes or clarifications and remove sections that are no longer applicable. Lastly, we are soliciting comment on specimen collection by physician office laboratories (POLs). As discussed previously in this proposed rule, we are proposing to delete the section in the manual regarding physician specimen collection as codes exist to describe these services when performed by physicians under the PFS. However, we understand that specimens may be collected in the physician's office by POL personnel. As stated in 42 CFR 410.32(d)(1)(iii), Medicare Part B pays for covered diagnostic laboratory tests that are furnished by the office of the patient's attending or consulting physician if that physician is a doctor of medicine, osteopathy, podiatric medicine, dental surgery, or dental medicine. When the physician's office is furnishing CDLTs for its own patients and collecting specimens for those tests, we do not believe this would include specimen collection for homebound or non-hospital inpatients or involve travel for specimen collection, since a POL is not an independent laboratory. However, we seek comments on any possible considerations for the removal of the manual section related to POL specimen collection. d. Background on the Laboratory Specimen Collection Travel Allowance PolicySection 1833(h)(3)(B) of the Act requires the Secretary to provide for and establish a fee to cover the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect the sample on which a CDLT was performed, except that such a fee may be provided only to an individual who is homebound or an inpatient in an inpatient facility (other than a hospital). Like the laboratory specimen collection fee policy discussed in the previous section of this proposed rule, our longstanding policies and instructions regarding the statutory requirements for the CLFS specimen collection travel allowance are described in the Medicare Claims Processing Manual guidance and CRs, currently with no corresponding regulations text. In an August 18, 1993 proposed rule titled “Medicare and Medicaid: Programs; Payment for Clinical Diagnostic Laboratory Tests,” we proposed to reflect both the CLFS specimen collection and travel allowance payment policies in regulation (58 FR 43838); however, the proposals therein were not finalized. As discussed in that proposed rule, due to the variability in time, distance, and wage circumstances in different localities, we implemented the travel allowance under section 1833(h)(3)(B) of the Act by allowing Medicare Administrative Contractors (MACs) discretion in calculating travel allowances. We provided general guidance through our manuals, specifically in the Medicare Claims Processing Manual, chapter 16, § 60.2.[115] The Medicare Claims Processing Manual guidance at chapter 16, § 60.2 describes two methods for calculating and billing travel allowance for Start Printed Page 46075 specimen collection. HCPCS code P9603 is used when the average round trip to a beneficiary's home or nursing home is farther than 20 miles, paid on a mileage per trip basis. HCPCS code P9604 is used when the average round trip is less than or equal to 20 miles, paid on a flat rate per trip basis. The manual further states that the travel allowance is intended to cover the estimated travel costs for a laboratory technician to travel to collect the specimen and to reflect the technician's salary and travel costs. The travel allowance can be made only where a specimen collection fee is also payable; that is, no travel allowance is made where the technician merely performs a messenger service to pick up a specimen drawn by a physician or nursing home personnel. The manual also states that the travel allowance may not be paid to a physician unless the trip to the beneficiary's home, or to the nursing home where the beneficiary resides, was solely for the purpose of drawing a specimen. Otherwise travel costs are considered to be associated with the other purposes of the trip. Furthermore, the manual states that the travel allowance is not distributed by CMS. Instead, the MACs (that is, within the claims processing system) calculate the travel allowance for each claim using the rules for the HCPCS codes used for travel allowances, which are P9603—Per Mile Travel Allowance and P9604—Flat Rate. As described in the manual, the conditions for usage of HCPCS code P9603 are that the minimum “per mile travel allowance” is $1.04 (based on CY 2022 instructions). The per mile travel allowance is to be used in situations where the average trip to beneficiaries' homes is farther than 20 miles, and is to be prorated in situations where specimens are drawn or picked up from non-Medicare patients in the same trip. The manual further states that the per mile allowance is computed using the Federal mileage rate (as determined by the Internal Revenue Service (IRS)), plus an additional 45 cents a mile to cover the technician's time and travel costs. For 2022, the Federal mileage rate is 58.5 cents; [116] that amount plus 45 cents equals $1.035, rounded up to $1.04. Contractors have the option of establishing a higher per mile rate in excess of the minimum ($1.04 a mile in CY 2022) if local conditions warrant it. The manual also states that the minimum mileage rate will be reviewed and updated in conjunction with the CLFS as needed and that at no time will the laboratory be allowed to bill for more miles than are reasonable or for miles not actually traveled by the laboratory technician.[117] For the flat-rate HCPCS code, P9604, the manual provides the following conditions of usage: CMS will pay a minimum of $10.40 for the flat rate code (HCPCS code P9604, based on CY 2022 instructions), which is the one-way flat rate travel allowance. The flat rate travel allowance is to be used in areas where average trips are less than 20 miles. The flat rate travel allowance is to be prorated for more than one blood draw at the same address, and for stops at the homes of Medicare beneficiaries and non-Medicare patients. The laboratory performs the proration calculation when the claim is submitted based on the number of beneficiaries seen on that trip, and the specimen collection fee will be paid for each beneficiary encounter. The manual states that this rate is based on the assumption that a trip is an average of 15 minutes and up to 10 miles one way and uses the Federal mileage rate (as determined by the IRS) and a laboratory technician's time of $17.66 an hour, including overhead. The manual states that contractors have the option of establishing a flat rate in excess of the minimum of $10.00, if local conditions warrant it, and that the minimum national flat rate will be reviewed and updated in conjunction with the CLFS, as necessitated by adjustments in the Federal travel allowance and salaries. The manual provides examples of the flat rate calculation and describes further MAC flexibilities regarding payment for the CLFS specimen collection travel allowance. The manual also indicates that MACs may use their discretion for the payment of travel allowance in circumstances where the CDLTs are needed on an emergency basis outside the general business hours of the laboratory making the collection. The manual also states that updates to the travel allowance amounts will be issued by CMS via Recurring Update Notification (RUN) on an annual basis. In summary, the Medicare Claims Processing Manual, chapter 16, § 60.2, indicates that HCPCS code P9603 is used when the average round trip to a beneficiary's home or nursing home is farther than 20 miles, paid on a mileage per trip basis. HCPCS code P9604 is used when the average round trip is less than or equal to 20 miles, paid on a flat rate per trip basis. In instances where one trip is made in order to execute specimen draws or pickups from multiple patients, the travel payment component is prorated based on the number of Medicare beneficiaries and non-Medicare patients (not the number of specimens collected) on that trip. All instances of specimen collection and pickups are included in the proration, and the prorated specimen collection travel allowance is billed on behalf of each Medicare patient. Furthermore, we have provided additional payment instructions through RUN CLFS—Medicare Travel Allowance Fees for Collection of Specimens CRs; the latest being CR 12593,[118] which was issued on January 14, 2022. Consistent with the manual, CR 12593 states that the travel allowance HCPCS codes allow for payment either on a per-mileage basis (P9603) or on a flat-rate per-trip basis (P9604). The CR states that under either method, when one trip is made for multiple specimen collections (for example, at a nursing home), the travel payment component is prorated based on the number of specimens collected on that trip, for both Medicare and non-Medicare patients, either at the time the claim is submitted by the laboratory or when the flat rate is set by the contractor. CR 12593 states that the Per Mile Travel Allowance (P9603) is to be used in situations where the average trip to the patients' homes is longer than 20 miles round trip and is to be prorated in situations where specimens are drawn from non-Medicare patients in the same trip. For CY 2022, the allowance per mile was computed using the Federal mileage rate of $0.585 per mile plus an additional $0.45 per mile to cover the technician's time and travel costs. The IRS determines the standard mileage rate for businesses based on periodic studies of the fixed and variable costs of operating an automobile, and CMS utilizes this amount for P9604. The CR also states that the Per Flat-Rate Trip Basis Travel Allowance (P9604) is a set fee amount, which is $10.40 for CY 2022. In summary, CR 12593 states that the travel payment component is prorated based on the number of specimens collected on the trip (and not the number of Medicare and non-Medicare patients), for both Medicare and non-Medicare patients, which differs from the manual instruction which states that the travel allowance should be prorated based on the number of Medicare Start Printed Page 46076 beneficiaries and non-Medicare patients (not the number of specimens collected) on that trip. e. Policy Concerns and Recommendations on the CLFS Specimen Collection Travel AllowanceLaboratories, members of the laboratory industry, and other interested parties have expressed concerns regarding our current CLFS travel allowance payment policy, suggesting that the travel proration methodology is unclear and guidance in the Medicare Claims Processing Manual, payment CRs, and guidance provided by the MACs are conflicting. Additionally, members of the public claim that the travel allowance requirements are administratively complex. 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. As discussed in the CY 2022 PFS final rule (86 FR 65328), commenters supported clarification to the existing travel allowance policy and also made suggestions regarding possible refinements. Several commenters described their concerns regarding the current travel allowance policy, stating that the current system requires the individual tracking of miles and paperwork documenting those miles, as well as 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 MACs. One commenter also noted that because of the complex logistics involved in obtaining specimens from homebound patients and non-hospital inpatients and transporting the specimens for prompt processing, a disincentive is created for serving this potentially underserved patient population, leading to potential access issues for Medicare beneficiaries. Several commenters requested that CMS simplify the travel allowance by creating a single per-encounter flat-rate payment for travel, which would simplify personnel and transportation expenses by eliminating the individual tracking of miles and paper documenting of those miles as well as the calculation of billable charges. The commenters stated that a 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. A few commenters suggested the creation of a rural add-on payment to provide payment to those laboratories serving Medicare beneficiaries residing in remote areas. Several commenters also stated that the current travel allowance is prone to billing inconsistencies, so simplifying the calculation of the travel allowance would increase the overall understanding of the policy among impacted parties, decrease the instances of health care providers inadvertently overbilling for mileage, reduce program integrity concerns, and improve clarity for all parties involved. Several commenters also recommended that business requirements outlined in the annual Medicare travel allowance CR 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 laboratories. The commenter requested that contractors be instructed to review claims and reprocess at the updated rates rather than require laboratories to initiate the revisions. Additionally, the OIG issued an August 25, 2021 report, CMS Needs To Issue Regulations Related to Phlebotomy Travel Allowances (A-06-20-04000),[119] in which the OIG discussed ongoing concerns regarding the Medicare CLFS travel allowance policy and summarized findings from previous audits of MACs in which claims for phlebotomy travel allowances were paid using incorrect prorated mileage and claims for phlebotomy travel allowances were paid using incorrect payment rates. The OIG also described instances in which health care provider documentation was insufficient to warrant payment of the phlebotomy travel allowances. The 2021 OIG report presented recommendations to CMS regarding the CLFS travel allowance policy, including working with the MACs to educate health care providers about the documentation requirements for specimen collection travel allowances, instructing the MACs to identify and adjust any paid claims that incorrectly used the previous year's rate, and issuing regulations related to phlebotomy travel to clarify various aspects of the travel allowance payment policy. In the CY 2022 PFS proposed rule (86 FR 39310 through 39311) and CY 2022 PFS final rule (86 FR 65328), we discussed the travel allowance policy and stated that we made permanent the option for laboratories to maintain electronic documentation 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 documentation applies to specimen collection for any CDLT. We noted that laboratories will need to be able to produce electronic documentation 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 submission of this information if necessary. We believe that this flexibility to maintain electronic documentation of miles traveled provides clarity to laboratories about documentation requirements for the Medicare CLFS travel allowance for specimen collection payment policy. Additionally, we have instructed the MACs to identify and adjust any paid claims that incorrectly used the previous year's rate, thereby addressing the OIG's and commenters' suggestions regarding reprocessing using the updated rates through the revision of business requirements in the January 14, 2022 RUN CLFS—Medicare Travel Allowance Fees for Collection of Specimens CR 12593.[120] The OIG and commenters alike recommended that we update the business requirements outlined in the annual Medicare travel allowance CR to require the MACs to search their files to adjust claims already paid at the prior year's travel allowance amount rather than require action by laboratories. Specifically, in the CR, we included the Business Requirement 12593.5, which states that “Contractors shall adjust previously paid travel allowance claims with dates of service on or after January 1, 2022, in order to apply the updated payment rate and initiate those adjustments within 60 days, if claims are paid at the prior year's rates before the new rate is entered into the MACs' systems.” We believe this modification to the business requirements will eliminate the need for action by laboratories for adjustments to claims and instead provide instruction to contractors to review claims and reprocess at the updated rates as appropriate. f. Proposed Codification and Modifications of the CLFS Specimen Collection Travel Allowance PolicyIn light of the concerns from the public, and in an effort to respond to the OIG's recommendation that CMS issue regulations regarding certain aspects of Start Printed Page 46077 the travel allowance for specimen collection payment policy, we are proposing to codify in our regulations, and make certain modifications and clarifications to, the Medicare CLFS travel allowance policies, as described below. We believe these proposals would achieve CMS' aims of simplifying and clarifying our travel allowance policies. We propose to add §414.523(a)(2), “Payment for travel allowance,” to reflect the requirements for the travel allowance for specimen collection. Specifically, in accordance with section 1833(h)(3)(B) of the Act, we are proposing to include in our regulations the following: (1) General requirement, (2) travel allowance basis, (3) travel allowance amount, and (4) travel allowance amount calculation. Section 1833(h)(3)(B) of the Act states that the Secretary shall provide for and establish a fee to cover the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect the sample. We believe this language indicates that only instances of specimen collection requiring trained technicians [121] for the purposes of collecting the sample are to be included in the travel allowance calculation. Therefore, travel for simple pickup of specimens or for specimen collection that does not require the services of trained technicians should not be considered in the calculation of the travel allowance. This means, the travel allowance may be paid only if a specimen collection fee is also payable; for example, no travel allowance would be paid if a trained technician merely performs a messenger service to pick up a specimen drawn by other technicians. The Medicare Claims Processing Manual, chapter 16, § 60.2 states, “The additional allowance can be made only where a specimen collection fee is also payable, i.e., no travel allowance is made where the technician merely performs a messenger service to pick up a specimen drawn by a physician or nursing home personnel.” We propose to codify this general requirement at § 414.523(a)(2)(i). This provision would state that CMS pays a travel allowance where the specimen is one for which a specimen collection fee is paid and would make clear that all of the requirements for the specimen collection fee to be paid (which are specified in § 414.523(a)(1)) would need to be met for the travel allowance to be payable. Additionally, section 1833(h)(3)(B) of the Act states that the travel allowance may be provided only with respect to an individual who is homebound or an inpatient in an inpatient facility (other than a hospital). We interpret this statutory language to mean that the fee only applies when a trained technician draws a specimen from a patient who either is in an inpatient facility that is not a hospital or is a homebound patient. (A discussion regarding the definition of a homebound patient is provided in section III.B.6.b. of this proposed rule.) The Medicare Claims Processing Manual, chapter 16, § 60.2 states that “Medicare, under Part B, covers a specimen collection fee and travel allowance for a laboratory technician to draw a specimen from either a nursing home patient or homebound patient”. We believe it is appropriate to codify that the travel allowance is permitted only where the individual from whom the specimen is collected is homebound or is an inpatient in an inpatient facility (other than a hospital). This requirement would be reflected at § 414.523(a)(2), which as we note above would require all of the specimen collection fee requirements at § 414.523(a)(1) to be met, and which would include the proposed requirement at § 414.523(a)(1)(ii) that the specimen is collected from a Medicare beneficiary who is homebound as described in 42 CFR 424.22(a)(1)(ii) or a non-hospital inpatient. In addition to proposing to codify the general requirement for travel allowance, we are also proposing to clarify and make modifications to the methodology for and the calculation of the CLFS travel allowance amounts. In accordance with section 1833(h)(3)(B) of the Act, we are proposing to reflect the travel allowance payment methodology in the regulations and include the following components: (1) travel allowance basis, (2) travel allowance amount, and (3) travel allowance amount calculation. In § 414.523(a)(2)(ii), we are proposing to codify and clarify that CMS pays a travel allowance on the following bases: (1) flat-rate travel allowance basis and (2) per-mile travel allowance basis. We interpret the statutory language in section 1833(h)(3)(B) of the Act that requires us to pay a fee for trained personnel to travel to the location of an individual to collect the sample to mean that the travel allowance fee is only applicable to travel that is for the purpose of collecting the specimen from a Medicare beneficiary. To that end, we believe only one travel allowance payment may be made for specimen collection for a Medicare beneficiary based on the beneficiary's location, and only when a Medicare beneficiary requires the collection of a specimen necessary for performance of CDLTs. We believe that non-Medicare patients should not be included in any portion of the calculation of the travel allowance. This interpretation would be a modification to existing guidance in the Medicare Claims Processing Manual, chapter 16, § 60.2, which states that the travel allowance “is to be pro-rated in situations where specimens are drawn or picked up from non-Medicare patients in the same trip.” This modification would reflect that we believe only Medicare patients should be considered in the calculation and payment of the travel allowance, which would more closely align with the statutory language regarding “the location of an individual,” that is, the location of a Medicare beneficiary receiving specimen collection services. We also believe this modification would address concerns from laboratories, the OIG, and other interested parties who requested clarification regarding the inclusion of Medicare and non-Medicare beneficiaries in the travel allocation calculation. We are proposing that, whether a laboratory bills the flat-rate travel allowance basis or the per-mile travel allowance basis would depend upon the total miles traveled and number of locations. Section 1833(h)(3)(B) of the Act states, in establishing a fee to cover the transportation and personnel expenses for trained personnel to travel to the location of an individual to collect a sample, the Secretary shall provide a method for computing the fee based on the number of miles traveled and the personnel costs associated with the collection of each individual sample. Therefore, we believe a key component of the travel allowance payment for specimen collection is the number of miles traveled for the specimen collection. In considering potential methodologies for calculating a travel allowance for specimen collection, we conducted an analysis of the usage of the existing Per Mile Travel Allowance HCPCS code (P9603) to understand the usage of P9603 and analyze the billing of miles related to travel allowance for specimen collection. In CY 2019, among professional and institutional Medicare claims, there were approximately 3.2 million total claim lines billed for HCPCS code P9603 (per-mile travel allowance). Among the P9603 claim lines, the average mileage billed per claim line was 18.8 with a standard Start Printed Page 46078 deviation of 33.4. However, the median distance traveled per line was 7 miles. Of all P9603 claim lines, 76.3 percent were billed with less than 20 miles, and 37.9 percent of all P9603 claim lines were billed with less than five miles. The average payment per line for P9603 in CY 2019 was $18.13; however, the median payment per line was $6.09. Additionally, our analysis also shows that 23.7 percent of miles traveled were greater than 20 miles, with 150,442 claim lines of the approximately 3.2 million total claim lines, or 4.7 percent, logging more than 85 miles per trip. We believe that these long-distance trips likely reflect specimen collection from beneficiaries in rural areas (which are generally underserved zones). Given that the majority of P9603 claim lines (76.3 percent) are billed with less than 20 miles, we believe that 20 miles would be an appropriate threshold for use in the travel allowance bases for specimen collection. In addition, to address concerns about administrative complexity, we are proposing that the flat-rate travel allowance basis only would be available for trips involving one location. Specifically, we are proposing in § 414.523(a)(2)(ii)(A) that the flat-rate travel allowance basis would apply when the trained technician travels 20 eligible miles or less to and from one location for specimen collection from one or more Medicare beneficiaries. We discuss our proposal for calculating eligible miles below. As discussed previously in this section of the proposed rule, we believe that section 1833(h)(3) of the Act supports payment for specimen collection and travel allowance for only Medicare beneficiaries and should not include non-Medicare beneficiaries. Under this proposal, laboratories would bill Medicare using existing HCPCS code P9604 to receive payment for the flat-rate travel allowance amount, prorated by the number of beneficiaries for whom a specimen collection fee is paid, which we discuss more fully in the travel allowance amount calculation proposal below. We believe that providing payment for the flat-rate travel allowance basis we are proposing would serve to simplify the administrative requirements for laboratories in terms of billing and record-keeping activities. Additionally, our proposed clarification regarding requirements for proration would address issues raised by interested parties, including the OIG, who expressed concerns regarding inconsistencies in current guidance. We are seeking comment on considerations related to the flat-rate travel allowance basis, including considerations for proposed distance, alternatives for a possible flat-rate travel allowance basis, as well as the utility of this basis or the potential exclusion of this basis for the purposes of the travel allowance for specimen collection. In addition to the flat-rate travel allowance basis, we are proposing in § 414.523(a)(2)(ii)(B) the per-mile travel allowance basis, which would apply when the trained technician travels more than 20 eligible miles to and from one location for specimen collection from one or more beneficiaries or when the trained technician travels to more than one location for specimen collection from more than one Medicare beneficiary. To be clear, this proposed basis would apply in two circumstances—where round trip travel to one location is greater than 20 eligible miles and where travel is to more than one location, regardless of the number of miles traveled. We are proposing to modify our per-mile travel allowance policy in this way for greater clarity, administrative simplification, and consistency with statute. Under this proposed travel allowance basis, the laboratory would receive payment for the total number of miles traveled for specimen collection, which would be allocated to each Medicare beneficiary for whom a specimen collection fee is paid. We believe this proposal would serve to address the OIG's recommendations that CMS clarify various aspects of the travel allowance payment policy, including requirements for proration, which we discuss more fully in the travel allowance amount calculation proposal below. We seek comment on all aspects of the proposed per-mile travel allowance basis. Additionally, we are proposing to specify travel allowance amount requirements pertaining to eligible miles and the travel allowance mileage rate. In § 414.523(a)(2)(iii)(A), we propose that eligible miles would begin at the laboratory and end at the laboratory where the trained technician returns the specimen(s) for testing. We believe the laboratory is the most likely place where the trained technician would become aware of the laboratory order and acquire the necessary supplies to perform the specimen collection. Although we do not believe the trained technician would commence travel related to specimen collection from a location other than the laboratory, we seek comment as to whether there are alternative starting locations we should consider. This proposed provision, requiring that the mileage calculation begins at a laboratory, would codify existing policy in the Medicare Claims Processing Manual, chapter 16, § 60.2, which provides several examples of travel allowance scenarios that reference the start of a travel allowance route as beginning at a laboratory, and would be consistent with section 1833(h)(3)(B) of the Act. We are further proposing in § 414.523(a)(2)(iii)(A) that eligible miles would not include miles traveled for any purpose unrelated to specimen collection, such as collecting specimens from non-Medicare beneficiaries or for personal reasons. We believe the statutory language in section 1833(h)(3)(B) of the Act supports our proposal to exclude from the calculation of eligible miles any miles traveled to a location where no specimens are collected, to the location of a non-Medicare beneficiary for specimen collection, to a Medicare beneficiary where no specimen collection occurs, or for personal purposes. This proposed provision would codify the Medicare Claims Processing Manual, chapter 16, § 60.2, which states that “the travel allowance is intended to cover the estimated travel costs of collecting a specimen.” In § 414.523(a)(2)(iii)(B), we are proposing to set forth the travel allowance mileage rate, which would be used in the travel allowance amount calculations discussed below. Section 1833(h)(3)(B) of the Act requires the travel allowance to cover both the “transportation” and “personnel expenses” for trained personnel to travel to the location of an individual to collect a sample. Our proposed travel allowance mileage rate therefore would reflect both of these components. As described previously in this section of the proposed rule, we currently issue annual travel allowance amounts through CR publications, such as CR 12593.[122] Currently, CMS adds the Internal Revenue Service (IRS) standard mileage rate to an additional $0.45 per mile, which is intended to pay for the trained personnel's time, as described in CR 12593, where the additional $0.45 per mile addresses time and travel costs required by the technician for approximately 15 minutes of labor. The manual states that this rate is based on the assumption that a trip is an average of 15 minutes and up to 10 miles one way and uses the Federal mileage rate (as determined by the IRS) and a technician's time of $17.66 an hour, including overhead. For CY 2022, the IRS standard mileage rate is $0.585. That amount plus $0.45 for the trained personnel's labor yields a Start Printed Page 46079 travel allowance mileage rate of $1.035, which is rounded up to $1.04 for CY 2022. We are proposing to codify the travel allowance mileage rate in regulation as well as modify and clarify certain aspects of it. The IRS updates and issues standard mileage rates on a periodic basis, generally annually.[123] These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving for the purpose of calculating Federal taxes. We are proposing that the “transportation” component of the travel allowance mileage rate would equal the IRS standard mileage rate, which would be consistent with our current policy. We believe using the IRS standard mileage rate would continue to be an appropriate way to cover transportation as the IRS rate accounts for the costs associated with transportation per mile traveled. We seek comment on our proposal to use the IRS standard mileage rate to cover the transportation component of the travel allowance mileage rate. In addition, we are proposing to include an amount to cover the “personnel expenses” component of the travel allowance mileage rate where the trained technician's personnel expenses would be based on a wages-per-mile amount. First, we are proposing that personnel expenses are wages in this context, where wages would represent the cost of the trained technician's time for traveling to collect the sample. We are proposing to base the specific wage amount on data from the BLS, which publishes salary statistics for occupations in the United States. The BLS defines a phlebotomist as a professional who draws blood for tests, transfusions, research, or blood donations.[124] The BLS separately defines clinical laboratory technologists and technicians as workers who collect samples and perform tests to analyze body fluids, tissue, and other substances.[125] For purposes of the travel allowance, we believe the BLS definition of phlebotomist more closely aligns with the trained technicians that we believe are providing the types of specimen collection services described earlier in this section, as a phlebotomist typically draws blood or other specimens, while a laboratory technologist may both collect the specimen as well as analyze the specimen. We do not believe that trained technicians collecting the specimen for the purposes of our specimen collection policies are also analyzing the specimens. Therefore, we propose to use wage data in the BLS-defined category of phlebotomist to establish the personnel expense component of the travel allowance mileage rate. For CY 2021, (the latest available information), the BLS states that the median pay (or the wage at which half of the workers in the occupation earned more than that amount and half earned less) for phlebotomists is $17.97 per hour.[126] To account for the personnel expenses associated with travel for specimen collection, we propose to use the latest available published figure for the median hourly wage amount for phlebotomists, which is published by the BLS, for the purposes of annually updating the travel allowance amount for specimen collection. We propose to codify this aspect of the travel allowance mileage rate at § 414.523(a)(2)(iii)(B) by describing that the travel allowance mileage rate includes an amount to cover expenses for a trained technician equal to the most recent median hourly rate for phlebotomists, as published by the BLS. This approach would be a clarification of and modification to current guidance, as CR 12593 describes that the $0.45 per mile added to the IRS rate is meant to address the trained personnel's time and travel costs by the technician based on approximately 15 minutes of labor. Next, we would calculate a per-mile amount to derive the approximate number of miles traveled by the trained technician each hour. To do this, we are proposing to use an average driving speed. The average miles-per-hour driving speed would be multiplied by the trained technician's estimated wages, as described above, and the result would be an amount that represents wages per mile, which would be the personnel expenses associated with travel for specimen collection. We are proposing to use an average driving speed of 40 miles per hour, as we believe most of the travel related to specimen collection would be performed in local and residential areas, as our data show that the median number of miles traveled for specimen collection is approximately 7 miles. Therefore, to establish the personnel expenses component of the travel allowance mileage rate, which would be a per-mile amount, we propose that we would divide the most recent median hourly wage for phlebotomists, as published by the BLS, by 40 to represent an average miles-per-hour. We propose to codify this aspect of the travel allowance mileage rate at § 414.523(a)(2)(iii)(B). For CY 2023, the amount would be equal to the most recent BLS median hourly wage for a phlebotomist of $17.97 per hour (which is currently the BLS CY 2021 rate) divided by 40, which is $0.45 per mile. This amount is consistent with the amount that we add to the IRS rate under our current travel allowance policy. In summary, we propose to establish in 414.523(a)(2)(iii)(B) that the travel allowance mileage rate is equal to the IRS standard mileage rate plus an amount to cover expenses for a trained technician equal to the most recent median hourly wage for phlebotomists, as published by the BLS, divided by 40 to represent an average miles-per-hour driving speed. The travel allowance mileage rate would be updated annually using the most recent IRS and BLS information, which we would issue in subregulatory guidance annually through CRs. We seek comment on all aspects of this proposed travel allowance mileage rate, including the use of the IRS standard mileage rate to cover transportation, the proposed use of estimated wages and average driving speed to cover personnel expenses, and other specific considerations or alternatives for establishing this rate. Finally, we are proposing to include in § 414.523(a)(2)(iii)(C) the travel allowance amount calculations for the flat-rate travel allowance basis and the per-mile travel allowance basis discussed previously in this section of the proposed rule. We believe that these proposed calculations would be a modification to existing guidance, as we would clarify and revise the travel allowance amount calculations in several respects. In our analysis of mileage traveled for the purposes of specimen collection, described above, the results indicate that the median mileage per trip for specimen collection per Medicare beneficiary is approximately 7 miles; therefore, we believe that a reasonable approximation of the typical mileage required for specimen collection per beneficiary is about 10 miles. As such, for the flat-rate travel allowance basis, we are proposing in § 414.523(a)(2)(iii)(C)(1) that the travel allowance amount is the travel allowance mileage rate described above multiplied by ten (10) (for CY 2023 example purposes, this amount would be $10.40) and divided by the number of beneficiaries for whom a specimen Start Printed Page 46080 collection fee is paid. Dividing by the number of beneficiaries for whom a specimen collection fee is paid would ensure that the flat-rate travel allowance amount is apportioned to each beneficiary receiving specimen collection services and that payment is calculated in a operationally feasible manner, as a laboratory must submit a claim for each beneficiary to receive payment for travel allowance; this would allow for a fixed payment amount to be straightforwardly apportioned to the number of beneficiaries for whom a specimen collection fee is paid in a single location. We believe this proposed flat-rate travel allowance calculation would simplify payment for travel to one location for specimen collection services requiring travel of 20 miles or less, which would ease administrative burden. Additionally, this proposed methodology would be consistent with the existing flat-rate travel allowance payment policy described in CR 12593 and would clarify the proration methodology. For an example of the proposed flat-rate travel allowance calculation, consider a situation in which a trained technician travels seven (7) miles from the laboratory to a nursing home to collect blood specimens collected through venipuncture from five patients, four of whom are Medicare beneficiaries. The trained technician collects three specimens from Medicare beneficiaries, collects one specimen from the non-Medicare patient, and simply picks up a previously collected specimen from one Medicare beneficiary. The trained technician then drives seven (7) miles back to the laboratory to deliver the specimens without making any other stops. The trained technician has provided specimen collection services to three Medicare beneficiaries. One Medicare beneficiary did not require specimen collection services, and therefore, a specimen collection fee would not be payable. In this example, the laboratory would use the flat-rate travel allowance basis because the trained technician traveled a total of 14 miles. To calculate the travel allowance mileage rate, the laboratory would divide flat-rate travel allowance amount of $10.40 by the number of beneficiaries for whom a specimen collection fee is paid (three beneficiaries), which equals $3.47. To bill for the travel allowance, the laboratory would submit one claim for each beneficiary for whom a specimen collection fee is paid by billing HCPCS code P9604. We propose that updates travel allowance mileage rates would be issued through subregulatory guidance, specifically the existing CMS change request process, on an annual basis. We seek comment on all aspects of the proposed calculation of the flat-rate travel allowance amount, including considerations for the proposed mileage factor of ten (10) and the proposed proration by the number of beneficiaries for whom a specimen collection fee is paid. We are also proposing to clarify, modify, and codify in regulation the calculation for the per-mile travel allowance amount. Under proposed § 414.523(a)(2)(iii)(C)(2), the per-mile travel allowance amount would equal the number of eligible miles multiplied by the travel allowance mileage rate discussed above, divided by the number of beneficiaries for whom a specimen collection fee is paid. As discussed previously in this section of the proposed rule, we believe that section 1833(h)(3) of the Act supports payment for specimen collection and travel allowance only for Medicare beneficiaries, and we are proposing that the per-mile travel allowance amount calculation would only consider the number of Medicare beneficiaries from whom specimens are collected in the proration of the per-mile travel allowance. As the current policy in manual guidance and the CR factor are inconsistent in referring to the number of specimens or number of patients, our proposal would be a policy change to clarify that only the number of Medicare beneficiaries for whom a specimen collection fee is paid should be included in the calculation. To calculate the per-mile travel allowance amount, the laboratory would first calculate the total number of eligible miles, as set forth in proposed § 414.523(a)(2)(iii)(A), the trained technician traveled—this would be the total number of miles traveled by the trained technician to locations where one or more Medicare beneficiaries received specimen collection services and back to the laboratory where the technician returns the specimen(s) for testing. The eligible miles would be multiplied by the travel allowance mileage rate as set forth in proposed § 414.523(a)(2)(iii)(B), then divided by the number of beneficiaries for whom a specimen collection fee is paid, which would yield a prorated travel allowance amount. Under this proposed approach, the laboratory would receive payment for the total number of eligible miles traveled for specimen collection, apportioned equally to each Medicare beneficiary for whom a specimen collection fee is paid. The laboratory would then submit a claim billing HCPCS code P9603 for payment of the per-mile travel allowance amount for each beneficiary for whom a specimen collection fee is paid. We believe this proposed calculation for the per-mile travel allowance basis would resolve concerns raised by the public about inconsistent guidance. For an example of the per-mile travel allowance amount calculation, consider a trained technician traveling 45 miles from a laboratory in a city to a rural SNF, collecting blood specimens through venipuncture from 6 Medicare beneficiaries, and then driving 45 miles to return to the laboratory. In this example, the laboratory would use the per-mile travel allowance basis because the trained technician traveled more than 20 eligible miles to one location for specimen collection. To calculate the per-mile travel allowance amount, the laboratory would sum the eligible miles traveled to the location of Medicare beneficiaries receiving specimen collection services, which, in this case is 45 miles from the laboratory to the SNF and 45 miles from the SNF returning to the laboratory, for a total of 90 eligible miles. The eligible miles would then be multiplied by the travel allowance mileage rate of $1.04, yielding a total of $93.60. This total amount would then be prorated by dividing by the number of Medicare beneficiaries for whom a specimen collection fee is paid (6), yielding a per-beneficiary amount of $15.60 ($93.60/6 = $15.60). To bill for the travel allowance, the laboratory would submit one claim for each beneficiary in the amount of $15.60 HCPCS code P9603. In another example, a trained technician travels 40 miles from a laboratory to the location of a Medicare beneficiary to collect a specimen, then travels 10 miles to the location of a non-Medicare patient to collect a blood specimen through venipuncture, then travels 20 miles to the location of two Medicare beneficiaries to collect urine specimens by catheterization, and then travels 20 miles to return to the laboratory. In this example, the laboratory would use the per-mile travel allowance basis because the trained technician traveled to more than one location for specimen collection. To calculate the per-mile travel allowance amount, the laboratory would sum the eligible miles, which would include the miles traveled from the laboratory to the locations of Medicare beneficiaries to collect specimens plus the miles back to the laboratory for specimen drop-off. Eligible miles would not would not include the 10 miles traveled to the Start Printed Page 46081 location of the non-Medicare patient to collect a specimen, but would include the 40 miles traveled from the laboratory to the location of the first Medicare beneficiary, the 20 miles to the location of the two Medicare beneficiaries, and the return trip to the laboratory of 20 miles, for a total of 80 eligible miles. The eligible miles would then be multiplied by the travel allowance mileage rate of $1.04, yielding a total of $83.20. This total would then be prorated by dividing by three (3) Medicare beneficiaries for whom a specimen collection fee is paid, yielding an amount of $27.73. The laboratory would then submit a claim using HCPCS code P9603 for travel allowance for each of the Medicare beneficiaries in the amount of $27.73. Again, the laboratory receives payment for the eligible miles traveled by the trained technician, apportioned equally to each Medicare beneficiary for whom a specimen collection fee is paid. In conclusion, the proposed travel allowance payment policies would represent both modifications to and clarifications of the specimen collection travel allowance payment methodologies currently described in guidance. We believe these proposed changes and clarifications, if finalized, would improve and simplify the administration of the travel allowance payment policy. Laboratories would use HCPCS code P9604 to bill for the flat-rate travel allowance basis for shorter trips to one location, and HCPCS code P9603 to bill for the per-mile travel allowance basis for longer trips to one location and trips to multiple locations, which we believe would ensure payment for specimen collection services based upon eligible miles required for such travel and address concerns of interested parties about the provision of specimen collection services for individuals residing in remote locations. We seek comment on all aspects of this travel allowance proposal, including the proposed general requirement, the proposed provisions regarding the flat-rate and the per-mile travel allowance bases and the utility of having both approaches, the proposed provisions regarding eligible miles and the travel allowance mileage rate, as well as considerations for the methodologies to calculate the travel allowance amounts. We also seek comments on possible alternative considerations for the CLFS travel allowance, including suggestions based on private-payor and/or other approaches for tracking mileage and paying for travel allowance, including per-beneficiary per-encounter bases, or other approaches for providing payment for travel for specimen collection. We note that our proposed regulations would not require MACs to calculate travel allowance payments, nor would they reflect the MAC flexibilities with respect to travel allowance payment that are currently in guidance, such as their discretion to pay the travel allowance in circumstances where CDLTs are needed on an emergency basis; we seek comment on this issue as well. We would make conforming changes to the Claims Processing Manual, Chapter 16, section 60 to reflect these proposed travel allowance policies, if finalized, including any changes or clarifications. As noted previously, we would remove sections of the manual containing policies that are no longer applicable. D. Expansion of Coverage for Colorectal Cancer Screening and Reducing BarriersMedicare coverage for colorectal cancer (CRC) screening tests under Part B are described in statutes (sections 1861(s)(2)(R), 1861(pp), 1862(a)(1)(H) and 1834(d) of the Act), regulation (42 CFR 410.37), and National Coverage Determination (NCD) (Section 210.3 of the Medicare National Coverage Determinations Manual). The statute and regulations expressly authorize the Secretary to add other tests and procedures (and modifications to tests and procedures) for colorectal cancer screening with such frequency and payment limits as the Secretary finds appropriate based on consultation with appropriate organizations. (Section 1861(pp)(1)(D) of the Act; § 410.37(a)(1)(v)). For a number of CRC screening tests, the statute at section 1834(d) of the Act established frequency and payment limits restricting coverage to individuals at least 50 years of age. We are proposing to expand Medicare coverage of certain CRC screening tests by reducing the minimum age payment limitation to 45 years in our regulations at § 410.37 and in NCD 210.3. Our proposal would align our coverage with a recently revised recommendation by the United States Preventive Services Task Force (USPSTF) for certain CRC tests as permitted by section 1834(n) of the Act. Moreover, after consulting with appropriate organizations, we are also proposing to modify the payment limitation for other CRC screening tests identified in § 410.37 and in NCD 210.3 to permit coverage for individuals to begin at age 45. In addition, we propose to expand the regulatory definition of CRC screening tests to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based CRC screening test returns a positive result. Historically, CMS has viewed a colonoscopy after a positive non-invasive stool-based CRC screening test to be a diagnostic colonoscopy. In recent years, the clinical recommendations and guidance of medical professional societies and screening experts have evolved for stool-based colorectal cancer screening due to a number of factors including the relative number of false positive results, low follow-up colonoscopy rates and patient access barriers. For example, the positive predictive value of a FIT (fecal immunochemical test) (the likelihood that an individual with a positive FIT test result actually has colorectal cancer) reportedly varies widely from 8 to 21 percent depending on the test and testing center.[127] Importantly, recent published evidence has again highlighted that individuals that did not get a follow-up colonoscopy were about twice as likely to die of colorectal cancer compared to individuals that did have one.[128] Since the overall goal of programmatic cancer screening using any CRC screening test is to prevent cancer, allow for early detection and treatment and reduce cancer mortality, the follow-up colonoscopy is integral to non-invasive stool-based CRC screening since improvements in health outcomes would not be possible without the follow-up. Medical professional organizations and clinical experts have reached consensus based on the evidence on this recommendation. In May 2021 USPSTF revised their evidence-based recommendation to include the statement “Positive results on stool-based screening tests require follow-up colonoscopy for the screening benefits to be achieved.” [129] Accordingly, we propose to modify CRC screening tests within our authority in consultation with appropriate organizations. The outcome of our more appropriate and complete approach to CRC screening will be that beneficiary cost sharing for the initial screening stool-based test and the follow-on screening colonoscopy test would not apply and that they are both tests paid at 100 percent (no applicable copayment percentage) as specified screening services under the Act. The issue of Start Printed Page 46082 when the follow-on screening colonoscopy involves the removal of tissue or other matter or other procedure furnished in connection with, as a result of, and in the same clinical encounter as the screening test would not change from current policy and is described later in our proposal. We believe this new understanding will encourage the wider utilization of non-invasive CRC screening tests and reduce barriers to screening, prevention and early detection of CRC. Our proposals will update Medicare coverage and payment policies to align with our new understanding of CRC screening. We believe these proposals will expand access to quality care and improve health outcomes through prevention, early detection, more effective treatment and reduced mortality. Moreover, they would directly advance health equity by promoting access and removing barriers for much needed cancer prevention and early detection within rural communities and communities of color that are especially impacted by the incidence of CRC. Our proposals also directly support President Biden's Cancer Moonshot Goal to cut age-adjusted death rate from cancer by at least 50 percent and addresses his recent Proclamation of March as National Colorectal Cancer Awareness Month. The proclamation stated that “early stages of colorectal cancer often emerge without symptoms, and it is important to begin regular screenings starting at the age of 45.” It goes on to read “Thanks to the Affordable Care Act, most health insurance plans must cover certain preventive services with no out-of-pocket costs. This coverage now includes colorectal cancer screenings for adults over the age of 45, making it easier to get colorectal cancer screenings and helping improve access to earlier treatment.” [130] 1. BackgroundIn CY 2019, the last year for which incidence data are available, CRC accounted for the 4th highest rate of new cancer cases and 4th highest rate of cancer deaths in the United States.[131] The National Cancer Institute estimates that in 2021, 149,500 individuals will be newly diagnosed with CRC and 52,980 individuals will die from CRC in the United States.[132] The Center for Disease Control and Prevention (CDC) advises, “Colorectal cancer almost always develops from precancerous polyps (abnormal growths) in the colon or rectum. Screening tests can find precancerous polyps, so that they can be removed before they turn into cancer. Screening tests can also find colorectal cancer early, when treatment works best. . . Regular screening, beginning at age 45, is the key to preventing colorectal cancer and finding it early.” [133] Rural communities and communities of color are especially impacted by the incidence of CRC. A CDC study found the death rate of CRC (per 100,000) to be 17.1 in rural nonmetropolitan counties verses 14.0 in metropolitan counties with populations greater than 1 million.[134] African Americans experience both new cases and deaths from colorectal cancer at rates significantly above those of all races.[135] An article in the American Journal of Pathology states African Americans also are often diagnosed at a younger age (median ages, 66 and 70 years for African American men and women compared with 72 and 77 years for white men and women, respectively). Moreover, African Americans are two times more likely to be diagnosed with CRC before the age of 50 years, which justified the recommendation to begin endoscopic screening at the age of 45 years instead of 50 years.[136] In May 2021, the USPSTF issued a revised Final Recommendation Statement on CRC Screening. This replaced the prior USPSTF 2016 Final Recommendation Statement and included a number of updated policy recommendations based on new evidence and understandings of CRC and CRC Screening. In terms of health disparities in CRC and CRC screening, the May 2021 revised USPSTF statement reads, “The causes for these health disparities are complex; recent evidence points to inequities in the access to and utilization and quality of colorectal cancer screening and treatment as the primary driver for this health disparity rather than genetic differences . . . Black adults across all age groups, including those younger than 50 years, continue to have higher incidence of and mortality from colorectal cancer than White adults.” [137] In addition to reducing the minimum age for Medicare payment for CRC screening test payment, we are proposing to address a longstanding barrier and disincentive to CRC screening using a non-invasive stool-based test as a first step of a complete screening. Examples of Medicare covered non-invasive stool-based CRC screening tests include a guaiac-based fecal-occult blood test (gFOBT) described in regulation at § 410.37(a)(2)(i) and in National Coverage Determination 210.3 Colorectal Cancer Screening Tests, as well as immunoassay-based fecal-occult blood test (iFOBT) and the CologuardTM —Multitarget Stool DNA (sDNA) test described in NCD 210.3. For the best health outcomes (CRC prevention and early detection), it is important that patients receive a complete CRC screening. In recent years, government bodies and professional societies have reconsidered their understanding of a complete CRC screening and now consider CRC screening incomplete for individuals with a positive result on a stool-based test until a follow-on screening colonoscopy is also completed. The National Colorectal Cancer Roundtable recommends that the patient should only be counted as having completed the CRC screening process after a colonoscopy is performed.[138] Under current Medicare policies, if a Medicare patient initially receives a positive result from a non-invasive and less burdensome screening stool-based CRC test, the test would be viewed as showing signs or symptoms of colorectal cancer. If a beneficiary received a subsequent colonoscopy, we viewed the test as a diagnostic procedure and normal cost sharing rules for diagnostic test would apply. Our current policy, however, may discourage patients from seeking a follow-on colonoscopy because of the Medicare cost-sharing. A 2018 guideline update from the American Cancer Society on CRC screening for average-risk adults reads “Trials offering a choice between a stool test and a Start Printed Page 46083 structural examination compared with either test alone have generally demonstrated greater uptake when a choice is offered. The best evidence in the United States derives from a randomized trial in a safety-net population comparing annual gFOBT versus colonoscopy versus choice between the 2 in which it was demonstrated that choice was more effective than offering colonoscopy alone. In the first year of the study, which included patient navigation (year 1 only), the screening completion rate was 38% for patients offered colonoscopy, 66 percent for those offered gFOBT, and 68 percent for those offered a choice. While uptake overall was similar in the gFOBT group versus the choice group, it is clear that a “colonoscopy-only” referral resulted in substantially lower adherence.” [139] One of the goals of CRC screening is to enable the healthcare system to identify patients who need treatment early enough to prevent or treat the condition most effectively. In order to encourage patients to obtain a follow-on colonoscopy, a number of appropriate organizations have suggested that we adopt a new approach that looks at colorectal cancer screening as a continuum in the scenario where an initial stool-based test returns a positive result and includes a follow-on screening colonoscopy, when determined appropriate by the patient and the healthcare provider. There currently exists a misalignment of applicable patient cost sharing for a follow-on screening colonoscopy after a positive non-invasive stool-based test as Medicare coverage policies have not yet been updated to align to this new understanding of a complete CRC screening described earlier. If the patient had chosen the more expensive, invasive and burdensome screening colonoscopy as the first step in their CRC screening, there would be no applicable beneficiary cost sharing for the screening colonoscopy. However, under current policy, if the patient initially receives a positive result from a non-invasive, less burdensome and less expensive stool-based test as the first step in their CRC screening, beneficiary cost sharing would not be applicable for the initial stool-based test, but would be applicable for the subsequent colonoscopy (because it would be considered a diagnostic testing service given the presence of signs and symptoms of disease based on the result of the initial stool-based test). 2. Statutory AuthoritySection 1861(s)(2)(R) of the Act includes CRC screening tests in the definition of 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(pp) of the Act defines “colorectal cancer screening tests” and specifically names the following tests:
Section 1861(pp)(1)(D) of the Act also authorizes the Secretary to include in the definition of CRC screening tests 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 1834(d) of the Act describes limitations for payment of CRC screening tests, including that no payment may be made for CRC screening tests of screening fecal-occult blood test at section 1834(d)(1)(B)(i) of the Act and screening flexible sigmoidoscopy at section 1834(d)(2)(E)(i) of the Act for patients under the age of 50. Section 1834(d) of the Act does not describe a minimum age limit for screening colonoscopy. Section 1834(n) of the Act, added by section 4105 of the Affordable Care Act, grants the Secretary the authority to modify coverage of certain preventive services identified in section 1861(ddd)(3) of the Act, which in turn cross-references section 1861(ww)(2) of the Act (including CRC screening tests at section 1861(ww)(2)(E) of the Act). The Secretary may modify coverage to the extent that such modification is consistent with the recommendations of the USPSTF, per section 1834(n)(1)(A) of the Act. 3. Regulatory AuthorityOur implementing regulations for CRC screening are codified at § 410.37. Similar to section 1834(d) of the Act, § 410.37 describes limitations on coverage and provide that payment may not be made for screening fecal-occult blood tests at § 410.37(c) or screening flexible sigmoidoscopies at § 410.37(e) for individuals under the age of 50. Also similar to section 1834(d) of the Act, § 410.37(g) does not describe a minimum age requirement for screening colonoscopies. Section 410.37 also establishes coverage for screening barium enemas at paragraph (h) and limits coverage to and individual 50 years of age or greater for an individual who is not at high risk of CRC at paragraph (h). Section 410.37(h) does not describe a minimum age limit for coverage of screening barium enemas for individuals who are at high risk of CRC. 4. National Coverage DeterminationNCD 210.3 CRC Screening Tests was last revised effective January 19, 2021, when coverage was expanded to include Blood-based Biomarker Tests. NCD 210.3 was previously revised effective October 9, 2014, when coverage was expanded to include The CologuardT—Multi-target Stool DNA (sDNA) Test. Prior to that, NCD 210.3 was revised effective January 1, 2004, when coverage was expanded to include immunoassay-based fecal occult blood test (iFOBT), which can be used as alternative to existing guaiac-based fecal occult blood test (gFOBT). Under NCD 210.3, the Blood-based Biomarker Tests, sDNA test, iFOBT and gFOBT tests all include a limitation of coverage that the patient be at least 50 years of age. In the NCD 210.3 Final Decision Memo dated January 19, 2021, we noted that multiple commenters provided an alert that a draft USPSTF revised CRC recommendation was circulating and which included a recommendation that CRC screening begin at age 45 instead of 50. The commenters on the draft NCD Decision Memo, in the course of the NCD process, also encouraged CMS to align screening age limitations for all CRC screening tests. At that time, the draft USPSTF recommendation had not been finalized. Therefore, we responded that we are finalizing NCD 210.3 coverage of CRC screening tests with an age range of 50 to 85 years of age. That said, if the draft USPSTF recommendation is finalized and/or other society guidelines are revised, we may reconsider, in consultation with appropriate professional organizations, the appropriate CRC screening tests limitations and address appropriately in an efficient manner. 5. Proposed RevisionsIn May 2021, the USPSTF issued a revised recommendation (with a Grade B) that adults who do not have signs or symptoms of CRC and who are at average risk for CRC begin screening at age 45 instead of the previous recommendation of age 50.[140] Accordingly, we propose to exercise our authority under section 1834(n) of the Act to modify coverage of certain CRC screening tests to begin when the individual is age 45 or older. The tests Start Printed Page 46084 included in the May 2021 USPSTF revised recommendation, including stool-based tests of gFOBT, iFOBT and sDNA, and direct visualization test of flexible sigmoidoscopy. Screening colonoscopy does not have a minimum age requirement under Medicare coverage. We invite public comment on this proposal. We also propose to exercise our authority under section 1861(pp)(1)(D) of the Act to expand coverage of certain CRC screening tests to begin for individuals at age 45 for barium enema test (coverage described in § 410.37(h)) and blood-based biomarker tests (coverage described in NCD 210.3). While these tests were not recommended in the earlier mentioned May 2021 revised USPSTF recommendation, they are Medicare covered CRC screening tests and would be an important alternative to the stool based and direct visualization tests, especially for individuals with medical complexity and those in rural and underserved communities. We believe that aligning the minimum age requirements for certain Medicare covered CRC screening tests described in our proposal to consistently begin for individuals at age 45 would avoid confusion and reduce barriers for beneficiaries and healthcare professionals. Our proposal reflects our belief that consistent coverage and payment policies will be important in promoting CRC screening, which will result in expanded prevention, early detection and improved health outcomes. Conforming changes for our proposals to reduce the minimum age for certain CRC screening tests would be made at § 410.37 and NCD 210.3 authorities described earlier. We are not proposing to modify existing conditions of coverage or payment for maximum age limitations and frequency limitations. We also retain the same existing frequency limitations except in the instance of a follow-on screening colonoscopy after a positive result from a non-invasive stool-based CRC screening test described earlier and later in our proposal). We propose to amend § 410.37 paragraph (c)(1), by removing the phrase “under age 50” and adding in its place the phrase “under age 45”, amend paragraph (c)(2), by removing the phrase “individual 50 years of age” and adding in its place the phrase “individual 45 years of age”, amend paragraph (e)(1), by removing the phrase “under age 50” and adding in its place the phrase “under age 45”, amend paragraph (e)(2) by removing the phrase “individual 50 years of age” and adding in its place the phrase “individual 45 years of age”, and amend paragraph (i)(1), by removing the phrase “individual age 50” and adding in its place the phrase “individual age 45”. We also propose to issue formal instructions that would revise the minimum age for the CRC screening tests described in NCD 210.3 from 50 to 45 years. We consulted with and reviewed recommendations from the following appropriate organizations in our proposal to uniformly reduce the minimum age for certain CRC screening tests from 50 to 45. ACS recommends that people of average risk of CRC start regular screening at age 45 and recommends stool-based tests and visual exam-based tests.[141] The American Society of Colon and Rectal Surgeons (ASCRS) recommends CRC screenings for individuals 45 years of age and older and identifies barium enema as one of multiple screening options.[142] The U.S. Multi-Society Task Force on Colorectal Cancer, which represents the American College of Gastroenterology, the American Gastroenterological Association, and the American Society for Gastrointestinal Endoscopy, also recently revised their recommendation that CRC screening for individuals of average risk of CRC begin at age 45 instead of 50.[143] The Centers for Disease Control and Prevention (CDC) website advises regular screening, beginning at age 45, is the key to preventing colorectal cancer and finding it early. The CDC website goes on to describe the earlier mentioned May 2021 revised USPSTF recommendations.[144] We considered the importance of aligning the minimum age requirement for CRC screening across Medicare covered CRC screening tests, as well as private health plans and Medicaid impacted by the May 2021 revised USPSTF recommendation. We believe consistent policy across payers in terms of minimum age limits for CRC screening tests is critical to the public's understanding of evolving CRC screening recommendations. As added by section 2713 of the ACA, 42 U.S.C 300gg-13 requires a that group health plan and a health insurance issuer offering group or individual health insurance coverage shall, at a minimum, provide coverage for and shall not impose any cost sharing requirements for evidence-based items or services that have in effect a rating of “A” or “B” by the USPSTF. In addition, we considered that section 1905(a)(13) of the Act, added by section 4106 of the ACA, which expands Medicaid coverage to include screening services that are assigned a grade of A or B by the USPSTF. We believe that expanding coverage for barium enema and blood-based biomarker CRC screening tests to a minimum age of 45, in alignment with the direct visualization and stool-based tests recommended in the May 2021 revised USPSTF recommendation, will allow additional, low burden options and alternatives that may be preferred by some health professionals and patients. While the recommendations from different professional societies and other appropriate organizations include varying detail in terms of specific tests, we understand the growing consensus in the health care community is that the pathology of CRC now requires that broad preventative screening should begin for individuals at age 45 instead of 50. We believe that reducing the minimum age for the Medicare covered CRC screening tests barium enema test (coverage described in § 410.37(h)) and blood-based biomarker tests (coverage described in NCD 210.3) from 50 to 45 years of age, in addition to and in alignment with the direct visualization and stool-based tests described in the 2021 USPSTF recommendation, is appropriate and consistent with our purpose of early detection of colorectal cancer described in § 410.37(a)(1). We received public comment broadly supportive of reducing the minimum age for certain CRC screening tests in both the CY 2022 PFS final rule (86 FR 65179) and in the public comments in response to our Proposed Decisions Memo for NCD 210.3 Screening for Colorectal Cancer—Blood-Based Biomarker Tests (Final Decision Memo dated January 19, 2021). We look forward to further consultation with the public and appropriate organizations through the public comment period for this proposed rule. We invite public comment on this proposal. We also propose to exercise our authority under section 1861(pp)(1)(D) of the Act to expand coverage of CRC screening tests to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based CRC screening test returns a positive result. In this scenario, we now understand the follow-on screening colonoscopy to be part of a continuum of a complete CRC Start Printed Page 46085 screening and not a separate diagnostic, therapeutic or other procedure. Relatedly, we propose that the frequency limitations described for screening colonoscopy in § 410.37(g) would not apply in the instance of a follow-on screening colonoscopy test after a positive result from a Medicare covered stool-based test. We propose to add new paragraph (k) to§ 410.37 to state that, effective January 1, 2023, colorectal cancer screening tests include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based colorectal cancer screening test returns a positive result. We aim to avoid disruption to the existing conditions of coverage and payment for CRC screening for this unique scenario and include text noting the frequency limitations described for screening colonoscopy in paragraph (g) of this section shall not apply in the instance of a follow-on screening colonoscopy test described in this paragraph. We acknowledge that under current Medicare policy, a colonoscopy after a stool-based CRC screening test returns a positive result would be subject to beneficiary cost sharing because it would be considered a diagnostic, therapeutic or other non-screening procedure. Section 410.32(a) describes a diagnostic test as an instance when the physician who furnishes a consultation or treats a beneficiary for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. Under current policy, a positive result from the CRC screening stool-based test would be a sign of illness or disease and the subsequent colonoscopy would be for treatment and management of that specific medical problem. We now believe our current policy of CRC screening to not include a follow-on screening colonoscopy after a stool-based test returns a positive result is incomplete and not in full support of our definition of CRC screening test at § 410.37(a)(1) for the purpose of “early detection of colorectal cancer”. Our proposal to expand the definition of CRC screening to include a follow-on screening colonoscopy after a stool-based test returns a positive result will include implications for beneficiary cost sharing. Under our proposal, beneficiary cost sharing (coinsurance and deductible) would not be applicable for the stool-based test nor the follow-on colonoscopy screening tests, as described at section 1833(1)(W)(ii) of the Act, as added by section 4104(b) of the Affordable Care Act. When the follow-on screening colonoscopy requires additional procedures furnished in the same clinical encounter, the phased-in Medicare payment percentages for colorectal cancer screening services described in regulation at § 410.152(l) and finalized in the CY 2022 PFS final rule (86 FR 65177 through 65179) will apply. That is, when the follow-on screening colonoscopy includes the removal of tissue or other related services during the same clinical encounter the beneficiary coinsurance will be reduced over time from 15 percent for services furnished during CY 2023 through CY 2026 to 10 percent for services furnished during CY 2027 through 2029 to zero percent beginning in CY 2030 and thereafter. Our goal is that the patient and their healthcare professional make the most appropriate choice in CRC screening, which includes considerations of the risks, burdens and barriers presented with an invasive screening colonoscopy in a clinical setting as their first step. CRC screening presents a unique scenario where there are significant differences between screening stool-based tests and screening colonoscopy tests in terms of invasiveness and burdens to the patient and healthcare system. We recognize there are several advantages to choosing a non-invasive stool-based CRC screening test as a first step compared to a screening colonoscopy, including relative ease of administering the test and potentially reducing the experience of unnecessary burdensome preparation and invasive procedures. It has been reported that a large proportion (46 percent) of screening colonoscopies found no polyps[145] so optimizing use of a non-invasive stool-based screening test as a first step (when determined appropriate by the patient and their healthcare professional) would benefit the patient and also the Medicare program. In many instances, a colonoscopy is not the most appropriate first step in colorectal cancer screening and would represent an unnecessary burden and over-servicing for both the patient and healthcare system. The May 2021 revised USPSTF recommendation reads, “stool-based screening requires persons to collect samples directly from their feces, which may be unpleasant for some, but the test is quick and noninvasive and can be done at home (the sample is mailed to the laboratory for testing), and no bowel preparation is needed to perform the screening test.” [146] The May 2021 revised USPSTF recommendation goes on to described that direct visualization CRC screening tests such as screening colonoscopy and screening flexible sigmoidoscopy must be performed in a clinical setting rather than home and require bowel preparation prior to the test. In addition, sedation or anesthesia is usually used during screening colonoscopy and the patient requires additional recovery time and assistance with transportation home. We have heard from interested parties that CMS should consider a complete CRC screening to include a follow-on screening colonoscopy when a non-invasive stool-based test returns a positive result. We consulted with and reviewed recommendations from a number of professional societies in developing this proposal, including supportive letters and communications with representatives from American Gastroenterological Association, American Cancer Society Cancer Action Network, and Fight Colorectal Cancer. Our proposal regarding a new understanding of a complete CRC screening aligns with a policy recommendation from the National Colorectal Cancer Roundtable, which was “established by the American Cancer Society (ACS) and the Centers for Disease Control and Prevention (CDC) in 1997, is a national coalition of public organizations, private organizations, voluntary organizations, and invited individuals.” [147] Our proposal also aligns to a 2018 CRC screening guideline update from the American Cancer Society, which reads “Implementation of the screening options included in this guideline is premised on the requirement that the appropriate follow-up to a positive (noncolonoscopic) test is a timely colonoscopy. The follow-up colonoscopy should not be considered a “diagnostic” colonoscopy but, rather, an integral part of the screening process, which is not complete until the colonoscopy is performed. The information provided to patients to facilitate a choice among tests must include the importance of follow-up of a positive (noncolonoscopic) test with colonoscopy. Repeating a positive stool-based test to determine whether to proceed to colonoscopy is not an appropriate screening strategy.” [148] We also considered the May 2021 revised USPSTF recommendation, Start Printed Page 46086 which includes the statement “When stool-based tests reveal abnormal results, follow-up with colonoscopy is needed for further evaluation . . . Positive results on stool-based screening tests require follow-up colonoscopy for the screening benefits to be achieved.”[149] We also note that the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury issued a Frequently Asked Questions guidance on January 10, 2022 that reads, “A [non-grandfathered group health] plan or [health insurance issuers offering non-grandfathered group or individual health insurance coverage] must cover and may not impose cost sharing with respect to a colonoscopy conducted after a positive non-invasive stool-based screening test or direct visualization screening test for colorectal cancer for individuals described in the USPSTF recommendation. As stated in the May 18, 2021 USPSTF recommendation, the follow-up colonoscopy is an integral part of the preventive screening without which the screening would not be complete.[150] The follow-up colonoscopy after a positive non-invasive stool-based screening test or direct visualization screening test is therefore required to be covered without cost sharing in accordance with the requirements of PHS Act section 2713 and its implementing regulations.” [151] We believe that our proposal to update our regulations to align to our new understanding of a complete CRC screening will address the beneficiary cost sharing barrier that currently exists for a subsequent colonoscopy after an initial stool-based test returns a positive result, would allow more options for healthcare professionals and patients, would help optimize non-invasive CRC screening test use, and improve health outcomes for Medicare beneficiaries. We received public comment supportive of the policy described in our proposal in both the CY 2022 PFS final rule (86 FR 65179) and in public comments to our Proposed Decision Memo for the NCD 210.3 Screening for Colorectal Cancer—Blood-Based Biomarker Tests (Final Decision Memo dated January 19, 2021).[152] We look forward to further consultation with the public and appropriate organizations through the public comment period for this proposed rule. We invite public comment on this proposal. The scope of our proposals is limited to CRC screening tests and do not address the coverage or payment status of other screening services or tests recommended by the USPSTF or covered by Medicare. 6. SummaryIn summary, we propose to exercise our authority in section 1834(n) and 1861(pp)(1)(D) of the Act to expand CRC screening coverage by reducing the minimum age for CRC screening tests from 50 to 45 years of age for certain Medicare covered CRC screening tests that currently include a minimum age of 50 as a limitation of payment or coverage. A screening colonoscopy would continue to not have a minimum age limitation under our proposal. We also propose to exercise our authority in section 1861(pp)(1)(D) of the Act to expand coverage of CRC screening to include a follow-on screening colonoscopy after a non-invasive stool-based test returns a positive result. We believe our proposals will expand access to quality care and improve health outcomes for patients through prevention, early detection, more effective treatment and reduced mortality. E. Removal of Selected National Coverage DeterminationsCMS periodically identifies and proposes to remove 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 and 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 later be established as reasonable and necessary for Medicare beneficiaries or replaced by more beneficial technologies or clinical paradigms. Since the CY 2021 PFS final rule (85 FR 84472), we have used notice and comment rulemaking to obtain 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 for efficiencies in timing and process to consider removal of NCDs, as compared to the public comment process established in section 1862(l) of the Act, to be used in making and reconsidering individual NCDs through the National Coverage Analysis process. Eliminating an NCD that provides national coverage for items and services means that the item or service will no longer be automatically, nationally 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:
• 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. Start Printed Page 46087
When we evaluate particular NCDs for removal, we review and consider information gathered from interested parties, particularly literature or evidence that supports a change in coverage, the Medicare claims data for those items and services, and other factors such as whether there may be documentation requirements within the NCD that are outdated or 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 addition to conducting an internal review to identify appropriate NCDs for removal, we receive removal requests from a variety of external interested parties, such as medical specialty societies, device manufacturers, beneficiaries, physicians and providers, and other interested individuals with many of those requests submitted as public comments to the PFS proposed rules. Additionally, sometimes topics are brought to our attention by the MAC medical directors. The following outlines the NCD proposed for removal and provides a summary of the rationale for removal. The current NCD 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 160.22 Ambulatory EEG Monitoring (06/12/1984)• 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: Ambulatory, or prolonged electroencephalographic (EEG) monitoring is a diagnostic test that continuously records the brain's electrical activity during a patient's routine daily activities and sleep. Ambulatory EEG monitoring may be used to diagnose seizure disorders and metabolic, infectious, or inflammatory disorders that affect the brain's activity, particularly when a resting/routine EEG is not conclusive. The NCD currently defines ambulatory EEG monitoring as 24-hour EEG monitoring and provides coverage for patients in whom a seizure diathesis is suspected but not defined by history, physical or resting EEG. The NCD also provides that ambulatory EEG can be utilized in the differential diagnosis of syncope and transient ischemic attacks if not elucidated by conventional studies. Additionally, the NCD states that ambulatory EEG “should always be preceded by a resting EEG”. External interested parties recommended removal of this NCD. The NCD contains outdated language that is inconsistent with, and contrary to current standards of care. For example, the NCD contains references to cassette tapes. This outmoded technology has been supplanted with more modern techniques that are more accurate and convenient for monitoring. The document uses the word “ambulatory,” implying certain sites of service whereas this diagnostic test is not site specific. The NCD makes mention of a 24-hour duration of monitoring. However, the more recent coding structures permit monitoring in increments including 36-60 hours, 60-84 hours, and >84 hours. Additionally, interested parties stated that the language “should always be preceded by a resting EEG” could potentially create waste and a burden. Interested parties indicated that in some clinical scenarios, a “resting/routine” EEG is unlikely to adequately detect seizure or other brain activity that would be useful for diagnostic purposes, but would be detected by prolonged EEG testing. Removing the outdated NCD will allow MACs to update guidance for this established diagnostic test. In summary, we solicit comment on the proposal to remove NCD 160.22 Ambulatory EEG Monitoring. We use the public comments to help inform our decision to take one of three actions on the NCD proposed for removal:
F. Modifications Related to Medicare Coverage for Opioid Use Disorder (OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)1. BackgroundSection 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 84692), we adopted new add-on codes for take home supplies of nasal naloxone and injectable naloxone. In the CY 2022 PFS final rule (86 FR 65340 and 65341), we established a new add-on code and payment for a higher dose of nasal naloxone. We also revised 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 (86 FR 65342). We are continuing to monitor Medicare enrollment by OTPs and utilization of OUD treatment services furnished by OTPs to ensure that Medicare beneficiaries have appropriate access to care, as well as monitoring for fraud, waste, and abuse. For CY 2023, we are proposing several modifications to the regulations and policies governing Medicare coverage and payment for OUD treatment services furnished by OTPs. 2. Methadone PricingIn the CY 2020 PFS final rule (84 FR 62667), we finalized a policy in Start Printed Page 46088 § 410.67(d)(2)(i) under which the payment for the drug component of episodes of care would be updated annually using the most recent data available from the applicable pricing mechanism at the time of ratesetting for the applicable calendar year. Under the policy finalized at § 410.67(d)(2)(i)(B), for oral medications, if average sales price (ASP) data are available, the payment amount is 100 percent of ASP, which will be determined based on ASP data that have been calculated consistent with the provisions in 42 CFR part 414, subpart J and voluntarily-submitted by drug manufacturers. If ASP data are not available, the payment amount for methadone will be based on the TRICARE rate. Using this established method, we determined that the payment amount for methadone furnished by OTPs during an episode of care in CY 2021 was $37.38,[153] which was 100 percent of ASP, as determined based on voluntarily-submitted ASP data for methadone. In early September 2021, while gathering available manufacturer-reported ASP data for the annual update to the OTP drug pricing for CY 2022, we found that the volume-weighted ASP for oral methadone had decreased by just over 50 percent compared to the CY 2021 rate, from $37.38 to $17.64.[154] This reduction was due to inclusion of newly reported ASP data for methadone tablets, whereas previously the manufacturer-reported ASP data reflected only sales of the methadone oral concentrate. The ASP is volume-weighted; however, ASP reporting is not required for oral methadone and only a small subset of methadone manufacturers voluntarily submit ASP data. In September 2021, of the nearly 50 available NDCs for oral methadone preparations with available pricing in the Red Book® compendia, voluntarily-submitted ASP data was available for only three of these NDCs. Pricing for oral methadone is distinct from most other drug pricing based on ASP because oral methadone is not separately payable as a drug or biological under Medicare Part B, and manufacturers are not subject to ASP reporting requirements under section 1927(b)(3)(A)(iii) of the Act for those NDCs. Additionally, we do not have utilization data on the different forms of methadone that can be dispensed or administered at OTPs. That is, we do not have data showing whether OTPs utilize oral methadone concentrate or tablets more often, or if the two formulations are utilized equally. When we researched OTP practice patterns as we were preparing to implement the new benefit for OUD treatment services furnished by OTPs, we received anecdotal reports that several OTPs used the oral concentrate exclusively. For these reasons, while performing our annual ratesetting exercise for CY 2022, we had concerns as to whether the ASP data available to us at that time, which reflected voluntarily reported data from only a very small subset of methadone manufacturers, was representative of utilization of the two forms of oral methadone by the Medicare beneficiaries receiving OUD treatment services in OTPs. Additionally, given reports regarding the effects of the public health emergency (PHE) for COVID-19 on individuals with substance use disorders (SUDs), including OUD, and the questions we had related to whether the ASP data we had for methadone was reflective of OTP utilization due to the distinct nature of methadone pricing, as described above, we believed it was in the public's best interest not to implement a significant decrease in the payment rate for methadone furnished by OTPs as part of OUD treatment services without first having an opportunity to review the issue, seek input from the OTP community regarding utilization of methadone oral concentrate compared to utilization of methadone tablets, and consider how this information should factor into the determination of the payment rate for methadone furnished by OTPs. We noted that section 1834(w)(2) of the Act allows for flexibility to consider the scope of services furnished, the characteristics of the individuals receiving services, and such other factors as the Secretary determines appropriate, in determining the rates paid to OTPs under Medicare. Therefore, we issued the “Medicare Program; Opioid Treatment Programs: CY 2022 Methadone Payment Exception” interim final rule with comment period (IFC) (hereafter referred to as “Methadone IFC”), which appeared in the November 19, 2021 Federal Register (86 FR 66031 through 66036). In the Methadone IFC, we established a limited exception to the methodology for determining the payment amount for the drug component of an episode of care in order to freeze the payment amount for methadone furnished during an episode of care in CY 2022 at the $37.38 payment amount that was determined for CY 2021. We also revised the regulation at § 410.67(d)(2)(i)(B), which governs the determination of the payment amount for oral medications, to reflect this exception for CY 2022 and to make a conforming change to the reference to 42 CFR part 414, subpart J. Under this exception, the payment amount for the drug component of the methadone bundle described by HCPCS code G2067 ( Medication assisted treatment, methadone; weekly bundle including dispensing and/or administration, substance use counseling, individual and group therapy, and toxicology testing, if performed (provision of the services by a Medicare-enrolled Opioid Treatment Program)) and the methadone add-on code described by HCPCS code G2078 ( Take-home supply of methadone; up to 7 additional day supply (provision of the services by a Medicare-enrolled Opioid Treatment Program); List separately in addition to code for primary procedure) was maintained at the CY 2021 rate of $37.38 for the duration of CY 2022. We also applied the annual update to the non-drug component of HCPCS G2067 for CY 2022 as required under § 410.67(d)(4)(iii). We stated that we believed maintaining the payment amount for methadone at the CY 2021 rate during CY 2022 would allow time for CMS to study the issue further and, if appropriate, to develop an alternative payment methodology for methadone that could be proposed through notice-and-comment rulemaking for CY 2023 (86 FR 66033). We solicited comments on this exception to the payment methodology for the drug component of an episode of care in order to maintain the payment rate for methadone at the CY 2021 payment amount during CY 2022. In addition, we sought comments on OTP utilization patterns for methadone, particularly the frequency with which methadone oral concentrate is used compared to methadone tablets in the OTP setting, including any applicable data on this topic. We also stated that we would consider the comments received in determining how best to determine the payment rate for methadone in CY 2023, including whether we should propose changes to the structure of OTP coding and payment in order to account for differences in pricing and utilization of the different formulations of methadone. We received several comments in response to the Methadone IFC from medical associations, national associations representing OTPs, and Start Printed Page 46089 individual commenters that expressed strong support for stabilizing the payment rate for methadone. One commenter stated cutting reimbursements to providers who specialize in treatment for OUD in the middle of an OUD epidemic that has been exacerbated by the COVID-19 pandemic could have harmful consequences for beneficiaries and cited that the HHS Office of Inspector General (OIG) expressed concern that Medicare beneficiaries face challenges accessing OUD treatment. The commenter also stated that if Medicare reimbursements for methadone fall well below OTPs' costs of acquiring and administering the medication, OTPs may have no choice but to prescribe a much more expensive medication (buprenorphine or naloxone) as part of medication-assisted treatment (MAT)/Medications for Opioid Use Disorder (MOUD), which would result in higher costs for the Medicare program and taxpayers, while not necessarily improving care. For example, methadone is often more ideal for severe dependence or if there is a high risk of divergence, while buprenorphine may be more advantageous for mild to moderate dependence and when extensive supervision by a practitioner is not needed.[155] Another commenter stated that it is possible that freezing the payment rate for methadone at the current level could still result in some negative outcomes, as supply chain and logistics issues have generally resulted in increased prices across the country such that a payment rate increase may be necessary, but thought that freezing the rate at the current level was a prudent solution for 2022. A commenter representing a large number of OTPs across the country stated that OTPs rarely dispense methadone tablets and instead administer the oral concentrate formulation. This commenter stated that methadone oral concentrate is more expensive to acquire and administer than the tablet form, but that it has been shown to lead to better clinical outcomes for their patients, which is why it is their doctors' formulation of choice. This commenter went on to state that the existing methodology to calculate the payment rate for the drug component of the methadone weekly bundle does not accurately capture the extra costs associated with administration of the oral concentrate, explaining that oral concentrate formulations require careful measurement in addition to maintaining electric pumps and updating computer software. The commenter also noted that it is expensive to employ the necessary nursing staff, and stated that a number of States require full-time pharmacists for the dispensing and administration of medication. Another commenter noted that the National Association of State Alcohol and Drug Abuse Directors (NASADAD), in conjunction with the State Opioid Treatment Authorities (SOTAs), conducted a survey that was distributed to the 1,800 OTPs throughout the United States. As of December 31, 2021, NASADAD and the SOTAs had collected data from 1,550 OTPs. These data include the number of patients being treated at OTPs as of January 1, 2021, including the number of patients using one of the three FDA-approved medications to treat opioid use disorder (methadone, buprenorphine, and extended-release naltrexone) and the specific forms of the medication being used. We appreciate the feedback received in response to the Methadone IFC. We agree with commenters that decreasing the payment amount for methadone in the middle of an OUD epidemic that has been exacerbated by the COVID-19 pandemic could have harmful consequences for beneficiaries as we discussed in the Methadone IFC (86 FR 66032). We are also looking forward to seeing the results of the survey initiated by NASADAD and the SOTA, so that we can better understand the utilization of methadone tablets and oral concentrate in OTPs. In light of the comments received, we have considered how best to maintain access to treatment with methadone in the OTP setting for Medicare beneficiaries. We considered splitting the methadone bundled payment code into two codes—one for oral concentrate and one for the tablet. This would allow us to track Medicare utilization of each formulation. However, because of the inconsistency in available ASP data for orally administered methadone due to the fact that manufacturer reporting of sales data for these dosage forms of methadone is voluntary, (that is, orally administered methadone is not a drug that falls under the ASP reporting requirements under sections 1927(b)(3)(A)(iii) or 1847A(f)(2)(A) of the Act), we do not believe that voluntary reporting of ASP data for either form of orally administered methadone (oral concentrate or tablet) currently provides a reliable source for pricing the methadone codes. For example, for the first quarter of 2022, there was no ASP data reported for orally administered methadone. Under the policy at § 410.67(d)(2)(i)(B)( 1), when ASP data are not available for methadone, we would base the payment amount for methadone on the TRICARE rate. We found that the applicable TRICARE payment amount for methadone for CY 2022 would be $24.04. Using the TRICARE payment amount for methadone for CY 2023 would result in a decrease of $13.34 compared to the rate that applied in CY 2021 and CY 2022. We believe that this decrease would be problematic for all of the reasons that we expressed in the Methadone IFC (86 FR 66034 through 66035). For these reasons, we believe that it is appropriate to propose an alternate methodology for pricing the drug component of the methadone bundle and the methadone add-on code in order to maintain payment stability, and therefore, maintain appropriate access to OUD treatment services furnished at OTPs for Medicare beneficiaries. In the CY 2020 PFS final rule (84 FR 62667), we discussed the methods we had considered for providing an update each year to the drug component of the OTP bundled payment rates. We stated that we considered annually updating the pricing of the drug component of the OUD treatment services payment rate via an established update factor such as the Producer Price Index (PPI) for chemicals and allied products, analgesics (WPU06380202). We explained that the PPI for chemicals and allied products, analgesics is a subset of the PPI produced by the Bureau of Labor Statistics (BLS). We solicited comments on this approach but did not receive any comments. Ultimately, we decided against proposing to update the pricing of the drug component of the OUD treatment services payment rate via an established update factor, such as the PPI, in favor of an update using the most recently available ASP data at the time of ratesetting for the applicable calendar year. We explained that we believed an ASP-based approach would update the pricing of the drug component of the OUD treatment services payment rate in a manner that would be more consistent with other Medicare payments under Part B. Because we do not believe that ASP data can provide an appropriate reflection of the changes in methadone costs for OTPs until such a time that more complete and reliable ASP data are available for methadone, we are reconsidering the use of the PPI to update the payment rate for methadone. According to the U.S. BLS,[156] the PPI program measures the average change over time in the selling prices received Start Printed Page 46090 by domestic producers for their output. The application of an annual adjustment factor would be consistent with Medicare payment policy in other areas, such as the outpatient prospective payment system, which updates the conversion factor used to set payment rates under that payment system by applying the outpatient department fee schedule increase factor, which is equal to the percentage change in the hospital inpatient market basket (86 FR 63498 through 63500). The percentage change in the market basket reflects the average change in the price of goods and services hospitals purchase to provide inpatient care. The PPI for Pharmaceuticals for Human Use (Prescription) (WPUSI07003) reflects price changes associated with the average mix of all pharmaceuticals in the overall economy and is both publicly available and regularly published. We believe that this PPI would be an appropriate factor to adjust the payment rate for methadone to reflect the changes in methadone costs for OTPs over time. Methadone is an established drug in the drug supply chain, and we believe that an overall price trend that incorporates price changes for prescription pharmaceuticals would provide an appropriate update to reflect any increase in the costs incurred by OTPs in furnishing methadone during episodes of care. Accordingly, for CY 2023 and subsequent years, we are proposing to revise our methodology for pricing the drug component of the methadone weekly bundle and the add-on code for take-home supplies of methadone. Under this proposal, we would base the payment amount for the drug component of HCPCS codes G2067 and G2078 for CY 2023 and subsequent years on the payment amount for methadone in CY 2021 and update this amount annually to account for inflation using the PPI for Pharmaceuticals for Human Use (Prescription). We propose to update the methadone payment amount for CY 2023 based on the projected increase in the PPI for Pharmaceuticals for Human Use (Prescription) to reflect the forecasted price growth for prescription drugs for the 2-year period from CY 2021 to 2022 and from CY 2022 to 2023. Because we froze the payment amount for methadone at the 2021 amount for CY 2022, we propose to account for the inflation for both CY 2022 and CY 2023 in setting the payment rate for CY 2023. Based on the 2022 Q1 forecast from IHS Global Inc. (IGI) the proposed CY 2023 methadone payment amount would be $39.29, which is the CY 2022 payment amount of $37.38 increased by a projected 5.1 percent growth in the PPI for Pharmaceuticals for Human Use (Prescription) from CY 2021 to CY 2023 ($37.38 * 1.051 = $39.29). IGI is a nationally recognized economic and financial forecasting firm that contracts with CMS to forecast various price proxies used in the CMS market baskets. Additionally, we are proposing that if more recent data become subsequently available (for example, a more recent estimate of the PPI), we would use such data in the final rule to determine the final CY 2023 methadone payment amount. For subsequent years, we are proposing to continue to update this rate annually using the PPI for Pharmaceuticals for Human Use (Prescription). We note that under this proposal, we would continue to monitor methadone pricing in order to determine whether we may need to propose additional changes to this methodology through future rulemaking to account for any significant changes in the acquisition costs for methadone. We may also revisit this policy in the event that new or more reliable data on methadone pricing become available. We also solicit public comment on other potential data sources that could be used to estimate an OTP's cost for acquiring methadone. Accordingly, we are proposing to revise the regulation at § 410.67(d)(2)(i)(B)(2) to state that for CY 2023 and subsequent years, the payment amount for methadone will be based on the payment amount for methadone in CY 2021 as determined under § 410.67(d)(2)(i)(B)(1) and updated by the PPI for Pharmaceuticals for Human Use (Prescription). Under this proposal, the TRICARE rate would no longer be an alternative pricing methodology for methadone. As part of this proposal, we would also correct an inadvertent error in the text of the current regulation at § 410.67(d)(2)(i)(B)(2), which includes an inaccurate cross-reference to paragraph (d)(2)(i)(B)(1). 3. Proposed Changes to the Rate for Individual Therapy in the Bundled RateIn the CY 2020 PFS final rule (84 FR 62658), we finalized a payment rate for the non-drug component of the bundled payment for episodes of care that was calculated using a building block methodology in which we took the sum of rates for similar services paid under the PFS. The payment rate for individual therapy included in the non-drug component of the bundled payment for an episode of care is currently based on a crosswalk to CPT code 90832, which describes 30 minutes of psychotherapy. In its December 2021 report,[157] titled “Many Medicare Beneficiaries Are Not Receiving Medication to Treat Their Opioid Use Disorder,” OIG indicated that approximately one million Medicare beneficiaries were diagnosed with OUD in 2020, but less than 16 percent of those beneficiaries received medication to treat OUD (in any setting), raising concerns that beneficiaries face challenges accessing treatment. In this report, OIG also stated that in 2020, less than 4 percent of Medicare beneficiaries with OUD received treatment from OTPs. We note that 2020 was the first year of the Medicare OTP benefit and that OTPs had to submit applications for enrollment with Medicare and have those applications approved prior to billing services to Medicare. As a result, we expect these numbers to improve in future years. However, CMS has been working to identify and track drivers of disparities in the treatment of OUD. Additionally, we have received feedback from interested parties, including associations and groups that represent OTPs, indicating that the current rate for individual therapy provided as part of the weekly bundle may not accurately reflect the resource costs involved with furnishing this service in the OTP setting and that for the first several months of treatment, patients typically receive weekly 50-minute individual therapy sessions. Now that we have 2 years of utilization data, we have reviewed how we implemented the OTP benefit to determine whether refinements to the bundled rate may be warranted to reflect more accurately the level of services furnished by OTPs. We believe that the severity of needs of the patient population diagnosed with OUD and receiving services in the OTP setting is generally greater than that of patients receiving 30-minute psychotherapy services paid under the PFS. For example, co-occurring substance use and mental health disorders are common among adults with OUD.[158] Individuals with co-occurring SUD and mental health disorders likely have complex treatment needs and may have different patterns of treatment than individuals diagnosed with a single condition.[159] During the first few months of treatment at an OTP, patients generally receive care at the OTP on a daily basis. Based on the generally greater severity of needs of the patient population receiving services at Start Printed Page 46091 OTPs compared to patients receiving psychotherapy services billed under CPT code 90382 and paid under the PFS, and therefore, the greater intensity of the work, we believe it is appropriate to re-visit the rate for individual therapy that is included in the non-drug component of the weekly episodes of care. Accordingly, we are proposing to modify the payment rate for the non-drug component of the bundled payment for an episode of care to base the rate for individual therapy on a crosswalk to CPT code 90834 (Psychotherapy, 45 minutes with patient), instead of a crosswalk to CPT code 90832 (Psychotherapy, 30 minutes with patient), as is our current policy. We believe CPT code 90834 most closely corresponds to a 50-minute therapy session, which interested parties have indicated is the typical amount of therapy received by patients in the first few months of treatment at an OTP. In the CY 2020 PFS final rule (84 FR 62658), we stated that we based the rate for individual therapy in the bundled payment on the 2019 non-facility payment rate for CPT code 90832, which was $68.47. Therefore, in order to change the rate for individual therapy, we are proposing to substitute the 2019 rate for CPT code 90832 included in the non-drug component of each of the bundled payments for an episode of care with the 2019 PFS non-facility payment rate for CPT code 90834, which was $91.18, to determine an adjusted payment rate for CY 2020 for the non-drug component of each applicable HCPCS code. As described in § 410.67(d)(4)(iii), we would then apply the Medicare Economic Index (MEI) updates for 2021, 2022, and 2023 to these adjusted payment rates to determine the CY 2023 payment amounts for the non-drug component of the bundled payments for an episode of care. In section II.M. of this proposed rule, we are proposing to rebase and revise the MEI from a 2006-base year to a 2017-base year. The MEI for CY 2023 is currently projected to be 3.8 percent based on the proposed 2017-based MEI, and is based on the most current forecast of the percentage increase of the proposed 2017-based MEI for the second quarter of 2022 (4.2 percent), and the most recent estimate of the historical productivity adjustment for calendar year 2021 (0.4 percent). The MEI for CY 2023 will be revised for the final rule based on the historical data through the second quarter 2022 and the most recently available total factor productivity data. We note that in the CY 2020 PFS final rule (84 FR 62644), we also finalized an adjustment to the bundled payment rates through the use of an add-on code to account for instances in which effective treatment requires additional counseling or group or individual therapy to be furnished for a particular patient that substantially exceeds the amount specified in the patient's individualized treatment plan. This adjustment is described by HCPCS code G2080 (Each additional 30 minutes of counseling or group or individual therapy in a week of medication assisted treatment, (provision of the services by a Medicare enrolled Opioid Treatment Program); List separately in addition to code for primary procedure.). We are not proposing any changes to HCPCS code G2080. We believe that our proposal to update the crosswalk we use to calculate the individual therapy portion of the non-drug component of the bundled payment to reflect 45 minutes of psychotherapy does not duplicate the add-on code for additional counseling. Rather, we believe that our proposal to update the crosswalk for individual therapy will ensure that the payment for the non-drug component of the bundled payment is more representative of the typical case in the OTP setting and better reflects the resource costs involved in furnishing this service in the OTP setting compared to the current crosswalk. Accordingly, we are proposing to revise the regulation text at § 410.67(d)(2) to adjust the payment for the non-drug component of the bundled payment for an episode of care to reflect 45 minutes of psychotherapy beginning in CY 2023. We welcome comments on this proposal. 4. Mobile Components Operated by OTPsEffective July 28, 2021, the Drug Enforcement Administration (DEA) issued a final rule (86 FR 33861) that authorized OTPs to add a “mobile component” to their existing registration, which eliminated a requirement for mobile medication units of OTPs to have a separate registration. Additionally, we note that SAMHSA has issued guidance to OTP Directors, State Opioid Treatment Authorities (SOTAs), and State Directors that revised and superseded related portions of SAMHSA's 2015 Federal Guidelines for OTPs by clarifying the range of services that can be provided by mobile units.[160] In light of the new SAMHSA guidance, we wish to clarify that services furnished via OTP mobile units will be considered for purposes of determining payments to OTPs under the Medicare OTP bundled payment codes and/or add-on codes to the extent that the services are medically reasonable and necessary and are furnished in accordance with SAMHSA and DEA guidance. We believe that allowing OTPs to bill Medicare for services furnished via mobile units is an opportunity to expand access to medications for treatment of OUD for Medicare beneficiaries by extending the reach of OTPs, particularly in remote or underserved areas. Because OTPs receive a bundled payment, we believe it would be appropriate to apply locality adjustments for services furnished via mobile units as if the service were furnished at the OTP registered with DEA and certified by SAMHSA. We anticipate that for beneficiaries receiving OUD treatment services from a mobile unit, some services included in the bundle for a given week may still be provided at the OTP, while some may be furnished via the mobile unit, which would make it difficult to determine which geographic locality adjustment to apply to the weekly bundle if the OTP and the location served by the mobile unit are subject to different geographic locality adjustments. Additionally, when services are furnished from a mobile unit, the OTP still incurs the cost of rent, staffing, supplies, etc. at the location of the OTP; therefore, we believe it is appropriate to apply the geographic locality adjustment as if the service were furnished at the OTP. Accordingly, we are proposing to amend the regulation at § 410.67(d)(4)(ii) to clarify that for purposes of the geographic adjustment OUD treatment services furnished via an OTP mobile unit will be treated as if the services were furnished at the physical location of the OTP registered with DEA and certified by SAMHSA. As stated in the CY 2020 PFS final rule, because HCPCS codes G2067-G2075 cover episodes of care of 7 contiguous days, OTPs should not bill any of these codes for the same beneficiary more than once per 7 contiguous day period, with limited exceptions (84 FR 62649), and we are not proposing any changes to this policy, regardless of the location(s) at which the services are provided. As noted previously, we will continue monitoring the benefit for OUD treatment services furnished by OTPs, including services furnished by mobile units, for fraud, waste, and abuse, and will use existing administrative authorities to take necessary action, as appropriate. Start Printed Page 46092 5. Flexibilities for OTPs to Use Telecommunications for Initiation of Treatment With BuprenorphineWe have finalized several flexibilities for OTPs regarding the use of telecommunications, both during the PHE for COVID-19 and outside of the PHE. In the CY 2020 PFS final rule, we finalized a policy allowing OTPs to furnish substance use counseling and individual and group therapy via two-way interactive audio-video communication technology. In the 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 19258), we revised § 410.67(b)(3) and (4) on an interim final basis to allow the therapy and counseling portions of the weekly bundles, as well as the add-on code for additional counseling or therapy, to be furnished using audio-only telephone calls rather than via two-way interactive audio-video communication technology during the PHE for the COVID-19 if beneficiaries do not have access to two-way audio/video communications technology, provided all other applicable requirements are met. In the CY 2022 PFS final rule (86 FR 65341 through 65343), we finalized that after the conclusion of the PHE for COVID-19, OTPs are permitted to furnish substance use counseling and individual and group therapy via audio-only telephone calls when the beneficiary cannot access or does not consent to the use of audio and video. 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 appeared in the May 8, 2020 Federal Register (85 FR 27558), we revised § 410.67(b)(7) on an interim final basis to allow periodic assessments to be furnished during the PHE for COVID-19 via two-way interactive audio-video communication technology and, in cases where beneficiaries do not have access to two-way audio-video communication technology, to permit the periodic assessments to be furnished using audio-only telephone calls rather than via two-way interactive audio-video communication technology, provided all other applicable requirements are met. In the CY 2021 PFS final rule (85 FR 84690), we finalized our proposal to revise § 410.67(b)(7) to provide that periodic assessments (HCPCS code G2077) must be furnished during a face-to-face encounter, which includes services furnished via two-way interactive audio-video communication technology, as clinically appropriate, provided all other applicable requirements are met, on a permanent basis. However, the flexibility for OTPs to furnish periodic assessments via audio-only communication is limited to the duration of the PHE for COVID-19. There are currently no flexibilities under Medicare for OTPs to furnish the intake add-on code via communication technology. SAMHSA regulations under 42 CFR 8.12(f)(2) require a complete physical evaluation before a patient begins treatment at an OTP. However, during the PHE, DEA and SAMHSA have allowed OTPs to initiate treatment with buprenorphine via audio-video and audio-only communication without first conducting an in-person evaluation.[161] According to guidance issued by SAMHSA [162] regarding the treatment of OUD during the PHE, SAMHSA made the decision to exercise its authority to exempt OTPs from the requirement to perform an in-person physical evaluation (under 42 CFR 8.12(f)(2)) for any patient who will be treated by the OTP with buprenorphine if a program physician, primary care physician, or an authorized healthcare professional under the supervision of a program physician, determines that an adequate evaluation of the patient can be accomplished via telehealth. This exemption applies exclusively to OTP patients treated with buprenorphine and does not apply to new patients treated with methadone. This exemption will continue only for the duration of the declared PHE for COVID-19 unless regulations are issued making this flexibility permanent. For services paid under the PFS, Medicare telehealth services fall under the authority of section 1834(m) of the Act, which generally limits payment for telehealth services to those furnished to patients located in specified types of medical care settings in mostly rural locations. The codes describing new patient office/outpatient visits (CPT codes 99202 through 99205) are on the Medicare Telehealth list. As discussed in the CY 2019 PFS final rule (83 FR 59496), section 2001(a) of the SUPPORT Act (Pub. L. 115-271, October 24, 2018) amended section 1834(m) of the Act, adding a new paragraph (7) that removed the geographic limitations for telehealth services furnished on or after July 1, 2019, to individuals with a diagnosed SUD for the purpose of treating the SUD or a co-occurring mental health disorder. Section 1834(m)(7) of the Act also allows telehealth services for treatment of a diagnosed SUD or co-occurring mental health disorder to be furnished to individuals at any telehealth originating site (other than a renal dialysis facility), including in a patient's home. In addition, as discussed in the CY 2022 PFS final rule (86 FR 65055), section 123 of the Consolidated Appropriations Act, 2021 (CAA 2021) (Pub. L. 116-260, December 27, 2020) modified the circumstances under which Medicare makes payment under the PFS for mental health services furnished via telehealth following the PHE. Specifically, it removed the geographic originating site restrictions and added the home of the individual as a permissible originating site for telehealth services when furnished for the purposes of diagnosis, evaluation, or treatment of a mental health disorder. In addition to the flexibilities authorized by section 2001(a) of the SUPPORT Act and section 123 of the CAA 2021, in the CY 2022 PFS final rule (86 FR 65055), for services for the diagnosis, evaluation or treatment of mental health conditions, including SUDs, CMS revised the regulatory definition of an “interactive telecommunications system” to permit the use of audio-only communications technology for mental health telehealth services under certain conditions when provided to beneficiaries located in their home. Given these flexibilities for the treatment, diagnosis, or evaluation of mental health disorders, including SUDs, under the PFS, we are proposing to allow the OTP intake add-on code to be furnished via two-way audio-video communications technology when billed for the initiation of treatment with buprenorphine, to the extent that the use of audio-video telecommunications technology to initiate treatment with buprenorphine is authorized by DEA and SAMHSA at the time the service is furnished. We are also proposing to permit the use of audio-only communication technology to initiate treatment with buprenorphine in cases where audio-video technology is not available to the beneficiary. As we explained in the CY 2022 PFS final rule (86 FR 65342), 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 Start Printed Page 46093 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 note under this proposal, the initiation of treatment with buprenorphine using telecommunications technology would be considered an intake activity for purposes of § 410.67(b)(6) only to the extent that the use of such telecommunications technology is permitted under the applicable DEA and SAMHSA regulations and guidance at the time the services are furnished. Accordingly, we are proposing to revise the regulation at § 410.67(b)(6) to state that services to initiate treatment with buprenorphine may be furnished via two-way interactive audio-video communication technology, as clinically appropriate, and in compliance with all applicable requirements. In cases where two-way audio-video communications technology is not available to the beneficiary, services to initiate treatment with buprenorphine can be furnished using audio-only telephone calls if all other applicable requirements are met. Finally, we are seeking comment on whether we should allow periodic assessments to continue to be furnished using audio-only communication technology following the end of the PHE for COVID-19 for patients who are receiving treatment via buprenorphine, and if this flexibility should also continue to apply to patients receiving methadone or naltrexone. G. Medicare Shared Savings Program1. Executive Summary and Backgrounda. PurposeAs of January 1, 2022, over 11 million people with Medicare receive care from one of the 528,966 health care providers in the 483 accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (Shared Savings Program), the largest value-based purchasing program in the country.[163] Eligible groups of providers and suppliers, including physicians, hospitals, and other healthcare providers, may participate in the Shared Savings Program by forming or joining an ACO and in so doing agree to become accountable for the total cost and quality of care provided under Traditional Medicare to an assigned population of Medicare fee-for-service beneficiaries. Under the Shared Savings Program, providers and suppliers that participate in an ACO continue to receive traditional Medicare FFS payments under Parts A and B, and the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements, and in some instances may be required to share in losses if it increases health care spending. The proposed changes to the Shared Savings Program described in this section of this proposed rule, and the topics on which we seek comment, are intended to advance Medicare's value-based care strategy of growth, alignment, and equity, with many proposals overlapping these categories. The Shared Savings Program offers different participation options (tracks) that allow ACOs to assume various levels of risk. The BASIC track offers a glide path for eligible ACOs to transition from a one-sided shared savings-only model to progressively higher increments of financial risk and potential reward under two-sided shared savings and shared losses models [164] within a single 5-year agreement period.[165] ACOs that enter the ENHANCED track accept greater financial risk for their assigned beneficiaries in exchange for potentially higher financial rewards. For the performance year beginning on January 1, 2022, 59 percent of Shared Savings Program ACOs are under two-sided models. Historically, we have observed that ACOs in performance-based risk tracks have better financial performance than ACOs in shared savings only tracks and that low revenue ACOs (which may tend to be small, physician only ACOs) have better financial performance than high revenue ACOs (whose composition likely includes institutional providers, particularly hospitals and health systems).[166] We have also observed that the highest earning ACOs had a higher proportion of beneficiaries that were members of racial and ethnic minority communities and included a greater proportion of ESRD, disabled, and aged/dual eligible Medicare and Medicaid beneficiaries than the lowest earning ACOs. Through the changes we are proposing in this proposed rule, we also seek to reverse certain recent trends [167 168] in the Shared Savings Program: in recent years growth in the number of beneficiaries assigned to ACOs has plateaued; higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks; and access to ACOs appears inequitable as shown by data indicating that Black (or African American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries are less likely to be assigned to a Shared Savings Program ACO than their Non-Hispanic White counterparts. Several of the proposals we are making in this proposed rule are expected to advance equity within the Shared Savings Program. Based on feedback from health care providers treating underserved populations that they require upfront capital to make the necessary investments to succeed in accountable care and may also need additional time under a one-sided model before transitioning to performance-based risk, we are proposing to provide advance shared savings payments to low revenue ACOs that are inexperienced with performance-based risk Medicare ACO initiatives, that are new to the Shared Savings Program (that is, not a renewing ACO or a re-entering ACO), and that serve underserved populations. These advance investment payments (AIPs) would increase when more beneficiaries who are dually eligible for Medicare and Medicaid or who live in areas with high deprivation (measured by the area deprivation index (ADI)), or both, are assigned to the ACO. Subject to certain limitations, these funds would be available to address the social needs of people with Medicare, as well as health care provider staffing and infrastructure. We are also proposing other modifications to certain existing policies under the Shared Savings Program to support organizations new to accountable care by providing greater flexibility in the progression to performance-based risk, allowing these organizations more time to redesign Start Printed Page 46094 their care processes to be successful under risk arrangements. We are proposing a health equity adjustment that would upwardly adjust ACOs' quality performance scores to continue encouraging high ACO quality performance, transition ACOs to all-payer eCQMs/MIPS CQMs, and support those ACOs serving a high proportion of underserved beneficiaries while also encouraging all ACOs to treat underserved populations. Finally, we are proposing certain changes to our benchmarking methodologies that are designed to encourage participation by health care providers who care for populations that include a high percentage of beneficiaries with high clinical risk factors and beneficiaries dually eligible for Medicare and Medicaid. Many of these proposals are the result of our efforts to align policies under the Shared Savings Program and under the Innovation Center's ACO models. For example, the proposed AIPs are derived from learnings from the ACO Investment Model (AIM), an Innovation Center model that tested the effects of making advanced payments to certain ACOs participating in the Shared Savings Program. This proposal to incorporate AIPs into the Shared Savings Program payment methodology is an example of how our larger ACO strategy of having the Innovation Center test new payment and service delivery models on the Shared Savings Program “chassis” can better harmonize policies across Medicare ACO initiatives and enable us to scale any findings. The Innovation Center recently announced the elimination of the ACO Track of the Community Health and Rural Transformation (CHART) Model, which would have provided advance shared savings payments to new rural ACOs participating in SSP, similar to AIM. We believe the proposal to incorporate AIPs into the Shared Savings Program will make the Shared Savings Program attractive to organizations that were previously considering participation in the ACO Track of the Community Health and Rural Transformation (CHART) Model. The CHART Model ACO Track specifically targeted ACOs whose providers and suppliers were located in rural areas. We believe the proposed methodology to determine payments based upon a beneficiary's risk factors-based score will allow for greater reach to ACOs operating in under-resourced communities and encourage providers and suppliers in rural areas to form ACOs. As we seek to increase the percentage of people with Medicare in accountable care arrangements, we are balancing incentives and participation options to serve a dual purpose of sustaining participation by existing ACOs and increasing program growth, recognizing that ACOs vary in their composition of providers/suppliers, the needs of the populations they serve, and have varying degrees of efficiency relative to their region and experience with accountable care initiatives. In this proposed rule, we are building on the existing Shared Savings Program benchmarking methodology by proposing modifications to strengthen financial incentives for long term participation by reducing the impact of ACOs' performance on their benchmarks, to address the impact of ACO market penetration on regional expenditures used to adjust and update benchmarks, and to support the business case for ACOs serving high risk and high dually eligible populations to participate, which will help sustain participation and grow the program. Additionally, we are proposing modifications to the benchmarking methodology to mitigate bias in regional expenditure calculations that benefits ACOs electing prospective assignment. The changes we are proposing to the benchmarking methodology used in the Shared Savings Program would align with our consideration of more long-term benchmarking concepts that would move toward the use of administratively set benchmarks in order to grow and sustain long term program participation as discussed in the Request for Information. We are also proposing to expand opportunities for certain low revenue ACOs participating in the BASIC track to share in savings even if they do not meet the minimum savings rate (MSR) to allow for investments in care redesign and quality improvement activities among less capitalized ACOs. We are proposing changes to the quality reporting and the quality performance requirements that are responsive to interested parties' feedback, and designed to support the transition of ACOs to all payer quality measure reporting. These proposals include reinstitution of a sliding scale reflecting an ACO's quality performance for use in determining shared savings for ACOs, regardless of how they report quality data, and to revise the approach for determining shared losses for ENHANCED track ACOs. We are proposing to implement a health equity adjustment to an ACO's quality performance score to recognize high quality performance by ACOs with high underserved populations. We are also proposing to extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option. We are soliciting input from interested parties to inform future rulemaking through requests for information addressing social determinants of health in ACO populations, and the addition of new Consumer Assessment of Healthcare Providers and Systems (CAHPS) for the Merit-based Incentive Payment System (MIPS) survey questions. We are also proposing to resolve a gap in our current policy for benchmarking quality measures reported through the CMS Web Interface. We are proposing changes that are important for improved operations of the Shared Savings Program, including policies to reduce ACO administrative burden. Specifically, we are proposing to eliminate the requirement for an ACO to submit marketing materials to CMS for review and approval prior to disseminating materials to beneficiaries and ACO participants, and modifications to streamline the SNF 3-day rule waiver application review process. We are also proposing modifications to the beneficiary notification requirements, including to reduce the frequency with which beneficiary information notices are provided to beneficiaries from annually to a minimum of once per agreement period, with a proposed follow-up beneficiary communication serving to promote beneficiary comprehension of the standardized written notice. Further, we are proposing to revise the data sharing requirements to recognize ACOs structured as organized health care arrangements (OHCAs) for data sharing purposes. b. Statutory and Regulatory Background on the Shared Savings ProgramOn 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 of 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 Start Printed Page 46095 growth in expenditures under Medicare Parts A and B. (See 42 U.S.C. 1395jjj.) 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 agreement periods expired 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 final rule and the CY 2022 PFS final rule for a summary of policies finalized in prior PFS rules (84 FR 40705 and 86 FR 65253). In the CY 2022 PFS final rule (86 FR 65253 through 65306), we finalized changes to Shared Savings Program policies, including to amend the reporting requirements under the APM Performance Pathway (APP) for performance year 2022 and subsequent Start Printed Page 46096 performance years, to freeze the quality performance standard at the 30th percentile MIPS Quality performance category score for performance year 2023, to update the definition of primary care services used in beneficiary assignment at § 425.400(c), to revise the repayment mechanism arrangement policy, to streamline the application process, and to amend the beneficiary notification process. 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. We have also made updates to policies under the Quality Payment Program through the annual CY PFS rules. c. Summary of Shared Savings Program ProposalsIn sections III.G.2. through III.G.6. of this proposed rule, we propose modifications to the Shared Savings Program's policies. As a general summary, we are proposing the following changes to Shared Savings Program policies to:
++ Update the definition of primary care services used in beneficiary assignment at § 425.400(c). ++ Identify how CMS certification numbers will be used in beneficiary assignment.
++ Establish an alternative quality performance standard for ACOs that do not meet the quality performance standard to share in savings at the maximum rate by reinstating a sliding scale approach for determining shared savings for ACOs, regardless of how they report quality data and revise the approach for determining shared losses for ENHANCED track ACOs. ++ Establish a health equity adjustment that would upwardly adjust an ACO's quality performance score, to reward ACOs that report all-payer eCQMs/MIPS CQMs, that are high performing on quality, and serve a high proportion of underserved beneficiaries. This proposed adjustment would add up to 10 bonus points to the ACO's MIPS quality performance category score. The resulting health equity adjusted quality performance score would be used to determine whether the ACO meets the quality performance standard set at the 30th percentile (for performance year 2023) or 40th percentile (for performance year 2024 and subsequent years) across all MIPS quality performance category scores; the final sharing rate for calculating shared savings payments under the BASIC track and the ENHANCED track for an ACO that meets the proposed alternative quality performance standard allowing for application of a sliding scale based on quality performance; and the shared loss rate for calculating shared losses under the ENHANCED track under the proposed modified approach to scaling shared losses. It would also be used when applying the extreme and uncontrollable circumstances policy for ACOs that report quality data via the APP and meet data completeness and case minimum requirements. ++ Extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option. ++ Change the nomenclature of the administrative claims measure Risk Standardized, All-Cause Unplanned Admissions for Multiple Chronic Conditions for MIPS to Clinician and Clinician Group Risk-standardized Hospital Admission Rates for Patients with Multiple Chronic Conditions to align with the MIPS program. ++ Clarify use of unweighted MIPS Quality performance category scores to determine the quality performance standard under the Shared Savings Program. ++ Clarify our policies on reopenings to address changes to MIPS quality performance category scores. ++ Establish policies for benchmarking quality measures reported through the CMS Web Interface for performance year 2022 through performance year 2024.
++ Incorporate a prospectively projected administrative growth factor, a variant of the United States Per Capita Cost (USPCC) referred to in this proposed rule as the Accountable Care Prospective Trend (ACPT), into a three-way blend with national and regional growth rates to update an ACO's historical benchmark and address increasing market saturation by ACOs in a regional service area (section III.G.5.c.(3) of this proposed rule). ++ Adjust benchmarks to account for prior savings, helping to mitigate lowering of an ACO's benchmark over time by returning to an ACO's benchmark an amount that reflects its success in lowering growth in expenditures from the previous agreement period (section III.G.5.c.(4) of this proposed rule). ++ Reduce the impact of negative regional adjustments on ACO benchmarks by reducing the cap on negative regional adjustments and gradually decreasing the negative Start Printed Page 46097 regional adjustment amount as an ACO's weighted-average prospective HCC risk score increases, or the proportion of dually eligible Medicare and Medicaid beneficiaries increases, or both (section III.G.5.c.(5) of this proposed rule).
We also describe several comment solicitations:
In combination, the Shared Savings Program proposals are anticipated to grow participation particularly from ACOs serving beneficiaries with greater needs and higher baseline spending. The incentive for ACOs to reduce spending over multiple agreement periods is also expected to be bolstered, for example by reducing the weighting on the regional component of the benchmark update and by providing a prior savings adjustment at rebasing. A further change will prevent an assignment bias from inflating benchmark adjustments for ACOs electing prospective assignment. In summary, we project a $15.5 billion decrease in spending on benefits (that is, savings from efficiency) and $650 million in higher net shared savings payments to ACOs, or $14.8 billion lower overall spending compared to the program baseline (which would have been projected to be a $4.2 billion net cost absent these changes). Certain policies, including both existing policies and the proposed new policies described in this proposed rule, rely upon the authority granted in section 1899(i)(3) of the Act to use other payment models that the Secretary determines will improve the quality and efficiency of items and services furnished under the Medicare program, and that do not result in program expenditures greater than those that would result under the statutory payment model. The following proposals require the use of our authority under section 1899(i) of the Act: allowing for AIPs as described in section III.G.2. of this proposed rule: the proposed modifications to the calculation of the shared loss rate under the ENHANCED track to allow for a sliding scale based on an alternative quality performance standard as described in section III.G.4. of this proposed rule; use of the ACPT/national-regional three-way blended benchmark update factor as described in section III.G.5.c.(3) of this proposed rule; the expansion of the criteria for certain low revenue ACOs participating in the BASIC track to qualify for shared savings in the event the ACO does not meet the MSR as required under section 1899(d)(1)(B)(i) of the Act as described in section III.G.5.f. of this proposed rule; and the exclusion of the proposed new supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals from the determination of Medicare Parts A and B expenditures used in certain financial calculations under the Shared Savings Program as described in section III.G.5.h. of this proposed rule. As described in the Regulatory Impact Analysis in section VII. and elsewhere in this proposed rule, these proposed changes to our payment methodology are expected to improve the quality and efficiency of care and are not expected to result in a situation in which the payment methodology under the Shared Savings Program, including all policies adopted under the authority of section 1899(i) of the Act, results in more spending under the program than would have resulted under the statutory payment methodology in section 1899(d) of the Act. We will continue to reexamine this projection in the future to ensure that the requirement under section 1899(i)(3)(B) of the Act that an alternative payment model not result in additional program expenditures continues to be satisfied. In the event that we later determine that the payment model that includes policies established under section 1899(i)(3) of Start Printed Page 46098 the Act no longer meets this requirement, we would undertake additional notice and comment rulemaking to make adjustments to the payment model to assure continued compliance with the statutory requirements. 2. Shared Savings Program Participation Optionsa. Increasing Participation in Accountable Care Models in Underserved Communities by Providing an Option for Advance Investment Payments to Certain ACOs(1) BackgroundIn the November 2011 final rule (76 FR 67969), we estimated an average of $0.58 million for the start-up investment costs and $1.27 million in ongoing annual operating costs for an ACO participating in the Shared Savings Program. This can be a substantial investment particularly for a small organization or an organization caring for underserved or more medically complex patients. The CMS Innovation Center has tested two models designed to support new ACOs in joining and succeeding in the Shared Savings Program. The Advance Payment (AP) ACO Model operated from 2012 to 2015, and the AIM operated from 2015 to 2018. The models tested whether up-front payments would increase participation in the Shared Savings Program by ACOs serving rural or underserved regions. The models also tested whether such payments would improve quality or reduce Medicare spending without negatively affecting quality.[169] Both models operated by pre-paying shared savings to ACOs participating in the Shared Savings Program and later recouping such amounts from earned shared savings. The AP ACO model tested whether the pre-payment of shared savings would increase participation in the Shared Savings Program by smaller providers and suppliers in rural and underserved areas, and whether these payments would allow ACOs to improve care for beneficiaries, generate Medicare savings more quickly, and increase the amount of total Medicare savings.[170] The eligibility standards for the AP ACO model required that an ACO enter the Shared Savings Program in April 2012 or July 2012. The ACO also had to meet one of the following standards: (1) not include any inpatient facilities and have less than $50 million in total annual revenue; or (2) not include any inpatient facilities other than critical access hospitals (CAHs) and/or Medicare low-volume rural hospitals and have less than $80 million in total annual revenue.[171] Prepaid shared savings included an up-front payment of $250,000 and a one-time payment of $36 per beneficiary, followed by an $8 per beneficiary per month payment for 2 years. AP ACOs received between $1.3-$2.7M in total prepaid shared savings.[172] CMS recovered pre-paid shared savings from an ACO's earned shared savings only if the ACO terminated before 3 years, in which case the ACO was required to immediately repay its prepaid shared savings payments in full.[173] AIM tested whether the pre-payment of shared savings helped to recruit and accelerated favorable outcomes for new ACOs in the Shared Savings Program from rural, low-penetration and underserved geographies.[174] There were two cohorts of AIM, referred to as Test 1 and Test 2. The eligibility standards to join Test 1 of AIM required that an ACO be: (1) new to the Shared Savings Program; (2) not include a hospital unless it was a critical access hospital or a small Inpatient Prospective Payment System (IPPS) hospital; and (3) not owned or operated by a health plan.[175] The prepaid shared savings amounts were distributed and recouped in the same amounts and manner as the AP ACO model for the majority of model participants.[176] ACOs joining Test 2 of AIM were not new to the Shared Savings Program and were required to directly repay any unrecouped prepaid shared savings at the end of their second Shared Savings Program agreement period. Conclusions from Test 2 of AIM were unable to be drawn due to low participation.[177] All further references to AIM refer to Test 1 of the model, unless otherwise specified. The results of the Innovation Center's evaluation of the AP ACO Model were inconclusive regarding the impact on quality or cost of care. While most ACOs included in the test continued to participate in the Shared Savings Program after the AP ACO Model ended, the Model did not significantly improve the quality or cost of care when compared to care provided outside the Shared Savings Program.[178] The results of the evaluation of AIM, however, found that the model was successful in meeting both its goals. AIM successfully encouraged ACOs to form in areas where ACOs may not have otherwise formed and where other Medicare payment and delivery innovations were less likely to be present.[179] The AIM Model also generated an estimated net aggregate reduction in spending by Medicare of $381.5 million after accounting for Medicare's payment of AIM funds and ACOs' earned shared savings.[180] AIM did not reduce the quality of care provided to beneficiaries.[181] We have received continued interest in the AIM and AP ACO models and ongoing requests to implement policies with similar up-front and ongoing payments for ACOs newly participating in the Shared Savings Program. Interested parties believe these models were valuable for transitioning small and rural practices into ACOs and believe there is ongoing need for this type of support. We agree, and we also believe that the Shared Savings Program should provide an entry point for all willing organizations who wish to move towards providing value-driven healthcare. Section 1899(i) of the Act authorizes the Secretary to use other payment models instead of the one-sided model described in section 1899(d) of the Act Start Printed Page 46099 so long as the Secretary determines that the other payment model will improve the quality and efficiency of items and services furnished to Medicare beneficiaries without additional program expenditures. We are interested in using the learnings from AIM and incorporating critical design features of AIM into the Shared Savings Program more broadly with the goals of increasing participation in the program by easing up-front costs for inexperienced, low revenue ACOs and supporting these ACOs in providing accountable care for underserved beneficiaries. We believe that advance payments of shared savings will improve health equity outcomes for Medicare beneficiaries by increasing Shared Savings Program participation in underserved regions and improving the success of ACOs in achieving shared savings and meeting quality metrics. Consequently, in accordance with the authority provided to the Secretary by section 1899(i) of the Act, we are proposing to make advance shared savings payments, referred to herein as advance investment payments (AIPs), to certain ACOs participating in the Shared Savings Program to improve the quality and efficiency of items and services furnished to Medicare beneficiaries by enhancing the accessibility of the Shared Savings Program. Such payments would be made pursuant to the standards we propose to establish in new § 425.630. We envision that this new payment option would distribute AIPs to ACOs for 2 years in order to reduce the financial barriers encountered by small providers and suppliers as they join the Shared Savings Program. These payments would be recouped from any shared savings the ACO earned. Funding the ACOs for 2 years would align with the policy in AIM. The AIPs are designed to reduce up-front costs that prevent providers and suppliers from forming ACOs, caring for beneficiaries in underserved communities, and achieving long term success in the Shared Savings Program. Section 1899(i)(3)(A) of the Act requires CMS to determine that AIPs will improve the quality and efficiency of items furnished to Medicare in order to make such payments. We believe that AIPs meet this standard because such payments would be modeled on the AIM payments, which were shown to improve the quality and efficiency of care. The AIM evaluation report concluded that AIM successfully encouraged ACOs to form in geographic areas where ACOs may not otherwise have formed, the up-front funding provided by CMS assisted in the formation of the ACOs, and there was a reduction in Medicare spending and utilization without a reduction in the quality of care provided or patient and caregiver experiences.[182] The AIM evaluation found that, across all AIM Test 1 ACOs, the model reduced per beneficiary per month (PBPM) total Medicare spending by an estimated $28.21 in PY1, $36.94 in PY2, and $38.73 in PY3 compared to beneficiaries in the AIM ACOs' non-ACO FFS market comparison group.[183] The estimates translated to an aggregate Medicare spending reduction of $131.0M in 2016, $187.7M in 2017, and $207.7 in 2018.[184] Section 1899(i)(3)(B) of the Act requires CMS to determine that AIPs, when implemented in combination with existing modifications made to the Shared Savings Program payment model specified in section 1899(d) of the Act, will not result in additional program expenditures. The addition of AIP meets this standard. Please review section VI.E.7 of this proposed rule for a fuller discussion of the financial impact of the Shared Savings Program payment model, including the findings necessary to demonstrate compliance with section 1899(i)(3)(B) of the Act. We intend to periodically reassess whether a payment model established under section 1899(i)(3) of the Act, including the payment of advance investments, continues to improve the quality and efficiency of items and services furnished to Medicare beneficiaries without resulting in additional program expenditures. If we determine that the payment model no longer satisfies the requirements of section 1899(i)(3) of the Act, for example if the payment model results in net program costs, we would undertake additional notice and comment rulemaking to make adjustments to our payment methodology to assure continued compliance with the statutory requirements. (2) EligibilityIn October of 2021, CMS outlined a renewed vision and strategy for how the Innovation Center will drive health system transformation to achieve equitable outcomes through high-quality, affordable, person-centered care for all beneficiaries.[185] We believe accountable care reduces fragmentation in patient care and lowers costs by giving providers and suppliers the incentives and tools to deliver high-quality, coordinated, team-based care. In partnership with the Innovation Center and in support of our shared goal of increasing the number of beneficiaries in a care relationship with accountability for quality and total cost of care, we are proposing broad eligibility requirements for AIPs that will lower the barrier of entry to the Shared Savings Program for low revenue ACOs who are inexperienced with risk. As discussed above, the AIPs are designed to assist ACOs that face difficulty funding the start-up costs for forming ACOs, caring for beneficiaries in underserved communities, and achieving long term success in the Shared Savings Program. Building upon AIM's success with new ACOs and ACOs inexperienced with performance-based risk Medicare ACO initiatives, we propose to limit the eligibility for these AIPs to these same groups. Our experience administering the Shared Savings Program suggests that re-entering and renewing ACOs have APM experience and would not need, or benefit as significantly from, the start-up funds that AIPs provide because they have already invested in creating an ACO. Additionally, we do not have data from our experience with AIM to conclude that previously established ACOs need or benefit from up-front shared savings. The final evaluation report for AIM could not draw conclusions for AIM Test 2 ACOs, which involved only previously established ACOs, because of the small number of AIM Test 2 ACOs and the variation in results between them. Six AIM Test 2 ACOs started AIM in April 2015 or January 2016. Two AIM Test 2 ACOs ceased participating in the Shared Savings Program at the end of 2015, leaving four AIM Test 2 ACOs evaluated in each of three performance years.[186] We are proposing eligibility criteria modified from the AIM eligibility criteria. The eligibility standards to join Test 1 of AIM required that an ACO be: (1) new to the Shared Savings Program; (2) not include a hospital unless it was a critical access hospital or a small IPPS hospital; and (3) not owned or operated by a health plan.[187] The model also Start Printed Page 46100 prioritized ACOs in rural locations and those in locations with low ACO penetration through the use of scoring criteria.[188] We believe certain eligibility modifications are necessary to scale advance payments from a model to a regular component of the Shared Savings Program and to align with the Innovation Center's stated vision for health care transformation. As AIM was only available to a limited number of ACOs, it relied on scoring criteria in addition to its eligibility standards to select the highest scoring applicants. The Shared Savings Program does not have a similar limitation; therefore, we are proposing more inclusive eligibility criteria. We are also broadening the eligibility criteria compared to AIM to reflect our belief that it is important to provide an incentive for providers and suppliers who serve high need beneficiaries in all areas to form ACOs. Similar to AIM, the Shared Savings Program intends to encourage the formation of new ACOs in rural areas; however, unlike AIM we also want to recognize that there are underserved beneficiaries who reside in urban areas who can also benefit from the high-quality coordinated care an ACO can provide. Additionally, underserved beneficiaries may receive care from providers and suppliers within a geographic area with high alternative payment model (APM) penetration. Generally, such providers and suppliers and the beneficiaries they serve are not or have not been part of an ACO previously. Therefore, we do not believe we should limit the opportunity for an ACO to receive AIPs to ACOs in only rural communities or in areas with low ACO penetration. We propose to establish the eligibility criteria for AIPs in § 425.630(b). Specifically, we propose that CMS must determine that an ACO meets all of the following criteria for the ACO to be eligible to begin receiving AIPs:
AIM required applicants to demonstrate an exceptional need for prepaid shared savings. In the Shared Savings Program, the definition of low revenue is a similar criterion for determining ACO funding needs. Under § 425.20, a low revenue ACO means an ACO whose total Medicare Parts A and B fee-for-service revenue of its ACO participants based on revenue for the most recent calendar year for which 12 months of data are available, is less than 35 percent of the total Medicare Parts A and B fee-for-service expenditures for the ACO's assigned beneficiaries based on expenditures for the most recent calendar year for which 12 months of data are available. Low revenue ACOs tend to be small, physician-only ACOs that are less well capitalized organizations. These ACOs may be encouraged to participate and remain in the program based on the availability of additional incentives, such as the opportunity to receive AIPs. We are proposing conforming changes to § 425.611(c)(4) to limit eligibility to low revenue ACOs. In accordance with § 425.611(c)(4), we adjust Shared Savings Program calculations to exclude all Parts A and B fee-for-service payment amounts for a beneficiary's episodes of care for treatment of COVID-19 from expenditure and revenue calculations for purposes of identifying whether an ACO is a high revenue ACO or low revenue ACO and determining an ACO's eligibility for participation options. We are proposing to revise § 425.611(c)(4) to exclude all Parts A and B fee-for-service payment amounts for a beneficiary's episodes of care for treatment of COVID-19 from expenditure and revenue calculations for purposes of determining an ACO's eligibility to receive AIPs. We propose to limit eligibility to ACOs applying to participate under any level of the BASIC track glide path because this participation option is indicative of an ACO's inexperience with performance-based risk. ACOs in the BASIC track are typically less experienced with risk and are more likely to benefit from up-front funding or ongoing financial assistance. In summary, we are proposing to create a new paragraph in § 425.100(d) to establish that an ACO may receive AIPs. We are also proposing in § 425.630(b) to specify the eligibility criteria for an ACO to begin receiving receive AIPs, and we are proposing conforming changes to § 425.630(c)(4). We seek comments on these proposals. (3) Application Procedure & ContentsWe propose to address the process for an ACO to apply for AIPs in § 425.630(c). Specifically, we propose that, to obtain a determination regarding whether an ACO may receive AIPs, the ACO must submit, as part of its application to participate in the Shared Savings Program, complete supplemental application information in the form and manner and by a deadline specified by CMS. The application cycle for AIPs would be conducted as part of and in conjunction with the Shared Savings Program application process under § 425.202 with instructions and timeline published through the Shared Savings Program website. We propose the initial application cycle to apply for AIPs would be for a January 1, 2024, start date. As noted in section III.G.2.a.(2) of this proposed rule, ACOs currently participating in the Shared Savings Program or applying to renew their participation agreement would not be eligible to apply. We intend to provide further information regarding the process, including the application and specific requirements such as the deadline for submitting applications, through subregulatory guidance and will also provide a feedback process to afford an opportunity for the applicant to clarify or revise its application. We propose in § 425.630(d)(1) that an ACO must submit sufficient information for CMS to determine whether the ACO is eligible to receive such payments. CMS would provide preliminary information to the applicant ACO about its eligibility to receive AIPs during the Phase 1 application cycle requests for information, and a final determination about its eligibility to receive AIPs at the time of final application dispositions. For example, we would provide preliminary information identifying whether an ACO is low revenue and inexperienced with performance-based risk through the ACO's application to participate in the Shared Savings Program. We further propose at § 425.630(d)(1) that an ACO would be required to submit a spend plan as part of its application for AIPs. At § 425.630(d)(2), we propose content requirements for spend plans. We propose that the plan must identify how the ACO will spend the AIPs during the agreement period to build care coordination capabilities (including coordination with community-based organizations, as appropriate), address specific health disparities, and meet other criteria under § 425.630. In addition, we propose that the spend plan must identify the categories of goods and services that will be purchased, the dollar amounts to be spent on the various categories, and such other information as may be specified by CMS. As more fully explained in section III.G.2.a.(4) of this proposed rule, we are Start Printed Page 46101 proposing at § 425.630(e)(4) to require ACOs to segregate AIPs from all other revenues by establishing and maintaining a separate account into which the ACO must immediately deposit all AIPs. Accordingly, we are also proposing at § 425.630(d)(2)(iii) that the spend plan must include a statement that the ACO has established a separate designated account for the deposit and expenditure of all AIPs in accordance with § 425.630(e)(4). We do not intend for the proposed spend plan to create a benchmark requirement against which we would hold the ACO accountable. Instead, we intend it to aid CMS in tracking ACO progress toward implementing their spend plan and any challenges or changes in strategy that occur following their receipt of AIPs. We believe that ACOs have the flexibility to better understand their needs over time and evolve their spending accordingly. While we do not intend an ACO's spend plan to limit it to specific uses of AIPs within the broad categories of acceptable uses, we would reserve the right to terminate an ACO's ability to receive the advance incentive payments if it is not in compliance with requirements of the Shared Savings Program (see our proposal described in section III.G.2.a.(7).(b) of this proposed rule). In addition, by certifying its application under § 425.202(a)(2), the ACO certifies that the information contained in the application, including the information necessary to determine eligibility for AIPs, is accurate, complete, and truthful. We propose at § 425.630(d)(3) that we would review the information submitted in the ACO's application to determine whether an ACO meets the eligibility criteria and other requirements for AIP and would approve or deny the application for AIPs accordingly. We would review the ACO's Shared Savings Program application simultaneously with the supplemental information in its AIP application. We note that the denial of an AIP application would be subject to reconsideration review in accordance with the standards specified in subpart I of part 425. In addition, we are proposing at § 425.630(d)(3) that CMS may review the spend plan at any time and require the ACO to make changes to its spend plan comply with § 425.630(e)(1) as a result of that review. Examples of permitted uses are described in section III.G.2.a.(4) of this proposed rule. Under our proposal, if the ACO fails to provide a spend plan that complies with § 425.630(e), CMS could terminate the ACO's AIPs pursuant to § 425.630(h)(1)(i) and take other remedial action under § 425.216 or § 425.218. As discussed in section III.G.2.a.(7).(a) of this proposed rule, we are also proposing to update our public reporting requirements under § 425.308 by adding new paragraph (b)(8) to require an ACO to publicly report its spend plan. We propose to require that the ACO post on its dedicated public reporting web page: (1) the total amount of AIPs received from CMS for each performance year; (2) the ACO's spend plan; and (3) an itemization of how the AIPs were actually spent during the year, including expenditure categories, the dollar amounts spent on the various categories, any changes to the spend plan as submitted under § 425.630(d)(1), and such other information as may be specified by CMS. The public reporting template that CMS provides to ACOs annually would be updated to reflect the new information categories that an ACO must report. We propose to add § 425.630(c) and (d) to establish standards for the contents of an application to be determined eligible for AIPs as well as the procedures for filing such an application. We solicit comments on these proposals. (4) Use and Management of PaymentsUnder section § 425.308(b)(4), ACOs are required to publicly report the total proportion of shared savings invested in infrastructure, redesigned care processes, and other resources required to support the goals of better health for populations, better care for individuals, and lower growth in expenditures, including the proportion of shared savings distributed among ACO participants. Although ACOs are required to report this information, our regulations do not require an ACO to spend its shared savings in any particular way. However, given the purpose of AIPs, the fact that they are made before any shared savings are actually earned by an ACO, and our proposed limitations on the recovery of these funds in the absence of any earned shared savings, we propose at § 425.630(e) to specify how an ACO may use AIPs. Similar to our experience with AIM, AIPs are intended to provide the means to build the ACO's population health management capabilities, including the provision of accountable care for underserved beneficiaries. AIPs are not intended to sit idle in an investment account or to serve purposes unrelated to the goals of AIPs. We propose at § 425.630(e) that AIPs must be used to improve the quality and efficiency of items and services furnished to beneficiaries by investing in increased staffing, health care infrastructure, and the provision of accountable care for underserved beneficiaries, which may include addressing social determinants of health. We emphasize, however, that AIP amounts are advance shared savings, and not payment or reimbursement for items or services under the three specified categories. We propose that expenditures of AIPs must comply with the beneficiary incentive provision at § 425.304 and all other applicable laws and regulations. Our proposal is intended to provide ACOs with flexibility to use payments within three specified categories of allowable uses. We solicit comment on whether there are additional categories of expenses that should be permitted in light of the purposes of AIPs. We will monitor how ACOs are spending these funds and will revisit these categories in future rulemaking if additional flexibilities or boundaries are required. We recognize that there are many ways to improve population health management and support the provision of accountable care for underserved beneficiaries. The most effective ways will vary by ACO. We believe ACOs know best the needs of their populations and how to use funds to meet program goals. We offer the following examples of permitted uses within the three categories: • Increased staffing. Hiring nurse case managers or other relevant support staff to implement screening for social determinants of health (SDOH); hiring community health workers, certified peer recovery specialists, other health care professionals with training in delivering culturally and linguistically tailored services; hiring a health equity officer; hiring behavioral health clinicians and case managers to integrate behavioral health treatment into the primary care setting; hiring oral health providers to integrate dental services into the primary care setting; or encouraging partnerships with healthcare systems and local, community-based organizations to increase organizational capacity to identify and address SDOH and connect individuals with culturally and linguistically tailored, accessible health care services, supports, and information at an appropriate literacy level. • SDOH strategies. Examples include developing or securing transportation services; housing-related services to address housing insecurity or homelessness, home or environmental modifications to support a healthy lifestyle, legal aid services to help patients' address social needs, employment-related services, food- Start Printed Page 46102 related services, utilities-related supports, services to support personal safety, services to reduce social isolation, services to help patients cope with or address financial strain or poverty, patient caregiver supports, providing remote access technologies, telemonitoring, and meals; ensuring individuals are able to access culturally and linguistically tailored, accessible health care services and supports that meet their needs, partnering with community-based organizations such as Area Agencies on Aging or Centers for Independent Living to address SDOH needs; or implementing systems to provide and track patient referrals to available community-based social services that assess and address social needs, as well as enable coordination and measurement of health and social care across the community where beneficiaries reside. CMS reserves the right to review any SDOH strategies and require that the ACO make changes as a result of that review. • Health Care Provider Infrastructure. Examples include investment in certified electronic health record technology (CEHRT) (including system enhancements and upgrades), connections to clinical data registries and networks that support health information exchange across disparate providers and systems involved in patient care, integration of ACO participant systems including tools to share and analyze operational and quality data, remote access technologies, telemonitoring, screening tools, case management or practice management systems to improve care coordination operations across the health and social care continuum, physical accessibility improvements, and tools to further integrate behavioral health or dental services into primary care settings. Where we refer to community-based organizations, we mean public or private not-for-profit entities that provide specific services to the community or targeted populations in the community to address the health and social needs of those populations. Such organizations are trusted entities that know the populations they serve and their communities, want to be engaged, and may have the infrastructure or systems in place to help coordinate supportive services that address social determinants of health or serve as a trusted source to share information.[189] They may include community-action agencies, housing agencies, area agencies on aging, or other non-profits that apply for grants to perform social services. They may receive grants from other agencies in the U.S. Department of Health and Human Services, including Federal grants administered by the Administration for Children and Families (ACF), Administration for Community Living (ACL), or the Centers for Disease Control, or other State-funded grants to provide social services. If an ACO wishes to address a social need, it is important for health providers who may not have expertise in providing social services to work with those community-based organizations that do have such expertise. We note that the Shared Savings Program does not prohibit ACOs from partnering with community-based organizations. Currently, if a community-based organization is enrolled in Medicare, they may already be an ACO participant or ACO provider or supplier. We believe community-based organizations play an important role in identifying and addressing gaps in health equity. We hope to encourage more ACOs to partner with community-based organizations whether they provide items and services reimbursed by Medicare or not. Regarding investments in networks that support health information exchange, we encourage ACOs to review the request for information in section II.A.3.B of this proposed rule regarding the recently released Trusted Exchange Framework and Common Agreement or TEFCA,[190] which includes discussion about how connecting to entities exchanging information under TEFCA can help to support health information exchange for a variety of use cases that may be relevant to ACOs. We propose in § 425.630(e)(2) to prohibit the use of AIPs for any expenses that would not constitute a permitted use of the funds. Similar to the AIM model, we intend for advance investment payments to encourage the formation of new ACOs that provide care to underserved beneficiaries, not simply to fund another business venture of an established company or to furnish items or services unrelated to the ACO or the beneficiaries it serves. Examples of prohibited uses of AIPs would include management company or parent company profit, performance bonuses, other provider salary augmentation, provision of medical services covered by Medicare, or items or activities unrelated to ACO operations that improve the quality and efficiency of items and services furnished to beneficiaries. However, performance bonuses could be tied to successful implementation of SDOH screenings or care management guidelines, or ACOs could pay a higher salary as necessary to retain a clinician who treats underserved beneficiaries. We solicit comment on these examples of prohibited uses and whether there are additional categories of expenses that should be prohibited in light of the purposes of AIPs. We will monitor how ACOs are spending these funds and will revisit these categories in future rulemaking if additional flexibilities or boundaries are required. Additionally, we propose that an ACO participating in Level E of the BASIC track may not use any advance shared savings payments to pay back any shared losses that it would have incurred as specified in a written notice from CMS under § 425.605(e)(2). To ensure compliance, we propose updating the annual certification requirements under § 425.302(a)(3) to require that the ACO certify that the payments were disbursed only for allowable uses. Level E of the BASIC track is currently an Advanced APM, and we expect it to remain an Advanced APM in future years. The level of risk in an Advanced APM is, by definition at § 414.1415(c), greater than a nominal amount; therefore, we are proposing that an ACO eligible to receive advance shared savings payments that is willing to take on such additional risk must remain liable for any losses incurred regardless of advance payments received. We propose at § 425.630(e)(4) to require ACOs to segregate AIPs from all other revenues by establishing and maintaining a separate account into which the ACO must immediately deposit all AIPs and from which all disbursements of such funds are made only for allowable uses. This would allow us to monitor whether the funds are used only for allowable uses and to ensure that AIPs do not pay for any prohibited uses under § 425.630(e)(2). We note that CMS would deposit AIPs into the same account used for the deposit of shared savings payments; that account must be specified in an ACO's Electronic Funds Transfer form submitted with its application. We propose that, upon receipt of AIPs, the ACO must immediately deposit the funds into the separate account designated for maintaining AIPs. As noted in section III.G.2.a.(4) of this proposed rule, we propose that the ACO's spend plan must also include a statement that the ACO has established a separate account for purposes of Start Printed Page 46103 segregating AIPs. Additionally, we propose to update our annual certification requirements under § 425.302 by adding new paragraph (a)(3)(iv) to require an ACO to certify at the end of each performance year that it has moved all AIPs received during that performance year into a designated AIP account, where the funds remained until spent as required under § 425.630(d). (5) Advance Investment Payment MethodologyIn AIM, prepaid shared savings included an up-front payment of $250,000 and a one-time payment of $36 per beneficiary, followed by a monthly payment of $8 per beneficiary per month for the first 2 performance years of an AIM ACO's agreement period. According to the AIM evaluation, AIM ACO leadership conveyed through interviews and the ACO Web survey that they wanted to join the Shared Savings Program to gain experience in delivering value-based care and remain independent, and that AIM funds were critical to building the infrastructure needed to implement their ACOs.[191] The evaluation also found that these new AIM ACOs consistently demonstrated greater reductions in key Medicare spending categories and related utilization compared to similar non-AIM Shared Savings Program ACOs.[192] Furthermore, there were greater reductions in all components of Medicare spending examined, including acute inpatient hospitalizations, outpatient visits, skilled nursing facility care, and home health use. The evaluation did not find reductions in Medicare spending and utilization to be offset by reductions in the quality of care provided or patient and caregiver experiences. We are proposing to provide an ACO that CMS determines meets the eligibility criteria described in section III.G.2.a.(2) of this proposed rule with AIPs during the first 2 performance years of the ACO's participation agreement. We are proposing that AIPs are comprised of two types of payments: a one-time payment of $250,000 and eight quarterly payments based on the number of assigned beneficiaries, capped at 10,000 beneficiaries. The proposed $250,000 one-time payment is informed by the AIM payment structure, which offered a $250,000 up-front fixed payment to new AIM ACO participants starting in the Shared Savings Program in 2015 and 2016. Under the model, the upfront fixed payment reflected the estimated upfront investment requirements to establish ACOs. Here, we are proposing a $250,000 one-time AIP because we believe that such a payment would similarly support an ACO in addressing the upfront investment requirements for a new, low revenue and inexperienced ACO to join the Shared Savings Program. We have experience with a fixed $250,000 upfront payment from AIM, which served ACOs that are similar in many ways to ACOs that would be served by the proposed AIPs. Furthermore, we believe that initial ACO start-up costs do not vary significantly by the size of an ACO or by the underlying level of risk of an assigned beneficiary population. However, we are considering alternative values of the one-time payment, such as allowing the one-time payment to vary by ACO based on the number of assigned beneficiaries, the risk factors of the ACO's assigned beneficiary population, or both. We seek comment on the proposal to provide ACOs with a one-time payment of $250,000, as well as these alternatives. The quarterly payments are informed by our experience in AIM where ACO participants had variable costs for clinical care management activities, such as clinical staff, which were supported by the per beneficiary per month payments offered to them in the model. We are proposing to make payments on a quarterly basis to balance providing ACOs with predictable cash flow to participate in the Shared Savings Program and simplifying operations for CMS. We considered other options for the frequency of the payments, such as monthly payments as were tested in AIM, or annual payments. Making more frequent payments, such as on a monthly basis, would result in additional operational burden for CMS because we would need to calculate the payments more frequently. Because the Shared Savings Program operates on a larger scale than AIM did, the burden of administering monthly advance payments is not feasible. Moreover, we believe that monthly payments offer little additional benefit to ACOs relative to quarterly payments. We are not proposing a single annual payment as we believe the benefit to ACOs of consistent payments on a quarterly basis outweighs the administrative costs of calculating quarterly payments. We seek comment on the proposed schedule of the AIPs to ACOs. We propose to determine the value of an ACO's upcoming quarterly payment amount prior to the start of the quarter based on the latest available assignment list for the performance year (see Table 40). We believe it is important to use the latest available assignment list because under current regulation the individual beneficiaries assigned to the ACO may change between annual and quarterly assignment runs. For ACOs under preliminary prospective assignment with retrospective reconciliation as described at § 425.400(a)(2) the assignment list is updated quarterly based on the most recent 12 months of data. For ACOs under prospective assignment as described at § 425.400(a)(3), the assignment list is updated quarterly to exclude beneficiaries that meet any of the exclusion criteria during the performance year. Therefore, we believe that using the latest available assignment list to determine the upcoming quarterly payment will best reflect the attributes of the ACO's assigned population. Start Printed Page 46104 We are also considering an alternative proposal for the timing of the quarterly payments calculation. Under this alternative, we would determine the ACO's quarterly payment at the start of the performance year based on the beneficiaries assigned to the ACO at the beginning of a performance year. The quarterly payment amount determined at the beginning of a performance year could remain fixed for the duration of that performance year. The total payments ACOs would receive over the course of a performance year would be known by the ACO at the start of that performance year. However, this alternative also carries the risk that CMS would underpay or overpay an ACO relative to an approach of redetermining the quarterly payment amount prior to the start of each quarter. We seek comment on this alternative proposal. We are proposing that the quarterly payments made to ACOs would be equal to the sum of per beneficiary payments for up to 10,000 beneficiaries. The per beneficiary payment amount would vary for each beneficiary based on a risk factors-based score that we would calculate for the beneficiary. The risk factors-based score would be informed by the beneficiary's dual eligibility status and the ADI national percentile ranking of the census block group of the beneficiary's primary address, described in further detail later in this section. The quarterly payments reflect expected variable ongoing operating costs that are related to the number and risk factors of the ACO's assigned beneficiaries. We propose to add a new § 425.630(f) to establish the frequency and payment methodology for AIPs. Specifically, we propose a one-time payment for ACOs at or near the beginning of PY 1 of the ACO's agreement period. Quarterly payments would be made each quarter for the first 2 performance years of the ACO's agreement period. We would complete the following steps to calculate the ACO's quarterly payment amount: • Step 1: Determine the ACO's assigned beneficiary population. The assigned beneficiaries used in determining the quarterly payment amount would be the beneficiaries most recently assigned to the ACO under § 425.400(a)(2) (for ACOs under preliminary prospective assignment with retrospective reconciliation) or § 425.400(a)(3) (for ACOs under prospective assignment), based on the certified ACO participant list for the relevant performance year. • Step 2: Assign each beneficiary a risk factors-based score. For each beneficiary in the assigned population identified in Step 1, CMS would do the following: ++ If the beneficiary is dually eligible for Medicare and Medicaid, assign a risk factors-based score of 100.[193] ++ If the beneficiary is not dually eligible, assign a risk factors-based score equal to the ADI national percentile rank of the census block group corresponding with the beneficiary's primary mailing address. ++ If the beneficiary is not dually eligible but cannot be matched with an ADI national percentile rank due to insufficient data, impute a risk factors-based score of 50.[194] • Step 3: Determine a beneficiary's payment amount. For each beneficiary in the assigned population, CMS would determine the payment amount that corresponds to the beneficiary's risk factors-based score according to the per beneficiary payment amounts specified by CMS elsewhere in this section (refer to Table 42). • Step 4: Calculate the ACO's total quarterly payment amount. The ACO's quarterly payment amount would be the sum of the payment amounts corresponding to each assigned beneficiary's risk factors-based score, capped at 10,000 beneficiaries. If the ACO has more than 10,000 assigned beneficiaries, CMS would calculate the quarterly payment amount based on the 10,000 assigned beneficiaries with the highest risk factors-based scores. As described earlier, a goal of AIPs is to reduce financial barriers for new, low revenue and inexperienced ACOs to join the Shared Savings Program. In addition to bringing ACOs into the program, as part of the Agency's goals to advance health equity, we are interested in using the AIPs to support ACOs in improving the care received by underserved beneficiaries. We believe that we will further the Agency's goal to advance health equity by basing the ACO's quarterly payment amount on the sum of per beneficiary payments that vary by a beneficiary's risk factors-based score, as informed by the ADI national percentile rank of the beneficiary's census block group and the beneficiary's dual eligibility status. We believe the ADI national percentile rank of the beneficiary's census block group and dual eligibility are good indicators of beneficiaries with high needs. The ADI measure is intended to capture local socioeconomic factors correlated with medical disparities and underservice, while the beneficiary level measure of dual eligibility is intended to capture socioeconomic challenges that could affect a beneficiary's ability to access care. The ADI was developed by researchers at the National Institutes of Health with the goal of quantifying and comparing social disadvantage across geographic neighborhoods. It is a composite measure derived through a combination of 17 input variables from census data. The 17 input variables across four domains are shown in Table 41. Start Printed Page 46105 The ADI is calculated at the census block group level through the US Census Bureau's American Community Survey. Census blocks, the smallest geographic area for which the Bureau of the Census collects and tabulates decennial census data, are formed by streets, roads, railroads, streams and other bodies of water, other visible physical and cultural features, and the legal boundaries shown on Census Bureau maps. A census block group is the next level above census blocks in the geographic hierarchy and is a combination of census blocks that is a subdivision of a census tract or block numbering area. The census block group typically contains 600 to 3,000 people and is the smallest geographic entity for which the decennial census tabulates and publishes sample data. Files containing the ADI of U.S. census block groups is publicly available through the Neighborhood Atlas from the University of Wisconsin.[195] It is a relative measure that is reported at the individual block group level, typically reported by nationwide percentile (1-100) or Statewide decile (1-10), with a higher percentile indicating greater disadvantage. The relative measure reported at the census block group level is referred to as the ADI national percentile rank. We are proposing to use the ADI national percentile rank for the census block group in which a beneficiary resides for that beneficiary's risk factors-based score if the beneficiary is not dually eligible for Medicare and Medicaid. Specifically, we are proposing to establish the ADI national percentile rank of the beneficiary's census block group derived from the beneficiary's latest mailing address in CMS data systems at the time of the calculation. Furthermore, we are proposing to use the most recently available version of the ADI. At the time of this proposed rule, the latest version available was the 2019 ADI which was based on the 2015-2019 ACS Five Year Estimates. The ADI data files are publicly available for download at https://www.neighborhoodatlas.medicine.wisc.edu/. We are proposing to use the beneficiary's dual eligibility status to inform the risk factors-based score. Specifically, we are proposing that if a beneficiary is dually eligible, the beneficiary's risk factors-based score would be 100. A score of 100 would ensure that the ACO receives the maximum payment amount for each beneficiary dually enrolled in Medicare and Medicaid, which would further the Agency's goal to ensure beneficiaries with dual eligibility have full access to seamless, high quality health care. To determine a beneficiary's dual eligibility status, we would consider the beneficiary's enrollment status in each month of a 12-month window. The 12-month window would correspond with the assignment window used for preliminary prospective assignment with retrospective reconciliation for that particular assignment run. For example, we are proposing to use PY1 Quarter 1 assignment to inform the quarterly payment we would make to the ACO in July of PY1; the preliminary prospective assignment window for that assignment run would be April 1 of the prior calendar year through March 30 of the current calendar year. Therefore, we would consider the beneficiary's dual eligibility status in each of those 12 months. If a beneficiary had zero months of dual enrollment, we would consider the beneficiary not dually enrolled. If the beneficiary had at least one month of dual enrollment in Medicare and Medicaid, we would consider the beneficiary dually enrolled. We are considering alternatives to assigning 100 points to the beneficiary for dual eligibility status. One alternative we are considering is to calculate a beneficiary's risk factors-based score as the sum of the ADI national percentile rank of the beneficiary's census block group and 25 points if the beneficiary is dually eligible for Medicare and Medicaid. The maximum risk factors-based score would therefore be 125, and we would revise the payment amount ranges to account for a higher maximum score. We are considering 25 points for dual status because through preliminary analysis we observed that the median ADI score for the population that was aligned to Direct Contracting Entities in PY 2021 was 42 with a standard deviation of 25. Furthermore, given the Start Printed Page 46106 fact that the ADI score is a variable value and the bonus points for dual eligibility status would be fixed at 25 points, the relative weight of the 25 points is lower for beneficiaries living in a relatively highly deprived area and higher for beneficiaries in a relatively advantaged area. For example, consider one dual eligible beneficiary and one non-dual eligible beneficiary, both living in a census block group with an ADI national percentile rank of 50 (the U.S. median). The dual eligible beneficiary would receive a risk factors-based score of 75 (50 plus 25), which is 50 percent higher than the risk factors-based score of the non-dual eligible beneficiary. For a dual eligible beneficiary who lives in a census block group with an ADI national percentile rank of 70 (more deprived than the median), 25 points would increase their score by 36 percent. There are many people who do not qualify for Medicaid but still face systemic and structural barriers to care. Therefore, we believe it would be reasonable to add a relatively moderate bonus to the beneficiary's ADI national percentile rank to calculate a combined risk factors-based score that values both dual status and other structural barriers to care that also may require upfront investments by an ACO to help their assigned beneficiaries overcome. We are seeking comment on an alternative proposal to calculate the beneficiary's risk factors-based score by taking the sum of the ADI national percentile rank where the beneficiary lives and 25 points if the beneficiary is dually eligible for Medicare and Medicaid. We are proposing per beneficiary payment amounts that increase as a beneficiary's risk factors-based score increases. The proposed per beneficiary payment amounts by range are shown in Table 42. A dually eligible beneficiary would receive a risk factors-based score of 100, which corresponds to a quarterly payment amount of $45. A beneficiary not dually eligible and residing in a census block group with an ADI in the 75th percentile would receive a risk factors-based score of 75 which corresponds to a quarterly payment amount of $40. We calibrated the proposed per beneficiary payment amounts against the distribution of risk factors-based scores for beneficiaries assigned to ACOs in PY 2020, such that the average ACO participating in PY2020 would have received approximately the same payment value across 2 performance years as the average ACO that participated in AIM. The payments would begin at $20 and would be scaled upward by increments of 4-5 dollars as the risk factors-based score increases. We are proposing that a beneficiary with a risk factors-based score of less than 25 would have a corresponding payment of $0, as a goal of the AIPs option is to encourage formation of new ACOs that serve underserved beneficiaries. A beneficiary risk factors-based score of less than 25 would indicate that the beneficiary is not dually eligible for Medicare and Medicaid and is residing in a census block group with low area deprivation. We are proposing that any beneficiary with a risk factors-based score of 85 or higher would receive the maximum payment of $45. These beneficiaries either have dual eligibility or reside in a census block group with high area deprivation; we consider beneficiaries with these factors to represent the highest need for upfront investments in care coordination interventions by ACOs. As we gain more experience with AIPs, we would reevaluate the effectiveness of the payment amounts in Table 42 and may propose modifications in future rulemaking. We are proposing to calculate the quarterly payment as the sum of the per beneficiary payment amounts corresponding to each assigned beneficiary, capped at 10,000 beneficiaries. The proposed 10,000 beneficiary cap is similar to what was tested in AIM. We believe a cap is necessary to insulate the Trust Funds from making extremely large quarterly payments to large ACOs. Also similar to AIM, we propose that if an ACO has more than 10,000 assigned beneficiaries, we would calculate the quarterly payment based on the 10,000 assigned beneficiaries with the highest risk factors-based scores, which would maximize the quarterly payment for the ACO. We are proposing under the new § 425.630(f) that CMS notifies in writing each ACO of its determination of the amount of AIP. If CMS does not make any AIP, the notice will specify the reason(s) why and inform the ACO of its right to request reconsideration review in accordance with the standards specified in subpart I of our regulations. Thus, with each quarterly payment we are proposing to provide the ACO with a report that shows our calculation of the ACO's quarterly payment amount, including the risk factors-based score we assigned to each beneficiary used as part of the calculation, and the per beneficiary payment that corresponds to that score. We are considering alternative methodologies to calculating an ACO's quarterly payment. We are considering an approach of determining an ACO's average risk factors-based score based on all of the ACO's assigned beneficiaries. That is, we would take the sum of the risk factors-based scores for each of the ACO's assigned beneficiaries and divide by the total number of the ACO's assigned beneficiaries. In this alternative, ACOs with an average risk factors-based score above the median would have their per beneficiary payment amount scaled upward and those with an average risk factors-based score below the median would have their per beneficiary payment amount scaled downward. An ACO with an average risk factors-based score of the median would have their per beneficiary payment amount set to $30. An ACO with an average risk factors-based score greater than the median would have their per beneficiary payment amount increased by the percentage difference of the score compared to the median. For example, if the median is 50, an ACO with an average risk factors-based score of 70 would have their per beneficiary payment amount increased by 20 percent to $36 and an ACO with an average risk factors-based score of 32 would have their per beneficiary payment amount reduced by 18 percent Start Printed Page 46107 to $24.60. The quarterly payment would equal the per beneficiary per quarter payment amount multiplied by the number of assigned beneficiaries, capped at 10,000 beneficiaries. This alternative approach would allow us to consider the risk factors-based scores of all of an ACO's assigned beneficiaries, not only the 10,000 assigned beneficiaries with the highest risk factors-based scores, in determining the ACO's quarterly payment. We seek comment on this alternative methodology. We also are considering an alternative proposal to identify underserved beneficiaries based on whether their mailing address is located in a Health Professional Shortage Area (HPSA) for primary care instead of the beneficiary's mailing address' ADI percentile rank. As part of the Health Resources and Services Administration's (HRSA) cooperative agreement with the State Primary Care Offices, the State Primary Care Offices conduct needs assessment in their States, determine what areas are eligible for designations, and submit designation applications to HRSA. HRSA reviews the HPSA applications submitted by the State Primary Care Offices, and—if they meet the designation eligibility criteria for the type of HPSA the application is for—designates a HPSA. HPSAs are defined under section 332(a) of the Public Health Service Act. HPSA designations identify geographic areas, population groups, or facilities within the United States that are experiencing a shortage of health care professionals. Geographic HPSAs are defined as having a shortage of providers services for the entire population within an established geographic area; population HPSAs, in which there is a shortage of providers services for a specific population subset within an established geographic area; and facility HPSAs, in which there is a shortage of providers for that include certain categories of facilities. The Health Resources and Services Administration (HRSA) is responsible for making these HPSA designations in accordance with section 332(a) of the Public Health Service Act. Under this alternative, the risk factor-based score would be based on the sum of points assigned based on whether an assigned beneficiary is residing in an area designated as a geographic HPSA, as determined by the beneficiary's mailing address, and whether a beneficiary is dually eligible for Medicare and Medicaid. As a result, there would be three different per beneficiary payment amounts based on whether an assigned beneficiary is: (1) both residing in a geographic HPSA and dually eligible for Medicare and Medicaid; (2) residing in a geographic HPSA only; or (3) dually eligible for Medicare and Medicaid only. Under this alternative, we would not provide a per beneficiary payment amount if the assigned beneficiary is not in a geographic HPSA and not dually eligible for Medicare and Medicaid. As we believe the ADI metric can support identification of beneficiaries who face a variety of social determinants to health, not only health provider shortages, we are proposing to use ADI. However, we are seeking comment on an alternative methodology of using HPSA scores. We are also considering an alternative methodology that additionally considers whether a beneficiary receives a Part D low income subsidy from Medicare in CMS' calculation of the quarterly payment amount.[196] In this alternative, the risk factors-based score would be equal to the assigned beneficiary's ADI national percentile or 100 points if the beneficiary is dually enrolled in Medicare and Medicaid or receives a Part D low income subsidy from Medicare. We are seeking comment on this alternative methodology. There are circumstances where a beneficiary may not have an ADI national percentile rank. In the cases where Medicare beneficiaries have a missing or partial address in our database, we will not be able to match them with a census block group. In a preliminary review of Medicare beneficiary information, less than 2 percent of beneficiaries could not be matched to a census block group due to missing or insufficient mailing address data. Additionally, under the ADI methodology approximately 2 percent of U.S. census block groups do not receive an ADI national percentile rank due to data suppression criteria. These suppression criteria include: fewer than 100 people, fewer than 30 housing units, or more than 33 percent of the population living in group quarters or missing core component variables. In our preliminary review of Medicare beneficiary information, approximately 1 percent of Medicare beneficiaries had sufficient address data, but were in a U.S. census block group without a national percentile rank due to data suppression criteria. For beneficiaries with no ADI national percentile rank due to missing or insufficient mailing address data or data suppression criteria, and are not automatically receiving a score of 100 for being a beneficiary who is dually eligible for Medicare and Medicaid, we propose to impute a value of 50 in place of the ADI national percentile rank for the purposes of determining an assigned beneficiary's risk factors-based score and per beneficiary payment amount. An imputed ADI ranking of 50 corresponds to the average national ADI ranking and would thus be the most neutral imputed value. This would avoid biasing an ACO's payments in either direction due to missing information. We seek comment on this proposal to impute a value in place of the ADI national percentile rank to address missing beneficiary information when calculating the risk factors-based score. To summarize, we are proposing to provide an ACO with a one-time payment of $250,000 prior to the start of the ACO's first performance year. We are additionally proposing to calculate an ACO's upcoming quarterly payment prior to the start of the quarter, using the latest available assignment list. We would calculate an ACO's quarterly payment amount based on risk factors-based scores of up to 10,000 beneficiaries assigned to the ACO prior to the start of the performance year, and ACOs with more than 10,000 beneficiaries would have a quarterly payment calculated based on the 10,000 beneficiaries assigned to the ACO with the highest risk factors-based scores. We are proposing to assign a risk factors-based score for each beneficiary using the ADI national percentile rank of the beneficiary's census block group or assigning 100 points if the beneficiary is dually eligible for Medicare and Medicaid. We are proposing to impute a value of 50 in place of an ADI national percentile rank if the beneficiary is not dually eligible for Medicare and Medicaid and cannot be matched with an ADI national percentile rank due to insufficient data. Finally, we are proposing dollar value amounts that vary by risk factors-based score, in that the amounts gradually increase as the risk factors-based score increases. We seek comment on each of these proposals. (6) Duration of Advance Investment PaymentIn AIM, ACOs in the model participated in 3-year agreements in the Shared Savings Program, and they received prepaid shared savings for the first 2 years of their participation and were allowed to spend that funding over their entire 3-year agreement period. In AIM, we observed that many ACO Start Printed Page 46108 model participants needed the entire agreement period to be able to spend the prepaid shared savings they received under the model. Based on our experience with AIM, we are proposing that the ACOs would receive AIPs (meaning one-time payment plus quarterly payments) in the first 2 years of their participation agreement and would be permitted to spend the AIPs over their entire 5-year agreement period. The requirement that funds be spent during the agreement period furthers our goals of supporting the establishment of ACOs and delivering care to beneficiaries in a prompt manner. We are seeking public comments on our proposal to provide AIPs to ACOs for the first 2 years of the ACO's performance period, to allow ACOs to spend those payments over the duration of their 5-year agreement period, and to send a demand letter for any unspent funds at the end of the ACO's agreement period. We are proposing at § 425.630(e)(3) that an ACO may spend an AIP over its entire agreement period and must repay CMS any unspent funds at the end of its agreement period. CMS will issue a demand letter for any such amounts. (7) Compliance and Monitoring(a) Public Reporting and Monitoring of Spend PlanWe propose to monitor the spending of AIPs to provide CMS with a clear indication of how ACOs intend to spend AIPs, provide adequate protection to the Medicare Trust Funds, and to prevent funds from being misdirected or appropriated for activities that do not constitute a permitted use of the funds. We would do so by comparing the anticipated spending as set forth in the spend plan submitted with an ACO's application against the actual spending as reported on the ACO's public reporting webpage, including any expenditures not identified in the spend plan. The reported annual spending must include any expenditures of AIPs on items not identified in the spend plan. ACOs would be required to annually report their actual expenditures via an updated spend plan on their public reporting webpage. We believe that transparency of information in the health care sector facilitates more informed patient choice and offers incentives and feedback that help improve the quality and lower the cost of care and improve oversight with respect to program integrity. As CMS has discussed in previous final rules, improved transparency supports a number of program requirements. In particular, increased transparency is consistent with and supports the requirement under section 1899(b)(2)(A) of the Act for an ACO to be willing to “become accountable for the quality, cost, and overall care” of the Medicare beneficiaries assigned to it. Therefore, we believe it is desirable and consistent with section 1899(b)(2)(A) of the Act for several aspects of an ACO's use of AIPs to be available to the public. Making this information available will provide both Medicare beneficiaries and the general public with insight into the use of AIP funds by an ACO. Accordingly, we are proposing to modify § 425.308 to require that an ACO annually report on its public reporting webpage information regarding AIPs. Specifically, under proposed new § 425.308(b)(8), we are proposing that, for each performance year, an ACO would be required to report (in a standardized format specified by CMS) its spend plan, the total amount of AIPs received, and an itemization of how any AIPs were actually spent during the year, including expenditure categories, the dollar amounts spent on the various categories, any changes to the spend plan as submitted under § 425.630(d)(1), and such other information as may be specified by CMS. We propose that this itemization would include expenditures not identified or anticipated in the ACO's submitted spend plan, and any amounts remaining unspent. Under this proposal, if CMS determined that an ACO had disbursed AIPs for a prohibited use under proposed § 425.630(e)(2), CMS could terminate the ACO's receipt of AIPs under proposed § 425.630(h), as discussed later in this section. Any AIPs that are unspent at the end of the ACO's agreement period must be repaid to CMS under proposed § 425.630(e)(3), as discussed above. Additionally, CMS could take compliance action as specified in §§ 425.216 and 425.218 if an ACO spent the funds on a prohibited use or if have unspent funds at the end of the agreement period. We seek comment on all aspects of this proposal. We note that under existing § 425.314, ACOs would be required to retain adequate books and records to ensure that CMS has the information necessary to conduct appropriate monitoring and oversight of ACOs' use of AIPs (for example, invoices, receipts, and other supporting documentation of AIP disbursements). To protect the program and the Medicare Trust Funds, we may use our authority under §§ 425.314 and 425.316 to audit ACO compliance with Shared Savings Program requirements and to monitor the performance of ACOs, respectively. We will conduct audits as necessary to monitor and assess an ACO's use of AIPs and compliance with other requirements related to such payments. (b) Monitoring for Changes in ACO Experience With Risk and ACO RevenueAs described in section III.G.2.a.(2) of this proposed rule, under the new § 425.630(b) ACOs must meet the following basic criteria to be eligible for AIPs:
Based on our program experience, the inexperienced/experienced and low/high revenue ACO determination could be affected by changes in the ACO participant list that are made during the course of the agreement period, where the changes are not motivated by the ACO's desire to avoid program requirements regarding participation options. ACO participant list changes during the agreement period could affect the categorization of ACOs, particularly for ACOs close to the threshold percentage. We considered that an ACO may change its composition of ACO participants each performance year. Any approach under which we would apply different policies to ACOs based on a determination of ACO participant prior experience under performance-based risk would need to recognize the potential for an ACO to add or remove ACO participants which could affect whether an ACO meets the definition of experienced with performance-based risk Medicare ACO initiatives. We are concerned about the possibility that an ACO may be eligible to receive AIPs and then quickly thereafter seek to add ACO participants experienced with performance-based risk, thereby avoiding these inexperience and low revenue eligibility requirements. To identify and address these circumstances, we propose at § 425.316(e)(1) that CMS will monitor ACOs that receive AIPs to determine if they remain low revenue ACOs that are inexperienced with performance-based risk. We would monitor ACOs for changes in the risk experience of ACO participants that would cause an ACO to be considered experienced with performance-based risk or a high Start Printed Page 46109 revenue ACO and therefore ineligible for AIPs. We propose at § 425.316(e)(2) to specify that if an ACO that receives AIPs and becomes experienced with performance-based risk Medicare ACO initiatives or becomes a high revenue ACO during any performance year of the agreement period, CMS will cease paying the ACO AIPs starting the quarter after the ACO became experienced with performance-based risk Medicare ACO initiatives or became a high revenue ACO and may take compliance action as specified in §§ 425.216 and 425.218. Under proposed § 425.316(e)(3), the ACO would be obligated to repay spent and unspent AIPs if CMS takes pre-termination action under § 425.216 and the ACO continues to be experienced with performance-based risk Medicare ACO initiatives or a high revenue ACO after a deadline specified by CMS pursuant to such compliance action (for example, the next deadline for updating the ACO participant list). To retain its AIP, an ACO that CMS determines to be experienced with performance-based risk or a high revenue ACO would be required to remedy the issue by the deadline specified by CMS. For example, if the ACO participants' total Medicare Parts A and B FFS revenue has increased in relation to total Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, the ACO could remove an ACO participant from its ACO participant list so that the ACO could meet the definition of a low revenue ACO. If the ACO fails to respond to compliance action under § 425.216 or otherwise fails to remedy the eligibility issue by the applicable deadline, the ACO would be required to repay all AIPs it had received. CMS will provide written notification to the ACO of the amount due, and the ACO must pay such amount no later than 90 days after the receipt of notification. CMS may recover the amount owed by reducing the amount of any shared savings. To aid us in determining whether it would be appropriate for us to recoup AIP funds from an ACO, we further propose to update the definitions of “inexperienced with performance-based risk Medicare ACO initiatives” and “experienced with performance-based risk Medicare ACO initiatives” under § 425.20 to allow for a rolling lookback period of the 5 most recent performance years beginning from the current performance year being monitored. This would be applicable to both ongoing compliance determinations and the assessment of an ACO's application to participate under a participation option for an agreement period under proposed § 425.600(h). We provide ACOs with preliminary participation options reports throughout the application and ACO participant list change request cycles so ACOs can be fully informed of the impact of becoming experienced with performance-based risk or high revenue for the upcoming performance year. (c) Termination of Advance Investment PaymentsUnder §§ 425.216 and 425.218, CMS can terminate an ACO or take pre-termination actions (such as requesting a corrective action plan) if CMS determines that an ACO is not in compliance with eligibility or other Shared Savings Program requirements. Accordingly, if we finalize our proposal to implement AIPs, CMS could take remedial action under those provisions if an ACO receiving such payments becomes experienced with performance-based risk Medicare ACO initiatives, becomes a high revenue ACO, spends AIPs for a prohibited use, fails to comply with other AIP requirements, or meets any of the grounds for ACO termination set forth in § 425.218(b). Where appropriate, we would work with the ACO to understand why the noncompliance with AIP requirements had occurred so that we could develop an effective plan of action and monitoring technique. However, our existing pre-termination actions do not include the cessation of payments to an ACO. To protect the Trust Funds, encourage speedy resolution of noncompliance, and provide an added safeguard against abuse, we propose at § 425.630(h) that CMS may terminate an ACO's receipt of AIPs if the ACO ceases to meet the eligibility requirements specified in proposed § 425.630(b)(3) and (4), fails to comply with other AIP requirements, or meets any of the grounds for termination set forth at § 425.218(b). For the same reasons, we further propose under § 425.630(h)(3) that CMS may immediately terminate an ACO's AIPs without taking any of the pre-termination actions set forth in § 425.216. We expect that immediate termination of AIPs would be invoked only in cases of serious noncompliance or when the ACO's actions or inaction poses a risk of harm to beneficiaries or negatively affects access to care. (8) RecoupmentIn AIM, we recouped prepaid shared savings from any shared savings earned by an ACO in its current agreement period, and if necessary, future agreement periods. If the ACO did not achieve shared savings, then the prepaid shared savings were not recouped. Additionally, the balance of funding was not recouped if the ACO completed the agreement period and decided not to reenroll in a second agreement period. If the ACO terminated prior to the end of its 3-year agreement period, the remaining balance was required to be repaid in full. During the model, we observed that offering new small ACOs prepaid shared savings that they were not at risk of being forced to repay if they did not achieve savings was a critical incentive for small providers and suppliers to form ACOs to join AIM and the Shared Savings Program. Based on our experience in AIM, we are proposing at § 425.630(g) a policy for recoupment of the AIPs from an ACO. The Shared Savings Program now has 5-year agreement periods instead of 3-year agreement periods that were in effect during AIM, so some timing adjustments to the recoupment policy are necessary, but the majority of the proposed policy aligns with AIM recoupment policy. We are proposing at § 425.630(g)(1) to recoup AIPs from any shared savings, as defined in § 425.20, earned by the ACO in any performance year until CMS has recouped all AIPs. We further propose that if there are insufficient shared savings to recoup the AIPs made to an ACO for a performance year, we would carry forward that remaining balance owed to the subsequent performance year(s) in which the ACO achieves shared savings, including any performance year(s) in a subsequent agreement period. Under new § 425.630(g)(2), we propose that in circumstances where the amount of shared savings earned by the ACO is revised upward by CMS for any reason, we would reduce the redetermined amount of shared savings by the amount of AIPs made to the ACO as of the date of the redetermination. If the amount of shared savings earned by the ACO is revised downward by CMS for any reason, we propose that the ACO would not receive a refund of any portion of the AIPs previously recouped or otherwise repaid. We propose under § 425.630(g)(3) that for each performance year, we would not recoup an amount of AIPs greater than the shared savings earned by an ACO for that performance year. Thus, if an ACO does not earn shared savings in its agreement period or a renewed agreement period, we would not recoup any of the AIPs from the ACO. For example, if an ACO received $300,000 in AIPs and achieved shared savings of $500,000 for the first performance year, we would recoup $300,000 and pay $200,000 in shared Start Printed Page 46110 savings to the ACO. Alternatively, if an ACO received $300,000 in AIPs and achieved shared savings of $200,000 for the first performance year, we would recoup only $200,000 and not pay any shared savings to the ACO. The outstanding balance of $100,000 would be carried forward, to be recouped in a future performance year in which the ACO achieves shared savings. Under a third scenario, if the ACO does not achieve shared savings in all 5 performance years of its agreement period and does not renew for another agreement period in the Shared Savings Program, we would not recoup any AIPs made to the ACO. However, to protect the program from abuse, CMS would recoup any outstanding balance from a re-entering ACO determined to be experienced with performance-based risk Medicare ACO initiatives. We note that a “re-entering ACO,” as defined at § 425.20, includes an ACO that is a new legal entity that is applying to participate in the program and more than 50 percent of its ACO participants were included on the ACO participant list of the same ACO in any of the 5 most recent performance years. Under the new § 425.630(g)(4), we propose that if an ACO terminates its participation agreement during the agreement period in which it received an AIP, the ACO must repay all AIPs it received. In such a case, CMS would provide written notification to the ACO of the amount due and the ACO must pay such amount no later than 90 days after the receipt of notification. This proposal ensures that AIPs are used by ACOs that complete their agreement period and reduces the risk of ACOs using termination to avoid repayment of the AIPs. As described in section III.G.2.a.(2) of this proposed rule, we have proposed that an ACO is not eligible for AIPs unless it is a low revenue ACO, as defined at § 425.20, and inexperienced with performance-based risk Medicare ACO initiatives, as defined at § 425.20. A goal of the AIPs is to encourage the formation of ACOs, and based on experience in AIM, we recognize that new, smaller ACOs need start-up funding to join the Shared Savings Program and to continue care coordination over the agreement period. As described earlier in section III.G.2.a.(7).(b) of this proposed rule, we have proposed to monitor and notify ACOs if they become high revenue or experienced with performance-based risk during a performance year so they may choose to modify their ACO participant lists for the next performance year to maintain their low revenue and inexperienced status. Under our proposal at § 425.316(e), if CMS determines that an ACO is experienced with performance-based risk Medicare ACO initiatives or is a high revenue ACO, CMS will cease payment of AIPs starting the quarter after the ACO became experienced with performance-based risk or became a high revenue ACO, and CMS may take compliance action as specified in §§ 425.216 and 425.218. For example, if CMS determines that an ACO became experienced with performance-based risk Medicare ACO initiatives or became a high revenue ACO during the first performance year of the agreement period, CMS will not pay to the ACO additional AIPs, effective the next quarterly payment after the ACO became experienced with performance-based risk Medicare ACO initiatives or a high revenue ACO, which would be January 1 of the second performance year. In addition, CMS could take compliance action as specified in §§ 425.216 and 425.218. If CMS determines after all AIPs have been paid (for example, during the third performance year of the agreement period) that an ACO became experienced with performance-based risk Medicare ACO initiatives, CMS may take compliance action as specified in § 425.216. For example, CMS could issue a request for a corrective action plan, and the ACO would be required to come back into compliance the following performance year. If an ACO remains noncompliant after the compliance deadline specified by CMS, we will provide written notification to the ACO of the amount due and the ACO must pay such amount no later than 90 days after the receipt of such notification. To achieve the goal of AIPs and ensure the payments support new, smaller ACOs, we are proposing at § 425.316(e) that if CMS determines during the agreement period in which an ACO received an AIP that the ACO became a high revenue ACO or became experienced with performance-based risk Medicare ACO initiatives, the ACO may be required to repay all AIPs it received during the agreement period. We propose to provide written notification to the ACO of the amount due and to require the ACO to pay such amount no later than 90 days after the receipt of notification. We are proposing at § 425.630(g)(5) that if an ACO that received AIPs enters into proceedings relating to bankruptcy, whether voluntary or involuntary, the ACO must provide written notice of the bankruptcy to CMS and to the U.S. Attorney's Office in the district where the bankruptcy was filed, unless final payment for the agreement period has been made by either CMS or the administrative or judicial review proceedings relating to any payments under the Shared Savings Program have been fully and finally resolved. We propose that the notice of bankruptcy must be sent by certified mail no later than 5 days after the petition has been filed and must contain a copy of the filed bankruptcy petition (including its docket number). We propose that the notice to CMS must be addressed to the CMS Office of Financial Management at 7500 Security Boulevard, Mailstop C3-01-24, Baltimore, MD 21244 or such other address as may be specified on the CMS website for purposes of receiving such notices. This proposal is consistent with the AIM model participation agreement and ensures that CMS can recover AIPs if an ACO files for bankruptcy. We are seeking comment on all aspects of our proposals for recoupment of the AIPs made to ACOs. b. Smoothing the Transition to Performance-Based Risk(1) BackgroundSince its inception in 2012, the Shared Savings Program has included both one-sided financial models (shared savings only) and two-sided financial models (shared savings and shared losses) for ACOs to select based on the arrangement that makes the most sense for their organization. Over the years, we have modified available financial models (participation options) providing “on-ramps” to attract both providers and suppliers that are new to value-based purchasing, as well as more experienced entities that are ready to accept two-sided risk. We have modified these participation options to adjust the maximum level of risk that must be assumed under two-sided models and to smooth the transition to two-sided models, including modifying eligibility criteria and adding flexibility for more advanced ACOs to transition to risk-based arrangements more quickly. These participation option modifications have been informed by lessons learned from CMS' experience with the program, testing through other initiatives conducted by the CMS Innovation Center under section 1115A of the Act (the Pioneer ACO Model, the Next Generation ACO Model and the Medicare ACO Track 1+ Model), and feedback from interested parties. In the November 2011 final rule (76 FR 67904), we stated our belief that a one-sided model would have the potential to attract a large number of participants to the program and broadly Start Printed Page 46111 introduce value-based purchasing to providers and suppliers, many of whom may not have participated in a value-based purchasing initiative before. Another reason we included the option for a one-sided track with no downside risk was that this model would be accessible to and likely to attract small, rural, safety net, and physician-only ACOs. However, we also noted that while a one-sided model could provide incentives for participants to improve quality, it might not be sufficient incentive for participants to improve the efficiency and cost of healthcare delivery (76 FR 67904). Thus, in the November 2011 final rule, we created two tracks in which ACOs could choose to participate. The one-sided risk model (Track 1) incorporated the statutory payment methodology under section 1899(d) of the Act, and the two-sided model (Track 2) was also based on the payment methodology under section 1899(d) of the Act but incorporated performance-based risk using the authority under section 1899(i)(3) of the Act to use other payment models. Track 1 was available for an ACO's initial agreement period, and all ACOs were required to transition to Track 2 to continue participating in subsequent agreement periods. (76 FR 67904 through 670909). In the June 2015 final rule (80 FR 32759), we reiterated our intent to continue to encourage ACOs' forward movement up the ramp from the one-sided model to performance-based risk. The June 2015 final rule discussed policy changes that would allow ACOs not yet ready to transition to performance-based risk a second agreement period under the one-sided model, while also encouraging ACOs to enter performance-based risk models by lowering the risk under the existing Track 2 and offering an additional two-sided model (Track 3) that was based on the payment methodology under Track 2 but incorporated different elements intended to make it more attractive for entities to accept increased performance-based risk. (80 FR 32759 through 32780). In 2017, the Innovation Center designed an additional option for eligible Track 1 ACOs, referred to as the Track 1+ ACO Model, to facilitate ACOs' transition to performance-based risk. The Track 1+ ACO Model was a time-limited model that began on January 1, 2018; it was based on Shared Savings Program Track 1 but tested a payment design that incorporated more limited downside risk, as compared to Track 2 and Track 3. Our early experience with the design of the Track 1+ ACO Model demonstrated that the availability of a lower-risk, two-sided model is an effective way to encourage ACOs in one-sided models (including ACOs within a current agreement period, initial program entrants (that is, new ACO legal entities), and renewing ACOs to progress more rapidly to performance-based risk. Most recently, in the December 2018 final rule (83 FR 67822), CMS redesigned the participation options available under the program to encourage ACOs to transition more rapidly to two-sided models under two tracks, a BASIC track and an ENHANCED track. Both tracks are designed for 5-year agreement periods. The BASIC track includes a glide path with 5 Levels (A through E) that allows eligible ACOs to begin under a one-sided model for 2 years (each year of which is identified as a separate level (Levels A and B)) and advance to a two-sided model that includes incrementally higher levels of risk and reward (Levels C, D, and E) for the remaining 3 years of the agreement period.[197] We allowed additional flexibility for new ACO legal entities that qualify as low revenue ACOs inexperienced with performance-based risk Medicare ACO initiatives to participate for up to 3 performance years under a one-sided model (4 performance years in the case of ACOs entering an agreement period beginning on July 1, 2019) of the BASIC track's glide path before transitioning to the highest level of risk and potential reward under the BASIC track (Level E) for the final 2 years of the agreement period. Based on a combination of factors, CMS determines an ACO's eligibility for participation options in the BASIC track and ENHANCED track along with the number of agreement periods that the ACO may participate in the BASIC track. These factors include the degree to which the ACO's ACO participants control total Medicare Parts A and B fee-for-service (FFS) expenditures for the ACO's assigned beneficiaries (low revenue ACOs versus high revenue ACOs), and the ACO's experience and its ACO participants' experience with the Shared Savings Program and other performance-based risk Medicare ACO initiatives. As noted in the December 2018 final rule (83 FR 67826), these policies were designed to increase savings for the Medicare Trust Funds and mitigate losses, reduce gaming opportunities, and promote regulatory flexibility and free-market principles. An ACO's ability to participate in the BASIC track is limited, and all ACOs eventually must transition to participation in the ENHANCED track to continue in the program. High revenue ACOs are limited to, at most, a single agreement period under the BASIC track prior to transitioning to participation under the ENHANCED track. Low revenue ACOs are limited to, at most, 2 agreement periods for a total of 10 performance years under the BASIC track (or 11 performance years in the case of an ACO that participates in an agreement period that began on July 1, 2019, and spans a total of 6 performance years). These agreement periods do not need to be sequential. The regulations at § 425.600(e) also require that should a low revenue ACO, identified as experienced with performance-based risk Medicare ACO initiatives, have changes in the revenue of its ACO participants that would cause the ACO to be considered a high revenue ACO (as these terms are defined in § 425.20) for a given performance year, the ACO must take corrective action or terminate its participation under the BASIC track by the end of the current performance year (83 FR 67877 and 67878). As discussed in the December 2018 final rule (83 FR 67881), many commenters who addressed the proposed changes to the participation options disagreed with the more aggressive transition of ACOs to performance-based risk under the proposed program redesign. Some commenters cautioned that although the proposed requirement that all ACOs undertake two-sided risk at some point during their first agreement period might improve the performance of the ACOs that continue to participate in the Shared Savings Program, it might also reduce ACO participation in the program. Several commenters expressed concern that the change in program requirements might cause ACOs to end their participation in the Shared Savings Program and create a barrier to entry for ACOs to join the program. One commenter recommended that CMS carefully monitor Shared Savings Program participation and change course if participation falls precipitously. As discussed in the Regulatory Impact Analysis section below, AIM participants—a subset of Track 1 ACOs that meaningfully outperformed peer ACOs in reducing spending and earning shared savings over the period from 2016 through 2018—dropped out at an elevated frequency before even attempting to enter the one-sided model (upside-only) Start Printed Page 46112 portion of the BASIC track glide path, where spending reductions were found to be similar regardless of an AIM ACO's decision to continue or exit the program.[198] This suggests both that, while an upside-only participation option with a lower shared savings rate can be a highly effective incentive for smaller, low-revenue ACOs targeted by AIM, such ACOs also likely feel a correspondingly-magnified disincentive to accept exposure to even the limited downside risk presented by the current BASIC track glide path, and not even superior performance under Track 1 appears to provide enough confidence for such ACOs to consistently move into participation options leading to assumption of two-sided risk. Several commenters expressed concern that requiring the rapid assumption of significant levels of risk by ACOs would discourage new participants and impede current ACOs' ability to make patient-centered infrastructure investments that are necessary for successful participation. Another commenter believed that reducing the amount of time permitted under the one-sided model was ill-advised and would jeopardize ACOs' continued participation. Our response to these comments included our commitment to continue to monitor program participation and consider further refinements to the program's participation options as we gained experience with implementing the redesigned program (83 FR 67835). Most commenters on the proposed participation options that were finalized in the December 2018 final rule recommended that CMS extend the time any ACO can participate in a one-sided model to 3 performance years, as opposed to the 2 performance years proposed for ACOs eligible to participate under the BASIC track with participation agreements beginning on or after January 1, 2020 that do not qualify for a third year under the one-sided model under the exception in § 425.600(a)(4)(i)(B)(2)( ii), stating that it takes longer than 2 performance years to implement meaningful changes in a healthcare delivery model and among healthcare provider and patient populations. Other commenters believed that the progression to two-sided risk that we proposed and ultimately finalized was far too aggressive and would deter participation. These commenters generally suggested allowing for 4 or 5 performance years (or a full agreement period) under a one-sided model. Some commenters suggested that rural ACOs should be allowed at least two, 5-year agreement periods under a one-sided model (83 FR 67847). At the time of the December 2018 final rule, we disagreed with suggestions to allow ACOs to remain under the one-sided model for an extended time because our experience suggested that the availability of 6 performance years of one-sided risk under Track 1 and the ability to benefit from significant waivers available in the program could be leading to the formation of one-sided ACOs that were not making serious efforts to improve quality and reduce spending, potentially crowding out the formation of more effective ACOs. The design of the current Shared Savings Program participation options, including a BASIC track glide path incorporating more limited downside risk as compared to the ENHANCED track, demonstrates that the availability of a lower-risk, two-sided model is an effective way to encourage ACOs (including ACOs within a current agreement period, initial program entrants, re-entering ACOs, and renewing ACOs) to progress more rapidly to performance-based risk. For PY 2022, a majority of the 483 ACOs (284 (59 percent)) that currently participate in the Shared Savings Program, selected a two-sided model. Refer to Table 43. While many ACOs have agreed to participate under a two-sided model, not all ACOs appear to be ready to take on performance-based risk. In 2020 and 2021, due to the PHE for COVID-19, as defined in § 400.200, we provided additional participation option flexibilities, allowing ACOs participating in the BASIC track's glide path the option to elect to forgo automatic advancement and “freeze” their participation for PY 2021 and PY 2022 at their PY 2020 and 2021 levels, respectively. (See May 2020 Interim Final Rule with comment period (IFC) (85 FR 27575 and 27576), CY 2021 PFS final rule (85 FR 84767 through 84769), and CY 2022 Hospital Inpatient Prospective Payment Systems final rule (86 FR 45502 through 45506)). Thus, eligible ACOs may have elected to remain in the same level of the BASIC track's glide path in which they participated during PY 2020 and PY 2021 once again, for PY 2022. As specified in the fiscal year (FY) 2022 Medicare Hospital Inpatient Prospective Payment System (IPPS) / Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule (86 FR 45503 through 45506), for PY 2023, an ACO that elected one or both of these advancement deferral options will be automatically advanced to the level of the BASIC track's glide path in which it would have participated during PY 2023 if the ACO had advanced automatically to the required level of the BASIC track's glide path for PY 2021 and PY 2022, as applicable (unless the ACO elects to advance more quickly before the start of PY 2023). For ACOs that continued their participation in the Shared Savings Program into the next performance year, when given the Start Printed Page 46113 opportunity to freeze at the ACO's current BASIC track level on the glide path, most eligible ACOs under a one-side model (Level A or Level B) chose to remain in a one-sided model:
As we have addressed several times through previous rulemakings, an ongoing consideration for CMS is how long ACOs should be allowed to participate under a one-sided model. We have to balance our goal of driving the greatest possible shift to high-value care delivery, which we believe may be incentivized most effectively under a two-sided model, with concern that requiring ACOs to take on too much downside risk too quickly will disincentivize program participation and reduce the program's potential to positively affect the quality and cost of care furnished to beneficiaries. Although we continue to believe there are stronger incentives for increased efficiency when ACOs are in a two-sided risk track, ACOs continue to report that they are constrained by the current participation options and need more time to invest in infrastructure and redesigned care processes for high quality and efficient health care service delivery before transitioning to performance-based risk. Additionally, some ACOs have reported that the ENHANCED track is too risky, and therefore, requiring ACOs to eventually move to ENHANCED may hinder continued participation. Therefore, we believe it would be prudent to provide greater flexibility for ACOs to join the program under one-sided risk and to remain in the program under lower levels of performance-based risk in order to balance our desire to see more ACOs participate under performance-based risk while also working towards our goal of increasing overall Shared Savings Program participation and improving outcomes for beneficiaries, including high need beneficiaries with complex health and social needs who may most benefit from ACOs' linked networks of clinicians with incentives, to close inequitable gaps in care associated with poorer health outcomes.[199 200] We note that the Shared Savings Program was established as, and remains, a voluntary program for providers and suppliers that choose to participate in an ACO and to become accountable for the quality and cost of care for an assigned population of Medicare FFS beneficiaries. Thus, to promote the program's goal of ACO accountability for the quality and cost of care furnished to assigned beneficiaries, we believe it would be appropriate to allow certain ACOs in their first agreement period in the program to maintain participation in a one-sided model (with a lower sharing rate) for a longer period of time, rather than risk having those ACOs leave the program altogether to avoid transitioning to two-sided risk before the ACO is confident it has been able to implement the systemic changes necessary to deliver high quality, value-based care. Even if an ACO does not earn shared savings, ACOs have demonstrated that they are likely saving Trust Fund dollars by modifying their ACO participants' behavior to coordinate care and carry out other interventions to improve quality and financial performance. In particular, ACOs with average to above-average baseline spending may decide that a benchmark with a neutral or negative regional adjustment presents too much exposure to performance-based risk if they are also required to participate under a two-sided model, but they may otherwise elect to participate and begin to reduce spending if permitted to join and remain under a one-sided model. In light of these considerations, we are concerned that our current policy of considering an ACO's status as a high- or low revenue ACO (as these terms are defined in § 425.20) in determining the participation options available to the ACO may disincentivize certain providers and suppliers from forming ACOs or joining existing ACOs. At the start of July 1, 2019, 52 percent of the participating ACOs met the definition of “high revenue ACO.” For PY 2020, 48 percent of participating ACOs were high revenue ACOs, for PY 2021, 46 percent of participating ACOs were high revenue ACOs, and for PY 2022, 44 percent of participating ACOs are high revenue. In all, the share of participating ACOs that meet the definition of high revenue ACO has decreased by 8 percentage points over three participation years in a consistent downward trajectory. It is not our intent to incentivize ACOs to exclude high cost providers and suppliers from their ACO participant lists to avoid meeting the definition of high-revenue ACO. We believe participation in the Shared Savings Program encourages providers and suppliers to provide better coordinated, more efficient care for beneficiaries and results in savings for the Trust Funds. High revenue ACOs, which typically include hospitals as ACO participants, have a greater opportunity to control assigned beneficiaries' total Medicare Parts A and B FFS expenditures, as they coordinate a larger portion of the assigned beneficiaries' care across care settings (83 FR 41916 through 41918). As a result, we believe it is important to provide participation options that will encourage more providers and suppliers, including those with high revenues, to participate in the Shared Savings Program. In addition, given the feedback we have received from ACOs and other interested parties, as well as our observation of trends in ACO participation, we believe ACOs inexperienced with performance-based risk Medicare ACO initiatives, regardless of their status as a high- or low revenue ACO, may be more likely to participate in the program if they are allowed more time under a one-sided model than is currently allowed under the available participation options. As discussed in the December 2018 final rule, some commenters opposed limiting high revenue ACOs to one agreement period in the BASIC track. Given that high revenue ACOs are responsible for a greater share of Medicare Part A and Part B FFS spending than low revenue ACOs, one commenter agreed that it is reasonable to ask high revenue ACOs to assume greater levels of risk and/or at a faster pace than low revenue ACOs. But this commenter also suggested that CMS should take into account that larger health systems must invest in change across a much broader delivery "footprint" and so may require additional investments over multiple years to make transformative system changes, and also need a longer time to recoup investments (such as in the form of shared savings). Similarly, we heard from at least one interested party that high revenue ACOs need more of an on-ramp to meaningful levels of two-sided risk because there are bigger systemic policies in place that take time to modify in order to create changes within the organization that focus on providing value-based care. Start Printed Page 46114 As noted above in section G.2.a.(2), CMS has outlined a renewed vision and strategy for how the Innovation Center will drive health system transformation to achieve equitable outcomes through high-quality, affordable, person-centered care for all beneficiaries. Further, in a January 2022 article, CMS stated our goal that 100 percent of people with Original Medicare will be in a care relationship with accountability for quality and total cost of care by 2030.[201] The Shared Savings Program is the largest Medicare alternative payment model with 483 ACOs participating in PY 2022 and 11 million assigned beneficiaries.[202] As a result, the Shared Savings Program will play an important role in achieving the goal of creating care relationships with accountability for quality and costs for all Medicare FFS beneficiaries. We believe APMs are well positioned to close gaps in health equity. Under the Shared Savings Program, ACOs are incentivized to provide high quality care while reducing unnecessary duplication of services and preventing medical errors. We believe it is important to encourage providers and suppliers who are providing care to high needs beneficiaries to join and/or form ACOs to help close gaps in health equity. We also believe flexibility with respect to the timeline for progression to two-sided risk is important in the Shared Savings Program to encourage small, rural, safety-net providers to form ACOs or to join larger, more urban practices to share resources. Both of these strategies can be utilized to help provide high need beneficiaries served by small, rural, safety-net providers with the resources to better coordinate their care and improve outcomes. (2) Proposal for a 5-Year Agreement Period Under a One-Sided Model for Eligible ACOsWe are proposing to allow certain ACOs more time under a one-sided model and more flexibility in transitioning to higher levels of risk and potential reward by modifying the participation options available under the Shared Savings Program. While the proposal for currently participating ACOs to elect to maintain their participation at Level A or Level B for the remainder of their current agreement period would apply beginning January 1, 2023, we are proposing to make all other policies outlined in this section effective for agreement periods starting on or after January 1, 2024, rather than January 1, 2023, because the majority of the application cycle for the 2023 performance year will occur before this rule is finalized. Establishing a January 1, 2024 start date for these changes would allow ACOs time to understand the scope of the proposed changes more fully before making decisions related to their participation, and would allow CMS adequate time to update its processes and application-related guidance documents for the new participation options, if they are finalized. First, we propose to add a new § 425.600(a)(4)(i)(C)( 3) to allow an ACO that enters the BASIC track's glide path at Level A under § 425.600(a)(4)(i)(A)( 1) and is currently at Level A to elect to remain in Level A under § 425.600(a)(4)(i)(A)( 1) for all subsequent performance years of the agreement period, for agreement periods beginning on or after January 1, 2024. Per the newly proposed § 425.600(a)(4)(i)(C)(3)( i), in order to be eligible to participate under Level A of the BASIC track for subsequent years of the agreement period as described in § 425.600(a)(4)(i)(C)( 3), an ACO must meet the following requirements: the ACO is participating in its first agreement period under the BASIC track under § 425.600(a)(4), and is not participating in an agreement period under the BASIC track as a renewing ACO (as defined in § 425.20) or a re-entering ACO (as defined in § 425.20) that previously participated in the BASIC track's glide path under § 425.600(a)(4); and the ACO is inexperienced with performance-based risk Medicare ACO initiatives (as defined in § 425.20). We propose to extend this participation option to re-entering former Track 1 ACOs, because they have not previously participated in the BASIC track glide path and we would like to encourage them to begin participating in the program again. Eligibility for this participation option would not consider the ACO's revenue status. For eligible ACOs, prior to the automatic advancement of the ACO to Level B, the ACO could elect to remain in Level A for all subsequent performance years of the agreement period. Under the new § 425.600(a)(4)(i)(C)(3)( ii), we propose to require that this voluntary election by an ACO to remain in Level A for the entirety of its first agreement period be made in the form and manner and by a deadline established by CMS. In the case of an ACO that elects to remain in Level A for the entirety of its first agreement period, the ACO generally would be eligible to enter into a subsequent agreement period under the BASIC track's glide path, giving the ACO 2 additional years of one-sided risk. If an eligible ACO made this election and did not elect faster advancement to a higher level of risk and potential reward, the ACO would have 7 years under one-sided risk, whereas a new ACO entering under the BASIC track's glide path may be eligible for as few as 2 performance years under one-sided risk under the current participation options. We believe that allowing a maximum of 7 years under one-sided risk would strike a more appropriate balance within the current structure of 5 performance year agreement periods and the BASIC track glide path, which provides for 2 years under the one-sided model. Currently, ACOs inexperienced with performance-based risk Medicare ACO initiatives generally are limited to 2 years under a one-sided model, which ACOs have informed us is not enough time before transitioning to risk. We believe giving ACOs longer than the proposed 7 years or potentially unlimited time under a one-sided model would dilute the program's ability to meaningfully influence expenditures and quality through the incentives provided by ACO risk assumption. This proposed change to extend the time eligible ACOs may remain under a one-sided model would allow ACOs more time to make investments in care improvement and to capitalize on those investments, while still working to lower costs and improve care quality for their assigned beneficiaries. Although we are proposing to increase the potential time certain ACOs may spend in one-sided risk, our proposal includes a pathway to transition these ACOs into two-sided risk. We continue to recognize that ACOs are best able to select their participation options to meet the needs of their organizations, including when to time their transition to performance-based risk, including within an agreement period. We propose to add a new § 425.600(g)(1)(i) to provide that an ACO that is inexperienced with performance-based risk Medicare ACO initiatives may participate in the BASIC track glide path for a maximum of 2 agreement periods (once at Level A for all 5 performance years and a second time in progression on the glide path). Furthermore, the ability to enter a Start Printed Page 46115 second agreement period in the BASIC track's glide path would be limited by the proposed new § 425.600(g)(1)(ii), which would provide that an ACO that enters an agreement at either Level A or Level B is deemed to have completed one agreement under the BASIC track's glide path and is only eligible to enter a second agreement under the BASIC track's glide path if the ACO continues to meet the definition of inexperienced with performance-based risk Medicare ACO initiatives and satisfies either of the following: The ACO is the same legal entity as a current or previous ACO that previously entered into a participation agreement for participation in the BASIC track's glide path only one time; or for a new ACO identified as a re-entering ACO, the ACO in which the majority of the new ACO's participants were participating previously entered into a participation agreement for participation in the BASIC track's glide path only one time. In new paragraph (g)(1)(iii), we propose that an ACO that is determined to be inexperienced with performance-based risk Medicare ACO initiatives but is not eligible to enter the BASIC track's glide path may enter either the BASIC track Level E for all performance years of the agreement period, or the ENHANCED track. For example, an ACO that voluntarily terminates its participation agreement during its first agreement under Level A of the BASIC track's glide path and chooses to re-enter the BASIC track under the proposed new § 425.600(g)(1)(ii) would be re-entering a second agreement and, if continuing to meet the definition of inexperienced with performance-based risk Medicare ACO initiatives, could progress along the BASIC track glide path for this second agreement period. For its third agreement, the ACO would be required to enter the BASIC track at Level E for all years of the agreement period, or the ENHANCED track. These provisions would prevent ACOs from terminating their participation agreement before transitioning to two-sided risk in order to stay under the one-sided model, potentially indefinitely. We also propose to add a new § 425.600(a)(4)(i)(B)(2)( vi) to allow currently participating ACOs that are participating in the BASIC track at Level A or Level B for performance year 2022 to elect to continue in their current level of the BASIC track glide path for performance year 2023 and continuing for the remainder of the agreement period. If the ACO does not elect to remain under Level A or Level B, for performance year 2023, the ACO would be automatically advanced to the next level of the BASIC track's glide path to which the ACO would have automatically advanced absent any election to maintain its participation level for performance year 2022 and, if applicable, the election to maintain its participation level for performance year 2021 under § 425.600(a)(4)(i)(B)(2)( iii), unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). We propose to modify § 425.600(a)(4)(i)(B)(2)( iv) to account for the proposed new election option under paragraph ( vi). We also propose to add a new § 425.600(a)(4)(i)(B)(2)( vii) to extend this participation option to eligible ACOs that begin an agreement period in Level A or Level B on January 1, 2023. We recognize we are proposing to implement participation option changes in the middle of an agreement period for currently participating ACOs in the BASIC track Level A or Level B. However, we are proposing to allow these ACOs to elect to remain at the level in which they are currently participating for PY 2022 for the remainder of their current agreement period, and to offer a similar option to ACOs that enter an agreement period starting under Level A or Level B of the BASIC track glide path beginning on January 1, 2023, because we wish to encourage continuity of participation in the program and do not see any advantage to excluding currently participating ACOs and ACOs with participation agreements beginning on January 1, 2023, from the same participation option that we are proposing to make available to newly participating ACOs inexperienced with performance-based risk Medicare ACO initiatives that begin a new agreement period on or after January 1, 2024. We propose that, in the case of a currently participating ACO that elects to remain in Level A or Level B under proposed § 425.600(a)(4)(i)(B)(2)( vi) or ( vii) for the remainder of its current agreement period, the ACO would be eligible to enter into a subsequent agreement period under the BASIC track's glide path pursuant to § 425.600(g)(1)(ii), giving the ACO an opportunity to participate for up to 2 additional years under one-sided risk. For performance year 3 of this subsequent agreement period, the ACO would be automatically advanced to Level C and to each successive level of risk and potential reward for each performance year thereafter, unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). We propose to require that this voluntary election by an ACO to remain in one-sided risk in Level A or Level B for the remainder of its current agreement period be made in the form and manner and by a deadline established by CMS. Consistent with our proposal to expand the participation options for renewing and re-entering ACOs, we propose to make changes to the definition of Performance-based risk Medicare ACO initiative in § 425.20 and to the regulation at § 425.224(a)(4) to allow a renewing or re-entering ACO that was previously under a one-sided model of the BASIC track's glide path (Level A or B) to reapply for participation in the BASIC track's glide path, provided the ACO is not identified as having also participated previously under a two-sided model. The proposed change to the definition of Performance-based risk Medicare ACO initiative in § 425.20 would be effective for performance years beginning on January 1, 2023 and for subsequent years. Specifically, we propose to amend paragraph (1)(i) of the definition of Performance-based risk Medicare ACO initiative in § 425.20 to include only Levels C through E of the BASIC track, and to remove the one-sided Levels A and B from the definition. Similarly, in § 425.224(a)(4), we propose to remove the reference to “a one-sided model of the BASIC track's glide path (Level A or Level B),” so that renewing and re-entering ACOs that previously participated in a one-sided model of the BASIC track's glide path but that are not identified as having participated in a two-sided model, are not limited to reapplying for participation in a two-sided model. We recognize that the annual application and change request cycle will begin before the CY 2023 PFS final rule is issued. Accordingly, we will give ACOs currently participating in Level A or B of the BASIC track glide path the opportunity during the change request cycle to indicate whether they are interested in maintaining their participation at Level A or Level B under this proposed policy, should it be finalized. ACOs expressing such an interest would not be required to submit a repayment mechanism at that time. In the event this proposed policy is not finalized in the CY 2023 PFS final rule, ACOs that are required under § 425.600(a)(4)(i)(B)( 2) to advance from Level A or Level B to a two-sided risk model for PY 2023 would have a limited opportunity to submit a repayment mechanism, resolve any deficiencies, and have it approved in time for the Start Printed Page 46116 start of the performance year. ACOs that fail to establish a repayment mechanism that complies with the requirements of § 425.204(f) by the deadline specified by CMS would be terminated as required under § 425.600(a)(4)(i)(B)( 3). In order to determine an ACO's eligibility to participate under the proposed new participation options, we are proposing to consider an ACO's experience with performance-based Medicare ACO initiatives only, rather than also considering the ACO's status as a high- or low revenue ACO. Our proposal would make the ENHANCED track optional for all ACOs, regardless of experience with performance-based risk Medicare ACO initiatives. As discussed above, because we do not wish to disincentivize the formation of ACOs that include high-cost providers (that is, high revenue ACOs), we propose not to use revenue status for determining ACO participation options. This proposal also would simplify the determination of which participation options are available to a particular ACO and would reduce burden on ACOs (in terms of ascertaining likely available participation options) and CMS (in terms of determining ACO eligibility for its selected participation option). We propose to modify the regulations in § 425.600(a)(4)(i)(B), § 425.600(d), and § 425.600(e) to apply only to agreement periods beginning on or after July 1, 2019, and before January 1, 2024, because these complex provisions depend on the ACO's status as a high- or low revenue ACO. For agreement periods beginning on or after January 1, 2024, we propose to streamline the specification of the BASIC track glide path in § 425.600(a)(4)(i)(C) and eligibility for participation options in § 425.600(g), which would define an ACO's participation options based solely on the ACO's level of experience with performance-based risk Medicare ACO initiatives. We believe that the determination of whether an ACO is inexperienced or experienced with performance-based risk Medicare ACO initiatives (as defined in § 425.20) could be affected by changes made by an ACO to its ACO participant list during the course of an agreement period, particularly for ACOs that are determined to be inexperienced when their agreement period begins but are close to the threshold percentage of forty percent of ACO participants having participated in a performance-based risk Medicare ACO initiative in any of the 5 most recent performance years prior to the agreement start date. Any approach under which we would apply different policies to ACOs based on the prior experience of an ACO's ACO participants with performance-based risk Medicare ACO initiatives would need to recognize the potential for an ACO to add or remove ACO participants during the course of the agreement period, which could affect whether the ACO meets the definition of experienced with performance-based risk Medicare ACO initiatives. We are concerned about the possibility that an ACO may begin participating under a one-sided, shared savings-only level of the BASIC track based on a determination that the ACO is inexperienced with performance-based risk Medicare ACO initiatives, and then quickly thereafter seek to add ACO participants experienced with performance-based risk, thereby avoiding the limitations under our proposed participation options regarding the availability of the one-sided model for experienced ACOs. To protect against this circumstance, we propose adding a new provision at § 425.600(h), which would provide that for performance years beginning on or after January 1, 2024, CMS will monitor ACOs identified as inexperienced with performance-based risk Medicare ACO initiatives and participating in the BASIC track under a one-sided model during an agreement period pursuant to a voluntary election under § 425.600(a)(4)(i)(B)( 2)( vi), (a)(4)(i)(B)( 2)( vii), or (a)(4)(i)(C)( 3) for changes to their ACO participant list that would cause an ACO to be considered experienced with performance-based risk Medicare ACO initiatives and ineligible for participation in a one-sided model. We further propose to update the definitions of inexperienced with performance-based risk Medicare ACO initiatives and experienced with performance-based risk Medicare ACO initiatives under § 425.20 to allow for a rolling lookback period (applicable to both the assessment of an ACO's application to participate under a participation option for an agreement period and to ongoing compliance determinations under proposed § 425.600(h)) of the 5 most recent performance years beginning from the current performance year being monitored. If an ACO meets the definition of experienced with performance-based risk Medicare ACO initiatives (as specified in § 425.20), we propose under the new provision at § 425.600(h)(2)(i) that the ACO would be permitted to complete the remainder of its current performance year in a one-sided model of the BASIC track, but would be ineligible to continue participation in the one-sided model after the end of that performance year if it continues to meet the definition of experienced with performance-based risk Medicare ACO initiatives and would be automatically advanced to Level E of the BASIC track at the start of the next performance year. As specified under the proposed new provision at § 425.600(h)(2)(ii), the ACO would be required to meet all requirements to participate under performance-based risk, including establishing an adequate repayment mechanism as specified under § 425.204(f) and selecting a MSR/MLR from the options specified under § 425.605(b), in accordance with § 425.600(a)(4)(i)(B)( 2)( v) or § 425.600(a)(4)(i)(C)( 4), as applicable. If the ACO fails to meet the requirements to participate under performance-based risk, its agreement would be terminated in accordance with § 425.600(a)(4)(i)(B)( 3) or § 425.600(a)(4)(i)(C)( 5), as applicable. An eligible ACO that enters a new agreement period beginning on or after January 1, 2024, at Level A of the BASIC track would be permitted to elect to remain in Level A for the next performance year and remain at Level A for all subsequent performance years of the agreement period under the proposed new provision at § 425.600(a)(4)(i)(C)( 3). We would review the ACO's proposed ACO participant list for each subsequent performance year and provide feedback to allow the ACO to assess if the proposed changes to its ACO participant list (if any) would yield a determination that the ACO qualifies as experienced with performance-based risk Medicare ACO initiatives based on the 5 most recent performance years prior to the performance year under review (for example, PY 2020 through PY 2024, if PY 2025 were under review). CMS would perform the same monitoring activity ahead of all subsequent performance years of the agreement period in which the ACO elected to remain in Level A under the proposed new provision at § 425.600(a)(4)(i)(C)( 3). If the ACO were to meet the definition of experienced with performance-based risk Medicare ACO initiatives based on the proposed ACO participant list for the performance year under review, the ACO would still be permitted to complete that performance year in Level A of the BASIC track. CMS would then reassess the proposed ACO participant list for the subsequent performance year. If at that point the ACO has made changes to its ACO participant list such that it no longer meets the definition of experienced with performance-based risk Medicare ACO initiatives, the ACO would be permitted to complete that Start Printed Page 46117 subsequent performance year in Level A of the BASIC track. But if the ACO continues to meet the definition of performance-based risk Medicare ACO initiatives based on its proposed ACO participant list for the subsequent performance year, the ACO would be automatically advanced to Level E of the BASIC track for that performance year, provided the ACO met all requirements to participate under performance-based risk. If the ACO did not meet all requirements to participate under performance-based risk, including establishment of an adequate repayment mechanism and selection of an available MSR/MLR, the ACO's participation agreement would be terminated. This proposed policy is illustrated in Table 44. There, hypothetical ACOs A and B begin a Shared Savings Program agreement period on January 1, 2024, and are determined for that performance year to be inexperienced with performance-based risk Medicare ACO initiatives. Both ACOs are monitored ahead of PY 2025 as proposed, and both continue to meet the definition of inexperience with performance-based risk Medicare ACO initiatives based on their proposed ACO participant lists for PY 2025. Consistent with their status as inexperienced with performance-based risk Medicare ACO initiatives, both ACO A and ACO B elect to maintain their participation at level A of the BASIC track for all years of the agreement period, as proposed in § 425.600(a)(4)(i)(C)( 3). Ahead of PY 2026, both ACOs are determined to be experienced with performance-based risk Medicare ACO initiatives based on their proposed ACO participant lists for PY 2026. Both ACOs are permitted to remain at Level A of the BASIC track for PY 2026, but will continue to be monitored by CMS. Ahead of PY 2027, the proposed ACO participant list for ACO A for PY 2027 is reviewed and the ACO is determined to be inexperienced with performance-based risk Medicare ACO initiatives, and ACO A is thus permitted to continue its agreement under Level A of the BASIC track for PY 2027. However, ACO B is determined to continue to meet the definition of experienced with performance-based risk Medicare ACO initiatives based on its proposed ACO participant list for PY 2027, and therefore is advanced to Level E of the BASIC track for PY 2027 and must remain there for the remainder of its agreement period. Our intention with the policies proposed in this section is to provide ACOs with a more gradual on-ramp to taking on two-sided risk and to allow them the flexibility they need to best ensure their readiness to take on two-sided risk. We believe our proposals would encourage more ACOs to form and join the program as well as encourage currently participating ACOs to remain in the program. Additionally, we believe our proposals would help to increase our participation options so that an ACO has more flexibility to select the option that best fits its circumstances when applying to participate in the Shared Savings Program. Increasing the participation options in the program by expanding the flexibilities for participation in the one-sided model would also be expected to promote health equity for underserved and vulnerable beneficiaries by providing ACOs and their ACO participants with an additional opportunity to close gaps in care for underserved populations before they are required to transition to performance-based risk. These additional flexibilities would also afford ACOs that serve high need beneficiaries or face greater start-up costs with more time to prepare to take on two-sided risk, as well as allowing ACOs to balance their response to the COVID-19 pandemic, while also managing normal operations, implementing care redesigns and improving the quality of care provided to beneficiaries. We seek comment on the foregoing proposals for ACO participation options in the Shared Savings Program. We also seek comment on whether to extend the proposed option for certain ACOs inexperienced with performance-based risk Medicare ACO initiatives to spend an entire five-year agreement period under the one-sided model of the BASIC track for an additional agreement period for low revenue ACOs that enter the BASIC track as a new legal entity (that has never before participated in the Shared Savings Program and is not identified as a renewing or re-entering ACO), so that these ACOs would be eligible for a second one-sided only agreement period followed by a third agreement period in the BASIC track glide path, which would include an additional 2 years under the one-sided model (for a total of 12 years under the one-sided model) before progressing to two-sided risk. We are considering extending this participation option only to low revenue ACOs that enter the BASIC track as a new legal entity because other ACOs have already had time under one-sided risk and therefore do not need a second agreement period in one-sided only. Although, as we noted previously, using revenue status in determining the participation options available to ACOs may disincentivize certain providers and suppliers from forming ACOs or joining existing ACOs, we have observed that there are differences in financial performance outcomes based on revenue status. An independent study found the first three entry cohorts of physician-group ACOs Start Printed Page 46118 (ACOs whose core medical groups for beneficiary attribution were not associated with hospitals, which are generally low revenue) consistently reduced spending as their first agreement periods progressed such that average per beneficiary benefit spending was reduced by $300 in 2015 compared to only $37 lower for hospital-integrated ACOs (ACOs whose core medical groups for beneficiary attribution were part of larger organizations or health systems that included hospitals).[203] We therefore estimate that this alternative could increase program retention for the type of ACO that, as a group, has demonstrated greater program savings under an upside-only incentive in the past (that is, low revenue ACOs inexperienced with performance-based risk Medicare ACO initiatives) and increase program savings (net of shared savings payments) by at least $1 billion. Under this alternative, a voluntary election by a qualifying ACO to remain in Level A for the entirety of its second agreement period in the BASIC track would be made in the form and manner and by a deadline established by CMS. In the case of a qualifying ACO that elects to remain in Level A for the entirety of its second agreement period in the BASIC track that is determined to be low revenue at the time of application for renewal to a third agreement period in the BASIC track, the ACO generally would be eligible to enter into this subsequent agreement period under the BASIC track's glide path, giving the ACO 2 additional years of one-sided risk. If an eligible ACO made this election and did not elect faster advancement to a higher level of risk and potential reward, the ACO would have a total of 12 years under one-sided risk in the BASIC track. If we were to adopt this alternative, we are concerned about the possibility that an ACO may be found eligible to continue for a full second agreement period under a one-sided model of the BASIC track because of a determination that it is an inexperienced, low revenue ACO at the time of application, and then quickly thereafter seek to add experienced and/or higher-revenue ACO participants, thereby avoiding the requirement under our proposed participation options to move to the glide path for the second agreement period under the BASIC track if it did not meet the eligibility requirements to continue under the one-sided model for the entire agreement period. To protect against these circumstances, we would continue monitoring for experience with performance-based risk Medicare ACO initiatives. Thus, we would establish a monitoring policy to monitor for changes to revenue status during the ACO's second agreement period in the one-sided only model of the BASIC track, to ensure that the ACO continues to meet the definition of a low revenue ACO (as well as an ACO inexperienced with performance-based risk Medicare ACO initiatives). We would take the following approach to ensuring continued compliance of ACOs with the eligibility requirements for this alternative participation option. When an ACO applies for a second agreement period entirely under the one-sided model of the BASIC track, we would determine whether the ACO would be a high- or low revenue ACO (and an ACO inexperienced or experienced with performance-based risk Medicare ACO initiatives) as defined under § 425.20, using the ACO's ACO participant list for the first performance year of the new agreement period. Only low revenue ACOs would be eligible to elect this participation option to remain in Level A for the entirety of their second agreement period under the BASIC track, and we would continue to monitor for revenue status (as well as experience with performance-based risk Medicare ACO initiatives) during the second agreement period. If, during the second agreement period, the ACO began to meet the definition of a high revenue ACO (or an ACO experienced with performance-based risk Medicare ACO initiatives), we propose that the ACO would be permitted to complete the remainder of its current performance year under Level A, but the ACO would be ineligible to continue participation in Level A after the end of that performance year unless it took corrective action. For example, if the ACO participants' total Medicare Parts A and B FFS revenue increased in relation to total Medicare Parts A and B FFS expenditures for the ACO's assigned beneficiaries, the ACO could remove an ACO participant from its ACO participant list, so that the ACO could continue to meet the definition of low revenue ACO. In the event the ACO does not take steps to maintain its status as a low revenue ACO, we would take compliance action, up to and including termination of the participation agreement, as specified in §§ 425.216 and 425.218, to ensure the ACO did not continue in Level A for subsequent performance years of the agreement period. For example, we would send the ACO a request for a corrective action plan to resolve their change in revenue status, which would allow the ACO time to modify its ACO participant list or PECOS enrollment data such that the ACO could continue to meet the definition of a low revenue ACO. If the ACO continued to meet the definition of a high-revenue ACO at the end of the next performance year (that is, based on the ACO's proposed ACO participant list for the following performance year), we propose that the ACO would be required to move to the level of the BASIC track's glide path in which the ACO would be participating for the following performance year if it had begun the agreement period in the BASIC track's glide path instead of under the one-sided model-only path. This includes meeting the applicable requirements prior to entering performance-based risk, such as establishing an adequate repayment mechanism as specified under § 425.204(f) and selecting a MSR/MLR from the options specified under § 425.605(b). Under this alternative, if an ACO remains either high revenue or experienced with performance-based risk Medicare ACO initiatives based on the ACO's proposed ACO participant list for the following performance year, the ACO would be required to move to Level E, as discussed in the earlier proposal for monitoring for changes in risk experience. When the ACO applies for a third agreement period under the BASIC track, we would determine revenue status at the time of application. Only low revenue ACOs that continued to be inexperienced with performance-based risk Medicare ACO initiatives and had entered into a participation agreement under the BASIC track only twice would be eligible to enter the BASIC track glide path. If at time of application CMS determined the ACO was a high revenue ACO as defined under § 425.20 (or if the ACO met the definition of experienced with performance-based risk Medicare ACO initiatives), then it would be required to participate in Level E of the BASIC track (or the ENHANCED track) for the agreement period, rather than entering the BASIC track glide path. If at any time during the ACO's third agreement period CMS determined the ACO had begun to meet the definition of a high revenue ACO (or of an ACO experienced with performance-based risk Medicare ACO initiatives), the ACO would be permitted to complete the remainder of the current performance year under the ACO's current level of the glide path, but would be ineligible to continue participation in the glide path after the end of that performance Start Printed Page 46119 year and would be moved to Level E of the BASIC track unless the ACO took corrective action to modify its ACO participant list as described above. (3) Proposal To Remove the Limitation on the Number of Agreement Periods an ACO Can Participate in Level E of the BASIC TrackCurrently, there are limitations on how long ACOs may participate in the BASIC track, including at Level E, the BASIC track's highest level of risk and potential reward. Under § 425.600(d)(1)(ii), high revenue ACOs experienced with performance-based risk Medicare ACO initiatives may not participate in the BASIC track at all unless they meet the limited criteria in § 425.600(d)(1)(ii)(B). Under § 425.600(d)(2)(ii), low revenue ACOs experienced with performance-based risk Medicare ACO initiatives may enter the program under the BASIC track Level E and remain in the BASIC track at that level for up to 2 agreement periods. Under § 425.600(d)(3), low revenue ACOs may participate under the BASIC track for a maximum of 2 agreement periods, after which they must move to the ENHANCED track to continue participating in the program. A low revenue ACO may only participate in the BASIC track for a second agreement period if it satisfies either of the following: (i) the ACO is the same legal entity as a current or previous ACO that previously entered into a participation agreement for participation in the BASIC track only one time; or (ii) for a new ACO identified as a re-entering ACO, the ACO in which the majority of the new ACO's participants were participating previously entered into a participation agreement for participation in the BASIC track only one time. Some ACOs have reported that they would rather leave the program than be required to move to the ENHANCED track and have requested that CMS make the ENHANCED track optional for ACOs. In our implementation of the Shared Savings Program, we intend to achieve larger programmatic goals by encouraging ACO participation and thereby promoting high quality, value-based care for Medicare FFS beneficiaries. As discussed above, we continuously seek, based on experience and feedback, to balance creating sufficient incentives for participation in a voluntary program, with ensuring that our policies achieve program goals to increase quality of care for Medicare beneficiaries and reduce expenditure growth to protect the Trust Funds. Accordingly, we now believe it would be in the best interest of the program and Medicare FFS beneficiaries to permit eligible ACOs to continue participating under the BASIC track Level E, rather than risk significant numbers of experienced, successful ACOs terminating their participation in the program instead of progressing to the higher level of risk and potential reward under the ENHANCED track. Our experience shows that ACOs in the BASIC Track Level E and ACOs in the ENHANCED Track have similar performance results. Therefore, we propose to add a new § 425.600(g)(2) to specify that if an ACO is determined to be experienced with performance-based risk Medicare ACO initiatives, the ACO may enter BASIC track Level E under § 425.600(a)(4)(i)(A)( 5) for all performance years of the agreement period, or the ENHANCED track under § 425.600(a)(3). These options would be available without regard to the ACO's status as a high- or low revenue ACO. We also propose that all ACOs would be permitted to participate indefinitely under the BASIC track, Level E, or the ENHANCED track. This would include ACOs currently in the ENHANCED track or that participate under the ENHANCED track in the future. These ACOs would be permitted to enter a new participation agreement under Level E of the BASIC track. We believe it is important to offer this option to encourage ACOs that believe they may be ready to take on the higher level of risk and potential reward under the ENHANCED track to progress to that participation option, secure in the knowledge that the more moderate level of risk and potential reward under Level E of the BASIC track would be available to the ACO in the future if the ACO concludes based on experience that that participation option is more appropriate for the ACO than the ENHANCED track. We anticipate providing education and offering outreach to ACOs on the available participation options through various methods available, including ACO Coordinators, guidance documents, tip sheets, FAQs, and a bi-weekly newsletter to assist ACOs as they navigate to higher levels of risk and potential reward throughout their participation in the program. In conjunction with these proposed changes to the participation options available under the program, we are proposing to make several technical and conforming changes to the existing regulations. We propose to modify § 425.600(a)(4)(ii) to reference the new paragraph § 425.600(g)(2) in addition to the currently identified paragraph (d). We propose to add new § 425.605(b)(2)(ii)(E) to include a provision for an ACO to select its MSR/MLR if it automatically transitions from Level A to Level E of the BASIC track's glide path under the new § 425.600(h)(2). Lastly, we propose to modify § 425.605(d)(1) and (d)(2) to reference the new paragraph § 425.600(g) in addition to the current reference to § 425.600(d). We invite comments on all proposals described in this section III.G.2. of this proposed rule, and related issues, including the alternative approach under which we would permit low revenue ACOs to remain in a one-sided only model of the BASIC Track for a second agreement period before entering the BASIC Track glide path in their third agreement. Please refer to Table 45, which summarizes the participation option policies we are proposing, and to Table 46, which summarizes the alternative participation option policy. Start Printed Page 46120 Start Printed Page 46121 3. Determining Beneficiary Assignment Under the Shared Savings Programa. Proposed Revisions to the Definition of Primary Care Services Used in Shared Savings Program Beneficiary Assignment(1) BackgroundSection 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 Rural Health Clinics (RHCs) and Federally Qualified Health Centers (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 (refer to 80 FR 32746 through 32748; 80 FR 71270 through 71273; 82 FR 53212 and 53213; 83 FR 59964 through 59968; 85 FR 27582 through 27586; 85 FR 84747 through 84756; 85 FR 84785 through 84793; 86 FR 65273 through 65279) to reflect additions or modifications to the codes that have been recognized for payment under the PFS and to incorporate other changes to the definition of primary care services for purposes of the Shared Savings Program. For the performance year beginning on January 1, 2022, and subsequent performance years, we defined primary care services in § 425.400(c)(1)(vi) for purposes of assigning beneficiaries to ACOs under § 425.402 as the set of services identified by the following HCPCS/CPT codes: (A) 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 this paragraph (c)(1)(vi)). (7) 99421, 99422, and 99423 (codes for online digital evaluation and management). (8) 99424, 99425, 99426, and 99427 (codes for principal care management services). (9) 99437, 99487, 99489, 99490 and 99491 (codes for chronic care management). (10) 99439 (code for non-complex chronic care management). (11) 99483 (code for assessment of and care planning for patients with cognitive impairment). (12) 99484, 99492, 99493 and 99494 (codes for behavioral health integration services). (13) 99495 and 99496 (codes for transitional care management services). (14) 99497 and 99498 (codes for advance care planning; services Start Printed Page 46122 identified by these codes furnished in an inpatient setting are excluded). (B) 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 ETA hospitals). (7) G0506 (code for chronic care management). (8) G2010 (code for the remote evaluation of patient video/images). (9) G2012 and G2252 (codes for virtual check-in). (10) G2058 (code for non-complex chronic care management). (11) G2064 and G2065 (codes for principal care management services). (12) G2212 (code for prolonged office or other outpatient visit for the evaluation and management of a patient). (13) G2214 (code for psychiatric collaborative care model). (C) Primary care service codes include any CPT code identified by CMS that directly replaces a CPT code specified in paragraph (c)(1)(vi)(A) of this section or a HCPCS code specified in paragraph (c)(1)(vi)(B) of this section, 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. (2) Proposed Revisions(a) HCPCS and CPT Codes Used in AssignmentBased on feedback from ACOs and our further review of the HCPCS and CPT codes that are currently recognized for payment under the PFS or that we are proposing to recognize for payment starting in CY 2023, we believe 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, 2023, and subsequent performance years in order to remain consistent with billing and coding guidance under the PFS. We propose to revise the definition of primary care services used for assignment in the Shared Savings Program regulations to include the following additions: (1) Prolonged services HCPCS codes GXXX2 and GXXX3, if finalized; and (2) Chronic Pain Management HCPCS codes GYYY1 and GYYY2, if finalized. The following provides additional information about the HCPCS codes that we are proposing to add to the definition of primary care services used in assignment: • Prolonged Services Codes GXXX2 and GXXX3: In section II.F of this proposed rule, we are proposing that prolonged nursing facility services furnished by a physician or non-physician practitioner (NPP) would be reportable under GXXX2, which would be used when the total time for the primary service is exceeded by 15 or more minutes to account for the additional time spent. The long descriptor would be GXXX2 (Prolonged nursing facility evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99306, 99310 for nursing facility evaluation and management services). ( Do not report GXXX2 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 993X0). (Do not report GXXX2 for any time unit less than 15 minutes)). Prolonged physician or NPP nursing facility (NF) services would be reportable once 95 minutes are spent for initial NF visits, and once 85 minutes are spent for subsequent NF visits, and for each additional 15 minutes furnished thereafter. Because GXXX2 would be reportable for each additional 15-minute increment of time beyond the total time for CPT codes 99306 and 99310, which are included in the Shared Savings Program definition of primary care services for purposes of beneficiary assignment, we believe GXXX2 should also be included in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2023, and subsequent performance years, if payment for the code is made permanent through the CY 2023 PFS rulemaking, since this code would represent the provision of services that are already included in the definition of primary care services for a longer period of time. We are additionally proposing that prolonged home or residence services by a physician or NPP would be reportable under GXXX3 (Prolonged home or residence evaluation and management service(s) beyond the total time for the primary service (when the primary service has been selected using 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 99345, 99350 for home or residence evaluation and management services). (Do not report GXXX3 on the same date of service as other prolonged services for evaluation and management 99358, 99359, 99417). (Do not report GXXX3 for any time unit less than 15 minutes)). Because code GXXX3 would be reportable as an add-on code to CPT codes 99345 or 99350 once the practitioner spends 15+ minutes beyond the total time finalized for the primary service, and CPT codes 99345 and 99350 are included in the Shared Savings Program definition of primary care services for purposes of beneficiary assignment, we believe GXXX3 should also be included in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2023, and subsequent performance years, if payment for the code is made permanent through the CY 2023 PFS rulemaking, since this code would represent the provision of services that are already included in the definition of primary care services for a longer period of time. • Chronic Pain Management (CPM) HCPCS codes GYYY1 and GYYY2: In section II.E this proposed rule, we are proposing two new HCPCS codes for CPM services, beginning January 1, 2023. We recognize that there is no existing code that specifically describes the work of the clinician involved in performing the tasks necessary to perform holistic, CPM under current Medicare payment policy. These new HCPCS codes would be analogous to Chronic Care Management (CCM) services and Principal Care Management (PCM) services because GYYY1 would include similar care plan, medication management, unusually complex clinical management; care coordination between relevant practitioners furnishing care; and time for care provided personally by a physician or other qualified health care professional, as described in CPT code 99424; and GYYY2 would include similar activities as described in CPT code 99425, both of which already are included in the Shared Savings Program definition of primary care services used in assignment. Additionally, we expect that most of these services would be Start Printed Page 46123 billed by primary care practitioners who are focused on long-term management of their patients with chronic pain and we expect the billing practitioner to demonstrate in the Medicare patient's record when there is coordination or continuity of care between a specialist or other relevant practitioner, such as a physical therapist or occupational therapist, which we believe supports the inclusion of the services described by these HCPCS codes in our definition of primary care services for purposes of beneficiary assignment under the Shared Savings Program. Under the Shared Savings Program, CCM services reported using CPT codes 99437, 99439, 99487, 99489, 99490 and 99491 and HCPCS code G2058 and PCM services reported using CPT Codes 99424, 99425, 99426, and 99427 and HCPCS codes G2064 and G2065 currently are included in the definition of primary care services for purposes of beneficiary assignment (refer to 85 FR 84749 and 86 FR 65274 through 65275) and as such, to remain consistent with updates to the scope of care management services payable under the PFS, we are proposing to include these CPM services codes, if finalized, in the definition of primary care services used for beneficiary assignment. Accordingly, we propose to include HCPCS code GYYY1 (Chronic pain management and treatment, monthly bundle including, diagnosis; assessment and monitoring; administration of a validated pain rating scale or tool; the development, implementation, revision, and maintenance of a person-centered care plan that includes strengths, goals, clinical needs, and desired outcomes; overall treatment management; facilitation and coordination of any necessary behavioral health treatment; medication management; pain and health literacy counseling; any necessary chronic pain related crisis care; and ongoing communication and care coordination between relevant practitioners furnishing care, e.g. physical therapy and occupational therapy, and community-based care, as appropriate. Required initial face-to-face visit at least 30 minutes provided by a physician or other qualified health professional; first 30 minutes personally provided by physician or other qualified health care professional, per calendar month. (When using GYYY1 30 minutes must be met or exceeded.)) and GYYY2 (Each additional 15 minutes of chronic pain management and treatment by a physician or other qualified health care professional, per calendar month (List separately in addition to code for GYYY1). When using GYYY2 15 minutes must be met or exceeded.) because GYYY2 is similar in scope as GYYY1, just for additional duration, in the definition of primary care services under § 425.400(c) for the performance year starting on January 1, 2023, and subsequent performance years, if payment for these codes is made permanent through the CY 2023 PFS rulemaking. Refer to other sections of this proposed rule for detailed, technical discussion regarding the proposed description, payment, and utilization of these HCPCS and CPT codes. (b) Technical Update to the Description of CPT Codes 99341 through 99350In the CY 2019 PFS final rule (83 FR 60093), we updated our regulations at § 400(c)(1)(iv)(A)(4) by adding the descriptor “codes for evaluation and management services furnished in a patients' [sic] home for claims identified by place of service modifier 12” to CPT codes 99341 through 99350, as used in the definition of primary care services used in assignment for performance years (or a performance period) starting during 2019 and performance year 2020. This descriptor, slightly modified to correct a typographical error, also applied for the performance year starting on January 1, 2021, under § 425.400(c)(1)(v)(A)(5) and continues to apply for the performance year starting on January 1, 2022, and subsequent performance years, under § 425.400(c)(1)(vi)(A)(5). On March 17, 2021, the AMA updated the CPT® Editorial summary of Panel Actions for February 2021 ( https://www.ama-assn.org/system/files/2021-03/february-2021-summary-panel-actions.pdf). This summary describes revisions made to Home and Residence Services to revise the guidelines for CPT codes 99341 through 99350 to include services provided in assisted living facilities, group homes, custodial care facilities, and residential substance use treatment facilities. As discussed in section II.C of this proposed rule, we are proposing to adopt these changes under Medicare Fee for Service payment policies and as such, we are proposing conforming changes to omit the reference to “for claims identified by place of service modifier 12” from the description for CPT codes 99341 through 99350. This proposed modification would be reflected in the proposed definition of primary care services used in assignment for the performance year starting on January 1, 2023, and subsequent performance years, in a new provision of the regulations at § 425.400(c)(1)(vii)(A)( 7). In this proposed provision, CPT codes 99341 through 99350 would be described as codes for evaluation and management services furnished in a patient's home, without the place of service 12 identifier. The place of service logic is included in claims processing algorithms and therefore accounted for in paid claims used by the Shared Savings Program in determining beneficiary assignment. As described in Medicare Claims Processing Manual, Publication 100-04, Chapter 26, place of service codes are two-digit codes placed on health care professional claims to indicate the setting in which a service was provided. Claims submitted for services that are allowable when provided in certain settings will process only when the appropriate place of service is included on the claim. Place of service 12 is defined as “location, other than a hospital or other facility, where the patient receives care in a private residence.” In previous rulemaking, we updated the reference to CPT codes 99341 through 99350 in the definition of primary care services at § 425.400(c) to include place of service 12 for clarity; however, we now believe it is no longer accurate as these codes have been revised to include multiple places of service, any of which we would consider to be the patient's home. (c) Rural Emergency HospitalsThe Consolidated Appropriations Act (CAA) of 2021, was signed into law on December 27, 2020. In this legislation, Congress established a new rural Medicare provider type: Rural Emergency Hospitals (REHs). These providers will furnish emergency department and observation care, and other specified outpatient medical and health services, if elected by the REH, that do not exceed an annual per patient average of 24 hours. Hospitals that were CAHs or rural hospitals with not more than 50 beds, participating in Medicare, as of the date of enactment of the CAA, are eligible to seek conversion to an REH. REHs are expected to help address the barriers in access to health care, particularly emergency services and other outpatient services that result from rural hospital closures, and by doing so, may help address observed inequities in health care in rural areas. Section 1861(kkk)(1)(A) of the Act defines the term “REH services” as emergency department and observation services, as well as other medical and health services furnished on an outpatient basis as specified by the Secretary Under section 1861(k)(10) of the Act, payments will be made for REH services Start Printed Page 46124 furnished on or after January 1, 2023. We expect that REHs will submit claims in a similar manner to hospital outpatient departments paid under the OPPS. As a result, we do not believe that we need to propose special policies regarding the treatment of services furnished in REHs for purposes of beneficiary assignment under the Shared Savings Program. Rather, we would consider services furnished in REHs in the same manner that we currently consider services furnished in hospital outpatient departments for purposes of conducting assignment under the Shared Savings Program. However, we will continue to monitor the development of payment policy for REHs to determine whether any adjustments to our assignment policies may be necessary to account for services furnished in REHs and will consider whether any findings may warrant changes through future notice and comment rulemaking. In addition, we note that in section III.G.3.b. of this proposed rule, we are proposing to include on an ACO's ACO provider/supplier list any CCNs that may be deactivated and then reactivated, or disenrolled as one facility type but re-enrolled as another facility type, which would include any CAHs that elect to re-enroll as rural emergency hospitals. We propose to specify a revised definition of primary care services in a new provision of the Shared Savings Program regulations at § 425.400(c)(1)(vii) to include the list of HCPCS and CPT codes specified in § 425.400(c)(1)(vi) along with the proposed additional HCPCS codes GXXX2 and GXXX3, and GYYY1 and GYYY2, if these additional codes are finalized through the CY 2023 PFS rulemaking. We further propose to omit from the description for CPT codes 99341 through 99350, the reference to “for claims identified by place of service modifier 12.” We propose that the new provision at § 425.400(c)(1)(vii) would be applicable for use in determining beneficiary assignment for the performance year starting on January 1, 2023, and subsequent performance years. Further, we propose technical modifications to the introductory text in § 425.400(c)(1)(vi) to limit the applicability of this provision to the performance year starting on January 1, 2022. We seek comment 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, 2023, and subsequent performance years. We also welcome comments on any other existing HCPCS or CPT codes and new HCPCS or CPT codes proposed elsewhere in this proposed rule, that we should consider adding to the definition of primary care services for purposes of assignment in future rulemaking. b. Proposal on Identifying how CMS Certification Numbers Will Be Included and Used in Beneficiary Assignment(1) BackgroundUnder the Shared Savings Program, ACOs are accountable for the quality, cost, and overall care of the Medicare FFS beneficiaries that are assigned to the ACO (§ 425.100(a)). ACOs are formed by one or more “ACO participants,” which are responsible for managing and coordinating care for the assigned beneficiary population. The Shared Savings Program regulations define “ACO participant” at § 425.20 as an entity identified by a Medicare-enrolled billing Taxpayer Identification Number (TIN) through which one or more “ACO providers/suppliers” bill Medicare, that alone or together with one or more other ACO participants compose an ACO, and that is included on the list of ACO participants that is required under § 425.118 (herein “ACO participant list”). An “ACO provider/supplier” is an individual or entity that: (1) is a provider (as defined at § 400.202) or supplier (as defined at § 400.202); (2) is enrolled in Medicare; (3) bills for items and services furnished to Medicare FFS beneficiaries during the agreement period under a Medicare billing number assigned to the TIN of an ACO participant in accordance with applicable Medicare regulations; and (4) is included on the list of ACO providers/suppliers that is required under § 425.118 (herein “ACO provider/supplier list”). CMS requires each ACO to execute contractual agreements with each of its ACO participants (“ACO participant agreements”), to ensure that the ACO participant and each ACO provider/supplier billing through the TIN of the ACO participant agree to the requirements of the Shared Savings Program. Under § 425.118(a), an ACO must maintain, update, and submit to CMS an accurate and complete list identifying each ACO participant (including its Medicare-enrolled TIN) and each ACO provider/supplier (including its National Provider Identifier (NPI), CCN, or other identifier). All Medicare-enrolled individuals and entities that have reassigned their right to receive Medicare payment to the TIN of an ACO participant must be included on the ACO provider/supplier list (§ 425.118(a)(4)). (a) Development and Maintenance of the ACO Participant ListAn ACO must submit a draft ACO participant list before the start of an agreement period and before each performance year thereafter. CMS reviews the draft list, conducts a program integrity screening on the individuals and entities identified on the list, approves or rejects each entry on the list, and informs the ACO of the contents of the resulting ACO participant list. In accordance with § 425.118(a)(3), the ACO must certify the accuracy of its ACO participant list before the start of its agreement period and before each performance year thereafter. An ACO must maintain and periodically update its ACO participant list. An ACO is required to notify CMS no later than 30 days after an entity ceases to be an ACO participant. The entity is deleted from the ACO participant list as of the termination date of the entity's ACO participant agreement. Absent unusual circumstances, the ACO participant's data will continue to be utilized for certain operational purposes. CMS does not make adjustments during the performance year to the ACO's assignment, historical benchmark, performance year financial calculations, or the obligation of the ACO to report on behalf of eligible clinicians who bill under the TIN of an ACO participant for certain CMS quality initiatives, to reflect the deletion of entities from the ACO participant list that become effective during the performance year. If the ACO wishes to add an entity to its ACO participant list, it must submit a request to CMS. If CMS approves the request, the addition becomes effective on January 1 of the next performance year. ACO participants may not be added during a performance year. The ACO participant list is critical to Shared Savings Program operations. CMS uses the ACO participant list to identify which entities are in the ACO, generate the ACO provider/supplier list, determine which Medicare FFS beneficiaries will be assigned to an ACO, establish the historical benchmark, perform financial calculations, and coordinate among CMS quality reporting initiatives. (b) Development and Maintenance of the ACO Provider/Supplier ListIn accordance with § 425.118, ACOs must submit to CMS before the start of an agreement period and before each performance year thereafter an accurate and complete list identifying each ACO provider/supplier (including its NPI, Start Printed Page 46125 CCN, or other identifier). In accordance with § 425.118(a)(3), the ACO must certify the accuracy of its ACO provider/supplier list. In addition, ACOs are required to notify CMS of any changes in their ACO provider/supplier list in accordance with § 425.118(c). Specifically, an ACO must notify CMS within 30 days after an individual or entity becomes or ceases to be a Medicare-enrolled provider or supplier that bills for items and services it furnishes to Medicare fee-for-service beneficiaries under a billing number assigned to the TIN of an ACO participant (§ 425.118(c)). For performance years starting on January 1, 2019, and subsequent performance years, CMS creates the initial ACO provider/supplier list for a performance year by using the Provider Enrollment, Chain, and Ownership System (PECOS) to identify by CCN and NPI all of the providers and suppliers, respectively, that have reassigned their right to receive Medicare payment to the TIN of an ACO participant. As with its ACO participant list, each ACO must review that initial list, make any necessary corrections, and certify the resulting ACO provider/supplier list prior to the start of a performance year and at such other times as specified by CMS. (c) Use of Lists in Beneficiary AssignmentFor performance years 2012 through 2018, ACOs were required to identify on their ACO participant list the CCNs for certain provider types (FQHCs, RHCs, Electing Teaching Amendment (ETA) hospitals, and Method II Critical Access Hospitals (CAHs)) as well as the ACO participant TIN under which the CCN was enrolled in Medicare. CMS required ACOs to identify CCNs and their associated TIN information because otherwise it would not be possible to identify the institutional claims billed by those providers for purposes of beneficiary assignment since TINs are not retained in the CMS Integrated Data Repository (IDR) for the claims submitted by FQHCs, RHCs, ETA hospitals, and Method II CAHs. Additionally, ACOs that included FQHCs and/or RHCs on their ACO participant list were also required to identify, through an attestation, a list of physicians who directly provided primary care services in each FQHC or RHC (herein “attestation list”) in accordance with § 425.404(a). The linkage of the physicians to the FQHCs and RHCs provided via the attestation list was necessary because physicians and other individual practitioners cannot reassign their Medicare billing rights to an FQHC or RHC CCN. Therefore, although FQHCs, RHCs, physicians, and other individual practitioners are all listed in PECOS, the PECOS reassignment data used to generate the ACO provider/supplier list could not have linked the NPI of a physician or other practitioner to the CCN of an FQHC or RHC and, in turn, to an ACO participant TIN. This attestation list was collected through the ACO's application to the Shared Savings Program and could be updated annually with changes, if any, which would take effect January 1 of the next performance year. In accordance with § 425.404(b), for performance years starting on January 1, 2019, and subsequent years, under the assignment methodology in § 425.402, CMS treats a service reported on an FQHC/RHC claim, identified using the CCN as a unique identifier for an individual FQHC/RHC, as a primary care service performed by a primary care physician. For performance years starting on January 1, 2019, and subsequent performance years, CMS uses PECOS to identify the CCN or NPI of each ACO provider/supplier enrolled under an ACO participant TIN. Specifically, CMS uses PECOS data to identify the following: (i) all Medicare enrolled entities (as identified by a CCN) that have enrolled under the TIN of an ACO participant; and (ii) all individual practitioners (as identified by an NPI) who have reassigned their right to receive Medicare payment to the TIN of an ACO participant. The resulting initial ACO provider/supplier list reflects PECOS enrollment information at a single point in time. An ACO may need to add or remove a provider or supplier who has reassigned his or her right to receive Medicare payment to the TIN of an ACO participant after the ACO certified its ACO provider/supplier list for the performance year. An ACO that needs to make a change to its certified ACO provider/supplier list must notify CMS within 30 days of the change. For purposes of beneficiary assignment, we identify claims for services furnished by Method II CAHs, ETA hospitals, FQHCs, and RHCs using the CCN assigned to the facility. In general, ACO participants are identified by TINs. However, the TINs for Method II CAHs, FQHCs, RHCs, and ETA hospitals are not included in the National Claims History and IDR claims files, so we use the CCN as the unique identifier to identify services furnished by these entities. Thus, for these providers, we use TINs from the certified ACO participant list and the associated CCNs sourced from PECOS as the basis for beneficiary assignment. We also use claims from participant TINs on the certified ACO participant list and the CCNs from the initial ACO provider/supplier list in the determination of whether an ACO is a high revenue ACO or low revenue ACO, as defined at § 425.20, and in the determination of beneficiary assignment upon which benchmark and performance year expenditure calculations are determined. This approach allows CMS to identify ACO participant TINs and associated CCNs for the downstream operations necessary to prepare for the start of the performance year on January 1, including producing the ACO's list of prospectively assigned or preliminarily prospectively assigned beneficiaries, as applicable, at the start of each performance year. Although the CCNs enrolled under a TIN may change during the course of an ACO's performance year, CMS' current operational process identifies any related CCN changes, through use of PECOS, only during the application process or the annual change request cycle. As with the certified ACO participant list, the CCNs used for purposes of beneficiary assignment and other operations are those that appear on the initial ACO provider/supplier list that is developed before the start of a performance year, and those CCNs remain applicable for the duration of the performance year. Any new CCNs that are established during a performance year are not used for purposes of beneficiary assignment and other operations until the start of the next performance year. The same applies to CCNs that become deactivated or change their TIN affiliation (that is, enroll under a different TIN) in PECOS during a performance year; those changes are not reflected in beneficiary assignment and other operations until the start of the next performance year. In PECOS, a “deactivated” enrollment status includes providers or suppliers whose Medicare billing privileges have been deactivated under § 424.540 as well as providers and suppliers that have voluntarily terminated their enrollment. (2) Proposed RevisionsIn order to administer the Shared Savings Program, we need to accurately identify all ACO participant TINs and ACO providers/suppliers that participate in the program. An accurate identification of the ACO participants and the CCNs that are ACO providers/suppliers in an ACO is critical for assignment of beneficiaries to the ACO, as well as for assessing the quality of care provided by the ACO to its Start Printed Page 46126 assigned beneficiaries. An accurate identification of the individuals and entities participating in the ACO is also critical for ensuring compliance with program rules and equally important for the ACO and its own operational and compliance purposes. Thus, both CMS and the ACO need to have a common understanding of the individuals and entities that compose the ACO. We obtain this common understanding by requiring per § 425.118 that the ACO certify the accuracy of its ACO participant and ACO provider/supplier lists prior to the start of each performance year. In addition, we require the ACO to notify CMS of any changes to its ACO participant list and ACO provider/supplier list throughout the performance year. Because we rely on these lists for operational purposes, we must have a transparent process that results in the accurate identification of all ACO participants and ACO providers/suppliers, including CCNs, that compose each ACO in the Shared Savings Program. Based on our operational experience, we have determined that our current process, wherein we use an ACO's certified ACO participant list and data from PECOS to generate the initial ACO provider/supplier list prior to the start of the performance year and to identify the CCNs used for purposes of beneficiary assignment and other operations, may not capture all changes to providers and suppliers that participate in an ACO during the performance year. Specifically, our current processes do not capture: (a) new CCNs that are enrolled in Medicare under ACO participant TINs after the initial ACO provider/supplier list for a performance year is generated; or (b) CCNs that are in a deactivated status as listed in PECOS at the time the initial ACO provider/supplier list for a performance year is generated. A CCN enrollment can become active or be deactivated in PECOS at any time, and a CCN can change TIN affiliations over time, including during the course of an ACO's performance year. Developing the initial ACO provider/supplier list, including the CCNs used for purposes of beneficiary assignment and other operations, before the start of a new performance year, and having that list remain applicable for the duration of the performance year, prevents us from later capturing during the performance year any newly-enrolled CCNs affiliated with ACO participant TINs. Not recognizing new CCNs that enroll under an ACO participant TIN after the initial ACO provider/supplier list is generated impacts the determination of beneficiary assignment, expenditure and revenue calculations, and coordination among CMS quality reporting initiatives. Analysis based on PY 2019, 2019A, 2020, and 2021 data has shown that considering only the CCNs on the ACO provider/supplier list that is established prior to the start of the performance year, has a significant impact on assignment for some ACOs that include FQHCs, RHCs, ETA hospitals, and Method II CAHs. We found that 555 CCNs newly enrolled or re-enrolled during the course of PY 2020. CCNs were added across 143 (28 percent) of the 517 participating ACOs. Among the 344 ACOs under preliminary prospective assignment with retrospective reconciliation, 96 ACOs (28 percent) would have been impacted if the newly-enrolled CCNs were added to the ACO's ACO provider/supplier list during the 2020 performance year. An estimated 42,000 additional beneficiaries could have been assigned based on primary care services provided by CCNs enrolled during the performance year. Over 80 percent (that is, approximately 28,000) of these additional beneficiaries would have been concentrated among 12 ACOs under preliminary prospective assignment with retrospective reconciliation. Accordingly, we propose to add a new provision at § 425.402(f) to reflect how CCNs are used in assignment. Under proposed § 425.402(f)(1), we state that prior to the start of the performance year and periodically during the performance year, CMS will determine the CCNs for all FQHCs, RHCs, Method II CAHs, and ETA hospitals enrolled under the TIN of an ACO participant, including all CCNs with an active enrollment in Medicare and all CCNs with a deactivated enrollment status. Under proposed § 425.402(f)(2), we would use those CCNs in determining assignment for the performance year. Under § 425.402(f)(3), we set forth how we would account for changes in CCN enrollment status during a performance year. Under our proposal, CCNs that enroll under an ACO participant TIN during the performance year would be reflected in program operations, including but not limited to: beneficiary assignment and revenue and expenditure calculations performed quarterly and during financial reconciliation for ACOs under preliminary prospective assignment with retrospective reconciliation. Specifically, if a new CCN with no prior Medicare claims experience enrolls under the TIN of an ACO participant after the ACO certifies its ACO participant list for a performance year as required under § 425.118(a)(3), CMS would consider services furnished by that CCN in determining assignment to the ACO for the applicable performance year if the ACO has selected preliminary prospective assignment with retrospective reconciliation. We believe it is important to limit these updates to newly-enrolled CCNs during the performance year in order to ensure equivalency between historical benchmark expenditures and performance year expenditures. We propose to codify this change in the regulations at § 425.402(f)(3)(i). We further propose that services furnished by a CCN with a deactivated enrollment status prior to that CCN becoming deactivated that is enrolled under the TIN of an ACO participant at the start of a performance year will be considered in determining beneficiary assignment to the ACO for the applicable performance year or benchmark year. For purposes of this policy, we would use PECOS data to determine whether a CCN has a deactivated enrollment status. In the case of a CCN with a deactivated enrollment status that had multiple TIN affiliations prior to its deactivation, we propose to use the TIN with which the CCN was most recently enrolled to identify the appropriate ACO participant, if any, to which services furnished by the CCN should be attributed. We believe that the inclusion of CCNs with a deactivated enrollment status in PECOS is consistent with our policy on the consideration of claims billed by merged/acquired TINs as discussed in the June 2015 Final Rule (80 FR 32715). We believe that our rationale for the merged/acquired TIN policy also applies to CCNs with a deactivated enrollment status—namely, that (a) it is likely that the physicians and other practitioners furnishing primary care services billed via the CCN will continue to serve the same patient population that they served before the CCN deactivated its enrollment and (b) their patients may appear on the ACO's list of assigned beneficiaries at the end of the performance year. We believe this proposed change is important to maintain accuracy and comparability with regard to historical benchmark and performance year expenditure calculations. We propose to codify this change in the regulations at § 425.402(f)(3)(ii). The policy under proposed § 425.402(f)(3)(ii) would apply to CCNs that are deactivated but later reactivated, or that are disenrolled as one facility type but later re-enrolled as another type of ACO provider/supplier. For example, if a CCN for a Method II Start Printed Page 46127 CAH was deactivated during PY 2022 and later re-enrolled as another facility type during PY2023, the services furnished by the deactivated CCN would be considered in determining the ACO's assigned beneficiary population and historical benchmark expenditures for PY 2023, which is not the case under current policy. Similarly, if a CCN for a Method II CAH was deactivated during PY 2022 and later re-enrolled as an REH with a new CCN in CY 2023, the services furnished by the deactivated CCN would be considered in determining the ACO's assigned beneficiary population and historical benchmark expenditures for PY 2023, which is not the case under current policy. By considering both the deactivated CCN and the new REH CCN in determining the ACO's assigned beneficiary population, we would ensure parity between historical benchmark expenditures and performance year expenditures. We note that while we are proposing a specific policy to include deactivated CCNs in assignment, a similar policy is not needed for deactivated NPIs. During the performance and benchmark years, deactivated NPIs are included in assignment by default if they are included on a claim during the applicable assignment window. We believe it is necessary to continue our current operational process, to not allow CCNs to switch between ACOs during the performance year. That is, if a CCN that was enrolled under the TIN of one ACO participant enrolls under a different TIN during a performance year, we would continue to treat services billed by the CCN as services furnished by the original ACO participant TIN under which the CCN was enrolled. We believe it is most appropriate to continue our current process and operationally treat CCNs in a similar fashion to ACO participant TINs and not allow a CCN to switch between ACOs during the performance year, rather than treating them in a similar fashion to an NPI that would be allowed to switch between ACOs during a performance year due to the relative magnitude of services provided by and assignment associated with a CCN, as compared to a much smaller amount of services and assignment associated with a single NPI, as described above. This operational approach would limit the potential for large impacts on performance year expenditure calculations and reduce the potential for gaming opportunities. Including services billed by the CCN as services furnished by the ACO participant is consistent with our policy on the treatment of ACO participant TINs included on the ACO participant list, wherein an entity is deleted from the ACO participant list as of the termination of its ACO participant agreement but claims billed under the ACO participant TIN continue to be included in program operations until the end of the performance year. We propose to codify this approach for CCNs in the regulations at § 425.402(f)(3)(iii). We propose to identify all CCNs associated with ACO participant TINs as determined by the methodology described in the preceding paragraphs for use in assignment and other operations prior to determining historical benchmarks, running quarterly assignment, and financial reconciliation. We also intend to develop a mechanism for reporting to ACOs all CCNs used in assignment and for purposes of program operations to provide for a transparent process. This CCN information would be provided to ACOs on a periodic basis for informational purposes, and this information will not need to be certified by the ACO. We propose that this revised approach to the treatment of CCNs would be applicable for purposes of all program operations for the performance year starting on January 1, 2023, and subsequent performance years. We seek comment on all aspects of this proposal. 4. Quality Performance Standard and Reportinga. BackgroundSection 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 for purposes of assessing such quality of care. 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. In the November 2011 final rule, we established 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 have subsequently updated the measures that comprise 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, 83 FR 59707 through 59715 respectively). b. Revising the Shared Savings Program Quality Performance StandardAs discussed in this section of this proposed rule, we are proposing to further refine the quality performance standard for performance year 2023 and subsequent performance years through a combination of modifications. Specifically, we are concerned that the current structure of the quality performance standard creates a cliff of “all-or-nothing” scoring where an ACO may be ineligible to share in savings due to a minor difference between its MIPS Quality performance category score and the quality performance standard required to share in savings at the maximum sharing rate for the applicable performance year. We propose to adopt an alternative quality performance standard that incorporates a sliding scale to avoid this cliff. This flexibility would be even more important as ACOs transition to eCQM/MIPS CQM reporting and when the quality performance standard under the Shared Saving Program increases to the 40th percentile across all MIPS Quality performance category scores starting in performance year 2024. Additionally, we are proposing to modify our approach for determining shared losses for ACOs in the ENHANCED track that would allow more ACOs to receive a shared loss rate based on a sliding scale rather than automatically being subject to the maximum loss rate of 75 percent. We are not proposing to change the current requirements for ACOs to be eligible to share in savings at the maximum sharing rate. Second, we are proposing to extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the sunsetting of the CMS Web Interface reporting option. Third, we are proposing to establish a health equity adjustment that would upwardly adjust an ACO's quality performance score when it delivers high quality care to underserved populations in order to support those ACOs serving a high proportion of underserved individuals, while also encouraging all ACOs to treat underserved populations. We conclude the discussion with a summary of the proposals within this section of this proposed rule. (1) Current PolicyIn 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 Start Printed Page 46128 revised the quality performance standard under the Shared Savings Program for performance years beginning on or after January 1, 2021, to reduce reporting burden and focus on patient outcomes. We also finalized a gradual phase-in of the increase in the level of quality performance that would be required for all ACOs to meet the Shared Savings Program quality performance standard. Specifically, for performance years 2021 and 2022, an ACO would be required to achieve a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores to be eligible to share in any savings generated, and for 2023 and subsequent performance years, an ACO would be required to achieve a quality performance score that is equivalent to or higher than the 40th percentile across all MIPS Quality performance category scores to be eligible to share in savings (85 FR 84719 through 84736). We also finalized modifications to the Shared Savings Program regulations on the use of ACO quality performance in determining shared savings and shared losses (85 FR 84736 through 84740). We explained that section 1899(d)(1)(A) of the Act specifies that an ACO is eligible to receive a shared savings payment for a portion of the savings generated for Medicare, provided that the ACO meets both the quality performance standards established by the Secretary and achieves the required level of savings against its historical benchmark. Section 1899(d)(2) of the Act authorizes payments of shared savings under the Shared Savings Program. Specifically, if an ACO meets the quality performance standards established by the Secretary (according to section 1899(b)(3) of the Act) and meets the savings requirements, a percent (as determined appropriate by the Secretary) of the difference between the estimated average per capita Medicare expenditures in the year, adjusted for beneficiary characteristics, and the benchmark for the ACO, may be paid to the ACO as shared savings and the remainder of the difference shall be retained by the Medicare program. Section 1899(d)(2) of the Act also requires the Secretary to establish limits on the total amount of shared savings paid to an ACO. We have also incorporated performance-based risk in the form of shared losses into certain financial models under the Shared Savings Program using the authority under section 1899(i)(3) of the Act to use other payment models. In the CY 2021 PFS final rule, we finalized an approach to incorporating ACO quality performance in determining shared savings that would allow ACOs to maximize the potential shared savings they could earn across the Shared Savings Program's financial models. Specifically, we replaced the previous sliding scale approach with an all-or-nothing approach to determining shared savings based on quality performance (85 FR 84735).[204] Thus, under the current regulations, for performance years beginning on or after January 1, 2021, if an ACO that is otherwise eligible to share in savings meets the quality performance standard established under § 425.512, the ACO will share in any savings generated at the maximum sharing rate according to the applicable financial model, up to the performance payment limit. If the ACO fails to meet the quality performance standard, the ACO will be ineligible to share in savings. Further, we finalized an approach that continued to allow CMS to take into consideration an ACO's quality performance score in calculating the amount of shared losses for certain two-sided models (85 FR 84740).[205] We finalized the following approach to determining the shared loss rate for ACOs participating in the ENHANCED track for performance years beginning on or after January 1, 2021, as specified under § 425.610(f)(2). If the ACO meets the quality performance standard established in § 425.512, CMS determines the shared loss rate as follows: • Step 1: Calculate the quotient of the MIPS Quality performance category points earned divided by the total MIPS Quality performance category points available. • Step 2: Calculate the product of the quotient described in step 1 and the sharing rate of 75 percent under the ENHANCED track. • Step 3: Calculate the shared loss rate as 1 minus the product determined in step 2. The shared loss rate may not exceed 75 percent and may not be less than 40 percent. If the ACO fails to meet the quality performance standard, the shared loss rate will be 75 percent. In the CY 2022 PFS final rule, we finalized an extended phase-in of the modified quality performance standard under the Shared Savings Program. Specifically, we extended the phase-in of the quality performance standard for an additional performance year (30th percentile for performance years 2021, 2022, and 2023). We also finalized that, for performance years 2022 and 2023, ACOs choosing to report on the 3 eCQMs/MIPS CQMs (meeting data completeness and case minimum requirements for all 3 measures) would meet the quality performance standard if they achieve a Quality performance category score equivalent to or higher than the 10th percentile of the performance benchmark on at least 1 of the 4 outcome measures in the APP measure set and achieve a Quality performance category score equivalent to or higher than the 30th percentile of the performance benchmark on at least 1 of the remaining 5 measures in the APP measure set (86 FR 65253 through 65272). In summary, pursuant to the policies finalized in the CY 2022 PFS final rule (86 FR 65266 through 65270), a Shared Savings Program ACO, with the exception of an ACO in the first performance year of its first agreement period, will be eligible to share in savings at the maximum sharing rate if it:
++ 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 ++ 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 Start Printed Page 46129 percentile. The outcome measures in the APP measure set are listed in Table 52.
We noted in the CY 2022 PFS final rule that we had received several comments suggesting that we revert to the previous sliding scale methodology used prior to the alignment with the APP for determining if an ACO has met the quality performance standard (86 FR 65268 and 65269). We stated in the CY 2022 PFS final rule in response to these comments that we would consider proposing to reinstate the sliding scale methodology for determining shared savings and shared losses in the CY 2023 PFS proposed rule for ACOs that report on the three eCQMs/MIPS CQMs. We stated that under such a proposed sliding scale methodology, we would multiply the ACO's MIPS Quality performance category 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 ACO's track (or payment model within a track) to determine the ACO's shared savings (86 FR 65269). (2) Proposals to Scale Shared Savings Based on Quality PerformanceIn light of the comments received during the public comment period for the CY 2022 PFS proposed rule, we are now proposing to reinstate a modified sliding scale approach for determining shared savings for all ACOs regardless of how they report quality data. In particular, commenters shared their concern that ACOs are now shifting from being compared against other ACOs to broadening this comparison to include all MIPS eligible clinicians (86 FR 65260). We also continue to hear this same concern from a number of interested parties. In addition, if this proposal were limited to eCQM/MIPS CQM reporting, it would require additional complexity specific to the requirements for scaled shared savings and scaled shared losses of the ENHANCED track. Please also refer to section III.G.4.b.(5) of this proposed rule for additional rationale on our proposal to apply the sliding scale approach to all ACOs regardless of how they report quality data. We propose in § 425.512(a)(4)(ii) and (a)(5)(ii) that, beginning with performance year 2023 and for subsequent performance years, if an ACO fails to meet the existing criteria under the quality performance standard to qualify for the maximum sharing rate but the ACO 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 then the ACO would share in savings (if otherwise eligible) at a lower rate that reflects the ACO's quality performance score. Specifically, the ACO's final sharing rate would be a scaled rate that is calculated by multiplying the maximum sharing rate for the ACO's track (or payment model within a track) by the ACO's quality performance score. The ACO's quality performance score used in this calculation would reflect the ACO's MIPS Quality performance category score plus any health equity adjustment bonus points the ACO is eligible to receive (referred to as the health equity adjusted quality performance score) based on our proposal described in section III.G.4.b.(7) of this proposed rule, if finalized. For an example of this proposed sliding scale approach for determining shared savings, consider a hypothetical ACO in Level B of the BASIC track in performance year 2023 that met the MSR to qualify for shared savings and achieved a health equity adjusted quality performance score of 45 which is less than the 30th percentile MIPS Quality performance category score based on the unweighted distribution. However, the ACO achieved a quality performance score equivalent to or higher than the 10th percentile of the performance benchmark on one of the four outcome measures in the APP measure set. In this example, the ACO would share in savings (if otherwise eligible) at a lower rate that is scaled by the ACO's health equity adjusted quality performance score. We would calculate the scaled final sharing rate for this ACO by multiplying the maximum sharing rate for an ACO in Level B of the BASIC track of 40 percent by the ACO's health equity adjusted quality performance score of 45 (expressed as a percentage) (that is, 40 percent × 45 percent) to obtain a final sharing rate of 18 percent. We would then multiply the final sharing rate by the ACO's total savings (measured on a first dollar basis) to calculate the ACO's shared savings amount before considering the performance payment limit. We believe the proposed sliding scale approach meets the statutory requirements of section 1899(b)(3)(C) of the Act, which requires the Secretary to establish quality performance standards to assess the quality of care furnished by ACOs and to seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new measures, or both for purposes of assessing such quality of care. Under our proposal, ACOs would still transition to a higher quality performance standard equivalent to or higher than the 40th percentile to share in savings at the maximum savings rate for their track beginning with performance year 2024. Still, this proposal to reinstate a sliding scale approach for determining shared savings for ACOs would allow for flexibility in order to avoid the all-or-nothing approach as the Shared Savings Program transitions to required reporting of eCQMs/MIPS CQMs beginning with performance year 2025 after the sunsetting of the CMS Web Interface measure set. As recently as performance year 2021, only 12 ACOs reported eCQMs/MIPS CQMs, indicating that most ACOs are still developing their strategy and workflows to combine data across their EHR systems in advance of the requirement to report eCQM/MIPS CQMs beginning in performance year 2025. We believe that the sunsetting of the CMS Web Interface collection, the requirement to report eCQMs/MIPS CQMs beginning in performance year 2025, and the increase in the quality performance standard to share in savings at the maximum savings rate starting in performance year 2024 will increase the stringency of the quality performance requirements under the Shared Savings Program as contemplated under section 1899(b)(3)(C) of the Act. We believe a scaled approach to the quality performance standard, and thus to the determination of shared savings, would be beneficial because small differences in the distribution of ACOs' MIPS Quality performance category scores and other MIPS reporters' scores for a performance year may result in a large difference in the number of ACOs that fail to meet the quality performance standard as currently defined. Moving away from an all-or-nothing approach to a sliding scale approach to determine shared savings based on ACO quality performance would help to minimize the impact of these fluctuations by allowing ACOs that are close to, but do not achieve the health equity adjusted quality performance score required to share in savings at the maximum sharing rate under their track, to receive some shared savings. In summary, to implement this proposal, we are proposing to revise the provisions governing the quality performance standard at § 425.512(a)(4) Start Printed Page 46130 and (5) to reflect the proposed alternative quality performance standard. Specifically, we propose to revise § 425.512(a)(4) and (5) to provide for a quality performance standard that an ACO must meet in order to share in savings at the maximum sharing rate under its track (or payment model within a track) and an alternative quality performance standard that an ACO would be required to meet in order to share in savings on a sliding scale. We also are proposing to make conforming changes to the methodologies for calculating shared savings under the BASIC track and the ENHANCED track, as specified in § 425.605 and § 425.610, respectively to reflect the proposed sliding scale approach. We reiterate our statement in the CY 2022 PFS final rule that for performance years 2022, 2023 and 2024 if an ACO: (1) does not report any of the 10 CMS Web Interface measures or any of the 3 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 (86 FR 65261). We are proposing that, for performance years 2023 and 2024, an ACO that does not meet these requirements would also not meet the proposed alternative quality performance standard. For performance years 2025 and subsequent performance years, we finalized that if an ACO does not report any of the 3 eCQMs/MIPS CQMs and does not administer a CAHPS for MIPS survey under the APP, the ACO will not meet the quality performance standard (86 FR 65262). We are also proposing that, for performance years 2025 and subsequent performance years, an ACO that does not meet these requirements would also not meet the proposed alternative quality performance standard. These proposals are reflected in our proposed revisions to § 425.512(a)(4) and (5). (3) Proposal To Modify Methodology for Determining Scaled Shared Losses for the ENHANCED Track Based on Quality PerformanceWe are also proposing a modification to the methodology used to determine shared losses for ACOs in the ENHANCED track. Under our current regulations at § 425.610(f)(2), for performance years beginning on or after January 1, 2021, an ACO in the ENHANCED track must meet the quality performance standard in order to have its shared losses scaled based on its quality performance and avoid automatically facing the maximum shared loss rate of 75 percent. We are proposing that for performance year 2023, and subsequent performance years, we would determine the ACO's shared loss rate using a sliding scale approach for an ACO that has losses that exceed its minimum loss rate and either meets the existing quality performance standard applicable for the performance year (that is, an ACO that would currently be eligible for shared losses scaled based on quality performance) or that does not meet that standard but 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. Under this proposal, an ACO that meets the existing quality performance standard or that meets the new alternative standard would be subject to a scaled shared loss rate equal to 1 minus the product of the maximum sharing rate for the ENHANCED track (75 percent) and the ACO's quality performance score. The ACO's quality performance score used in this calculation would reflect the ACO's MIPS Quality performance category score plus any health equity adjustment bonus points the ACO is eligible to receive (referred to as the health equity adjusted quality performance score) based on our proposal described in section III.G.4.b.(7) of this proposed rule. The scaled shared loss rate would be subject to a minimum of 40 percent and a maximum of 75 percent. An ACO that fails to achieve 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 would continue to automatically share in losses at the maximum shared loss rate of 75 percent. Likewise, an ACO that fails to achieve the proposed alternative quality performance standard because it (1) does not report any of the ten CMS Web Interface Measures (for performance year 2023 or 2024) or any of the three eCQMs/MIPS CQMs (for performance year 2025 or subsequent performance year) and (2) does not administer a CAHPS for MIPS survey under the APP as described in section III.G.4.b.(2) of this proposed rule would also automatically share in losses at the maximum rate. This proposal would, by itself, not materially change the current methodology for determining shared losses for ENHANCED track ACOs that meet the existing quality performance standard (or would meet the criteria for the eCQM/MIPS CQM incentive), but would newly allow for the application of a scaled shared loss rate for ENHANCED track ACOs that achieve 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, as opposed to these ACOs automatically receiving the maximum shared loss rate under the ENHANCED track of 75 percent as required under the current regulations at § 425.610(f)(2)(ii). That is, more ACOs would have the opportunity to lower their shared loss rate below the maximum rate based on their quality performance. In practice, an ACO would need to achieve a health equity adjusted quality performance score of higher than 33 and one-third in order to have a shared loss rate below 75 percent under the proposed approach. That is, a score greater than 33 1/3 is needed for the scaled shared loss rate formula to yield a value less than 75 percent. For an ACO with a score of exactly 33 and one-third, the shared loss rate calculated by the formula would equal 75 percent. For an ACO with a score below 33 and one-third, the calculated rate would be greater than 75 percent, triggering the application of the maximum shared loss rate of 75 percent. We note that our proposal to determine the shared loss rate using the ACO's health equity adjusted quality performance score uses language that is different from the phrasing used in the current regulation at § 425.610(f)(2), which describes the shared loss rate as being calculated using “the quotient of the MIPS Quality performance category points earned divided by the total MIPS Quality performance category points available.” As indicated in the CY 2021 PFS final rule, this approach allowed CMS to continue to scale shared losses by the ACO's quality score under the Shared Savings Program's two-sided models with the highest levels of risk and potential reward, the ENHANCED track and the Track 2 (although performance year 2021 was last year in which ACOs participated under this financial model) (85 FR 84736 through 84740). The phrasing “the quotient of the MIPS Quality performance category points earned divided by the total MIPS Quality performance category points available” represents a mechanical description of how the score is calculated to clarify that the scaling factor represented a value between 0 and 1 which, in turn, would ensure that the shared loss rate falls between 0 and 100 percent (before the application of the minimum or maximum shared loss rate). However, upon further consideration, we believe that this phrasing may cause unnecessary Start Printed Page 46131 confusion. For example, it does not clarify whether or how applicable MIPS bonus points or quality improvement points would be incorporated or how the calculation would be impacted if the ACO is subject to the extreme and uncontrollable circumstances policy described in § 425.512(b). Furthermore, it does not address the treatment of health equity adjustment bonus points, if the proposed health equity adjustment described in section III.G.4.b.(7) of this proposed rule is finalized. As we have described in prior rulemaking (85 FR 84735), the ACO's MIPS Quality performance category score accounts for any MIPS bonus points and quality improvement points and the extreme and uncontrollable circumstances policy in § 425.512(b), which we are proposing to re-designate as § 425.512(c), indicates how an ACO's quality performance score will be determined if the ACO is affected by an extreme and uncontrollable circumstance. Furthermore, an ACO's health equity adjusted quality performance score would always take on a value between 0 and 100 as the MIPS Quality performance category score itself will always fall between 0 and 100 and the application of the proposed health equity adjustment, if finalized, would be restricted from raising the health equity adjusted quality performance score above 100. As a result, an ACO's health equity adjusted quality performance score could be expressed as a percentage that would also ensure that the scaled shared loss rate falls between 0 and 100 percent (before the application of the minimum or maximum shared loss rate). Therefore, we favor using the phrasing “health equity adjusted quality performance score” in describing our proposed methodology for determining the shared loss rate for ENHANCED track ACOs for performance year 2023 onward, and we also note that this phrasing would align with the terminology used in the description of the proposed sliding scale approach for determining shared savings. For an example of the sliding scale approach for determining shared losses, consider a hypothetical ACO participating in the ENHANCED track in PY 2023 that had total losses above its minimum loss rate and achieved a health equity adjusted quality performance score of 45, which is less than the 30th percentile MIPS Quality performance category score based on the unweighted distribution. If the ACO 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, it would share in losses at a rate that is scaled by the ACO's quality performance score. We would calculate the scaled shared loss rate for this ACO as 1 minus the maximum shared loss rate for the ENHANCED track of 75 percent multiplied by the ACO's health equity adjusted quality performance score of 45 (expressed as a percentage) [1 − (45 percent × 75 percent)] to obtain a shared loss rate of 66.25 percent. We would then multiply this shared loss rate by the ACO's total losses (measured on a first dollar basis) to calculate the ACO's shared losses before consideration of the loss recoupment limit. We propose to revise the regulatory text in § 425.610(f) to provide for this scaled approach to the determination of shared losses. (4) Additional Considerations Related to Proposed Modifications to Advanced APM CriteriaSection 414.1415(b)(1) through (3) require that to be an Advanced APM, an APM must include quality measure performance as a factor when determining payment to Advanced APM participants. Specifically, § 414.1415(b)(1) through (3) require, in relevant part, that two quality measures, one of which is an outcome measure, be a factor when determining payment to Advanced APM participants. In the Shared Savings Program, the ENHANCED track and Level E of the BASIC track are currently Advanced APMs, and we expect them to be Advanced APMs in the future. As part of our proposal to permit ACOs that fail to meet the existing criteria under the quality performance standard to share in savings at a lower rate (if otherwise eligible), we are proposing that an ACO must achieve 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. This proposed approach would not meet the current requirements for an Advanced APM at § 414.1415(b)(2) and (b)(3). This is because the proposal permits the use of a single outcome measure as a factor when determining payment. We note that in section IV.A.4.a of this proposed rule, there is a proposal to modify the Advanced APM criteria to allow for a single quality measure to be used to meet both quality measure criteria at § 414.1415(b)(2) and (b)(3). We are aligning our proposal with the proposed modifications to § 414.1415(b)(2) and (b)(3). As such, we are proposing in § 425.512(a)(4)(ii) and (a)(5)(ii) to require that an ACO meet only one of the four outcome measures for the ACO to be eligible to share in savings at a lower rate. Should the proposal under section IV.A.4.a of this proposed rule not be finalized, we would consider finalizing the following alternate policy based on comments received. Beginning with performance year 2023 and for subsequent performance years, if an ACO fails to meet the existing criteria under the quality performance standard to qualify for the maximum sharing rate, but the ACO 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 measures in the APP measure set, then the ACO would share in savings (if otherwise eligible) at a lower rate that reflects the ACO's health equity adjusted quality performance score. The ACO would consequently be required to meet the performance benchmark on either 2 outcome measures (one outcome measure at the 10th percentile and another measure 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 to maintain consistency with the requirements of § 414.1415(b)(1) through (3). With respect to shared losses for ACOs in the ENHANCED track, we would consider finalizing a parallel approach that would allow for application of a scaled shared loss rate for ENHANCED track ACOs that achieve 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 measures in the APP measure set. (5) Broad Applicability of the Proposal To Apply the Sliding Scale Approach To Determining Shared Savings for ACOsWe are proposing to apply the sliding scale approach to determine shared savings for all qualifying ACOs and to determine shared losses for ENHANCED track ACOs regardless of how they report quality data to CMS in order to maintain consistency in the treatment of quality performance across all ACOs. Start Printed Page 46132 We believe inclusion of all qualifying ACOs in this proposal regardless of reporting method would be responsive to the concerns expressed by interested parties regarding the perceived inequality in comparing MIPS quality scores between the Shared Savings Program and the traditional MIPS program. Specifically, ACOs have indicated they are limited to reporting the measures included under the APP, whereas traditional MIPS participants have a broader range of measures to select and report (86 FR 65268). Our proposal to implement the sliding scale methodology would allow ACOs that otherwise would not have received any shared savings, but perform well on quality to share in a portion of the savings they achieve, but at a lower rate. This policy would also potentially allow ACOs to make a greater investment in the infrastructure necessary for transitioning to eCQM/MIPS CQM reporting in performance year 2025 or earlier by enabling certain ACOs to receive shared savings that they otherwise would not have received under the current quality performance standard policies. Furthermore, if we were to finalize this proposal, these ACOs would have additional funds available that they could choose to invest in advancing health equity. We seek comments on all aspects of the proposals to scale shared savings and shared losses discussed in sections III.G.4.b.(2) through (5) of this proposed rule, including the alternative approach if the proposed changes to § 414.1415(b)(2) and (b)(3) are not finalized. (6) Extension of eCQM/MIPS CQM IncentiveWe are separately proposing to revise § 425.512(a)(4) and (5) to extend the incentive for reporting eCQMs/MIPS CQMs through performance year 2024 to align with the timeline for sunsetting of the CMS Web Interface reporting option and to allow ACOs an additional year to gauge their performance on the eCQM/MIPS CQMs before full reporting of the measures are required beginning in performance year 2025. We originally adopted this incentive in the CY 2022 PFS final rule to encourage ACOs to begin the transition to eCQM/MIPS CQM reporting in PYs 2022 and 2023 (86 FR 65269). Under the current incentive:
In the CY 2022 PFS final rule, we finalized our proposal to freeze the quality performance standard at the 30th percentile across all MIPS Quality performance category scores for performance year 2023 (86 FR 65269). Therefore, under the current regulations, beginning with performance year 2024 and subsequent performance years, an ACO must achieve 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 (86 FR 65270). To align with the finalized policy from the CY 2022 PFS final rule, we are proposing to update the eCQM/MIPS CQM incentive for performance year 2024 to include this requirement. Under this proposed update to the incentive for performance year 2024:
We seek comment on this proposal.
If we were to modify the eCQM/MIPS CQM incentive to align with the proposed modifications to § 414.1415(b)(2) and (b)(3), we would make corresponding changes to the proposed regulatory text at § 425.512(a)(5)(i)(A)(2) by removing the requirement that an ACO achieve 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 in order to meet the quality performance standard used to determine eligibility for shared savings and to avoid maximum shared losses, if applicable. In addition, we would make corresponding changes to the regulatory text governing the eCQM/MIPS CQM incentive for PY 2023 at § 425.512(a)(4)(i)(B). We note that the requirements to qualify for the eCQM/MIPS CQM incentive for PY 2022 would not be affected by the proposed modifications to § 414.1415(b)(2) and (b)(3). (7) Health Equity Adjustment for ACOs That Report All-Payer eCQMs/MIPS CQMs, and Are High Performing on Quality, and Serve a High Proportion of Underserved Beneficiaries(a) Background and OverviewHealth care outcome inequalities exist among patients throughout the United States, and empirical research has found that certain patient characteristics are associated with worse health outcomes. Patients experiencing worse health outcomes often face barriers to accessing health care services and have access to fewer health care providers. This research also provides evidence of the relationships between socioeconomic status/social risk factors and health care outcomes. Section 2(d) of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 (Pub. L. 113-183) called for the Secretary of Health and Human Services (HHS) to conduct a study evaluating the effect of individuals' socioeconomic status (SES) on quality measures and measures of resource use under the Medicare program. The Office of the Assistant Secretary for Planning and Education's (ASPE) March 2020 Report to Congress: Social Risk Factors and Performance in Medicare's Value-Based Purchasing (VBP) Program, provides insight into whether and how value-based programs should account for Start Printed Page 46133 beneficiaries' social risk factors such as income, housing, transportation, and nutrition that might adversely affect their access to health care services or health outcomes. A key finding is that dual enrollment status is a strong predictor of poorer health care quality measure outcomes in Medicare's VBP programs, even when accounting for other social and functional risk factors.[206] In addition, several peer-reviewed research studies demonstrate that neighborhood-level factors for those residing in disadvantaged neighborhoods also have a relationship to worse health outcomes for these residents. Living in an area with an ADI score of 85 or above, a validated measure of neighborhood disadvantage, is shown to be a predictor of 30-day readmission rates, lower rates of cancer survival, poor end of life care for patients with heart failure, and longer lengths of stay and fewer home discharges post-knee surgery even after accounting for individual social and economic risk factors.[207 208 209 210 211] Many rural areas also have relatively high levels of neighborhood disadvantage and high ADI levels. We believe dual Medicare and Medicaid eligibility and ADI score are good indicators of beneficiaries with high needs. Dual eligibility, an indicator at the beneficiary level, is intended to capture socioeconomic challenges that could affect a beneficiary's ability to access care, while ADI, a neighborhood-level indicator, is intended to capture local socioeconomic factors correlated with medical disparities and underservice. We refer readers to the CY 2022 PFS final rule (86 FR 65382 through 65384) for a detailed review of the literature on health care outcome inequalities. The information included in these articles and reports informed our decision to propose a health equity adjustment in connection with ACO quality performance and our consideration of the appropriate criteria for determining ACO eligibility for the adjustment. As discussed in section III.G.4.f. of this proposed rule, health equity, addressing health disparities, and closing the performance gap on the quality of care provided to underserved populations continue to be high priorities for the Agency through inclusion of health equity initiatives in CMS programs, and better addressing the social needs of people with Medicare is an important part of this strategy. We are committed to achieving health equity for Medicare beneficiaries by supporting ACOs in quality improvement activities to reduce health disparities, enabling Medicare beneficiaries to make more informed decisions, and promoting provider accountability for health care disparities.[212 213] Further, CMS has set forth a goal that 100 percent of people with Original Medicare will be in a care relationship with accountability for quality and total cost of care by 2030, and is focused on expanding the reach of ACOs into rural and other underserved communities. Among other considerations for reaching this goal, CMS is examining the use of incentives to close gaps in outcomes for Medicare beneficiaries.[214] In section III.G.2.a. of this proposed rule, we are proposing to provide advance shared savings in the form of AIPs to certain ACOs participating in the Shared Savings Program using beneficiary dual eligibility status and ADI data to determine the amount of quarterly payments. To align with these goals, we are proposing a health equity adjustment that would upwardly adjust quality performance scores for ACOs that serve a high proportion of underserved individuals and achieve high quality performance. As discussed in section III.G.4.a. of this proposed rule, 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, while section 1899(b)(3)(A) of the Act provides that that the Secretary shall determine appropriate measures to assess the quality of care furnished by the ACO. We are concerned that our current quality performance standard and the quality performance measures we have adopted do not adequately assess the quality of care provided by ACOs with clinicians who serve a high proportion of underserved individuals. We are similarly concerned that the current quality performance standard and quality measures set do not adequately incentivize all ACOs to provide high quality care to underserved beneficiaries nor do we want to create an incentive for ACOs to avoid underserved populations as we transition to all payer eCQMs/MIPS CQMs because patients with social risk factors tend to have worse quality scores overall. The concern about lower quality scores for underserved populations is magnified in eCQMs compared to reporting via the CMS Web Interface, because all-payer reporting in eCQMs includes quality scores for people with Medicaid (correlating with low-levels of income and increased prevalence social risk factors when compared to people with Medicare); whereas, historical reporting via the CMS Web Interface has only included those quality scores for people with Medicare. Therefore, ACOs that serve a higher proportion of Medicaid enrollees may receive lower quality scores during the switch to eCQMs without an adjustment. In turn, without an adjustment during the switch to eCQMs, ACOs that serve a higher proportion of people with Medicaid or other underserved populations outside of Medicare could be incentivized to avoid underserved populations, delay switching to eCQMs for as long as possible, or even cease participation in the Shared Savings Program altogether. This concern has been raised by interested parties serving large proportions of underserved populations. We have previously been urged to adopt risk-adjusted quality measures that account for beneficiary Start Printed Page 46134 characteristics such as geographic location, socioeconomic status, education, race, ethnicity, gender, preferred language, disability status, or health literacy (76 FR 67873). A number of our measures do adjust for certain beneficiary characteristics, such as age and gender; however, we do not broadly adjust measure performance on the numerous demographic characteristics listed. Quality performance approaches based on risk adjustment that are intended to promote equity can mask real differences in quality and make it more difficult to identify and address disparities where they exist. Risk adjustment for social risk factors may also have the unintended effect of setting lower quality standards for underserved populations, rather than ensuring high quality standards for all populations receiving care that is established in the move to eCQMs/MIPS CQM all payer quality measures. In considering how to modify the existing quality performance requirements under the Shared Savings Program to more fully assess the quality of care furnished by ACOs that serve a high proportion of underserved individuals, we believe that rather than risk adjusting for disparities in the health status of underserved populations, it would be more appropriate to adopt an approach that rewards high quality performance across all populations served by an ACO. For this reason, we are now proposing to revise how we assess the quality of care furnished by ACOs through the creation of a health equity adjustment designed to support those ACOs serving a high proportion of underserved individuals while also mitigating disparities in health care by encouraging all ACOs to treat underserved populations. We believe the proposed approach would also continue encouraging high ACO quality performance, reinforce ACOs' transition to reporting all-payer eCQMs/MIPS CQMs, and provide an incentive for ACOs to provide high quality care to all of the populations they serve. Additionally, because every year a greater proportion of ACOs are making the switch to eCQMs, instituting a health equity adjustment for those ACOs making the switch to eCQMs will allow us to study the impacts and make refinements during subsequent rulemaking. As described within this section of this proposed rule, we propose that the health equity adjustment would be available for performance year 2023 and for subsequent performance years to an ACO that reports the three eCQMs/MIPS CQMs in the APP measure set, meeting the data completeness requirement at § 414.1340 for all three eCQMs/MIPS CQMs, and administers the CAHPS for MIPS survey. We propose such ACOs may receive up to a maximum of 10 additional points added to their MIPS Quality performance category score. The level of the adjustment would be determined based on the joint consideration of an ACO's performance on quality measures and the population served by the ACO, such that ACOs that perform well on quality measures and serve a higher proportion of beneficiaries who are from underserved neighborhoods (residing in census block group with an ADI national percentile rank of 85 or higher) or are dually eligible for Medicare and Medicaid would receive a higher number of bonus points. (b) Application of the AdjustmentWe propose to apply the health equity adjustment in the form of bonus points added to the ACO's MIPS Quality performance category score. Under this proposed approach, the ACO's health equity adjusted quality performance score would be the sum of the ACO's MIPS Quality performance category score for all measures in the APP measure set and the ACO's health equity adjustment bonus points, if applicable. This proposal would not change the current policy for determining and calculating an ACO's MIPS Quality performance category score. Under the existing regulations at § 425.512 and under the proposed modifications to the quality performance standard described elsewhere within this proposed rule, there are specific programmatic uses of the ACO's MIPS Quality performance category score. In applying the proposed health equity adjustment to the ACO's MIPS Quality performance category score, which constitutes the ACOs' aggregate, or overall score, across the APP measure set, we propose to limit the application of the health equity adjustment to certain specified Shared Savings Program determinations and calculations. The use of the ACO's health equity adjusted quality performance score in these calculations would allow ACOs that report the eCQMs/MIPS CQMs and provide high quality care to underserved beneficiaries to share in savings at relatively higher sharing rates, or in the case of ENHANCED track ACOs that owe shared losses, to reduce the shared loss rate used to calculate the amount of shared losses owed to CMS. We believe this approach would serve as a means to incentivize ACOs by offering a financial reward for providing high quality care to underserved beneficiaries, further financially support ACOs that serve underserved beneficiaries, encourage ACOs to add ACO participants in underserved areas, and avoid creating adverse incentives for ACOs to avoid underserved populations or the health care providers serving those populations. We propose to apply an ACO's health equity adjusted quality performance score in determining whether the ACO met the quality performance standard set at the 30th percentile for performance year 2023 as specified under § 425.512(a)(4)(i)(A), or the 40th percentile for performance year 2024 and subsequent performance years, as specified in the proposed revised regulations at § 425.512(a)(5)(i)(A)( 1) and § 425.512(a)(5)(i)(B), respectively. Use of the ACO's health equity adjusted quality performance score in making this determination would potentially allow more ACOs that provide high quality care to underserved beneficiaries to meet the quality performance standard. Under the Shared Savings Program's current policies, ACOs that meet this quality performance standard share in any savings generated at the maximum sharing rate under their track (or payment model within a track), up to the performance payment limit. For ENHANCED track ACOs that meet the quality performance standard, the ACO's shared losses are scaled based on its quality performance. We further propose to apply an ACO's health equity adjusted quality performance score in the determining shared savings and losses as specified in certain existing provisions of the Shared Savings Program regulations and under proposed modifications to the regulations as described elsewhere within this proposed rule. We propose to use an ACO's health equity adjusted quality performance score to determine the final sharing rate for calculating shared savings payments under the BASIC track (under § 425.605(d)) and the ENHANCED track (under § 425.610(d)) for an ACO that meets the proposed alternative quality performance standard allowing for application of a sliding scale based on quality performance, as specified in proposed modifications to § 425.512(a)(4)(ii) and (a)(5)(ii). Among ACOs whose shared savings would be determined according to the sliding scale approach (described in sections III.G.4.b.(2) and (3) of this proposed rule), the application of the proposed health equity adjustment would allow for relatively higher quality performance scores in calculating the final sharing rate and make it possible for an ACO to share in savings at a relatively higher Start Printed Page 46135 final sharing rate under its track (or payment model within a track). For ENHANCED track ACOs that owe shared losses, we propose to apply the health equity adjustment to the ACO's quality performance score used in calculating the ACO's shared loss rate, to allow the ACO to share in losses at a relatively lower rate, based on its quality performance. Specifically, we propose to use an ENHANCED track ACO's health equity adjusted quality performance score in calculating shared losses under § 425.610(f) when the ACO meets the quality performance standard specified under § 425.512(a)(4)(i) or (a)(5)(i) (which includes the incentive for reporting eCQMs/MIPS CQMs for PY 2023 and the proposed extension of the incentive for PY 2024) or meets the proposed alternative quality performance standard under § 425.512(a)(4)(ii) and (a)(5)(ii) allowing for the application of a sliding scale based on quality performance. For an ENHANCED track ACO in the first performance year of its first agreement period that meets the quality performance standard by reporting data via the APP and meeting the data completeness and case minimum requirements in accordance with § 425.512(a)(2), the ACO's quality performance score is utilized in calculating any shared losses under § 425.610(f). Therefore, we also propose to use the ACO's health equity adjusted quality performance score to determine the shared loss rate for such ACOs. Further, we propose to apply the health equity adjustment in calculating the ACO's quality performance score for an ACO affected by extreme and uncontrollable circumstances if the ACO is able to report quality data via the APP and meet data completeness and case minimum requirements, as provided in § 425.512(b)(3) in the current regulations. As discussed in section III.G.4.b.(8) of this proposed rule, the proposed approach of using an ACO's health equity adjusted quality performance score to determine the “higher of” score under the extreme and uncontrollable circumstances policy would have no practical impact on the sharing rate for an ACO that is eligible to share in savings. For an ACO participating in the ENHANCED track that is liable for shared losses, the proposed application of the health equity adjustment could increase the ACO's quality performance score used to determine the ACO's shared loss rate, and thus potentially reduce the amount of shared losses owed to CMS. (c) Identifying Top Quality Performance Among ACOs reporting eCQMs/MIPS CQMs; Determining the Measure Performance ScalerWe propose the health equity adjustment would be available to an ACO that reports the three eCQMs/MIPS CQMs in the APP measure set and meeting the data completeness requirement at § 414.1340 for all three eCQMs/MIPS CQMs, and administers the CAHPS for MIPS survey. We believe that limiting the proposed health equity adjustment to ACOs reporting all-payer measures (eCQMs/MIPS CQMs) would further encourage ACOs to report all-payer measures in performance year 2023 (while the Web Interface is still an available reporting option). ACOs may opt to report eCQMs/MIPS CQMs in order to have the benefit of the application of the health equity adjustment. As stated previously, the concern about lower quality scores for underserved populations is magnified in eCQMs compared to reporting via the CMS Web Interface, because all-payer reporting in eCQMs includes quality scores for people with Medicaid (correlating with low-levels of income and increased prevalence social risk factors when compared to people with Medicare). ThereforeIn addition, offering a health equity adjustment to ACOs who report all three eCQMs/MIPS CQMs would support ACOs that are serving greater proportions of underserved populations as the shift to all-payer reporting takes place. ACOs not yet familiar with their performance on these measures or how they may be impacted by the change to all-payer populations may be incentivized by this proposal to begin reporting these measures before the full transition occurs. This proposal takes into account interested parties' concerns regarding challenges in improving quality of care for underserved populations, while recognizing ACOs that provide high quality of care for this population. It also helps address the concerns that we have heard from ACOs that serve higher proportions of people with Medicaid and other underserved populations with regards to all-payer quality reporting during the switch to eCQMs/ MIPS CQMs. As we have noted previously in this section of the proposed rule, social risk factors may adversely affect access to health care services or preferred health outcomes, and dual-enrollment status is a strong predictor of poorer health care quality measure outcomes in Medicare's VBP programs. We acknowledge that using the all payer quality measures as well as outcome measures may make it even more difficult for ACOs that serve underserved populations to achieve the quality performance standard, since all-payer reporting will newly include people with Medicaid as part of quality reporting, and people with Medicaid tend to have a higher amount of social risk factors and lower quality scores. As we discussed in section III.G.4.b(2) of this proposed rule, most ACOs are still developing strategies and workflows to combine data across EHR systems in advance of requirements to report eCQMs/MIPS CQMs. Adding health equity adjustment bonus points to the ACO's MIPS Quality performance category score could allow more ACOs that care for underserved populations to potentially meet the quality performance standard set at the 30th percentile (for performance year 2023) or 40th percentile (for performance year 2024 and subsequent performance years) across all MIPS Quality performance category scores, and therefore support these ACOs reporting eCQMs / MIPS CQMs. We propose to consider the ACO's performance on all measures in the APP measure set in calculating the health equity adjustment. Refer to Table 53 for the proposed APP measure set for eCQM/MIPS CQM reporting for performance year 2023. To determine an ACO's performance on quality for the purpose of calculating health equity adjustment bonus points, we propose to create three groups based on measure performance (or “performance groups”): (1) a group comprised of the top third performing ACOs; (2) a group comprised of the middle third performing ACOs; and (3) a group comprised of the bottom third performing ACOs. These groups would be created for each of the six measures independently such that an ACO in the top group based on performance on one measure may be in the bottom group based on performance on another measure. Consistent with current implementation of eCQMs and MIPS CQMs, the three groups would be created by reporting mechanism so that ACOs that report eCQMs would have each measure grouped into a top, middle, and bottom third based on the performance of other ACOs that also report eCQMs. The same methodology would be used for ACOs that report the MIPS CQMs. For the CAHPS for MIPS survey and claims-based measures, ACOs would be compared to all ACOs with data on those measures (including those that reported via the Web Interface, eCQMs, or MIPS CQMs). We propose to assign to an ACO a value of four for each measure for which its performance places it in the top Start Printed Page 46136 performance group, a value of two for each measure for which its performance places it in the middle performance group, and a value of zero for each measure for which its performance places it in the bottom performance group. We would sum the values assigned to each measure in the APP measure set to determine an ACO's total assigned value, which we refer to as the ACO's “measure performance scaler.” Under this approach, an ACO could have a measure performance scaler of up to 24 if it is among the top performance group for each measure and thereby received a value of four for each of six measures. We would assign a value of zero to a measure in certain cases when we would not evaluate the ACO's performance on a measure. For purposes of calculating the health equity adjustment, an ACO would receive zero for a claims-based measure or an eCQM/MIPS CQM for which the ACO does not meet the case minimum requirements at § 414.1380. Similarly, an ACO would receive zero for the CAHPS for MIPS survey in the event it does not meet the minimum sample size requirements. An ACO that cannot meet case minimum requirements or does not have a sufficient sample size to administer the CAHPS for MIPS survey would still qualify to receive the health equity adjustment bonus for those measures that were accurately and completely reported and provided the ACO met the data completeness requirement at § 414.1340 for all three eCQMs/MIPS CQMs. We also considered and analyzed scaling quality performance for the bottom, middle, and top third of measure performance by different values to evaluate how these values interact with the underserved multiplier (described in detail below) to calculate ACOs' health equity adjustment bonus points. Specifically, we also analyzed assigning a value of 0, 1, and 2 for the bottom, middle, and top third of measure performance, respectively, and decided on proposing 0, 2, and 4 instead. The proposed scaling would allow ACOs that have high levels of an underserved multiplier and high quality performance on most or all measures to receive near or at the maximum of 10 health equity adjustment bonus points. That is, an ACO with an underserved multiplier of 0.45 (or 45 percent) that achieved a measure performance scalar of 24 would receive the maximum of 10 health equity adjustment bonus points. With the alternate scaling approach, this ACO would achieve a measure performance scalar of 12 (that is, a value of 2 for each measure in the top third × 6 measures) but would not receive the maximum of 10 health equity adjustment bonus points even though the ACO would have achieved high-quality while caring for a large proportion of underserved beneficiaries (that is, measure performance scalar of 12 × an underserved multiplier of 0.45 = 5.4 points). Thus, the proposed scaling is consistent with CMS' goal to incentivize greater inclusion of underserved populations and the delivery of high quality care. (d) Identifying ACOs Serving High Proportions of Underserved Beneficiaries; Determining the Underserved MultiplierThrough the proposed health equity adjustment we seek to improve health equity outcomes by providing incentives to ACOs and their ACO participants and ACO providers/suppliers to achieve high levels of performance on all-payer and outcome focused Medicare quality measures for underserved populations, given the concerns we have heard regarding reporting eCQMs/ MIPS CQMs, which require reporting of data on all patients and are considered all-payer measures. We propose to award higher positive adjustments to ACOs providing higher quality of care to underserved populations, with the amount of the adjustment increasing as an ACO's proportion of underserved beneficiaries increases. Such an approach would support ACOs currently serving a high proportion of underserved individuals while also encouraging all ACOs to treat underserved populations. We propose to identify ACOs serving larger proportions of underserved beneficiaries, by considering the proportion of dually eligible Medicare and Medicaid beneficiaries and the proportion of beneficiaries residing in areas of high socioeconomic disadvantage within the ACO's performance year assigned beneficiary population. We propose to calculate an “underserved multiplier” for each ACO that would be determined using the higher value of either the proportion of an ACO's assigned beneficiary population that is considered underserved based on beneficiaries who are from underserved neighborhoods, identified using ADI data, or the proportion of an ACO's assigned beneficiary population that are dually eligible for Medicare and Medicaid. As noted above, dual eligibility status and ADI are good indicators of socioeconomical disadvantages, with ADI associated with medical disparities and underservice and dual eligibility associated with beneficiary's inability to access care. We would then multiply this underserved multiplier by the aforementioned measure performance scaler to determine the ACO's health equity adjustment bonus points. We refer readers to the discussion in section III.G.2.a. of this proposed rule for a general description of the ADI data, including the 17 input variables from census data that make up the ADI composite measure. Each census block group's ADI score is ranked nationally, with higher national percentile ranks corresponding to more socioeconomically disadvantaged areas. Census block group's have been found to have stronger associations with hospitalization rates than larger areas used to create ADIs.[215] For each ACO, we would create an underserved multiplier that ranges from zero to one and is based on the higher value of either the proportion of the ACO's performance year assigned beneficiary population residing in a census block group with an ADI national percentile rank of at least 85 or the proportion of the ACO's performance year assigned beneficiaries that are dually eligible for Medicare and Medicaid (including dually eligible ESRD, disabled, and aged beneficiaries).[216] An ADI national percentile rank of at least 85 or above is being used as a cutoff because this is the value at which some empiric studies have demonstrated worse outcomes. In particular, one study demonstrated that 30-day rehospitalization rates did not vary significantly across the least disadvantaged 85 percent of neighborhoods, but hospitalizations within the most disadvantaged 15 percent persons increased with worsening ADI, with a pattern that was similar amongst individuals with congestive heart failure, acute myocardial infarction, and pneumonia.[217] Under the proposed approach, an ACO serving mostly beneficiaries residing in areas of high socioeconomic disadvantage or serving Start Printed Page 46137 a larger proportion of dually eligible Medicare and Medicaid beneficiaries would receive a multiplier value closer to one and a larger health equity adjustment to its quality performance score, all else equal. An ACO serving mostly beneficiaries from areas that are not considered to be of low socioeconomic disadvantages and serving a smaller proportion of dually eligible Medicare and Medicaid beneficiaries would not likely receive an underserved multiplier value that meets the proposed floor of 20 percent (described in section III.G.4.b.(7)(e) of this proposed rule), and therefore, would not receive health equity adjustment bonus points. Thus, the result of the underserved multiplier would be that ACOs serving a higher proportion of underserved beneficiaries would be eligible for a greater number of bonus points, assuming they achieve high quality performance. Therefore, the use of the underserved multiplier, combined with the proposed floor to receive any bonus points, is consistent with our goal of rewarding ACOs that include a higher proportion of underserved beneficiaries while delivering high quality care. The proposed use of ADI and Medicare and Medicaid dually eligible status to assess underserved populations in the health equity adjustment allows CMS to consider both broader neighborhood level characteristics and individual characteristics among CMS beneficiaries. As described elsewhere in this proposed rule, we are proposing to use ADI and dual eligibility status to determine levels of quarterly AIPs for eligible Shared Savings Program ACOs (see section III.G.2.a. of this proposed rule). These two factors reflect different types of characteristics, which may relate to patient populations differently. An ADI is a multidimensional evaluation of the socioeconomic characteristics of the neighborhoods the beneficiaries live in, and incorporates domains such as education, income, employment, housing, and household characteristics. It also reflects neighborhood factors that may influence health, health care, and care delivery regardless of individual circumstance. Dual Medicare and Medicaid eligibility status is a direct measure of the beneficiary, reflecting their individual income status, and has been shown to be a predicator of worse health outcomes. While there is some overlap between ADI and dual eligibility, we propose to utilize both because they can be used to identify complementary populations that may not be fully recognized using only one of the factors, by taking the higher of the ACO's proportion of assigned beneficiaries residing in a census block group with an ADI national percentile rank of at least 85 or the ACO's proportion assigned beneficiaries that are dually eligible for Medicare and Medicaid, to determine an ACO's underserved multiplier for calculating health equity adjustment bonus points. Our proposal for the underserved multiplier used for calculating the health equity adjustment and our proposal for calculating quarterly AIPs are directionally aligned in that they both seek to provide greater benefit to ACOs that are serving underserved populations. For the health equity adjustment, we believe use of ACO-level indicators (that is, the proportion of the ACO's performance year assigned beneficiaries residing in a census block group with an ADI national percentile rank of at least 85 or the proportion that are dually eligible for Medicare and Medicaid) to measure the extent to which an ACO serves underserved populations is preferred to an approach that would establish an underserved multiplier at the beneficiary-level. We believe it would be appropriate to apply an ACO-level underserved multiplier to the measure performance scaler, which would be determined based on ACO-level performance on the measures in the APP measure set. This would allow for alignment between the underserved multiplier and the measure performance scaler to which it is being applied. Our proposal to use a “higher of” either the proportion of an ACO's assigned population residing in census blocks with high ADI or the proportion of the ACO's assigned beneficiaries that are dually eligible for Medicare and Medicaid to calculate the underserved multiplier is intended to avoid double-counting overlapping beneficiaries (as could happen when taking the sum of the two proportions), while also allowing an ACO alternate ways to achieve a higher multiplier value, recognizing that no single value would fully represent its population. We also note that this approach to determining the underserved multiplier based on the ACO's assigned population is a means of approximating the extent to which the ACO and its ACO participants and ACO providers/suppliers are serving underserved beneficiaries. The ADI component of the underserved multiplier would be based on the neighborhood level characteristics among ACO assigned beneficiaries, and these characteristics may generally reflect the social determinants of health in the communities served by the ACO and thus serve as a proxy for the all payer population characteristics and their neighborhoods. The use of dual Medicare and Medicaid eligibility is based on the status of beneficiaries within the ACO. Although we are proposing to determine the underserved multiplier as the higher of two characteristics—the proportion of assigned beneficiaries residing in areas of high socioeconomic disadvantage or the proportion of dually eligible Medicare and Medicaid assigned beneficiaries—we considered an alternative approach that would use a combination of these characteristics in calculating the underserved multiplier. Together these characteristics may be complementary in identifying an ACO's underserved populations, one based on neighborhood characteristics and the other based on dual eligibility status among the ACO's assigned beneficiaries. However, while the two characteristics allow for recognition of the ACO's underserved population at the neighborhood and beneficiary levels, there is potential overlap and thus double-counting with the approach to combine (sum) these characteristics. We seek comment on this alternative approach to calculating the underserved multiplier as the sum of an ACO's proportion of assigned beneficiaries residing in areas of high socioeconomic disadvantage and an ACO's proportion of dually eligible Medicare and Medicaid assigned beneficiaries. We note that such an approach would result in a potentially higher underserved multiplier for ACOs, and thereby higher total health equity adjustment bonus points compared to the proposed approach. As a result, under this alternative calculation of the underserved multiplier, more ACOs would likely achieve the maximum of 10 bonus points. More generally, we note that CMS is considering similar methodologies for determining underserved populations outside of the Shared Savings Program. For example, as discussed in the Announcement of Calendar Year (CY) 2023 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies,[218] we are developing a health equity index as a potential methodological enhancement to the Part C and Part D Star Ratings that would summarize performance among groups with social risk factors across multiple measures into a single score. The goal of this health equity index would be to Start Printed Page 46138 advance equity and support underserved communities by incentivizing contracts to perform well serving enrollees with social risk factors such as low-income subsidy (LIS)/dual eligibility and disability. We also considered alternative approaches for calculating the underserved multiplier that would additionally consider whether an ACO's assigned beneficiaries receive the low-income subsidy (LIS) available under the Medicare Part D prescription drug program. LIS, as an indicator, may capture a different group of low-income beneficiaries than dual eligible status and the eligibility criteria for LIS does not vary by State. Specifically, we considered alternatives under which we would use the LIS indicator in place of, or in addition to, a beneficiary's dual Medicare and Medicaid enrollment status. We also considered using the higher of three factors based on the ACO's performance year assigned beneficiary population: (1) The proportion of the ACO's assigned beneficiary population residing in a census block group with an ADI national percentile rank of at least 85; (2) the proportion of the ACO's assigned beneficiaries that are dually eligible for Medicare and Medicaid; or (3) the proportion of the ACO's assigned beneficiaries receiving LIS. We seek comment on these alternative approaches, or other approaches, to incorporating assigned beneficiaries' LIS status into the underserved multiplier. (e) Determining the Health Equity Adjustment Bonus Points an ACO Is Eligible To Receive Based on the ACO's Measure Performance Scaler and Underserved MultiplierWe propose the ACO's health equity adjustment bonus points would be calculated by multiplying the measure performance scaler and the ACO's underserved multiplier. However, we are also proposing to impose a number of limitations on the availability of and the amount of the health equity adjustment bonus points. We propose that ACOs would be ineligible to receive any bonus points if their underserved multiplier is less than 20 percent, thereby establishing a “floor”on the size of the ACO's underserved population under the health equity adjustment. Imposing a floor of 20 percent for the underserved multiplier, for an ACO to be eligible to receive bonus points, reinforces that the health equity adjustment is intended to reward ACOs that are serving higher proportions of underserved beneficiaries while also achieving high levels of quality performance. We believe this approach is necessary to remain consistent with the goal to reward and incentivize care for these populations. Absent such a floor, ACOs that perform well on quality measures but serve relatively small populations of underserved beneficiaries would be further rewarded, which could create incentives that are inconsistent with the purpose of the health equity adjustment. We anticipate the percent of ACOs meeting the 20 percent floor for the underserved multiplier would increase over time, as existing ACOs seek to expand their reach into underserved communities, and as a result of the proposed new participation options discussed elsewhere in this proposed rule that are designed to foster greater entry into the Shared Savings Program by ACOs that serve underserved communities. For example, among ACOs receiving the proposed AIPs, the amount of the quarterly payments would increase as beneficiaries' risk factors-based scores increase (set to 100 if the beneficiary is dually eligible for Medicare and Medicaid, or set to the ADI national percentile rank of the beneficiary's census block group if the beneficiary is not dually eligible). ACOs receiving AIPs that expand the size of their underserved populations would thereby receive higher amounts of quarterly AIPs to build their care coordination capabilities (including coordination with community-based organizations, as appropriate), address specific health disparities, and meet other proposed criteria for use of the funds (as described in section III.G.2.a. of this proposed rule). Under the proposed health equity adjustment, these ACOs would have a further incentive to deliver high quality of care and thereby perform well on the APP measure set for eCQM / MIPS CQM reporting. We propose the number of health equity adjustment bonus points to be awarded would not exceed a maximum of 10 points. We believe that limiting the health equity adjustment bonus to a maximum of 10 points strikes a balance between creating an incentive for ACOs to report eCQM/MIPS CQM measures and rewarding ACOs that are high performing on quality and serve higher proportions of underserved beneficiaries, while not overly inflating an ACO's quality performance score. Further, allocating a maximum of 10 points for this bonus would align with the scoring of the required measures under the APP. Previous bonuses within the MIPS program have not exceeded 10 points or been higher than 10 percent of the score the bonus aligns with.[219 220] We further propose that the bonus points would be added to the ACO's MIPS Quality performance category score, with the sum capped at 100 percent. This proposed cap at 100 percent would ensure that the application of the health equity adjustment does not cause the ACO's quality performance score to exceed the maximum possible quality performance score an ACO could achieve absent the adjustment. Thus, the proposed cap would align with the current practice which sets the maximum quality performance score at 100 percent. The health equity adjustment bonus points would be added to the ACO's MIPS Quality performance category score for the purpose of determining whether the ACO meets the quality performance standard for a given performance year by meeting or exceeding the applicable MIPS Quality performance category score percentile and, if applicable, in determining the ACO's final sharing rate or shared loss rate. We note that this proposal to adopt a health equity adjustment would not impact the calculation of the quality performance standard itself. That is, the required percentile (30th for PY 2023 and 40th for subsequent performance years) would continue to be determined across all MIPS Quality performance category scores, excluding entities/providers eligible for facility-based scoring, and would not reflect any health equity bonus points earned by Shared Savings Program ACOs. Further, as described in section III.G.4.b.(2) of this proposed rule, under the proposed sliding scale approach for determining shared savings, we would calculate an ACO's final sharing rate as the product of the maximum sharing rate under the ACO's track (or payment model within a track) and the ACO's quality performance score (inclusive of any applicable health equity adjustment bonus points). Similarly, as described in section III.G.4.b.(3) of this proposed rule, under the proposed modifications to the approach to calculating scaled Start Printed Page 46139 shared losses for ENHANCED track ACOs, we would calculate an ACO's shared loss rate as 1 minus the product of 75 percent and the ACO's quality performance score (inclusive of any applicable health equity adjustment bonus points), not to exceed 75 percent and not to be less than 40 percent. The proposed cap of 100 percent on the sum of the ACO's MIPS quality performance category score and health equity adjustment bonus points would allow for clarity and consistency in the calculation of the final sharing rates under the proposed sliding scale approach, and for the calculation of the shared loss rate for ENHANCED track ACOs. Accordingly, the proposed health equity adjustment would enable more ACOs that serve underserved populations and provide high quality care to share in a portion of the savings that they generate as the addition of the proposed health equity adjustment bonus points should allow more ACOs to meet the quality performance standard by meeting or exceeding the applicable MIPS quality performance category score percentile for a given performance year (that is, 30th percentile for PY 2023, and 40th percentile thereafter). For ACOs that meet the proposed alternative quality performance standard described elsewhere in section III.G.4.b. of this proposed rule, the addition of health equity adjustment bonus points to the ACO's quality performance score could increase the final sharing rate used to calculate the ACO's shared savings payment. Finally, for ACOs participating in the ENHANCED track that owe shared losses, the addition of health equity adjustment bonus points could reduce the shared loss rate used to calculate the amount of shared losses owed to CMS. The combination of the measure performance scaler, based on an ACO's performance on different quality measures, and the underserved multiplier, based on an ACO's unique assigned beneficiary population, results in a range of possible health equity adjustment bonus points that is designed to give the highest rewards to ACOs caring for a disproportionate share of underserved individuals and delivering high quality care. Through the proposed health equity adjustment, ACOs that perform well on measures in the APP measure set for eCQM/MIPS CQM reporting and serve a large proportion of underserved individuals within their assigned beneficiary population would be more likely to receive the maximum number of 10 bonus points, and in turn could see the largest increases in their quality performance score, which in turn, would have the most significant impact on determining the rate at which the ACO shares in savings, or for ACOs under the ENHANCED track, the rate at which the ACO shares in losses. We refer readers to mathematical examples for the steps in the calculation of the health equity adjustment, described in section III.G.4.b.(7)(f) of this proposed rule. Based on initial modeling, approximately 30 percent of ACOs participating in performance year 2020 would have had an underserved multiplier above the 20 percent floor necessary to qualify for the proposed health equity adjustment. Therefore, we believe the proposed approach could result in a significant number of ACOs earning health equity adjustment bonus points, which in turn would support these ACOs in caring for underserved populations. Furthermore, by rewarding ACOs when high quality is achieved, the health equity adjustment could create incentives for ACOs to improve care for those who have been historically underserved. This proposed approach, which is designed to upwardly adjust the ACO's quality performance score, lacks additional financial penalties for ACOs that are not meeting high standards of care, which we believe is important as such a downward adjustment could worsen disparities and further jeopardize the ability of these ACOs to care for the populations they serve. We believe this proposal aligns with the broader CMS health equity goals and serves as an important step forward in advancing health equity by providing an incentive for ACOs to care for underserved populations and to provide high quality care to all of the populations they serve, rather than merely adjusting measure performance for patient risk factors. (f) Calculation Steps and ExamplesIn this section, we outline the calculation steps and provide examples of the determination of health equity adjustment bonus points and the application of these bonus points (for eligible ACOs) to an ACO's MIPS Quality performance category score. These example calculations illustrate the variability in the health equity adjustment bonus points resulting from the proposed approach, which accounts for both an ACO's quality performance and the ACO's proportion of underserved beneficiaries among its assigned beneficiary population. Step 1: Calculate the ACO's measure performance scaler. In the example calculation of the ACO's measure performance scaler, as shown in Table 47, ACOs with “high” measure performance have been assigned a value of four for each of the six measures in the APP measure set for having achieved performance on these measures in the top performance group (top third). ACOs with “middle” measure performance have a mix of performance in the top performance group (top third, assigned a value of four per measure) and middle performance group (middle third, assigned a value of two per measure) on the six quality measures. ACOs with “low” measure performance have a mix of performance in the middle performance group (middle third, assigned a value of two per measure), and bottom performance group (bottom third, assigned a value of zero per measure) on the six quality measures. Start Printed Page 46140 Step 2: Calculate the ACO's underserved multiplier. Under the proposed approach, as illustrated in Table 48, the underserved multiplier (column [C]) would be calculated as the higher of the proportion of the ACO's performance year assigned beneficiary population residing in a census block group with an ADI national percentile rank of at least 85 (column [A]) or the proportion of the ACO's performance year assigned beneficiaries that are dually eligible for Medicare and Medicaid (column [B]). To be eligible for the health equity adjustment bonus points, an ACO would need to have an underserved multiplier of 20 percent (0.2) or higher. Step 3: Calculate the ACO's health equity adjustment bonus points. As shown in Table 49, to calculate the number of health equity adjustment bonus points awarded to an ACO (column [C]), CMS would multiply an ACO's measure performance scaler (Step 1, column [A]) by the ACO's underserved multiplier (Step 2, column [B]). Start Printed Page 46141 Step 4: Add the health equity adjustment bonus points to the ACO's MIPS Quality performance category score to calculate the ACO's health equity adjusted quality performance score. As shown in Table 50, up to 10 health equity adjustment bonus points (Step 3, column [B]) would be added to the ACO's MIPS Quality performance category score (column [A]), with a maximum health equity adjusted quality performance score (column [C]) of 100 percent (that is, the sum is capped at 100). (g) Incorporating the Health Equity Adjustment Into Shared Savings Program Quality Performance ReportsIn the event an ACO reports both the Web Interface measure set and the eCQM/MIPS CQM measure set, the ACO will be assigned the higher of the two quality performance scores for purposes of the MIPS quality performance category (86 FR 65259). If the addition of health equity adjustment bonus points results in the ACO's eCQM/MIPS CQM quality performance score becoming higher than the ACO's Web Interface score (even though it was initially lower), the Shared Savings Program would use the health equity adjusted eCQM/MIPS CQM quality performance score as the ACO's quality performance score. The health equity adjustment would not impact a MIPS eligible clinician's final scores because the health equity adjusted quality performance score would be limited to the Shared Savings Program, where it would be used at the ACO level to determine an ACO's shared savings or losses. Under MIPS, eligible clinicians in ACOs that report both the CMS Web Interface measures and the three eCQMs/MIPS CQMs would receive the higher of either the CMS Web interface or the three eCQMs/MIPS CQMs based on their ACO's MIPS Quality performance category score. We plan to show the calculation of the health equity adjustment for all ACOs that report on eCQMs/MIPS CQM measures, even if the adjustment would not affect the determination of shared savings or shared losses for the ACO. These calculations would be provided to ACOs in their reconciliation reports package. For example, under § 425.512(a)(2)(ii), an ACO in the BASIC track that is participating in the first performance year of its first agreement period meets the quality performance standard if it reports quality data via the APP and meets data completeness and case minimum requirements specified for the performance year. An ACO meeting these criteria would qualify for the maximum sharing rate under the level of the BASIC track under which it is participating, regardless of the health equity adjustment. Likewise, if such an ACO was participating in a two-sided model under the BASIC track and was liable for shared losses, the ACO would Start Printed Page 46142 be subject to a fixed 30 percent shared loss rate that would also be unaffected by the health equity adjustment. For such an ACO, the calculation and reporting of the health equity adjustment would be for purely informational purposes. This information would provide ACOs with an understanding of the proportion of underserved individuals they care for and give ACOs additional insight into this population and opportunities for improvement as they transition to all payer quality measure reporting and develop associated quality improvement strategies and initiatives. (h) Proposed Modifications to the RegulationsWe propose to amend the regulation at § 425.512, which establishes the ACO quality performance standard for performance years beginning on or after January 1, 2021, to include a new paragraph (b) to govern the calculation of an ACO's health equity adjusted quality performance score for performance year 2023 and subsequent performance years, including the policies governing calculation of health equity adjustment bonus points. We are also proposing to make additional conforming changes to § 425.512 to incorporate references to the health equity adjusted quality performance score, through proposed modifications to § 425.512(a)(4)(i)(A), and within proposed revisions to § 425.512(a)(5)(i)(A)( 1 ) and (a)(5)(i)(B).[221] We propose further technical and conforming changes to § 425.512 to redesignate existing paragraph (b) specifying the alternative approach to calculating the quality performance score for ACOs affected by extreme and uncontrollable circumstances, as a new paragraph (c). We also propose a modification to update a cross-reference within the newly redesignated § 425.512(c) for accuracy and to revise newly redesignated § 425.512(c)(3) to specify that we would use the health equity adjusted quality performance score in determining the quality performance score for ACOs affected by extreme and uncontrollable circumstances that report quality data under the APP and meet data completeness and case minimum requirements for performance year 2023 and subsequent performance years (refer to section III.G.4.b.(8) of this proposed rule). In addition, as described elsewhere within this proposed rule, we propose to revise § 425.605 and 425.610 to specify use of the ACO's health equity adjusted quality performance score determined in accordance with § 425.512(b) for purposes of calculating an ACO's final sharing rate based on a sliding scale. Similarly, under the proposed modifications to § 425.610, we propose to specify use of the ACO's health equity adjusted quality performance score determined in accordance with § 425.512(b) for purposes of calculating the ACO's shared loss rate based on a sliding scale. In conclusion, we believe the health equity adjustment proposal would support ACOs transitioning to all-payer quality measure reporting, incentivize ACOs to report eCQMs/MIPS CQMs, provide stronger incentives for quality improvement, and recognize high performing ACOs serving underserved populations. We seek comment on all aspects of the proposed methodology. In particular, we seek comment on the proposal to use a three-tiered approach to determine the values assigned to each measure. We seek comment on the scale of values attributed to these three performance groups, as well as the proposal to limit the overall amount of the health equity adjustment to a maximum of 10 bonus points. We seek comment on the proposed requirement that an ACO's underserved multiplier be at least 20 percent for an ACO to be eligible for health equity adjustment bonus points. Finally, we seek comment on alternative methodologies for calculating the underserved multiplier, including using a combination of the ACO's proportion of assigned beneficiaries residing in areas of high socioeconomic disadvantage and proportion of dually eligible Medicare and Medicaid assigned beneficiaries, instead of the higher of these factors. We also seek comment on incorporating into the methodology for calculating the ACO's underserved multiplier whether ACO assigned beneficiaries are eligible for the LIS available under the Medicare Part D prescription drug program, including use of a LIS indicator in place of a beneficiary's dual enrollment status. Given that the proposed approach, if finalized, would be the initial implementation of a health equity adjustment under the Shared Savings Program, we note our intent to monitor the impact of the adjustment to ensure it achieves the goal of rewarding ACOs for high quality performance while caring for larger proportions of underserved beneficiaries. As necessary, we would consider modifications to the design of the health equity adjustment through future notice and comment rulemaking. (8) Application of Extreme and Uncontrollable Circumstances PolicyThe approach used to calculate the quality score for ACOs affected by extreme and uncontrollable circumstances is described in § 425.512(b)(2) and (3) of the current regulations, which we are proposing to redesignate as § 425.512(c)(2) and (3) (refer to section III.G.4.b.(7)(h) of this proposed rule). In summary, for an ACO that fails to report quality data via the APP or that reports quality data but fails to meet the data completeness or case minimum requirements applicable for the performance year, we will set the ACO's quality performance score to the equivalent of the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 and subsequent performance years) across all MIPS Quality performance category scores for the relevant performance year, as described in § 425.512(b)(2). For an ACO that reports quality data via the APP and successfully meets data completeness and case minimum requirements, we will use the higher of the ACO's own health equity adjusted quality performance score or the equivalent of the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 and subsequent performance years) across all MIPS Quality performance category scores as described in § 425.512(b)(3). By design, any ACO that is deemed to be affected by an extreme and uncontrollable circumstance will receive a score that is at least as high as the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 and subsequent performance years) across all MIPS Quality performance category scores, thus aligning with the quality performance standard applicable for the performance year as described under § 425.512(a) in the current regulations. An ACO affected by an extreme and uncontrollable circumstance that is eligible for shared savings (by virtue of having savings that meet or exceed its MSR) will thus receive a final sharing rate equal to the maximum sharing rate for the ACO's track (or payment model within a track) in the calculation of its shared savings amount, as described in § 425.605(d) (for ACOs participating in the BASIC track) or § 425.610(d) (for ACOs participating in the ENHANCED track). An ACO affected by an extreme and uncontrollable circumstance participating in the ENHANCED track that is liable for shared losses (by virtue Start Printed Page 46143 of having losses that meet or exceed its minimum loss rate) will face a shared loss rate that considers the ACO's quality performance as described in § 425.610(f). The remainder of this section describes how we propose the existing extreme and uncontrollable circumstances policy would interact with our proposals related to scaled shared savings and losses, described in sections III.G.4.b.(2) and III.G.4.b.(3) of this proposed rule, respectively, and the proposed health equity adjustment, described in section III.G.4.b.(7) of this proposed rule, if finalized. An ACO that is determined to have been affected by an extreme and uncontrollable circumstance and is eligible for shared savings would already receive the maximum possible sharing rate for its track (or payment model within a track) under the current extreme and uncontrollable circumstances policy. The sharing rate for such an ACO would not be affected by our proposal to re-institute scaled shared savings as described in section III.G.4.b.(2) of this proposed rule. That is, an ACO affected by an extreme and uncontrollable circumstance that meets the proposed alternative quality performance standard, if finalized, would continue to qualify for the maximum sharing rate for its track (or payment model within a track) rather than receiving a sharing rate scaled based on the ACO's quality performance. An ACO participating in the ENHANCED track that is affected by an extreme and uncontrollable circumstance and is liable for shared losses already receives a shared loss rate that is scaled by the ACO's quality performance under the current extreme and uncontrollable circumstances policy. If such an ACO meets the proposed alternative quality performance standard, if finalized, it would continue to receive a shared loss rate that is scaled by its quality performance. Thus, our proposal to extend scaled shared losses to ENHANCED track ACOs that meet the alternate quality performance as described in section III.G.4.b.(3) of this proposed rule would not, by itself, have a practical impact on the shared loss rate for an ACOs affected by an extreme and uncontrollable circumstance. With regard to the proposed health equity adjustment, for an ACO affected by an extreme and uncontrollable circumstance that reports eCQMs/MIPS CQMs via the APP, and successfully meets the data completeness requirement at § 414.1340 and case minimum requirement at § 414.1380, we would apply the health equity adjustment bonus points to the ACO's MIPS Quality performance category score, in accordance with our proposed approach described in section III.G.4.b.(7) of this proposed rule before determining the “higher of” score under the extreme and controllable circumstances policy. That is, the ACO would receive the higher of the quality performance score equal to the sum of the ACO's MIPS Quality performance category score and the ACO's health equity adjustment bonus points (that is, the health equity adjusted quality performance score) or a score equivalent to the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 and subsequent performance years) across all MIPS Quality performance category scores. We propose to specify the use of the health equity adjusted quality performance score in determining the quality performance score for an ACO affected by extreme and uncontrollable circumstances within the proposed new provision at § 425.512(b) and in determining the “higher of” score under the redesignated provisions at § 425.512(c)(3)(ii) and (iii). The proposed approach of applying the health equity adjustment before determining the “higher of” score under the extreme and uncontrollable circumstances policy would have no practical impact on the sharing rate for an ACO that is eligible to share in savings. By design, such an ACO would meet or exceed the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 and subsequent performance years) MIPS Quality performance category score, and qualify for the maximum sharing rate for its track (or payment model within a track) . However, for an ACO participating in the ENHANCED track that is liable for shared losses, the application of the health equity adjustment could increase the ACO's quality performance score used to determine the ACO's shared loss rate, and thus potentially reduce the amount of shared losses owed to CMS. For an ACO affected by an extreme and uncontrollable circumstance that fails to report quality data via the APP or that reports but fails to the meet data completeness or case minimum requirements, we would continue to set the ACO's quality performance score to the equivalent of the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 and subsequent performance years) MIPS Quality performance category score. Such an ACO would not meet the proposed requirements for the health equity adjustment with respect to reporting and measure performance. (9) Summary of the ProposalsThe following provides an overview of the quality performance standards that would apply in future performance years under these proposals for purposes of determining the rate at which an ACO may share in savings. Performance Year 2023
++ Report the 10 CMS Web Interface measures in the APP measure set, administer a CAHPS for MIPS survey, while we would calculate the two claims-based measures included under the APP, and achieve a health equity adjusted 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 ++ Report the three eCQMs/MIPS CQMs in the APP measure set, administer a CAHPS for MIPS survey, while we 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 of this subchapter and the case minimum requirement at § 414.1380 of this subchapter for all three eCQMs/MIPS CQMs, the ACO must achieve 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. An ACO that fails to meet the criteria above may qualify to share in savings on a sliding scale based on its performance on any of the 10 CMS Web Interface measures or three eCQMs/MIPS CQMs, CAHPS for MIPS survey, and CMS' calculation of the two claims-based measures in the APP measure set that are reported by the ACO. The ACO must achieve 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 to share in savings (if otherwise eligible) at a lower rate that is scaled by the ACO's health equity adjusted quality performance score. If an ACO (1) does not report any of the ten CMS Web Interface measures or any of the three eCQMs/MIPS CQMs Start Printed Page 46144 and (2) does not administer a CAHPS for MIPS survey under the APP, the ACO will not meet the quality performance standard or the alternative quality performance standard. Performance Year 2024
++ Report the 10 CMS Web Interface measures in the APP measure set, administer a CAHPS for MIPS survey, while we would calculate the two claims-based measures included under the APP, and achieve a health equity adjusted 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, or ++ Report the three eCQMs/MIPS CQMs in the APP measure set and administer a CAHPS for MIPS survey, while we 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 of this subchapter and the case minimum requirement at § 414.1380 of this subchapter for all three eCQMs/MIPS CQMs, the ACO must achieve 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 40th percentile of the performance benchmark on at least one of the remaining five measures in the APP measure set.
Performance Year 2025 and Subsequent Performance Years
Similarly, we are proposing to modify the methodology for calculating shared losses under the ENHANCED track to account for the sliding scale approach, which would remove the “cliff” from the all-or-nothing approach instituted in the CY 2021 PFS final rule (85 FR 84734 through 84736) whereby an ACO that does not meet the quality performance standard would automatically face the maximum shared loss rate of 75 percent. For performance year 2023 and subsequent performance years, we are proposing that an ACO that has losses that exceed its minimum loss rate and either meets the quality performance standard or does not meet that standard but meets the proposed alternative quality performance standard by achieving 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 would have a shared loss rate that is 1 minus the product of the maximum sharing rate for the ACO's track (75 percent) and the ACO's health equity adjusted quality performance score. The shared loss rate would be subject to a minimum of 40 percent and a maximum of 75 percent. Under the proposed health equity adjustment, an ACO that reports the three eCQMs/MIPS CQMs in the APP measure set, meeting the data completeness requirement at § 414.1340 for all three eCQMs/MIPS CQMs, and administers the CAHPS for MIPS survey, may receive up to a maximum of 10 points added to its MIPS Quality performance category score. This combined score would be the ACO's health equity adjusted quality performance score and would be used in determining whether the ACO met the quality performance standard and in determining scaled shared savings and shared losses, as applicable, as summarized in this section of the proposed rule. This health equity adjusted quality performance score would also be used when applying the extreme and uncontrollable circumstances policy for ACOs that report quality data via the APP and meet data completeness and case minimum requirements. In addition, we wish to clarify that any requirements that are based on achieving a specified quality performance score on outcome measures are limited to outcome measures that are scored. For example, please refer to Table 52 in section III.G.4.c.(1) of this proposed rule, which indicates the CMS Web Interface measure Depression Remission at Twelve months is an outcome measure that is not scored. We reiterate our statement in the CY 2022 PFS final rule that for performance years 2022, 2023 and 2024 if an ACO: (1) does not report any of the 10 CMS Web Interface measures or any of the 3 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 (86 FR 65261). In addition, we are proposing in this proposed rule that, for performance years 2023 and 2024, an ACO that does not meet these requirements would also fail to meet the alternative quality performance standard. Such an ACO would not be eligible to share in savings and, if in the ENHANCED track, would automatically face the maximum shared loss rate. Additionally, as finalized in the CY 2022 PFS final rule, beginning with performance year 2025, ACOs will be required to report eCQMs/MIPS CQMS, as the Web Interface reporting option Start Printed Page 46145 sunsets after performance year 2024 (86 FR 65261). We note that if our proposal described in section III.G.5.f. of this proposed rule to allow certain ACOs in the BASIC track that do not meet their MSR to receive reduced shared savings is finalized, ACOs meeting the requirements of that policy would face final sharing rates equal to one half of the final sharing rates determined based on the ACO's quality performance, as described in this section. In Table 51, we summarize the proposed changes to the regulation at § 425.512(a)(4) and (5) to reflect these proposed changes to the quality reporting requirements for performance years 2023 and subsequent performance years. Start Printed Page 46146 c. Quality Measures(1) Proposed APP Measure SetWe refer readers to Table 52, which 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. These are the same measures finalized in the CY 2022 PFS final rule (86 FR 65264 through 65266); however, we note that the Meaningful Measures 2.0 area for each measure has been updated to be consistent with the latest information available on the Meaningful Measures website and a measure number has been added for the Risk Standardized, All-Cause Unplanned Admissions for Multiple Chronic Conditions for MIPS measure.[222] We are proposing to change the nomenclature of this measure to align with the MIPS program. There are no other proposed changes to this measure except for the name and the addition of a measure number. The measure title we are proposing to use moving forward is Measure 484: Clinician and Clinician Group Risk-standardized Hospital Admission Rates for Patients with Multiple Chronic Conditions. In addition, we have included the measure type in Table 52, for each measure in the measure set. We are including this information to provide ACOs a list of the outcome measures for purposes of meeting the quality performance incentive for reporting eCQMs/MIPS CQMs. This information is also relevant to our proposal to establish an alternative quality performance standard under which ACOs that fail to meet the quality performance standard to qualify for the maximum sharing rate, but that achieve a quality performance score at the 10th percentile on 1 of the 4 outcome measures in the APP measure set, may be eligible to share in savings on a sliding scale. We note inclusion of this information does not change any of the measures in the measure set. Start Printed Page 46147 Start Printed Page 46148 Table 53 includes the proposed eCQM/MIPS CQM measure set for the Shared Savings Program and outlines the measure types, especially for ACOs that may elect to report on eCQM/MIPS CQMs for PY2023 in order to qualify for the incentive under § 425.512(a)(4)(i)(B). The outcome measures in the APP measure set are listed in Table 52. The CMS Web Interface collection type under traditional MIPS and the APP includes 10 measures. One of the 10 measures included in the CMS Web Interface collection type is measure Q110: Preventive Care and Screening: Influenza Immunization (also referred to PREV-7 under the CMS Web Interface collection type). Table Group CC of Appendix 1 of this proposed rule includes a proposal to remove measure Q110: Preventive Care and Screening: Influenza Immunization from traditional MIPS for the Medicare Part B Claims, eCQM, and MIPS CQM collection types starting with the 2023 performance period and a proposal to retain the measure for use in relevant MVPs and as a measure in the CMS Web Interface collection type under the APP for purposes of APM Entity-level reporting applicable to Medicare Shared Savings Program ACOs. Because Shared Savings Program ACOs report under the APP, this measure would still be available as a measure under the CMS Web Interface collection type. Please refer to Table Group CC of Appendix 1 where we discuss this proposal further. We are also proposing to make changes to measure specifications for the CMS Web Interface starting in PY 2023. These changes are being proposed to update these measures and to align these measures with the CQM practice workflows and for consistency with clinical guidelines. These proposed changes are discussed in Group Table E of Appendix 1 of this proposed rule. (2) Proposed Benchmarking Policies for CMS Web Interface Measures for Performance Years 2022, 2023, and 2024In 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. 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. In the CY 2021 PFS final rule (85 FR 84720), we explained that the APP measure set would address the highest priorities for quality measurement and improvement, while also reducing reporting burden, promoting alignment of measures and consolidation of reporting requirements across CMS programs, moving payment toward value, and identifying consumers' key quality performance metrics. We also stated that, under the APP, the quality performance score for an ACO will be calculated using the same benchmarks that are established for quality measures available under MIPS (85 FR 84724). Measure benchmarks established under MIPS are based on performance by collection type ( i.e., eCQM or MIPS CQM) using data from all available sources, including MIPS eligible clinicians and APM Entities, to the extent feasible, during the applicable baseline or performance period (§ 414.1380(b)(1)). Under § 414.1380(b)(1)(ii)(A), the benchmarks from the corresponding reporting year of the Shared Savings Program are used to score CMS Web Interface measures for purposes of the MIPS Quality performance category. Accordingly, in the preamble to the CY 2021 PFS we indicated that for performance year 2021, we would continue to use the Shared Savings Program benchmarks developed for the CMS Web Interface measures for performance year 2020, which were based on data reported by ACOs, MIPS eligible clinicians, and groups through the CMS Web Interface, and/or a registry from 2016, 2017 and 2018, which would allow us to be consistent with the approach that had been used for scoring CMS Web Interface measures in the Shared Savings Program under § 425.502(b) (85 FR 84724). Furthermore, consistent with the final policy to require ACOs to report quality data via the APP and to score those measures using the MIPS benchmarks, in the CY 2021 PFS final rule, we revised § 425.502 to apply only to performance years beginning on or before January 1, 2020. Under the policies adopted in the CY 2021 PFS final rule, performance year Start Printed Page 46149 2021 would have been the final year in which ACOs would have the option to report either the 10 CMS Web Interface measures or the 3 eCQMs/MIPs CQMs under the APP, and starting in performance year 2022 all ACOs would be required to report the 3 eCQMs/MIPS CQMs (85 FR 84722 and 84723). However, in response to concerns raised by commenters regarding the timeline for implementing eCQM/MIPS CQM reporting requirements under the APP for Shared Savings Program ACOs, in the CY 2022 PFS final rule, we further extended the CMS Web Interface as a collection type under the Quality Payment Program for performance years 2022, 2023, and 2024 for Shared Savings Program ACOs reporting under the APP (85 FR 65261). When we finalized the extension of the CMS Web Interface as a collection type for the Shared Savings Program, we failed to consider the policies that would apply for purposes of establishing the performance benchmark and minimum attainment level for the CMS Web Interface measures for performance years 2022, 2023, and 2024. As noted previously, when we adopted the requirement that ACOs report quality for purposes of the Shared Savings Program using the APP, our intent was to use the measure benchmarks established under MIPS to score the measures in the APP measure set. However, under § 414.1380(b)(1)(ii)(A), we use the benchmarks from the corresponding reporting year of the Shared Savings Program to score CMS Web Interface measures for purposes of the MIPS Quality performance category. Thus, because the benchmarking policies under § 425.502(b) that were used to establish quality measure benchmarks in the Shared Savings Program prior to the development and implementation of the APP were sunset with the 2020 performance year, there are no policies currently in place that can be used to establish benchmarks for the CMS Web Interface measures in the APP measure set for purposes of determining quality performance under the Shared Savings Program for performance years 2022, 2023, and 2024. Additionally, the absence of benchmarking policies under the Shared Savings Program also impacts MIPS because MIPS uses the CMS Web Interface measure benchmarks established by the Shared Savings Program (§ 414.1380(b)(1)(ii)(B)). Under the regulation at § 425.502(b)(4)(i), CMS updated the quality performance benchmarks every 2 years. The last set of CMS Web Interface measure benchmarks were established for performance year 2020 and were also used to score the Web Interface measures for performance year 2021 as explained in the CY 2021 PFS final rule (85 FR 84724). In light of the decision to extend the availability of the CMS Web Interface measures under the APP, we now need to establish benchmarks under the Shared Savings Program for these measures for performance years 2022, 2023, and 2024. We believe that the previously established benchmark policies at § 425.502(b) continue to be appropriate for purposes of establishing the quality measure benchmarks and minimum attainment levels and establishing a point scale for the CMS Web Interface measures under the Shared Savings Program for performance years 2022, 2023, and 2024. In the 2015 PFS final rule (79 FR 67927), we finalized the benchmarking proposal to set benchmarks for two years for stability in quality improvement targets while also maintaining reasonable current practices. We propose to use this approach for performance years 2022, 2023 and 2024, using available data for performance year 2022 and 2023 and establishing benchmarks for performance year 2024 which is the last year of Web Interface reporting. We believe the policies are still appropriate as it would provide stability during the transition to all-payer reporting and sunsetting of the Web Interface reporting option, as well as prevent potential variations that could unintentionally create provider burden. In addition, this would allow CMS to score as many of the Web Interface measures as possible, providing stronger incentives for improving and delivering high quality care. Furthermore, using the same policies to establish the benchmarks for the CMS Web Interface measures for performance years 2022, 2023, 2024, would maintain consistency in the development of CMS Web Interface measure benchmarks. Therefore, we are proposing to amend the regulation at § 425.512, which governs the ACO quality performance standard for performance years beginning on or after January 1, 2021, to include a new paragraph (a)(6), which will provide that for performance years 2022, 2023, and 2024, CMS designates a performance benchmark and minimum attainment level for each CMS Web Interface measure and establishes a point scale for the measure as described in § 425.502(b). We acknowledge that to the extent we are proposing to apply these benchmark policies to determine performance benchmarks for the Web Interface measures for performance year 2022, our proposal is retroactive and would require the use of our authority under § 1871(e)(1)(A), which permits the retroactive application of a substantive change in the regulations when the failure to do so would be “contrary to the public interest.” We believe this proposal meets the standard for retroactive rulemaking as absent retroactive application of the proposed benchmarking policies the CMS Web Interface measures could not be scored in performance year 2022 for use under the Shared Savings Program in determining shared savings and losses or under MIPS for purposes of the MIPS payment adjustments. We also note that by establishing policies that will allow us to adopt benchmarks for these measures, we will ensure that we can determine the ACOs' quality performance score. If we did not have the authority to establish benchmarks, we would be unable to score ACO quality performance which is used to calculate shared savings and losses inhibiting our ability to successfully implement the Shared Savings Program and recognize and reward ACOs for better care coordination and quality improvement. At the same time, the lack of benchmarks to score quality measures submitted by ACOs would prevent their MIPS eligible clinicians from receiving any MIPS payment adjustment they may be eligible for and could subject them to negative MIPS payment adjustments if they are determined to have poor performance due to the inability to benchmark performance and score the measures submitted by the ACO. In addition, as mentioned above it is in the public interest to establish benchmarks as it should strengthen the incentive for ACOs to deliver high quality and coordinated care consistent with the goals of the Shared Savings Program. We believe there are advantages in having a greater number of scored measures in the CMS Web Interface, including the ability for Shared Savings Program ACOs to report on a larger number of measures to have a potentially higher score, as well as collecting data on measures that can be used for ACOs' quality improvement. An ACO's performance on each measure is assessed against its benchmark to determine points and the overall Quality performance category score. Additionally, when CMS determines that a benchmark cannot be provided for a Web Interface measure, the measure will not be scored for Shared Savings Program ACOs. However, ACOs would still be required to report on any measure that is not scored in order to Start Printed Page 46150 complete the CMS Web Interface dataset. We also need to make a correction from the CY 2022 PFS final rule (86 FR 65266) in which we inadvertently indicated that a benchmark would not be created for the Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226). In the CY 2022 PFS final rule (86 FR 65262), we noted 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)) did not have benchmarks for performance year 2022 and would not be scored, however, the measures were required to be reported in order to complete the CMS Web Interface dataset. We refer to Table 52 of this proposed rule for a listing of the measures that would not have benchmarks and therefore would not be scored for performance year 2022. We have determined that we do not have adequate historical data available for benchmarking for the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) measure for the 2022 performance year. Therefore, CMS is proposing to use the approach in this section of the proposed rule to amend the regulation at § 425.512 to set flat percentage benchmarks for the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) measure. Since we stated in the CY 2022 PFS final rule (86 FR 65266) that a benchmark would be created for Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134), we find it suitable to use flat percentage benchmarks to measure performance on the measure. CMS is proposing to score the Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) measure using flat percentage benchmarks under the approach we proposed to amend the regulation at § 425.512 in this section of the proposed rule. The Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) measure triggered flat percentage benchmarks by the policies described at § 425.502(b)(2)(ii) in the previous benchmarking update for the 2020 and 2021 performance years. Therefore, CMS believes it would be advantageous for the measure to keep its flat percentage benchmarks for the 2022 performance year for continuity and that having another scored measure can be beneficial to an ACO's overall quality performance. As we are proposing for Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) and the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) to be scored using flat percentage benchmarks for the 2022 performance year, ACOs would be scored on eight out of ten CMS Web Interface measures. We believe ACOs might prefer to be scored under a greater number of measures which may improve their overall score and performance for purposes of Shared Savings Program quality assessment. Lastly, use of flat percentages allows ACOs with high scores to earn maximum or near maximum achievement points while allowing room for improvement and rewarding that improvement in subsequent years. Use of flat percentages also helps to ensure that ACOs with high performance on a measure are not penalized as low performers. For the 2023 performance year, we expect to apply flat percentages for the Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention (Quality ID# 226) and the Preventive Care and Screening: Screening for Depression and Follow-up Plan (Quality ID 134) as the Medicare data may not be unavailable or may be inadequate. We seek comment on this proposal. d. Clarifying the Use of Unweighted MIPS Quality Performance Category Scores for Quality Performance Standard Determinations Under the Shared Savings ProgramIn the CY 2022 PFS proposed and final rules (86 FR 39274 and 86 FR 65271), we stated that 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 also stated that, for a given performance year, the 30th or 40th percentile across all MIPS Quality performance category scores would be 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 performance rate information prior to or during the performance year. Nevertheless, we stated that 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 stated that we would release this historical information on the Shared Savings Program website as soon as it becomes available. While conducting analysis on the MIPS Quality performance category score data files after the publication of the CY 2022 PFS final rule, we determined that we erroneously used the weighted distribution of Quality performance category scores, rather than an unweighted distribution of Quality performance category scores, to calculate the 30th and 40th percentile MIPS Quality performance category scores provided in the CY 2022 PFS proposed and final rules for 2018 and 2019. The weighted distribution of Quality performance category scores is used in MIPS for final payment calculations. The unweighted distribution of Quality performance category scores submitted by ACOs, groups, and individuals has historically been used to calculate benchmarks for quality measure performance under MIPS and the Shared Savings Program. In this proposed rule, we are clarifying that, despite this publication error, we use the submission level MIPS Quality performance category scores (unweighted distribution of scores) to determine the 30th percentile and 40th percentile MIPS Quality performance category scores for purposes of establishing the applicable quality performance standard under the Shared Saving Program. We are also clarifying that we use an ACO's submission, which is considered the unweighted distribution of Quality performance category scores, to calculate its MIPS Quality performance category score for purposes of determining whether the ACO meets the quality performance standard under the Shared Savings Program in performance year 2021 and subsequent performance years. As noted above, this policy aligns with the MIPS and Shared Savings Program benchmarking policies and is consistent with our original intended methodology of using the unweighted distribution based on submission data to calculate the MIPS Quality performance category Start Printed Page 46151 scores for ACOs as we did to calculate the impacts of the Shared Savings Program quality performance standard proposals in the CY 2021 PFS proposed rule (85 FR 50380). Based on the use of the unweighted distribution of the Quality performance category scores, for performance year 2018, the MIPS Quality performance category score at the 30th percentile is equivalent to 59.30 and the MIPS Quality performance category score at the 40th percentile is equivalent to 70.80. For performance year 2019, the MIPS Quality performance category score at 30th percentile is equivalent to 58.00 and the MIPS Quality performance category score at the 40th percentile is equivalent to 70.82. For performance year 2020, the MIPS Quality performance category score at 30th percentile is equivalent to 63.90 and the MIPS Quality performance category score at the 40th percentile is equivalent to 75.59. See Table 54 outlining the historical unweighted MIPS Quality performance category scores. e. Addressing MIPS Quality Performance Category Score Corrections in the Shared Savings Program's Reopening AuthorityAs finalized in the CY 2021 PFS final rule, beginning with performance year 2021, the Shared Savings Program will use an ACO's MIPS Quality performance category score under the APP to determine whether the ACO has met the Shared Savings Program's quality performance standard. In turn, the ACO's quality performance informs the amount of shared savings earned or shared losses owed. There are interactions between the Shared Savings Program's financial reconciliation timeline and the Merit-Based Incentive Payment System (MIPS) targeted review process and other MIPS Quality performance category score-related corrections, and as a result, CMS may learn of errors in the calculation of MIPS Quality performance category scores after the issuance of an initial determination of financial performance under the Shared Savings Program. CMS has sole discretion over when to reopen determinations of ACO shared savings and shared losses to correct errors for good cause. We believe that it would be appropriate to clarify the circumstances in which we would exercise our discretion to reopen the initial determination of an ACO's financial performance for good cause to correct errors in the determination of MIPS Quality performance category scores that affect the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO. In this section, we discuss these circumstances and explain how we will approach such reopenings, the process by which we would make any corrections, and the manner in which we will adjust shared savings payments to the ACO or shared loss recoupments from the ACO, if applicable. Under § 425.315, CMS may reopen the initial determination or a final agency determination under 42 CFR part 425 subpart I and issue a revised initial determination: (1) at any time in the case of fraud or similar fault as defined in § 405.902; or (2) not later than 4 years after the date of the notification to the ACO of the initial determination of savings or losses for the relevant performance year, for good cause. Good cause may be established when: (1) there is new and material evidence that was not available or known at the time of the payment determination and may result in a different conclusion; or (2) the evidence that was considered in making the payment determination clearly shows on its face that an obvious error was made at the time of the payment determination. In the June 2016 final rule, we noted in response to comments, that in order to provide an opportunity for CMS to consider updated information and make other adjustments to payment determinations across all ACOs, and to minimize program disruptions for ACOs resulting from multiple reopenings, we would, to the extent feasible, use a unified reopening (as opposed to multiple reopenings) to correct errors for a given performance year (81 FR 38001). In addition, we indicated that we would consider other ways to reduce operational burdens for both ACOs and CMS that could result from making payment adjustments to correct errors for good cause under the reopening provisions. For example, we explained that if, during the 4-year time period following notification of the initial payment determination, we determine that a correction needs to be made to a prior performance year's results for good cause, we would seek to potentially adjust the shared savings payment to the ACO or the shared loss recoupment from the ACO for a subsequent performance year (81 FR 38001). To illustrate, we stated that if an ACO that generated shared savings for the second performance year of its agreement period owed CMS money based on a correction made to the payment determination for the prior performance year, we might be able to deduct the amount owed prior to making the shared savings payment for the current year (subject to the general Shared Savings Program requirement for ACOs to repay monies owed to CMS within 90 days of notification of the obligation). We also explained that ACOs would not be able to delay recoupment of any payments owed by notifying us of a possible error that could merit reopening (81 FR 38002). Instead, we stated that if we later determine that a correction should be made, we would subsequently combine, if feasible, the revised calculation of shared savings or shared losses for the affected performance year with the financial reconciliation for the most recent performance year. For example, we indicated that we would add any amount owed to the ACO as a result of a reopening, to any shared savings payment for which the ACO is eligible for the most recent performance year. We indicated that we expected to be able to provide ACOs with sufficient details regarding these corrections that they would be able to attribute the additional payment or recoupment arising from the reopening internally Start Printed Page 46152 and, as applicable, distribute additional funds to or collect amounts from the appropriate ACO participants from the prior PY. Further, we explained that in considering when to reopen an error for good cause, we intend to strike a careful balance between important Medicare program integrity concerns that payments be made timely and accurately under the Shared Savings Program with our desire to minimize unnecessary operational burdens for ACOs and CMS, and to support the ACOs' ability to invest in additional improvements to increase quality and efficiency of care (81 FR 38001). To achieve this careful balance in objectives, for reopenings to address CMS technical errors, we indicated that we may consider whether an error satisfies a materiality threshold, such as when it affects 3 percent of the total amount of net shared savings and shared losses for all ACOs for the applicable performance year. This was a threshold based on guidance from the Government Accountability Office (GAO) for financial audits of Federal entities.[223] We explained that although ACOs are not Federal entities, we believed it would be reasonable to consider the GAO guidance in determining when a technical error has a material effect across all ACOs, such that we should use our discretion to reopen for good cause. As finalized in the CY 2021 PFS final rule, beginning with PY 2021, Shared Savings Program ACOs are required to report quality data for purposes of the Shared Savings Program via the APP under the Quality Payment Program (85 FR 84720 through 84736). An ACO will meet the Shared Savings Program quality performance standard if the ACO achieves a quality performance score that is equivalent to or higher than the percentile specified for the relevant performance year, across all MIPS Quality performance category scores (§ 425.512(a)(3) and (4)). In the CY 2022 PFS final rule, we finalized an extended phase-in of the quality performance standard under the Shared Savings Program (§ 425.512(a)(3) through (5); 86 FR 65266), which we discuss in detail in section III.G.4.b. of this proposed rule. Because ACOs are now reporting quality data via the APP and receiving MIPS Quality performance category scores, we are concerned that CMS may learn of errors in the calculation of MIPS Quality performance category scores after the Shared Savings Program has issued financial reconciliation reports (which are initial determinations of an ACO's financial performance for the applicable performance year). For this reason, we believe that it is appropriate to clarify the circumstances in which we would exercise our discretion to reopen the initial determination of an ACO's financial performance for good cause to correct errors in the determination of MIPS Quality performance category scores that affect the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO. We issue (typically in the summer) MIPS performance feedback reports for the previous performance year to MIPS eligible clinicians, eligible practices that submitted data as a group, virtual groups, and APM entities. For ACOs, the MIPS performance feedback report includes data on ACO quality performance, but does not indicate whether the ACO has met the Shared Savings Program's quality performance standard. Each ACO's MIPS Quality performance category score is calculated using the ACO's performance on the measures reported under the APP (ACO-reported measures, CAHPS for MIPS survey measure, claims-based measures), any applicable MIPS bonus points, and quality improvement points.[224] MIPS eligible clinicians, groups and APM entities (such as ACOs) may request a targeted review of the calculation of the MIPS payment adjustment factor pursuant to § 414.1385. The MIPS targeted review submission period starts once the MIPS performance feedback report is issued and remains open for 60 days with the reviews concluding on a rolling basis, and may extend into October or November (§ 414.1385(a)(2)). If a request for a targeted review is approved, CMS may recalculate, to the extent feasible and applicable, the scores with regard to measures, activities, performance categories (including the quality performance category), and the final score, as well as the MIPS payment adjustment factors (§ 414.1385(a)(6)). For Shared Savings Program ACOs, changes to MIPS Quality performance category scores could affect the quality performance standard and have an impact on the amount of shared savings earned or shared losses owed by the ACOs. Further, because we are proposing to incorporate a sliding scale approach as part of the quality performance standard, a change to an ACO's own MIPS Quality performance category score could also have an impact on the amount of shared savings earned by the ACO or the amount of shared losses owed to CMS under the ENHANCED track. CMS aims to deliver the Shared Savings Program financial reconciliation reports that incorporate MIPS Quality performance category scores for the previous year to ACOs in August on an embargoed basis (that is, ACOs may not publicly release the information in these reports), and typically 2-3 weeks later an unembargoed basis, at which point ACOs can publicly share the information in the reports. Unlike the MIPS performance feedback reports, these reports indicate whether an ACO has met the Shared Savings Program's quality performance standard. Under the proposed policies in this proposed rule, an ACO's health equity adjusted quality performance score for a performance year and the determination of whether the ACO met the Shared Savings Program quality performance standard would affect the determination of shared savings for that performance year and, for ACOs participating in the ENHANCED track, the amount of any shared losses owed. The unembargoed financial reconciliation reports constitute an initial determination of the ACO's financial performance for the applicable performance year. With the initial determination, we also send demand letters to ACOs that indicate the amount of shared losses that must be paid in full to CMS within 90 days of receipt. CMS initiates payments to ACOs that have earned shared savings for a performance year in September of the year following the applicable performance year in order to pay with the correct fiscal year funds. Given that the timeline for conducting a MIPS targeted review of the MIPS performance feedback report may extend past the date that we issue unembargoed financial reconciliation reports, we may learn of errors in the calculation of MIPS Quality performance category scores after the issuance of initial determinations of financial performance under the Shared Savings Program. As we discussed previously in this section, we believe that it is appropriate to clarify how we would exercise our discretion to reopen for good cause in the event of errors in the MIPS Quality performance category scores, such as Start Printed Page 46153 those identified through the MIPS targeted review process, that affect the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO. We are contemplating an approach under which we would reopen initial determinations of ACO financial performance to account for any corrections that have been made to MIPS Quality performance category scores that affect the determination of whether an ACO is eligible for shared savings [225] or the amount of shared savings or shared losses, with no restrictions on the magnitude of the error or the number of ACOs affected. Under this approach, the determination of whether there has been an error in the determination of a MIPS Quality performance category score that affects the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO; whether a correction would be warranted; and the timing of any correction would be within the sole discretion of CMS as provided in § 425.315(a)(4). For illustrative purposes, we describe how a correction to a MIPS Quality performance category score, based on a targeted review or other changes to the MIPS Quality performance category score, could affect the determination of whether an ACO is eligible for shared savings. In this example, an ACO participating under the BASIC track received an initial determination indicating that it met the MSR requirement and that it met the quality performance standard because it achieved a MIPS Quality performance category score that is equivalent to or higher than the percentile specified as the quality performance standard for that performance year. Because the ACO was otherwise eligible to share in savings for the performance year, CMS issued an initial determination that the ACO was eligible to share in savings at the maximum sharing rate under its track (or payment model within a track). Several weeks after that initial determination is issued, CMS learns of an error in the calculation of the MIPS Quality performance category scores that caused the ACO's health equity adjusted quality performance score to be higher than it would have been absent the error. As a result, the ACO's actual health equity adjusted quality performance score was less than the percentile specified as the quality performance standard for that performance year. In this example, we would exercise our discretion to reopen the determination of the ACO's financial performance for good cause to correct the ACO's MIPS Quality performance category score. As a result of this correction, the ACO would no longer have a health equity adjusted quality performance score that is equivalent to or higher than the percentile specified as the quality performance standard for that performance year. Accordingly, the ACO would no longer meet the quality performance standard and thus would be ineligible for shared savings or alternatively might be eligible to receive a reduced shared savings payment in the event we finalize the proposed sliding scale approach. Alternatively, a correction to a MIPS Quality performance category score could affect the amount of shared savings or shared losses owed to an ACO. For example, an ACO under the ENHANCED track might receive an initial determination indicating that it owes shared losses to CMS calculated at the maximum shared loss rate because it: (1) Exceeded the minimum loss rate; and (2) it failed to meet the quality performance standard for that performance year.[226] Several months after that initial determination is issued, as a result of a MIPS targeted review, we learn of an error in the calculation of the ACO's MIPS Quality performance category score that caused the ACO's health equity adjusted quality performance score to be lower than it would have been without the error. In this case, we would exercise our discretion to reopen the determination of the ACO's financial performance for good cause to correct the ACO's MIPS Quality performance category score. In making this correction, the ACO now achieves a health equity adjusted quality performance score that causes it to meet the quality performance standard. While the ACO would still owe shared losses because it exceeded the minimum loss rate, the amount of shared losses it owes could be reduced based on the ACO's corrected health equity adjusted quality performance score as we would now determine the ACO's shared loss rate using a sliding scale approach. In the event that we learn of errors in the calculation of MIPS Quality performance category scores (from a MIPS targeted review or some other MIPS Quality performance category score-related corrections) that change the percentile score an ACO must achieve in order to meet the quality performance standard, we would exercise our discretion to reopen the initial determination of an ACO's financial performance for good cause to correct errors in the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO due to the miscalculation of MIPS Quality performance category scores. Moreover, as noted previously, if we determine that there is good cause to make a correction to a prior performance year's determination of ACO financial results as a result of corrections made to MIPS Quality performance category scores, we would seek to potentially adjust the shared savings payment to the ACO or any shared loss recoupment from the ACO for a subsequent performance year. This approach would not alter the current requirement that ACOs repay shared losses within 90 days after notification of the initial determination of shared losses. We believe this approach is flexible and balanced and would allow us to exercise our discretion to reopen initial determinations of ACO financial performance for good cause to account for any corrections that have been made to MIPS Quality performance category scores that affect the determination of whether an ACO is eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO. We acknowledge that from year to year, corrections could sometimes advantage individual ACOs and sometimes disadvantage individual ACOs. We seek comment on this clarification of when we would exercise our discretion to reopen for good cause when either an initial determination or a final agency determination regarding an ACO's financial performance needs to be corrected as a result of any corrections made to MIPS Quality performance category scores that affect the determination of whether an ACO is Start Printed Page 46154 eligible for shared savings, the amount of shared savings due to the ACO, or the amount of shared losses owed by the ACO. f. Screening for Social Drivers of Health and Screen Positive Rate for Social Drivers of Health Measures and Future Measure Development—Request for Information (RFI)In the CY 2022 PFS proposed rule, we solicited comments on addressing health disparities and promoting health equity (86 FR 39269 and 39270). We indicated our belief that assessing Shared Savings Program ACOs' quality performance on a broader population can have a positive impact on the quality of care for all groups, including Medicare beneficiaries (86 FR 39270). Additionally, we affirmed our expectation that the transition to all-payer eCQM/MIPS CQMs would help to address disparities and promote health equity by promoting a single standard of care across all patients receiving care from practices participating in Shared Savings Program ACOs regardless of location or racial/ethnic group (86 FR 39270). We sought comment and recommendations on how ACOs could utilize their resources to ensure all patients have access to equal care and how to improve the quality of care provided to certain communities, while addressing the disparities that currently exist in healthcare (86 FR 39270). Furthermore, we sought comment on how we could 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 (86 FR 39270). We received many comments in support of CMS' commitment to advancing health equity and addressing health disparities within the Shared Savings Program, including several comments supporting stratification of data and quality measures by social risk factors such as race and ethnicity and inclusion of health equity measures in the program. In addition, we received some feedback expressing concerns that eCQM/MIPS CQM measures would divert resources into electronic systems instead of focusing on health equity. Commenters also noted that changes to the payment structure under the Shared Savings Program could help ACOs improve infrastructure to address health equity and disparities. As we stated in the November 2011 final rule (76 FR 67872), our principal goal in selecting quality measures for the Shared Savings Program 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. Health equity and addressing health disparities continue to be high priorities for the agency through inclusion of health equity initiatives in CMS programs, and better addressing the social needs of people with Medicare is an important part of this strategy. Communities experiencing persistent poverty or inequality tend to disproportionately experience unmet social needs.[227] According to the U.S. Department of Health and Human Services Office of Disease Prevention and Health Promotion's Healthy People 2030, which has a strong focus on eliminating health disparities and creating equitable opportunities for people to live healthy lives, social determinants of health have a major impact on people's health, well-being, and quality of life. This report cites safe housing, transportation, neighborhoods and access to nutritious foods as examples of social determinants of health.[228] For health care providers to help improve health outcomes by addressing these needs for people with Medicare, there is growing evidence to support screening patients for social needs, referring patients who screen positive to local community-based organizations that can help patients address these needs, and finally ensuring that follow-up is obtained and the social needs are addressed. In addition, screening patients for social needs would allow clinicians to develop treatment plans, if needed, which would better capture a patient's unique needs and priorities.[229] In this proposed rule, we are seeking comment on the potential future inclusion of two new structural measures in the APP measure set: Screening for Social Drivers of Health and Screen Positive Rate for Social Drivers of Health. The National Quality Forum (NQF) provided conditional support for these two measures during the 2021-2022 cycle and indicated the measures would be appropriate for consideration in the Shared Savings Program.[230] The measure Screening for Social Drivers of Health assesses the percentage at which providers screen their adult patients for food insecurity, housing instability, transportation problems, utility help needs, and interpersonal safety. This screening for health-related social needs is consistent with the priorities of the agency and the Shared Savings Program, including Meaningful Measures 2.0 priority areas specific to equity. Meaningful Measures 2.0 includes addressing measurement gaps such as development and implementation of measures that reflect social and economic determinants.[231] The measure Screening for Social Drivers of Health assesses the rate at which providers screen beneficiaries 18 years and older for food insecurity, housing instability, transportation problems, utility help needs, and interpersonal safety. Below are the numerator and denominator for the measure: • Numerator: The number of beneficiaries 18 and older screened for food insecurity, housing instability, transportation needs, utility assistance, and interpersonal violence. • Denominator: The number of beneficiaries 18 and older in practice (or population). We refer readers to IV.A.10.c.(1)(c)(i) of this proposed rule and Table Group A of Appendix 1 of this proposed rule, where we discuss the proposed health equity measure for purposes of MIPS, “Screening for Social Drivers of Health.” We refer readers to section IV.A.10.c.(1)(d) of this proposed rule for the request for information regarding measure development related to health equity under MIPS. If the measure is adopted in the traditional MIPS program, we will consider proposing, in future rulemaking, the addition of this measure as an eCQM/MIPS CQM under the APP beginning in PY 2025, once the Web Interface reporting option sunsets and the transition to reporting eCQMs/MIPS CQMs is complete. It is important to note that the measure specifications are not being developed for electronic health record (EHR) reporting at this time, but would be considered for purposes of any future rulemaking. Start Printed Page 46155 Per the Measure Applications Partnership 2021-2022 Considerations for Implementing Measures in Federal Programs: Clinician, Hospital, and Post-Acute Care Long-Term Care final report,[232] this measure would also address a significant performance gap “in which 84 percent of physician offices do not screen for all five needs, even though approximately one-third of patients would screen positive for one or more social needs.” We believe the potential inclusion of this measure in the APP measure set reported by Shared Savings Program ACOs could advance health equity by ensuring ACO participants better understand the needs of the patients that they serve. We expect that, by screening for these social determinants of health, the ACO would accomplish the first step in helping people with Medicare address their social needs—understanding their needs. This screening would also enable clinicians to develop treatment plans, if needed, that are focused on beneficiaries' unique needs and priorities. We may consider including additional quality measures in the future that would assess how well ACOs address the social needs of Medicare beneficiaries more directly. We note that any changes to the measures included in the APP measure set, including the addition of new measures, would be proposed through future rulemaking. We are also seeking input on Screen Positive Rate for Social Drivers of Health, which assesses the percentage of patients who screened positive for health-related social needs. We are interested in feedback from ACOs and other interested parties on the value of implementing a quality measure that indicates a patient's social needs as a part of the quality of care provided to them. We are soliciting comments on the potential addition of these two social determinant of health measures to the APP measure set reported under the Shared Savings Program if these measures are adopted for the traditional MIPS program and other ways to incorporate health equity into public reporting. We also seek comment on the following:
Separately, we refer you to section III.G.2. of this proposed rule where we are proposing to implement AIP, which would provide advance shared savings payments based on assigned beneficiary dual eligibility status and ADI score to new, low revenue ACOs that are inexperienced in performance-based risk. Eligible ACOs may use the funds to invest in support strategies to address patient challenges related to social determinants of health, such as developing transportation services, remote access technologies, telemonitoring, language, literacy and cultural competency services, offering meals, and partnering with community-based organizations to address a patient's social needs, further aligning policies under the Shared Savings Program with initiatives to advance health equity and be responsive to social needs. We are committed to prioritizing the advancement of health equity through program policies with a focus on underserved populations, improving data collection and analysis on social needs and health disparities, and incorporating actionable measures addressing health disparities in future notice and comment rulemaking. We note that, should measures that screen for social needs be adopted in the future, data gathered through such screenings may support the prudent use of AIPs by ACOs. g. Addition of New Consumer Assessment of Healthcare Providers and Systems (CAHPS) for the Merit-based Incentive Payment System (MIPS) Survey Questions—Request for Information (RFI)We are also seeking to gather ACOs and other interested parties input on the potential and modified questions in the CAHPS for MIPS Survey pertaining to health disparities and price transparency, which would support implementation of the No Surprises Act. The No Surprises Act includes provisions specific to improvements in transparency and greater oversight of prescription drug and medical costs. The CAHPS for MIPS Survey measures 10 key domains of patients' experience of care that are referred to as summary survey measures (SSMs) and include the following:
CAHPS surveys are an integral part of the Shared Savings Program's efforts to meaningfully assess patient experience and have been a requirement of the program since the November 2011 final rule establishing the Shared Savings Program (76 FR 67872). We stated in that final rule that we believe there is evidence that the CAHPS survey assesses important aspects of provider-patient interaction that can be influenced by an ACO's level of organizational support, training and incentive structure (76 FR 67874). In the CY 2021 PFS final rule (85 FR 84722), we finalized that beginning in PY 2021, Shared Savings Program Accountable Care Organizations (ACOs) are required to report quality data via the APP. As part of the APP, Shared Savings Program ACOs are required to administer the CAHPS for MIPS survey (85 FR 84730 through 84732). The No Surprises Act,[233] which took effect on January 1, 2022, includes provisions such as billing protections for consumers covered under group and individual health plans as well as certain improvements to transparency and oversight of prescription drug and medical costs (86 FR 36872). The No Surprises Act aligns with President Biden's goals of increased transparency, competition, and fairness across healthcare systems.[234] We are firmly committed to the advancement of the President's vision for health care and the resulting benefits, which include empowerment of consumers in making more informed and value-based health care decisions. We believe certain provisions of the No Surprises Act are Start Printed Page 46156 relevant in consideration of the questions we are seeking input on for the CAHPS for MIPS survey. On [date], the Office of Personnel Management, the Internal Revenue Service, the Department of Labor, and CMS issued an interim final rule entitled Requirements Related to Surprise Billing; Part 1 (86 FR 36872). This interim final rule notes that regulations promulgated under the No Surprises Act should ensure that all individuals, particularly those from underserved and minority communities, trust and believe information they receive related to healthcare costs and coverage (86 FR 36875). The agencies also note that regulations issued pursuant to the No Surprises Act should encourage regulated entities to address barriers to access of care, including trust concerns with the health care system, and to communicate with individuals in a language they can understand, in a respectful way that addresses cultural differences, and at an appropriate level of literacy (86 FR 36875). As previously described in this section of the proposed rule, in developing policies for the Shared Savings Program, we are also committed to prioritizing the advancement of health equity through program initiatives with a focus on underserved populations, improving data collection and analysis on health disparities, and incorporating actionable measures addressing health disparities in future notice and comment rulemaking. An article in the Journal of the American Medical Association titled Patient-Reported Experiences of Discrimination in the U.S. Health Care System describes a cross-sectional national survey conducted in 2019 that included 3,253 U.S. adults. This survey was designed to determine the prevalence, frequency and main types of discrimination experienced in the health care system.[235] Of the 2,137 survey respondents, 458 (21.4 percent) indicated they had experienced discrimination in the health care system, and 330 (72 percent) of those who had experienced discrimination reported experiencing it on more than one occasion. The most frequently reported type of discrimination experienced in the health care system was racial/ethnic discrimination, followed by educational or income level discrimination, weight, sex and age. According to the authors, the survey results suggested that health care discrimination experiences were more prevalent than previously recognized and a need existed for additional analysis of how discrimination related to structural inequities and social determinants of health. One of the additional questions that we are considering adding to the CAHPS survey would be specific to health disparities and focuses on the patient's experience with discrimination based on the characteristics of the patient. The question we are seeking input on is “In the last 6 months, did anyone from a clinic, emergency room, or doctor's office where you got care treat you in an unfair or insensitive way because of any of the following things about you?” The potential responses include; health condition, disability, age, culture, sex (including sexual orientation and gender identity) and income. We seek feedback on additional or modified potential response categories for this health disparities question. Feedback received through this RFI, along with analysis and findings from the testing of the survey question in other programs and future testing in this program would be used to inform future rulemaking. We also believe that this question aligns with the goals of the quality performance standard under the Shared Savings Program. Section 1899(b)(3)(C) of the Act provides that the Secretary shall establish quality performance standards to assess the quality of care furnished by ACOs, and the Secretary shall seek to improve the quality of care furnished by ACOs over time, in part, by specifying new measures. Inclusion of this question to the CAHPS for MIPS Survey would allow CMS to better understand the extent to which patients perceive discrimination in their health care, in alignment with HHS efforts to provide culturally and linguistically appropriate services (CLAS). The National CLAS Standards, were developed by the HHS Office of Minority Health and provide a blueprint for individuals and healthcare organizations to implement services that are respectful of health beliefs, practices and needs of diverse patients with the goal to advance health equity, improve quality of services and assist with elimination of disparities.[236] In addition, the Behavioral Health Implementation Guide for the National Standards for Culturally and Linguistically Appropriate Services in Health and Health Care (Behavioral Health Guide) underscores the ways in which the National CLAS Standards can improve access to behavioral health care, promote quality behavioral health programs and practice, and ultimately reduce persistent disparities in mental health and substance use treatment for underserved minority communities.[237] In addition, inclusion of a health disparities question in the CAHPS for MIPS survey would align with the five priorities outlined in the CMS Framework for Health Equity 2022-2032.[238] The priorities include both system and community level approaches for achievement of equity in Medicare and include: • Priority 1: Expand the Collection, Reporting and Analysis of Standardized Data; • Priority 2: Assess Causes of Disparities Within CMS Programs and Address Inequities in Policies and Operations to Close Gaps; • Priority 3: Build Capacity of Health Care Organizations and the Workforce to Reduce Health and Health Care Disparities; • Priority 4: Advance Language Access, Health Literacy, and the Provision of Culturally Tailored Services; and • Priority 5: Increase All Forms of Accessibility to Health Care Services and Coverage. In addition, we believe that the inclusion of a health disparity question in the CAHPS for MIPS Survey would assist CMS in understanding the patient's perspective of their treatment during health care visits as well as provide insight for health care providers on how to improve upon patient interactions, promotion of health equity and delivery of care. In addition, this question is already being tested in the Medicare Advantage program and based on the findings from this testing in the Medicare Advantage program, we may consider including this question in the CAHPS for MIPS survey through future rulemaking. Including the question in the CAHPS for MIPS survey would provide consistency across CMS programs in learning more about patient Start Printed Page 46157 experiences with discrimination from various health care providers. We are also seeking input on the addition of questions to the CAHPS for MIPS survey specific to price transparency. These questions would build upon the goals of the No Surprises Act to improve transparency and oversight of drug and medical costs, allowing patients to have more information on which to base their healthcare decisions. We also note that the questions under consideration are patient focused, which is one of the goals of the CAHPS for MIPS survey. Currently, the CAHPS for MIPS survey includes the question “In the last 6 months, did you and anyone on your health care team talk about how much your prescription medicines cost?” [239] We are considering adding a question that would be more general in nature and encompass additional areas of a patient's care, such as whether the patient talked with anyone on their health care team about the cost of health care services and equipment. An additional question or questions encompassing a patient's health care costs would allow us to better understand how extensively health care providers are considering and discussing costs with their patients, so they are more able to make informed health care decisions. We believe the inclusion of such questions would also support the goals of the Shared Savings Program which include promotion of accountability for patient populations and fostering coordination of items and services under Medicare Parts A and B. The program also encourages investment in infrastructure and redesigned care processes for high quality and efficient health care service delivery. ACOs work to reduce fragmentation in patient care and cost by giving their ACO participants and ACO providers/suppliers the incentives and tools to deliver high-quality, coordinated, team-based care that proactively promotes improved health for all patients.[240] We are also considering revisions to the CAHPS for MIPS Survey measure in order to make it more broadly applicable to specialty groups in addition to primary care groups. In particular, we are requesting public comment on shortening the survey to remove survey items that are relevant only to primary care providers. Alternately, we may create an alternate shortened survey version for specialty groups while maintaining the existing survey questions for primary care groups. In summary, we are seeking information and feedback from commenters on: (1) the potential future inclusion of health disparities and price transparency questions and whether there are other questions that should also be considered for potential future inclusion in the CAHPS for MIPS survey; and (2) whether they have any input on creating a shortened version of the CAHPS for MIPS Survey measure such that it is more applicable to specialty groups. Feedback received through this RFI, along with analysis and findings from the testing of the survey questions in other programs and future testing in this program would be considered to inform future rulemaking, as previously indicated. 5. Financial Methodologya. OverviewIn this section of this proposed rule, we are proposing modifications to the financial methodologies used under the Shared Savings Program. We propose a combination of modifications to the Shared Savings Program's benchmarking methodology and financial models to encourage sustained participation by ACOs in the program and remove barriers for ACOs serving medically complex and low-income populations. Specifically, we are proposing to revise the benchmarking methodology by: incorporating a prospective, external factor for updating the benchmark (section III.G.5.c.(3) of this proposed rule); adjusting rebased benchmarks to account for an ACO's prior savings (section III.G.5.c.(4) of this proposed rule); and reducing the impact of negative regional adjustments on ACO benchmarks (section III.G.5.c.(5) of this proposed rule). We are also seeking comment on alternatives to the combination of policies proposed in sections III.G.5.c.(3) through (5) which would be aimed at addressing concerns about the effect of an ACO's assigned beneficiaries on regional FFS expenditures used in establishing, adjusting, updating, and resetting an ACO's historical benchmark (section III.G.5.c.(6) of this proposed rule). We are also proposing changes to how we calculate regional factors used in benchmarking to reflect differences in prospective and preliminary prospective assignment (section III.G.5.d. of this proposed rule), how we conduct annual risk adjustment to better account for medically complex, high cost populations and to guard against coding initiatives (section III.G.5.e. of this proposed rule), and we are proposing a methodology to increase opportunities for low revenue ACOs participating in the BASIC track to share in savings (section III.G.5.f. of this proposed rule). We discuss ongoing considerations of the impact of the PHE for COVID-19 on ACO expenditures (section III.G.5.g. of this proposed rule), and we are proposing to exclude from the determination of Medicare Parts A and B expenditures for purposes of calculations under the Shared Savings Program a proposed new supplemental payment under the IPPS for IHS/Tribal Hospitals and hospitals located in Puerto Rico (section III.G.5.h. of this proposed rule). We conclude with a discussion of the proposed modifications to 42 CFR part 425, subpart G (section III.G.5.i. of this proposed rule), to incorporate the related proposed changes discussed throughout this section, as well as certain technical and conforming changes, and corrections. Our specific proposals are discussed in detail in the following sections. b. Statutory and Regulatory Background on Establishing and Updating the Benchmark and Determining SavingsSection 1899(d)(1)(B)(i) of the Act specifies that, in each year of the agreement period, an ACO is eligible to receive payment for shared savings only if the estimated average per capita Medicare expenditures under the ACO for Medicare FFS beneficiaries for Parts A and B services, adjusted for beneficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark under section 1899(d)(1)(B)(ii) of the Act. 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 Start Printed Page 46158 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 and savings determination 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 and savings determination 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. The rules governing the benchmarking calculations and determination of shared savings and losses are set forth in the regulations at 42 CFR part 425, subpart G. 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). Calculations related to determination of shared savings and shared losses are specified in § 425.605 for ACOs participating under the BASIC track, and § 425.610 for ACOs participating under the ENHANCED track (formerly referred to as Track 3). In the June 2015 final rule, CMS established Track 3, constituting the program's highest level of risk and potential reward (80 FR 32771 through 32781). In the December 2018 final rule, CMS renamed Track 3 the ENHANCED track (see, for example, 83 FR 67841), and established the BASIC track, which includes a glide path with five Levels (A through E) (83 FR 67841 through 67857). The BASIC track's glide path allows eligible ACOs to begin under a one-sided model and incrementally advance to higher levels of risk and reward. We refer the reader to earlier rules for details on the development of the current policies for determining shared savings and losses under the BASIC track and ENHANCED track. In the May 8, 2020, COVID-19 IFC (85 FR 27578 through 27582), we established adjustments to benchmark and performance year expenditure calculations to address the COVID-19 pandemic as specified under § 425.611. In the CY 2021 PFS final rule (85 FR 84771 through 84785), we summarized and responded to public comments received on these adjustments, and finalized the regulation at § 425.611 with modifications. Details on the Shared Savings Program's financial methodology are included in Specifications documents. Refer to the Medicare Shared Savings Program, Shared Savings and Losses and Assignment Methodology Specifications (version #10, January 2022), available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-1. For details on Shared Savings Program policies to address the impact of COVID-19 pandemic and the resulting public health emergency, refer to the Medicare Shared Savings Program, Shared Savings and Losses and Assignment Methodology, Specifications of Policies to Address the Public Health Emergency for COVID-19 (December 2020), available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf. c. Strengthening Participation by Reducing the Effect of ACO Performance on Historical Benchmarks, Addressing Market Penetration, and Strengthening Incentives for ACOs Serving Medically Complex and High Cost of Care Populations(1) Regulatory BackgroundTo establish an ACO's historical benchmark for an agreement period, CMS uses ACO historical expenditures for beneficiaries that would have been assigned to the ACO in the 3 most recent years prior to the start of the agreement period. As the statute requires the use of historical expenditures to establish an ACO's benchmark, the per capita costs for each benchmark year must be trended forward to current year dollars and then a weighted average is used to obtain the ACO's historical benchmark. Section 1899(d)(1)(B)(ii) of the Act also requires that the benchmark shall be 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. Therefore, in the November 2011 final rule establishing the Shared Savings Program, we adopted policies for trending forward expenditures for benchmark year (BY) 1 and BY2 to BY3 dollars (76 FR 67924 and 67925), and for updating the benchmark for each performance year during the ACO's agreement period (76 FR 67925 through 67927). Over the 10 years since the Shared Savings Program was first established, we have used a variety of approaches for determining the trend and update factors to make an ACO's cost target more independent of its own expenditures, including using factors based on national expenditures, regional expenditures, or both. With these approaches, we have maintained a degree of parity between the factors used to trend and update the benchmark, either based on national FFS expenditures, regional FFS expenditures, or a blend of national and regional FFS expenditures. In the November 2011 final rule establishing the Shared Savings Program, we adopted policies at § 425.602 establishing trend and update factors based on national FFS expenditures (76 FR 67924 through 67927). We finalized use of a national growth rate in Medicare Parts A and B expenditures for FFS beneficiaries for trending forward BY1 and BY2 to BY3 dollars. We also finalized use of a flat dollar equivalent of the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the Original Medicare FFS program to update the benchmark for each performance year of the agreement period. We described our belief that using a trend factor based on a national growth rate in Medicare Parts A and B expenditures and an update factor calculated as a flat dollar amount equivalent of the projected absolute amount of growth in national FFS expenditures provides a relatively higher expenditure benchmark for low growth/low spending ACOs and a relatively lower benchmark for high growth/high spending ACOs. ACOs in high cost high growth areas would therefore have an incentive to reduce their rate of growth to bring their costs more in line with the national average; Start Printed Page 46159 while ACOs in low cost low growth areas would have an incentive to maintain or improve their overall lower spending levels (76 FR 67924 through 67927). In the June 2015 final rule, we adopted policies for resetting the benchmark for ACOs entering a second agreement period in 2016 at § 425.603(b) (80 FR 32786 through 32796). These policies addressed concerns about the use of an ACO's prior performance years as benchmark years in second and subsequent agreement periods [241] by weighting each benchmark year equally and incorporating an adjustment to account for the average per capita amount of savings generated during the ACO's prior agreement period. We refer to this adjustment as a “prior savings adjustment.” We believed that incorporating a prior savings adjustment into the benchmarking methodology for renewing ACOs entering a second agreement period in 2016 would encourage ongoing program participation by ACOs that had lowered expenditures during their first agreement period. We noted that absent this adjustment, an ACO that previously achieved success in the program may elect to terminate its participation in the program rather than face a lower benchmark that reflects the lower costs for its patient population during the performance years of its prior agreement period (80 FR 32788 through 32791). When proposing this policy in the December 2014 proposed rule (79 FR 72838 and 72839), we highlighted the advantages of the prior savings adjustment, including increasing incentives for ACOs to remain in the program and continue generating shared savings and improving quality due to the prospect of a higher benchmark in future agreement periods. Furthermore, we hypothesized that adjusting benchmarks for prior performance would increase the likelihood of ACOs entering two-sided risk models. The prior savings adjustment adopted in the June 2015 final rule applied only to ACOs entering a second agreement period beginning in 2016 because we subsequently finalized an alternative methodology incorporating factors based on regional FFS expenditures to establish, adjust and update the benchmark for ACOs beginning a second or subsequent agreement period in 2017 and later years. In the June 2016 final rule (81 FR 37953 through 37991), we modified the benchmarking methodology to finalize an approach that incorporated factors based on regional FFS expenditures when resetting (or rebasing) and updating ACO historical benchmarks, as specified in § 425.603(c) through (f). We replaced the national trend factor used in the rebasing methodology with a methodology incorporating regional trend factors. This revised rebasing methodology applied beginning in 2017 to determine rebased historical benchmarks for ACOs renewing for a second or subsequent agreement period under the Shared Saving Program. We also adopted a phased approach to adjusting the rebased benchmark to reflect a percentage of the difference between an ACO's historical expenditures and FFS expenditures in the ACO's regional service area. A higher percentage would be used in calculating this regional adjustment to the ACO's rebased historical benchmark for the ACO's third agreement period (or fourth agreement period for ACOs that entered a second agreement period in 2016) and all subsequent agreement periods. The finalized methodology also included an annual update to the rebased benchmark to account for changes in regional FFS spending, replacing the update based solely on the absolute amount of projected growth in national FFS spending. We finalized an approach to calculate regional FFS expenditures, which included defining an ACO's regional service area to include all counties where one or more beneficiaries assigned to the ACO reside, calculating risk adjusted county FFS expenditures for the ACO's regional service area using the assignable beneficiary population residing in each of the counties included in the ACO's regional service area, and weighting county-level FFS costs by the proportion of the ACO's assigned beneficiaries in the county. The approach adopted in the June 2016 final rule was designed to address concerns about an ACO's influence on its historical benchmark by making the ACO's cost target more independent of its historical expenditures and more reflective of FFS spending in its region by incorporating regional expenditures into the determination of an ACO's historical benchmark and applying a methodology for risk adjustment that accounted for the health status of the ACO's assigned population in relation to FFS beneficiaries in the ACO's regional service area. This approach, which was sunset through subsequent rulemaking that was finalized in December 2018, applied to determine the rebased historical benchmark for ACOs that renewed their participation agreement for a second agreement period beginning on January 1, 2017, January 1, 2018, or January 1, 2019. In the December 2018 final rule (83 FR 68005 through 68030), we adopted policies at § 425.601 that expanded the use of regional factors in establishing, adjusting, and resetting historical benchmarks to all ACOs, including ACOs in a first agreement period, for agreement periods beginning on July 1, 2019, or in subsequent years. These policies sought to address concerns about ACOs influencing their own regional trends by using a blend of national and regional trend factors to trend forward BY1 and BY2 to BY3 when determining the historical benchmark under § 425.601(a)(5) and a blend of national and regional update factors to update the historical benchmark to the performance year under § 425.601(b) (83 FR 68024 through 68030). Under this approach, the weight applied to the national component of the blended trend and update factors increases with an ACO's penetration in its regional service area. We also finalized changes to limit the magnitude of the regional adjustment to address CMS' concerns about windfall gains for low-spending ACOs and to reduce disincentives for ACOs serving medically complex patients (83 FR 68017 through 68024). Specifically, we established a symmetrical cap on the regional adjustment to the historical benchmark equal to positive or negative 5 percent of the national per capita FFS expenditures for assignable beneficiaries for each enrollment type. We also modified the schedule of weights used to phase in the regional adjustment at § 425.601(f), to reduce the maximum weight from 70 to 50 percent for all ACOs and to slow the phase-in of weights for ACOs with higher spending than their regional service area. In earlier rulemaking, we have acknowledged that the use of factors based on regional FFS expenditures in calculating benchmarks will have varying effects on ACOs depending on each organization's individual circumstances ( see, for example, 81 FR 37954 through 37957, and 81 FR 37975 through 37977; also 83 FR 68017 and 68026). (2) Overview of Considerations for Modification to the Benchmarking MethodologyIn 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 interested parties and solicited comments. We discussed some of our Start Printed Page 46160 considerations based on our initial analyses of these 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 sought comment on possible approaches for removing an ACO's assigned beneficiaries from the assignable beneficiary population used in the regional expenditure calculations to address concerns raised by ACOs and other interested parties that the current approach results in relatively lower benchmarks for ACOs, particularly ACOs with high market penetration in their regional service area, which they suggest may tend to be rural ACOs (86 FR 39292). In the CY 2022 PFS proposed rule (86 FR 39293), we noted the potential, based on initial simulations, for mixed effects on ACOs from modifications to the benchmark methodology to remove the ACO's assigned beneficiaries from the calculation of regional FFS expenditures. We also specified that it would be important to consider the extent to which market penetration should be considered in benchmark calculations, noting that relatively few ACOs have high market shares (86 FR 39293). We also sought 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 (86 FR 39294). We sought comment on alternate approaches to updating the historical benchmark, noting that in order for us to use our authority under section 1899(i)(3) of the Act to implement payment methodologies that diverge from the requirements of section 1899(d)(1)(B)(ii) of the Act, those payment methodologies must be determined to improve the quality and efficiency of items and services furnished to Medicare beneficiaries without resulting in additional program expenditures (86 FR 39294). In the section of the CY 2022 PFS final rule entitled “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” (86 FR 65295 through 65306), we summarized comments received, and noted that we would take these comments into consideration as we contemplate additional refinements to the Shared Savings Program's benchmarking methodologies. We noted that we would propose any specific policy changes, if deemed appropriate, in future notice and comment rulemaking. In the following discussion we provide select information on the comments received and previously summarized, and we refer readers to the aforementioned section of the CY 2022 PFS final rule for more complete summaries of commenters' suggestions. Several commenters, including MedPAC, did not support removing ACO assigned beneficiaries from the regional FFS expenditure calculations (86 FR 65298). MedPAC expressed concern this would reward historically low spending ACOs without improving their efficiency of care while at the same time further reducing participation incentives among high spending ACOs that were likely to have the greatest opportunity for efficiency improvements.[242] Many commenters favored removing ACO assigned beneficiaries from the regional reference population (86 FR 65298 through 65302), with some commenters suggesting this approach in combination with other modifications to the benchmarking methodology, such as to expand the definition of regional service area, or to modify the blended national-regional growth factors used in trending and updating the ACO's historical benchmark. Some commenters sought clarity on the approach that would be used to remove an ACO's assigned beneficiaries from the assignable population of beneficiaries used to determine regional FFS expenditures given anticipated mixed effects on ACOs, including the impact on ACOs serving patients with high costs of care (86 FR 65298). Commenters offered differing perspectives on unintended consequences that could result from removing ACO assigned beneficiaries from regional FFS expenditures, with some commenters suggesting that this could also inadvertently increase incentives for patient selection and market consolidation (86 FR 65300 and 65301). Commenters offered a variety of alternative approaches (86 FR 65301 and 65302). For example, MedPAC 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 local and national estimates as is already done for benchmarking under the Global and Professional Direct Contracting Model (to be redesigned and renamed as the ACO Realizing Equity, Access, and Community Health (REACH) Model beginning January 1, 2023).[243] We have continued to investigate the commenters' concerns and consider their suggestions, and have performed additional modeling and analysis. We take seriously ACOs' and other interested parties' concerns about the Shared Savings Program's benchmarking methodology. There are three core concerns (or dynamics) which we seek to address in this rule through proposed modifications to the Shared Savings Program's benchmarking methodology:
As indicated in the regulatory background in section III.G.5.c.(1) of this proposed rule, we have taken incremental steps to address these dynamics through previous rulemaking, such as: using factors based on regional FFS expenditures to trend and update the ACO's rebased historical benchmark instead of a prior savings adjustment, followed by modifications to use blended national-regional growth factors in trending and updating the ACO's historical benchmark beginning with the ACO's first agreement period; incorporating a regional adjustment to the benchmark in the rebasing methodology, followed by modifications Start Printed Page 46161 to apply the regional adjustment beginning with the ACO's first agreement period, and to adjust the phase-in of weights used in determining the regional adjustment over time; and modifying the risk adjustment methodology to account for changes in severity and case mix of the ACO's assigned beneficiaries during the performance year. While these approaches have made some progress to address the aforementioned dynamics, as discussed elsewhere in this proposed rule, we continue to receive feedback from ACOs and other interested parties that additional modifications to the benchmarking methodology are needed to further reduce impacts from rebasing and the regional effects of increasing market penetration by ACOs, and to support ACOs, and in particular ACOs serving medically complex, high cost populations, as they work to achieve the program's goal of lowering growth in Medicare FFS expenditures. There is some evidence that certain aspects of the program's benchmarking methodology, notably the regional adjustment to the benchmark, may already deter participation among ACOs with spending above their regional benchmark and those serving medically complex, high cost populations. For example, in performance years 2017 through 2019, just over 80 percent of ACOs subject to a regional adjustment received a positive adjustment, indicating their spending was lower than spending in their regional service area. More recently, the share of ACOs receiving a positive regional adjustment is closer to 90 percent. This pattern suggests selective participation behavior, where ACOs that have already achieved efficiency or that are serving beneficiaries with lower health risks are more likely to participate. Providers with the greatest opportunity to reduce spending (those that are inefficient and high spending relative to their region and that would receive a negative regional adjustment if they formed an ACO) are less likely to participate under the current methodology, limiting savings for the Medicare program. Additional analysis has suggested that ACOs receiving the largest negative regional adjustments tend to be those serving beneficiaries with high average risk scores and/or high proportions of beneficiaries dually eligible for Medicare and Medicaid. This further suggests, that these ACOs may be higher cost relative to their regions as a result of caring for the highest needs populations rather than being inefficient, and that ACOs serving medically complex, high cost populations may have more difficulty participating in the Shared Savings Program. We believe that addressing the concerning dynamics in the benchmarking methodology, combined with modifications to the risk adjustment methodology and to participation options targeted at improving participation by ACOs serving medically complex, high cost populations,[244] would further CMS' goal that 100 percent of people with Original Medicare will be in a care relationship with accountability for quality and total cost of care by 2030.[245] This goal has informed our consideration of how to approach potential modifications to the benchmarking methodology, and in particular to consider approaches that would allow for a potentially significant increase in participation in the Shared Savings Program. We also note that we are continuing to consider additional modifications to the Shared Savings Program benchmarking methodology that may be needed to ensure the program's longer-term sustainability. MedPAC discussed ratchet effects from rebasing and ACOs' affecting their own regional expenditures in its November 2021 public meeting [246] and January 2022 public meeting.[247] Many of the commissioners appear to support a longer-term approach under which CMS would update ACOs' benchmarks annually using “exogenous” factors, meaning factors not impacted by the individual or collective performance of ACOs. This approach, which has been referred to as “administratively set benchmarks”, would use a combination of administratively determined factors and projected growth in volume and intensity of FFS services, to account for whether an ACO is high or low spending relative to its region. However, at least one commissioner questioned using a projected trend when the actual trend is available and, in their view, has served the program well.[248] In its June 2022 Report to the Congress, MedPAC formally recommended the administratively set benchmarks approach.[249] In section III.G.7. of this proposed rule, we describe and seek comment on a potential longer-term approach for use of administratively set benchmarks that are decoupled from ongoing observed FFS spending. Within this section of this proposed rule, we propose a combination of policies to ensure a robust benchmarking methodology that would reduce the effect of ACO performance on ACO historical benchmarks and increase options for ACOs caring for high-risk populations. Specifically, we are proposing to modify the methodology for updating the historical benchmark (section III.G.5.c.(3) of this proposed rule), incorporate a prior savings adjustment in historical benchmarks for renewing and re-entering ACOs (section III.G.5.c.(4) of this proposed rule), and modify the negative regional adjustment (section III.G.5.c.(5) of this proposed rule). We also believe these proposed modifications could serve as “stepping stones” to a potential longer-term approach to the benchmarking methodology, and they are designed to be consistent with the potential approach for incorporating a methodology for administratively set benchmarks, which is described in the request for information in section III.G.7. of this proposed rule. In section III.G.5.c.(6) of this proposed rule we also seek comment on two potential alternatives to the package of policies we are proposing in sections III.G.5.c.(3) through (5). Both alternatives would seek to limit the impact of an ACO's own assigned beneficiaries on the regional factors used in benchmarking calculations. While these alternatives would address concerns raised by some interested parties, we believe they would be less effective than our Start Printed Page 46162 proposed policies at addressing the full set of core concerns we articulate in this section. (3) Incorporating a Prospective, External Factor in Growth Rates Used To Update the Historical Benchmark(a) BackgroundAs 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 the 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. In accordance with § 425.601(b), for agreement periods beginning on July 1, 2019, and in subsequent years, we update the historical benchmark for an ACO for each performance year using a blend of national and regional growth rates between BY3 and the performance year. To update the benchmark, we make separate calculations for expenditure categories for each of the following populations of beneficiaries based on Medicare enrollment type: ESRD, disabled, aged/dual eligible for Medicare and Medicaid, aged/non-dual eligible for Medicare and Medicaid. The national-regional blend is a weighted average of national FFS and regional growth rates between BY3 and the performance year for the applicable Medicare enrollment type. The national growth rates are computed using CMS OACT national Medicare expenditure data for BY3 and the performance year for assignable beneficiaries (as defined at § 425.20) identified for the 12-month calendar year corresponding to each year. Regional growth rates are computed using expenditures for the ACO's regional service area for BY3 and the performance year. To calculate regional expenditures, we determine the counties included in the ACO's regional service area based on the ACO's assigned beneficiary population for the year, and determine the ACO's regional expenditures as specified under § 425.601(c) and (d). The national and regional growth rates are blended together by taking a weighted average of the two. The weight assigned to the national component of the national-regional blend for a given Medicare enrollment type is calculated as the share of assignable beneficiaries in the ACO's regional service area that are assigned to the ACO for the applicable performance year, calculated by taking a weighted average of county-level shares as specified in § 425.601(a)(5)(v). To calculate this share, we first calculate the county-level share of assignable beneficiaries that are assigned to the ACO for each county in the ACO's regional service area for that Medicare enrollment type. We then weight the county-level shares according to the ACO's proportion of assigned beneficiaries in the county, determined by the number of the ACO's assigned beneficiaries residing in the county in relation to the ACO's total number of assigned beneficiaries for that Medicare enrollment type. Next, we sum these weighted county-level shares for all counties in the ACO's regional service area for each Medicare enrollment type. As an ACO's penetration in its region increases, a higher weight is placed on the national component of the national-regional blend and a lower weight on the regional component. The national and regional growth rates are blended together by taking a weighted average of the two. Specifically, for each Medicare enrollment type, the national-regional blended growth rate is equal to the sum of the following: (1) the growth rate for national assignable FFS expenditures for BY3 to the performance year multiplied by the weight assigned to the national component; and (2) the average growth rate for regional FFS expenditures for BY3 to the performance year based on the ACO's regional service area multiplied by the weight assigned to the regional component. In accordance with § 425.601(a)(5), we also use blended national-regional growth rates to trend forward expenditures for each benchmark year (BY1 and BY2) to BY3 dollars, making separate calculations for each Medicare enrollment type. We summarize concerns with the current benchmarking approach in section III.G.5.c.(2) of this proposed rule. Specifically, ACOs and other interested parties have expressed concerns regarding the dynamic under which an ACO that reduces costs for its own assigned beneficiaries also reduces its average regional costs, resulting in a relatively lower benchmark for the ACO under the blended national-regional growth rates used to trend and update the ACO's historical benchmark. As echoed in public comments, ACOs and other interested parties have suggested that this dynamic particularly disadvantages ACOs with high market penetration in their regional service areas, which may tend to be ACOs operating in rural areas (see, for example, 86 FR 65296 through 65299). (b) Proposed RevisionsWe are proposing to incorporate a prospectively projected administrative growth factor, a variant of the United States Per Capita Cost (USPCC) referred to here as the Accountable Care Prospective Trend (ACPT), into a three-way blend with national and regional growth rates to update an ACO's historical benchmark for each performance year in the ACO's agreement period. Incorporating this prospective trend in the update to the benchmark would insulate a portion of the annual update from any savings occurring as a result of the actions of ACOs participating in the Shared Savings Program and address the impact of increasing market penetration by ACOs in a regional service area on the existing blended national-regional growth factor. Because the ACPT would be prospectively set at the outset of an agreement period, any savings generated by ACOs during the agreement period would not be reflected in the ACPT. Accordingly, incorporation of the ACPT would allow for benchmarks to increase beyond actual spending growth rates as ACOs slow spending growth. By limiting the negative feedback of efforts by ACOs to slow spending growth on their own benchmarks, we believe the use of this three-way blend to update ACOs' benchmarks would incentivize both greater savings by ACOs and greater program participation. Because incorporating the ACPT into the update would reduce the degree to which an ACO's savings negatively impact its benchmark through the regional trend component of the update, we also believe that this proposed change to the update methodology would help to address the concerns discussed in section III.G.5.c.(2) of this proposed rule regarding the disproportionate impact of an ACO's savings on the benchmark update for ACOs with high market share. We discuss this in greater detail elsewhere in this section. We are not proposing to revise the methodology used to trend forward per capita expenditures from BY1 and BY2 to BY3, but would maintain the current two-way blend used in calculating the ACO's benchmark. Modifying the methodology for determining the update factor but not the trend factor means there would no longer be parity between these factors, but we believe this would be an appropriate departure from the approach we have maintained since the start of the program. The two-way blend used for trend factors would continue to reflect actual growth rates, which we believe is still appropriate for purposes of determining the historical benchmark Start Printed Page 46163 because the benchmark is intended to reflect historical spending prior to any savings achieved during the agreement period for which the benchmark will be used. In contrast, the proposal to use a three-way blend to update the benchmark would incorporate a projected growth rate, the ACPT, which would reflect increases in spending independent of any savings achieved by the ACO, or ACOs collectively, during the agreement period, thus limiting the extent to which ACOs' success in reducing expenditures for their assigned beneficiaries over the course of an agreement period negatively impacts their ability to share in savings during that agreement period. We believe this would incent ACOs to reduce expenditures during the agreement period because there would be less risk of those reductions negatively impacting their benchmark updates. This, in turn, could lead to greater savings generated and increased shared savings payments to ACOs. Under the proposed approach, a three-way blend would be calculated as the weighted average of the ACPT (one-third) and the existing national-regional blend (two-thirds) for use in updating an ACO's historical benchmark between BY3 and the performance year (PY). The ACPT component of the blend would be an external factor, meaning it would not be impacted by the individual or collective performance of ACOs. Within this proposed rule, reference to a “two-way blend” is synonymous with the existing blended national-regional growth rates under § 425.601. The CMS Office of the Actuary (OACT) provides projections of Medicare program spending for various recurring deliverables, including the Medicare Trustees Report and the Advance Notice and Announcement of Medicare Advantage capitation rates and Part C and Part D payment policies. These publications include both historical and projected future Medicare spending amounts expressed on a per capita basis (differences in ESRD and non-ESRD calculations, are described in further detail in this section). These amounts published in the Advance Notice and the Announcement are labeled the FFS USPCCs. We are proposing to calculate the ACPT component of the blended annual update using an annualized growth rate based on 5-year-projections in per capita spending as of the start of an ACO's agreement period. We selected this projection horizon to align with the 5-year agreement periods used under the Shared Savings Program. The ACPT would be projected by OACT and would be a modification of the existing FFS USPCC growth trend projections used annually for establishing Medicare Advantage rates. The modifications to the FFS USPCC, aimed at making the trends more consistent with Shared Savings Program's existing expenditure calculations, would reflect the following:
OACT currently produces separate FFS USPCCs for ESRD (dialysis-only, including aged/ESRD, disabled/ESRD and ESRD-only) and non-ESRD aged/disabled populations. Likewise, OACT would also calculate the ACPT separately for these two populations. Currently, most Shared Savings Program benchmarking calculations are performed separately for four separate Medicare enrollment types: ESRD, disabled, aged/dual eligible for Medicare and Medicaid, and aged/non-dual eligible for Medicare and Medicaid. The Shared Savings Program identifies enrollment type status on a monthly basis. A beneficiary month is classified as an ESRD month if the beneficiary was in long-term dialysis or transplant status for that month (including up to 3 months post-graft). All non-ESRD months are then classified as one of the other three categories based on age (under 65 for disabled) and dual eligibility status (for beneficiaries 65 and over only).[250] We are proposing to use the ESRD ACPT in calculating update factors for the ESRD population and to use the combined Aged/Disabled ACPT in calculating update factors for the remaining three enrollment types (disabled, aged/dual eligible, aged/non-dual eligible). Using ACPTs based on the existing populations for which FFS USPCCs are calculated would allow us to leverage existing OACT models which do not currently differentiate among categories within the aged/disabled population. We do not believe that there would be significant precision gained from revising these existing models to incorporate assumptions regarding these distinctions. Furthermore, we note that outside of the unforeseen impact of the PHE for COVID-19, national assignable per capita spending growth rates were reasonably consistent across the three non-ESRD enrollment types from 2013-2019 and we anticipate that pattern continuing during the period in which the ACPT would be incorporated into ACO calculations. We are proposing to set the ACPT growth factors for the ACO's entire 5-year agreement period near the start of the agreement period. The ACPT factors would remain unchanged throughout the ACO's agreement period, providing a degree of certainty to ACOs. We anticipate we would publish finalized ACPT values in the Spring of the first performance year of an ACO's agreement period, and we note earlier years' trends would be available for reference prior to the start of the ACO's agreement period. We acknowledge that, under an approach that sets the value of the ACPT at the start of an ACO's agreement period, ACOs entering agreement periods in different years could be subject to higher or lower updates depending on how projections change from year to year. This could lead ACOs to try to time their entry (or renewal) in the program to try to maximize the fixed portion of their update. However, we believe this concern will be mitigated because the ACPT would represent only one-third of the three-way blend used to update an ACO's benchmark. We further propose that the annualized growth rate(s) would be calculated as either a uniform annualized projected growth rate over each of the 5 performance years of the 5-year agreement period, or as two or more annualized growth rates during the 5 performance years comprising the 5-year agreement period. Two or more annualized growth rates would be used if OACT determines that a uniform annualized projected rate of growth does not reasonably fit the anticipated growth curve—for example, if growth is expected to be above- or below-average in the short-run and return to more typical levels later in the agreement period. We considered whether the ACPT component of the blend should express projected growth on a relative basis (as the current two-way national-regional blend operates) or on an absolute (flat) dollar basis. Applying the new portion of the update as an absolute dollar growth amount would more closely adhere to the approach stipulated in section 1899(d)(1)(b)(ii) of the Act for the benchmark to be updated by the Start Printed Page 46164 projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare FFS program. However, under the proposed approach, the ACPT would be weighted together with the two-way national-regional blend. Based on retrospective modeling (described elsewhere in this section), both the relative basis and flat dollar approaches to calculating the ACPT are anticipated to improve the incentive to participate compared with the current two-way blend for both ACOs with higher market penetration within their regional service area (the ACO's assigned beneficiaries constitute at least 30 percent of the assignable beneficiary population within the ACO's regional service area) and ACOs operating in a regional service area with higher ACO market penetration (at least 50 percent of the assignable beneficiaries within an ACO's regional service area are assigned to any Shared Savings Program ACO). During the period examined, ACO benchmarks increased an average of $19 per capita, with an average of 62 percent of all ACOs across all years modeled receiving a larger benchmark increase compared with the current two-way blend. An average of 65 percent of ACOs operating in a regional service area with higher Shared Savings Program market penetration were better off under the three-way blended update factor compared with the current two-way blend. Additional results comparing the benefits of the three-way blend to the current two-way blend are described elsewhere in this section. We also anticipate that introducing the ACPT as part of a three-way blend may incentivize ACOs to achieve additional savings by providing a known prospective trend that allows for improved planning and provides a target for ACOs to compare their performance against. Because the prospective trend would allow ACOs to improve planning, a higher percentage of ACOs may benefit from the three-way blend than is reflected in the simulations. In addition, we expect the three-way blend would further insulate a portion of the benchmark update from the impact of an ACO's own savings, as actual spending trends downward from initial projections. While both approaches are, on average, favorable for ACOs, the risk adjusted flat dollar approach is anticipated to be more beneficial to ACOs because the flat dollar amount would be based on per capita expenditures among the national assignable population, which tend to be higher than per capita expenditures among ACO-assigned beneficiaries. That is, if national per capita expenditures are projected to increase by 3 percent per year, a flat dollar amount representing 3 percent of per capita expenditures from the national assignable population would be greater than 3 percent of a typical ACO's own benchmark amount; thus, the flat dollar ACPT would result in a larger overall increase to the ACO's benchmark amount each year. Another potential advantage of calculating flat dollar amounts based on the national per capita FFS expenditures for the assignable population (rather than simply calculating flat dollar amounts from OACT's original projected dollar values for the ACPT), is that it allows us to generate separate values for each of the four Medicare enrollment types. This approach would also align projections with actual per capita expenditures of the assignable population, minimizing the degree to which the projections may systematically differ in how they are calculated. Therefore, we are proposing to calculate flat dollar amounts (separately for each Medicare enrollment type) by applying the relevant projected growth rate to truncated national per capita FFS expenditures for assignable beneficiaries for BY3 for the given Medicare enrollment type. The assignable population for this calculation would be identified using the assignment window for the 12-month calendar year corresponding to BY3. Truncation would be done in the same manner as is done when calculating the ACO's own per capita expenditures to draw an equivalent comparison. That is, we would truncate national per capita FFS expenditures for assignable beneficiaries for BY3 for a given Medicare enrollment type, for purposes of calculating the ACPT flat dollar amounts, at the 99th percentile of national Medicare FFS expenditures for assignable beneficiaries identified for the 12-month calendar year corresponding to BY3. This approach would be consistent with the approach to truncating an assigned beneficiary's expenditures in calculating the ACO's benchmark year expenditures as currently specified in § 425.601(a)(4), and in the proposed new provision at § 425.652(a)(4), and performance year expenditures as specified under § 425.605(a)(3) (BASIC track) and § 425.610(a)(4)(ii) (ENHANCED track). This approach to truncation to establish the ACPT flat dollar amounts would also align with the approach to truncating assignable beneficiary expenditures in calculating county expenditures (refer to § 425.601(c)(3), and the proposed new provision at § 425.654(a)(3)) used in determining factors based on regional FFS expenditures, including the regional component of the two-way blend. We are further proposing to risk adjust these flat dollar amounts to account for differences in severity and case mix between the ACO's assigned beneficiaries and the national assignable FFS population for each Medicare enrollment type. We are concerned that flat dollar amounts that are not risk adjusted could generate a relatively lower update for higher spending ACOs caring for medically complex populations because the amount of the update would be set based on per capita expenditures for the national assignable population (which are likely to be lower) instead of the ACO's own assigned beneficiary population. Risk-adjusting the flat dollar amounts would provide a higher flat dollar amounts for ACOs serving medically complex populations. We are not proposing to adjust the ACPT flat dollar amounts for geographic differences in costs or prices, as we believe that such an adjustment may inadvertently reward higher spending, less efficient ACOs with a high market share in their regional service area. In order to blend the risk adjusted flat dollar amounts with the corresponding two-way blend for each enrollment type, which would continue to operate on a relative basis, we would first need to re-express the risk adjusted flat dollar amounts on a relative basis by dividing by the ACO's historical benchmark expenditure amount. This would be done separately for each Medicare enrollment type. Using hypothetical values, the steps below illustrate how we would set the annualized growth rate(s) and calculate the ACPT flat dollar amount(s) (re-expressed as a relative value) that would be included in the three-way blend. Step 1: Calculate Annualized Growth Rate(s) for Agreement PeriodFor step 1, OACT would calculate one or more annualized growth rates for the ESRD population (the ESRD ACPT) and one or more annualized growth rates for the aged/disabled population (the Aged/Disabled ACPT). Specifically, for each population OACT would project per capita spending growth for Parts A and B Medicare FFS spending as described earlier in this section between BY3 and each performance year of the agreement period. These annualized growth rates may either be calculated as a uniform annualized projected rate of growth over each of the 5 performance years of the Start Printed Page 46165 5-year agreement period, or as two or more annualized growth rates reflecting the projected rates of growth during the 5 performance years comprising the 5-year agreement period if CMS determines that a uniform annualized projected rate of growth does not reasonably fit the anticipated growth curve. Step 2: Express the Growth Rate(s) for Each Performance Year as Flat Dollar Amounts (the ACPT)For step 2, we would multiply BY3 truncated national per capita FFS expenditures calculated by OACT for the assignable FFS population for a given enrollment type (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries), by the applicable growth rate to calculate the flat dollar amount of growth for each performance year. As previously described in this section, we would use ESRD growth rate(s) for the ESRD population and non-ESRD aged/disabled growth rate(s) for the disabled, aged/dual eligible, and aged/non-dual eligible populations. Thus, for example, if the truncated national assignable per capita expenditures for a given enrollment type was $13,000, and the projected growth rate for that enrollment type in that year is 5 percent per year, the flat dollar amounts would be: PY1 flat dollar amount = $13,000 × (1.050 − 1) = $650, and PY5 flat dollar amount = $13,000 × (1.276 − 1) = $3,588 [251] Step 3: Risk Adjust the Flat Dollar AmountsIn step 3, we would multiply the flat dollar amounts for each performance year, for each enrollment type, by the ACO's mean BY3 prospective HCC risk score [252] for that enrollment type. For consistency with other Shared Savings Program risk adjustment calculations, the risk score used would first be renormalized by dividing by the national mean risk score for the assignable FFS population for that enrollment type identified for the calendar year corresponding to BY3. Risk adjusting the flat dollar amounts would allow for a higher update for ACOs serving a population that is more medically complex than the national average. If the ACO's BY3 risk score was 1.025, the risk adjusted flat dollar amounts would be: PY1 flat dollar amount = $650 × 1.025 = $666, and PY5 flat dollar amount = $3,588 × 1.025 = $3,678 Step 4: Re-Express Risk Adjusted Flat Dollar Amounts as Relative FactorsThe fourth and final step before calculating the three-way blended update factor would be to re-express the risk adjusted flat dollar amount for each enrollment type on a relative basis such that it can be combined in a weighted average with the current two-way blend. We would do this by dividing the risk adjusted flat dollar amounts computed in Step 3 for a given enrollment type by the ACO's historical benchmark expenditures for that enrollment type. The resulting amount would represent the final ACPT portion of the blended update factor for that enrollment type. If the historical benchmark expenditures for the enrollment type were $12,000, the final ACPT portion of the blended update factors for this enrollment type would be: PY1 final ACPT portion of the blended update factor = ($666 / $12,000) + 1 = 1.056, and PY5 final ACPT portion of the blended update factor = ($3,678 / $12,000) + 1 = 1.306 The values in this step would then be combined with the two-way blend to compute the three-way blended update factor. The ACPT would constitute one-third of the total blend, while the remaining two-thirds would consist of the existing two-way blend. To illustrate how we would compute the three-way blend, and how it would compare with the two-way blend, assume for the same hypothetical ACO for a given enrollment type that the regional expenditure growth between BY3 and PY1 is 2.5 percent, that national assignable FFS expenditure growth is 3 percent and that the ACO's assigned beneficiaries represent 20 percent of the assignable population in the ACO's regional service area. For simplicity, assume the ACO faces a risk ratio of 1.0. The current two-way blended update factor would be calculated as: Two-way blend = (National Update Factor × National Weight) [253] + (Regional Update Factor × (1 − National Weight)); or Two-way blend = (1.030 × 20 percent) + (1.025 × 80 percent) = 1.026. Updating the ACO's benchmark with the two-way blended update factor alone would yield a value of $12,312 (that is, $12,000 × 1.026 = $12,312). To calculate the three-way blend by incorporating the PY1 ACPT factor of 1.056 (from earlier in the example) we would use the following weighted average: Three-way blend = [PY1 ACPT × (1/3)] + [PY1 Two-Way Blend × (2/3)]; or Three-way blend = [1.056 × (1/3)] + [1.026 × (2/3)] = 1.036. Applying the three-way blended update factor to the historical benchmark would yield an updated benchmark of $12,432 for the enrollment type (that is, $12,000 × 1.036 = $12,432). In this example, the ACO's benchmark update factor increases by 1.0 percentage point, corresponding to an increase of $120 per capita, which increases the ACO's potential for shared savings and reduces the potential for shared losses, if applicable. Including the ACPT as a component of a three-way blend could provide a degree of certainty that benchmarks would not be lowered as a result of ACOs reducing FFS spending growth, and thereby increase the incentive for such savings and strengthen incentives for ACOs to enter and remain in the Shared Savings Program. However, incorporating the ACPT into a three-way blended update factor would have the potential for mixed effects. For example, it may also lower an ACO's benchmark relative to the current approach if external factors lead to higher program spending growth than originally projected at the start of an ACO's agreement period. This could, for example, cause an ACO in a two-sided model that would not have been responsible for shared losses under the two-way blend to owe shared losses under the three-way blend or cause an ACO that would have owed shared losses under the two-way blend to owe a larger amount of shared losses under the three-way blend. Additionally, the three-way blend could potentially have negative implications for an ACO based on the Shared Savings Program's policy regarding monitoring of ACO financial Start Printed Page 46166 performance described in § 425.316(d). Under this policy, if an ACO's performance year expenditures exceed its updated benchmark by an amount equal to or exceeding either the ACO's negative MSR under a one-sided model or the minimum loss rate (MLR) under a two-sided model, CMS may take pre-termination actions against the ACO. For a subsequent occurrence for another performance year in the same agreement period, CMS may immediately or with advance notice terminate the ACO's participation agreement. Consequently, we believe a guardrail is needed to ensure the use of the three-way blend does not result in lower benchmarks than the current national-regional blend in a way that poses higher financial risk for ACOs under two-sided models, or that could jeopardize an ACO's continued participation in the Shared Savings Program under the financial performance monitoring policy described in § 425.316(d), or both. We propose to institute this guardrail as follows: if an ACO generates losses for a performance year that meet or exceed its minimum loss rate (MLR) (for two-sided model ACOs) or negative MSR (for one-sided model ACOs) under the three-way blend, we would recalculate the ACO's updated benchmark using the national-regional blended update factor (two-way blend). If the ACO generates a smaller amount of losses using the two-way blend, we would use this smaller amount to determine the ACO's responsibility for shared losses, if applicable, and in determining the ACO's financial performance for monitoring purposes under § 425.316(d). If the ACO generates saving using the two-way blend to update its benchmark but does not generate savings under the three-way blend, the ACO would neither be responsible for shared losses (if in a two-sided model) nor eligible for shared savings for the applicable performance year, even if the savings generated exceed the ACO's MSR. ACOs in these scenarios would publicly report their performance in accordance with § 425.308(b)(4) based on the recalculated amounts determined using the two-way blend. However, an ACO that generated savings under the two-way blend, but was not eligible to earn a shared savings payment, would be required to report zero shared savings for the performance year. We believe this guardrail would protect ACOs from the most negative potential outcomes of the proposed three-way blend, while still insulating the Trust Funds. To illustrate how the guardrail would be applied, consider a second hypothetical ACO participating at Level E of the BASIC track for which the updated benchmark calculated using the three-way blend was $12,760. Assume that the ACO's per capita performance year expenditures were $12,980 and that the ACO had selected a symmetrical MSR/MLR of 1.5 percent. Using the three-way blend, the ACO would have per capita losses of −$220, or −1.7 percent of its updated benchmark which would be above ACO's selected MLR of −1.5 percent. Applying the fixed shared loss rate of 30 percent under Level E, the ACO would, in absence of the guardrail, be liable for shared losses (on a per capita basis) of −$66 and would face potential pre-termination actions or involuntary termination (depending on the ACO's financial performance in prior years of its agreement period). However, with the guardrail in place, we would re-assess the ACO's performance using the two-way blend. If the two-way blend produced an updated benchmark of $12,804, the ACO's new per capita losses amount would be −$176, or −1.4 percent of its updated benchmark which would be within the ACO's selected MLR of −1.5 percent. This ACO would therefore not be responsible for shared losses for the performance year and would not face any negative consequences under the financial performance monitoring policy. If the two-way blend instead produced an updated benchmark of $13,183, the ACO would have measured per capita savings of $203, or 1.54 percent of its updated benchmark. As previously explained, under the proposed approach, the ACO would no longer be responsible for shared losses nor face pre-termination action or termination based on its financial performance. However, although the savings amount would exceed the ACO's MSR of 1.5 percent, the ACO would not be eligible for shared savings under the proposed policy. Under this proposal to set the ACPT for the duration of the ACO's agreement period, we would not adjust the ACPT due to external factors such as geographic price changes, efficiency discounts, or other retrospective updates occurring during the performance years throughout the agreement period. However, we acknowledge that a variety of circumstances could cause actual expenditure trends to significantly deviate from projections. Thus, we believe there are circumstances that may warrant reducing the weight placed on the ACPT on an ad hoc basis. In particular, if we determine that expenditure growth has differed significantly from projections made at the start of the agreement period due to unforeseen circumstances, such as an economic recession, pandemic, or other factors, a reduction in the weight placed on the ACPT may be considered. For example, based on a review of projections detailed in the 2009 Medicare Trustees Report, an ACPT projected in 2009 (amidst the great recession and before passage of the ACA) would have ultimately overstated per capita spending growth from 2008 to 2013 by roughly 9 percentage points (which would have corresponded to a 3 percent upward bias to benchmarks when weighted as one-third of the blended update). We are especially concerned that such unforeseen circumstances could result in an update factor that significantly differs from actual expenditure trends, and in turn could result in ACOs owing excessive shared losses or the Medicare Trust Funds paying out windfall shared savings. As discussed elsewhere in this section, we are proposing a “guardrail” to provide protection for ACOs that would be responsible for sharing losses with the Medicare program based on an updated benchmark computed using the proposed three-way blend and that would have had a higher updated benchmark under the two-way blend. While we believe the guardrail offers protection against some unexpected variances between the projected amount and actual expenditures to protect against shared losses, we believe it is also important for CMS to retain flexibility to reduce the impact the prospectively determined ACPT portion of the three-way blend if unforeseen circumstances occur during an ACO's agreement period. When determining an approach for adjusting the three-way blend if unforeseen circumstances occur, we considered CMS' experience with use of a prospective trend, calculated by OACT based on an adjusted USPCC amount, in the Next Generation ACO (NGACO) Model.[254] CMS maintained the sole discretion to retrospectively modify the projected trend used in calculating the performance year benchmark (aggregate expenditure target) if CMS determined that exogenous factors, such as a natural disaster, epidemiological event, legislative change and/or other similarly unforeseen circumstance during the performance year, rendered the projected trend invalid. CMS used this Start Printed Page 46167 discretion for the NGACO Model in response to the COVID-19 pandemic in performance years 2020 and 2021. For performance year 2020, instead of applying the prospective trend, CMS offered NGACOs the choice between use of a retrospective national trend or a retrospective regional trend. For performance year 2021, CMS applied a retrospective national trend to all NGACOs instead of a prospective trend.[255] Based on the experience in the NGACO Model, we believe it would be appropriate, when unforeseen circumstances occur, to adjust the three-way blend to prevent drastic differences between actual and projected expenditure trends. Accordingly, we are proposing that if unforeseen circumstances occur, we would retain discretion to decrease the weight applied to the ACPT in the three-way blend. Absent unforeseen circumstances, we would weight the two-way blend as two-thirds and the ACPT as one-third in calculating the three-way blend. However, if CMS determines an unforeseen circumstance has occurred that would warrant adjustments to these weights, then CMS would modify the three-way blend to reduce the weight that will apply to the ACPT and increase the weight of the two-way blend. We further propose that CMS would have sole discretion to determine whether unforeseen circumstances exist that would warrant adjustments to these weights, as well as the extent to which the components of the three-way blend would be re-weighted. However, given that external factors that cause deviations from projected trends would continue to be reflected in the two-way blend component of the update factor, the impacts from unforeseen circumstances that either increase or decrease the two-way blend component would also then increase or decrease the three-way blend. This would likely mitigate the need to adjust the weight of the ACPT used in the three-way blend. Based on initial modeling, we believe that the proposed three-way blended update factor with the associated guardrail, in combination with other benchmarking changes discussed elsewhere in section III.G.5.c. of this proposed rule, to apply a prior savings adjustment and mitigate the impact of negative regional adjustments on ACOs, would serve as a mid-term solution to ensuring the sustainability of ACOs' historical benchmarks as we consider moving toward an administrative benchmarking methodology, as discussed in section III.G.7. of this proposed rule. To simulate the potential impact of the three-way blend, we examined ACO spending over a 5-year period (2014 to 2019) using ACO participant lists in effect for all 12- or 6-month performance years or performance periods beginning on January 1, 2019, and existing Medicare Part A and Part B USPCC projections published in the 2014 Medicare Trustees report.[256] We also adjusted the Part A projections to remove IME, DSH, and uncompensated care payments, to better reflect how the proposed ACPT would be calculated in practice. For the purposes of this simulation, we used 2014 per capita spending as the historical benchmark for each ACO in lieu of a 3-year base period. We then simulated updating each ACO's historical benchmark for each of the 5 subsequent years using the existing two-way blended update factor methodology (in accordance with § 425.601(b)) and incorporating the simulated flat dollar ACPT amounts into a three-way blended updated factor. We compared the simulated benchmark updates determined using this three-way blend to updates simulated using the existing two-way blend. These simulations showed that, on average, ACOs were better off over the course of the 5-year agreement period using the three-way blend than using the current two-way blend. That is, in a given year, an ACO's benchmark on average increased more when the annual update was calculated using the proposed three-way blend. Incorporating the ACPT into a three-way blended update factor during the model period resulted in an average benchmark increase of $19 per capita, with an average of 62 percent of all ACOs across all years modeled receiving a larger benchmark increase compared with the current two-way blend. ACOs with high market penetration within their regional service area (ACOs whose assigned beneficiaries constitute at least 30 percent of the assignable beneficiary population within the ACO's regional service area) had similar results to those with lower market penetration (61 percent vs 63 percent, respectively), with both groups receiving larger benchmark increases from the three-way blend. ACOs operating in markets where the Shared Savings Program as a whole has higher penetration (at least 50 percent of the assignable beneficiaries in an ACO's regional service area are assigned to any Shared Savings Program ACO) were, on average, better off under the three-way blend. We observed that, on average over the 5-year period used in our modeling, approximately 65 percent of ACOs operating in markets with high Shared Savings Program penetration had a larger benchmark increase under the three-way blend compared with the two-way blend. Additionally, an average of 50 percent of ACOs with at least 25 percent of assigned beneficiaries being dually eligible for Medicare and Medicaid received a higher benchmark update under the three-way blend as well as 65 percent of ACOs with at least 20 percent of assigned beneficiaries being disabled and 55 percent of ACOs operating in rural areas. As discussed elsewhere in this section, these results simulate a change in how the benchmark update is calculated holding everything else constant. That is, these results do not reflect any additional savings that may have materialized had a three-way blend that includes the ACPT been in place during the 5-year period included in our modeling. We anticipate that introducing the ACPT into a three-way blend may incentivize ACOs to achieve additional savings, and that the three-way blend would then insulate a portion of the benchmark update from the impact of those savings as actual spending trends downward from initial projections. As a result, a higher percentage of ACOs may benefit from the three-way blend than is reflected in these simulations. We believe that incorporating the prospective trend into the benchmarking methodology by including the ACPT in a three-way blended update factor would be an important step towards an administrative benchmarking approach. ACOs may have a greater incentive to enter and continue participation in the Shared Savings Program when their benchmarks are further decoupled from their ongoing observed FFS spending while continuing to reflect a measure of the ACO's efficiency relative to its region. This approach may also serve to anchor and stabilize benchmarks to the extent that the ACPT projected growth component is an effective counterbalance when there are changes in an ACO's penetration in its regional service area that affect the weights given Start Printed Page 46168 to the national and regional expenditure components of the current two-way blended update factor. However, we recognize that some interested parties may still have concerns and prefer a different approach to address impacts that may result from ACO market penetration. In section III.G.5.c.(6) of this proposed rule we seek comment on two potential alternatives to the package of policies we are proposing in this section and in sections III.G.5.c.(4) and (5). Both of the alternatives presented in section III.G.5.c.(6) would attempt to limit the impact of an ACO's own assigned beneficiaries on regional factors used in the benchmarking methodology. Because the proposed three-way blended update factor would be used in place of an update factor based on the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original FFS program as called for in section 1899(d)(1)(B)(ii) of the Act, this proposal would require us to continue to use our authority under section 1899(i)(3) of the Act. This provision grants the Secretary the authority to use other payment models, including payment models that 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 program expenditures under the alternative methodology would be equal to or lower than those that would result under the statutory payment model. By combining an external, prospective factor calculated based on the USPCC, as a component in the benchmark update, we believe that the proposed ACPT/national-regional three-way blended update factor would decouple an ACO's benchmark to a certain degree from ongoing observed FFS spending which is currently reflected in ACO benchmarks under the methodology specified under § 425.601. This approach may serve to anchor and stabilize benchmarks to the extent that the ACPT projected growth component is an effective counterbalance to the savings achieved by ACOs participating in the Shared Savings Program, which reduce the update factor under the current two-way national-regional blended update, including as a result of increasing market penetration by efficient ACOs in their regional service area. The proposed guardrail is designed to protect ACOs from larger shared losses (or potentially from the negative implications of financial monitoring) but would not allow ACOs to move to a position of sharing in savings. Additionally, the proposal that CMS would retain discretion to reweight the components of the three-way blend to adjust the weight applied to the ACPT and the two-way blend in the event of unforeseen circumstances that result in drastic differences between the ACPT and actual national per capita FFS expenditure growth for assignable beneficiaries for a given performance year, would protect against ACOs owing excessive shared losses or the Medicare Trust Funds paying out windfall shared savings. We believe this combination of additional incentives and safeguards may encourage ACOs to enter and continue participation in the Shared Savings Program. As discussed in section III.G.5.d. of this proposed rule, we are also proposing to determine the assignable population of beneficiaries used in calculating county-level FFS expenditures, and in other factors based on the assignable population in the ACO's regional service area, using the assignment window that corresponds to the ACO's selected assignment methodology to improve the precision of the calculations. This modification would address a favorable bias in calculations for ACOs under prospective assignment, resulting in an estimated decrease in regionally adjusted historical benchmarks for these ACOs estimated to range from 0.2 percent-1.9 percent based on modeling using historical benchmarks for ACOs participating in the 6-month performance year from July 1, 2019, through December 31, 2019 (compared to leaving the bias uncorrected). If left uncorrected, the bias could potentially grow over time as more ACOs are subject to higher weights in the calculation of the regional adjustment. The proposed change in methodology for identifying the assignable beneficiaries used in calculating factors based on regional FFS expenditures would also improve the precision of the calculation of the blended national-regional growth rates within the benchmark update. Considering the combination of these factors, we believe the changes to the methodology for updating the benchmark that we are proposing pursuant to section 1899(i)(3) of the Act would improve the quality and efficiency of items and services furnished under the Medicare Program. More specifically, we believe that the introduction of the prospectively set ACPT into the blended benchmark update factor would increase the incentive for ACOs to achieve savings by partially insulating ACOs from the impact of those savings on future benchmark updates. We also believe that this change would encourage ACOs to enter and remain in the Shared Savings Program, which would lead to improvement in the quality of care furnished to Medicare FFS beneficiaries because participating ACOs have an incentive to perform well on quality measures in order to maximize the shared savings they may receive, and in the case of ACOs participating under the ENHANCED track to minimize any shared losses owed (as described in section III.G.4. of this proposed rule). In addition, as discussed in the Regulatory Impact Analysis (section VII of this proposed rule), we project that this proposed approach for use of an ACPT/national-regional three-way blended update factor, in combination with other changes to the statutory payment model proposed elsewhere in this proposed rule, as well as current policies established using the authority of section 1899(i)(3) of the Act, would not increase program expenditures relative to those under the statutory payment model. We will continue to reexamine this projection in the future to ensure that the requirement under section 1899(i)(3)(B) of the Act that an alternative payment model not result in additional program expenditures continues to be satisfied. In the event that we later determine that the payment model established under section 1899(i)(3) of the Act no longer meets this requirement, we would undertake additional notice and comment rulemaking to make adjustments to the payment model to assure continued compliance with the statutory requirements. We propose that the update factor based on a three-way blend of the ACPT and blended national-regional growth rates and the associated guardrail would be applicable to agreement periods beginning on January 1, 2024, and in subsequent years. The use of the three-way blend, the associated guardrail, and the discretion for CMS to adjust the weight of the ACPT in the three-way blend in the event of unforeseen circumstances would be specified in paragraph (b) of a proposed new provision at § 425.652, which would govern the process for establishing, adjusting, and updating the benchmark for agreement periods beginning on January 1, 2024, and in subsequent years. We also propose to specify within § 425.652(b) the other components of the update factor, namely the calculation of the national and regional components of the blend which would follow the same approach currently specified under § 425.601(b), although Start Printed Page 46169 with conforming changes to reflect the use of a three-way blend. Further, we propose to specify the calculation of the ACPT in a new provision at § 425.660. Refer to section III.G.5.i. of this proposed rule for a discussion of the organization of the proposed new provisions in 42 CFR part 425, subpart G. We seek comment on the proposal to use a three-way blend that incorporates the ACPT to update an ACO's historical benchmark for agreement periods beginning on January 1, 2024, and in subsequent years. We also seek comment on the specific elements of this approach, including our proposal to calculate the ACPT on a risk adjusted flat dollar basis, to institute a guardrail to protect ACOs, and to retain discretion to adjust the weight applied to the ACPT and the two-way blend in the event of unforeseen circumstances. (4) Adjusting ACO Benchmarks To Account for Prior Savings(a) BackgroundUnder section 1899(d)(1)(B)(ii) of the Act, an ACO's benchmark must be reset at the start of each agreement period. Section 1899(d)(1)(B)(ii) of the Act provides the Secretary with discretion to adjust the historical benchmark by “such other factors as the Secretary determines appropriate.” Pursuant to this authority, as described in the June 2015 final rule (80 FR 32785 through 32791), we established a prior savings adjustment that applied when establishing the benchmark for ACOs entering a second agreement period beginning on January 1, 2016, to account for the average per capita amount of savings generated during the ACO's prior agreement period.[257] The prior savings adjustment adopted in the June 2015 final rule (80 FR 32788 through 32791) was designed to adjust an ACO's benchmark for its second agreement period to account for the average per capita amount of savings generated by the ACO across the 3 performance years of its first agreement period. This average per capita amount also accounted for the ACO's quality performance in each performance year under its first agreement period. We limited the adjustment to the benchmark for the second agreement period to the average number of assigned beneficiaries (expressed as person years) [258] under the ACO's first agreement period in order to help ensure that the adjustment did not exceed the amount of net savings generated by the ACO during the first agreement period due to ACO participant list changes that may increase the number of assigned beneficiaries in the second agreement period (80 FR 32789). In calculating the adjustment, we used data from the ACO's finalized financial reconciliation reports for the performance years which corresponded to the benchmark years for the ACO's second agreement period. As described in the June 2015 final rule, the calculation included the following steps (80 FR 32789): • Step 1: Determine whether the ACO generated net savings. For each performance year we determined an average per capita amount reflecting the quotient of the ACO's total updated benchmark expenditures minus total performance year expenditures divided by performance year assigned beneficiary person years. However, the ACO's total updated benchmark expenditures minus total performance year expenditures could not exceed the performance payment limit for the relevant track. If the sum of the per capita amounts for the 3 performance years was positive, the ACO would be determined to have net savings and we would proceed with Steps 2 and 3. If the sum of the per capita amounts for the 3 performance years was zero or negative, we did not make any adjustment to the ACO's rebased benchmark to account for any savings the ACO may have generated under its prior agreement period. • Step 2: Calculate an average per capita amount of savings reflecting the ACO's final sharing rates based on quality performance. We averaged the performance year per capita amounts determined in Step 1 to determine the average per capita amount for the agreement period. We also determined the ACO's average final sharing rate, based on an average of the ACO's quality performance in each performance year of the agreement period. Therefore, the average per capita amount of savings would account for those situations where an ACO's sharing rate for a performance year was set equal to zero (based on the ACO's failure to meet the quality performance requirements in that year). We then calculated an average per capita amount of savings which was the product of the average performance year per capita amount and the average sharing rate based on quality performance. • Step 3: Add the average per capita amount of savings determined in Step 2 to the ACO's rebased historical benchmark. The additional per capita amount was applied to the ACO's rebased historical benchmark for a number of assigned beneficiaries (expressed as person years) not to exceed the average number of assigned beneficiaries (expressed as person years) under the ACO's first agreement period. Reinstituting a prior savings adjustment would be broadly in line with our interest in addressing dynamics to ensure sustainability of the benchmarking methodology as described in section III.G.5.c.(2) of this proposed rule. Specifically, such an adjustment would help to mitigate the rebasing ratchet effect on an ACO's benchmark by returning to an ACO's benchmark an amount that reflects its success in lowering growth in expenditures while meeting the program's quality performance standard in the performance years corresponding to the benchmark years for the ACO's new agreement period. Furthermore, we believe that returning dollar value to benchmarks through a prior savings adjustment could help address an ACO's effects on expenditures in its regional service area that result in reducing the regional adjustment added to the historical benchmark. We also note that when applying two adjustments in establishing the benchmark—a prior savings adjustment and a regional adjustment—there are number of considerations related to the potential interactions between these adjustments. These interactions will determine the extent to which efficient ACOs receive positive regional adjustments to their benchmark and the extent to which less efficient ACOs can use their savings from a prior agreement period to offset a negative regional adjustment, which could help foster their continued participation in the Shared Savings Program. (b) Proposed RevisionsWe are proposing to incorporate an adjustment for prior savings that would apply in the establishment of benchmarks for renewing ACOs and re-entering ACOs entering an agreement period beginning on January 1, 2024, Start Printed Page 46170 and in subsequent years and that were reconciled for one or more of the 3 performance years immediately preceding the start of their agreement period. We considered a variety of approaches to calculating the prior savings adjustment and prefer an approach that resembles the policy implemented for renewing ACOs entering a second agreement period in 2016 but that includes additional steps to account for subsequent changes in Shared Savings Program policies. Specifically, these steps would account for the impact of the regional adjustment on the ACO's benchmark and attribute prior savings to re-entering ACOs.[259] In the June 2016 final rule (81 FR 37962 through 37965), we explained our belief that it was important to forgo the adjustment to account for shared savings generated by the ACO under its prior agreement period when transitioning to a benchmark rebasing methodology that incorporates an adjustment for regional FFS expenditures. We anticipated that for ACOs generating savings, a rebasing methodology that accounts for regional FFS expenditures would generally leave a similar or slightly greater share of measured savings in an ACO's rebased benchmark for its subsequent agreement period. At the time, we disagreed with comments suggesting that we either maintain the adjustment for prior savings or broaden its scope to make it more generous because we believed that maintaining an adjustment for prior savings alongside a regional adjustment could allow benchmarks to become overly inflated for some ACOs (particularly those benefiting from the regional adjustment). We also believed that continued application of the adjustment for prior savings would further tie an ACO's benchmark to its past performance rather than making it more reflective of FFS spending in the ACO's region, which was an important aim of revisions to the rebasing methodology in the June 2016 final rule (81 FR 37965). Based on our experience with rebasing under the current benchmarking methodology, we now believe it would be timely to re-introduce a prior savings adjustment to ensure rebased benchmarks continue to serve as a reasonable baseline when benchmark years correspond to performance years of the ACO's preceding agreement period. However, we continue to believe that the rebased benchmarks of ACOs that are lower spending compared to their regional service area and that generated savings in their benchmark years could become overinflated if we were to allow for both a prior savings adjustment and a positive regional adjustment. To prevent this from occurring, we believe that adjusting an ACO's benchmark based on the higher of either the prior saving adjustment or the ACO's positive regional adjustment would be appropriate. Additionally, we believe it would be appropriate to use a prior savings adjustment to offset negative regional adjustments for ACOs that are higher spending compared to their regional service area. This would permit ACOs that have generated savings in prior years to receive a relatively higher benchmark than under the current approach, which would incorporate a negative regional adjustment. We recognize that there are interactions between this proposed approach and the proposal to reduce the amount of the negative regional adjustment described in section III.G.5.c.(5) of this proposed rule. We have accounted for these interactions in developing the proposed methodology for determining the prior savings adjustment. In order to calculate the prior savings adjustment, we propose calculating the simple average of per capita savings or losses generated by the ACO during the 3 performance years that immediately precede the start of the ACO's current agreement period, and therefore, constitute the benchmark years of the current agreement period. The per capita savings for each performance year would be determined as the quotient of the ACO's total updated benchmark expenditures minus total performance year expenditures divided by performance year assigned beneficiary person years. We would use all savings generated during each of the prior 3 performance years in the prior savings adjustment, not just savings that met or exceeded the ACO's MSR for that prior performance year. This would include savings generated by ACOs that were participating in an agreement period under the BASIC track that did not meet the MSR but met the expanded criteria to qualify for shared savings as proposed in section III.G.5.f. of this proposed rule. An ACO would be eligible for the prior savings adjustment if the ACO generates positive average prior savings across the 3 performance years immediately preceding the start of its current agreement period. If an ACO is not eligible to receive a prior savings adjustment, the ACO would receive the regional adjustment to its benchmark. In calculating an ACO's average per capita prior savings over the 3 performance years immediately preceding the start of its agreement period, we believe a safeguard is needed to ensure that ACOs that achieved savings for a performance year that serves as a benchmark year for the current agreement period, but were ineligible to receive a shared savings payment due to noncompliance with Shared Savings Program requirements, are not subsequently eligible to have a portion of those savings included in their historical benchmark. Without such a safeguard, we would be rewarding an ACO, despite its noncompliance, through a higher benchmark in its subsequent agreement period. This would conflict with the sanction imposed on the ACO for its noncompliance during the performance year(s) of its prior agreement period. Accordingly, we propose that if an ACO was ineligible to share in savings for any performance year in the 3 performance years immediately preceding the start of its agreement period due to noncompliance with Shared Savings Program requirements, we would set at zero the per capita amount of savings for the affected performance year(s) when calculating the prior savings adjustment. There are a variety of reasons that could result in an ACO's ineligibility to receive a shared savings payment due to noncompliance. In accordance with §§ 425.605(c)(2), and 425.610(c)(2), an ACO does not qualify to receive shared savings for a performance year if it failed to meet the quality performance standard as specified under § 425.512 (also refer to section III.G.4.b. of this proposed rule for proposed modifications to the use of quality performance in determining shared savings and shared losses) or otherwise did not maintain its eligibility to participate in the Shared Savings Program. Furthermore, an ACO is not eligible to receive shared savings during the time it is under a corrective action plan (CAP) for avoidance of at-risk beneficiaries, or for performance years attributable to the time that necessitated the CAP (§ 425.316(b)(2)(ii)). Start Printed Page 46171 We propose to apply a prior savings adjustment in establishing the historical benchmark for re-entering ACOs that meet the eligibility criteria for the adjustment. Under § 425.20, a re-entering ACO means an ACO that is not a renewing ACO and that is either the same legal entity as an ACO that previously participated in the program or a new legal entity that has never participated in the program and more than 50 percent of its 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. For new ACOs that are identified as a re-entering ACO, we propose to calculate the average per capita prior savings based on the prior performance of the ACO in which 50 percent or more the ACO participants previously participated. We attribute various aspects of this prior ACO to the re-entering ACO for purposes of determining its eligibility to participate in the Shared Savings Program (§ 425.224), and to determine the agreement period the ACO is entering for purposes of applying program requirements that phase-in over multiple agreement periods (§ 425.600(f)). We believe it would also be appropriate to attribute to the re-entering ACO the prior savings of this prior ACO. Therefore, in calculating the average per capita prior savings for ACOs identified as re-entering ACOs, we would include the per capita savings or losses of the prior ACO in the 3 performance years immediately preceding the start of the re-entering ACO's agreement period. This calculation would exclude from the prior savings adjustment any savings generated for performance years in which the prior ACO was ineligible to share in savings because of noncompliance with Shared Savings Program requirements. This safeguard would help to ensure that we are not rewarding ACOs for circumstances that may have led to their termination from the program, including circumstances that may have led to the formation of a new ACO. We propose to apply a proration factor to the prior savings adjustment to account for situations where an ACO's assigned beneficiary population is larger in the benchmark years when calculated using the ACO's certified ACO participant list and assignment methodology for the current performance year, than the ACO's assigned beneficiary population was when the ACO was reconciled for the 3 performance years preceding the start of its current agreement period. Although the proration approach was not described with much specificity in the earlier rulemaking, this proration factor would be calculated and implemented in a manner that is mathematically equivalent to the cap on the prior savings adjustment that was adopted in the June 2015 final rule (80 FR 32789). Mathematically, to apply this proration factor we would calculate a ratio between: (1) the ACO's average person years for the 3 performance years that constitute the benchmark years for the ACO's current agreement period (regardless of whether these performance years occurred over one or multiple prior agreement periods) and (2) the average person years in the 3 benchmark years for the ACO's current agreement period calculated using the ACO's certified ACO participant list and assignment methodology for the current performance year. Increases in beneficiary assignment would therefore result in a ratio less than 1, while decreases in assignment would result in a ratio greater than 1. This ratio would be capped at 1 to avoid increasing the per capita prior savings adjustment if the average number of beneficiaries assigned to the ACO across the 3 benchmark years of its current agreement period is lower than the average number of beneficiaries assigned during the 3 performance years immediately preceding the start of the ACO's current agreement period. This proration factor would be multiplied by the average positive per capita prior savings for the 3 performance years immediately preceding the start of the ACO's current agreement period to produce the pro-rated average per capita prior savings. Prorating for growth in assignment would ensure that the prior savings adjustment does not exceed the amount of cumulative savings generated by the ACO during the performance years that constitute the benchmark years for its current agreement period. We note that there are a number of factors affecting the size of the ACO's assigned population between when CMS determined assignment for the performance year under the prior agreement period, and when CMS determines assignment for the corresponding benchmark year of the ACO's current agreement period, thereby necessitating the calculation of the proration factor at the start of the ACO's new agreement period. Specifically, changes in the size of the ACO's assigned beneficiary population could be due to the addition and removal of ACO participants or ACO providers/suppliers in accordance with § 425.118(b), a change to the ACO's beneficiary assignment methodology selection under § 425.400(a)(4)(ii), or changes to the beneficiary assignment methodology specified in 42 CFR part 425, subpart E. These circumstances also could arise during the course of an ACO's agreement period, and thereby also affect benchmark year assignment. Therefore, for the second and each subsequent performance year during the term of the current agreement period, we propose to redetermine this proration factor under § 425.652(a)(9)(iv) to account for changes in the ACO's assigned beneficiary population in the benchmark years of the ACO's current agreement period, for the aforementioned reasons. We further propose to account for circumstances when an ACO was not reconciled for one or more of the 3 performance years immediately preceding the start of its current agreement period in the calculation of average per capita prior savings and the proration factor. ACOs that renew their agreement periods early or are a re-entering ACO may not be reconciled for one or more of the 3 years preceding the start of their current agreement period depending upon the timing of the expiration or termination of their prior agreement period and the start of their new agreement period. We propose that if an ACO (or the prior ACO, if the ACO is identified as a re-entering ACO) was not reconciled during any of the 3 performance years immediately preceding the start of its current agreement period, the ACO would receive zero savings or losses in the calculation of average per capita prior savings for the relevant year(s). We believe this is appropriate because the purpose of the prior savings adjustment is to return to an ACO's benchmark a portion of the savings experienced by beneficiaries assigned to the ACO during the 3 performance years immediately preceding the start of its current agreement period and CMS has no way to determine whether the ACO would have generated savings or losses during performance years it was not reconciled for. Excluding these years entirely from the calculation of average per capita prior savings would unduly increase the weight on the other year(s) included in the prior savings adjustment calculation for which the ACO received financial reconciliation results. In contrast, we believe it would be appropriate to exclude years the ACO (or the prior ACO, if the ACO is identified as a re-entering ACO) was not reconciled for when calculating the proration factor. The purpose of the proration factor is to account for Start Printed Page 46172 situations where an ACO's assigned beneficiary population calculated at financial reconciliation in the 3 years preceding the start of the ACO's agreement period (numerator) is smaller than the ACO's assigned beneficiary population identified for those same years using the ACO's certified ACO participant list and assignment methodology for the current performance year (denominator). If an ACO was not reconciled for one or more of the 3 performance years immediately preceding the start of its current agreement period, it would naturally have zero assigned beneficiaries determined at financial reconciliation for such years, which would factor into the numerator of the proration factor if such years were considered. However, the ACO would have positive beneficiary counts in the 3 years preceding the start of its current agreement period generated using the ACO's certified ACO participant list and assignment methodology for the current performance year, which would factor into the denominator of the proration factor if such years were considered. Thus, if the numerator and the denominator were both calculated as averages over 3 years, incorporating years for which the ACO was not reconciled in the calculation of the proration factor would artificially decrease the proration factor and lead to a smaller pro-rated average per capita prior savings for the ACO. Alternatively, if the numerator were calculated as an average that excludes performance years for which the ACO was not reconciled (that is, as an average across less than 3 years, including only those years an ACO was reconciled for) and the denominator was calculated as an average that included all 3 years preceding the beginning of the ACO's agreement period, the direction of the impact on the proration factor would depend on whether the number of assigned beneficiaries calculated using an ACO's current certified ACO participant list and assignment methodology in the benchmark years for which the ACO was not reconciled exceeds the number of assigned beneficiaries in the other benchmark years, and by how much. Therefore, we see no compelling reason to include any of the 3 performance years immediately preceding the start of an ACO's agreement period for which the ACO was not reconciled in the numerator or the denominator of the proration factor and propose to remove such years from the calculation of the proration factor. This would ensure that the proration factor compares average person years determined for prior performance years at financial reconciliation (numerator) to average person years determined using the ACO's current certified ACO participant list and assignment methodology (denominator) across a consistent set of years preceding the start of the ACO's agreement period. For instance, if an ACO were only reconciled in 2 of the 3 performance years immediately preceding the start of its current agreement period, the proration factor would be calculated as a ratio between: (1) the ACO's average person years for the 2 performance years for which the ACO was reconciled (regardless of whether these performance years occurred over one or multiple prior agreement periods) and (2) the average person years in the 2 benchmark years of the ACO's current agreement period which correspond to these same 2 performance years, calculated using the ACO's certified ACO participant list and assignment methodology for the current performance year. Tables 55 and 56 provide examples of the proration factor calculation when an ACO was not reconciled for one of the 3 performance years preceding the start of its agreement period. We do not propose parallel adjustments to the calculation of the proration factor if an ACO was ineligible to share in savings for any performance year in the 3 performance years immediately preceding the start of its agreement period due to noncompliance with Shared Savings Program requirements. We believe this is appropriate because if an ACO was ineligible to share in savings in one of these years due to a noncompliance issue, we could still use the ACO's assigned person years calculated at financial reconciliation in each of the 3 years preceding the start of the ACO's agreement period in the numerator of the proration factor, and could calculate the proration factor using the same method we would use for other ACOs that were reconciled in each of the 3 performance years immediately preceding the beginning of its agreement period. We propose to calculate the final prior savings adjustment separately depending on whether an ACO is higher or lower spending relative to its regional service area. In order to avoid overinflating the benchmarks of ACOs that are lower spending relative to their regional service area by granting them both a prior savings adjustment and a positive regional adjustment, we believe it would be appropriate to apply the higher of the prior savings adjustment and the regional adjustment. In contrast, for ACOs that are higher spending relative to their region, we believe it would be appropriate to apply the prior savings adjustment to offset their negative regional adjustments partially or in full. For an ACO that is lower spending than its regional service area, we propose that the ACO would receive an adjustment equal to the higher of the following: (1) its positive regional adjustment; and (2) a prior savings adjustment equal to the lesser of—(i) 50 percent of its pro-rated positive average per capita prior savings and (ii) 5 percent of national per capita FFS expenditures for assignable beneficiaries. The national assignable per capita FFS expenditure cap used in this calculation would be expressed as a single per capita value by weighting the national per capita FFS expenditure averages for assignable beneficiaries of each Medicare enrollment type according to the ACO's person-year based enrollment proportions. The regional adjustment used in this calculation would be the ACO's regional adjustment determined as specified in the proposed new provision at § 425.656 (which includes modifications to the methodology for determining the regional adjustment as proposed in section III.G.5.c.(5) of this proposed rule) and expressed as a single value by taking a person-year weighted average of the Medicare enrollment type-specific regional adjustment values. We believe that the cap on the prior savings adjustment at 5 percent of national per capita FFS expenditures for assignable beneficiaries is needed to ensure the amount of the prior savings adjustment does not inflate an ACO's benchmark to the point where the ACO is likely to generate shared savings without decreasing expenditures. The cap at 5 percent of national per capita FFS expenditures for assignable beneficiaries would align with the existing cap on positive regional adjustments (see § 425.601(a)(8)(ii)(C)). Further we note that the 5 percent cap on regional adjustments is adjusted to exclude episodes of care for treatment of COVID-19 in accordance with § 425.611(c)(2)(iii). Consistent with this current approach, we propose to adjust the cap on prior savings adjustments to exclude episodes of care for treatment of COVID-19, and to specify this adjustment through modifications to the regulation at § 425.611(c)(2)(iii). We are proposing to apply the 50 percent scaling factor to the pro-rated positive average per capita prior savings because we believe it is important to consider a measure of the sharing rate used in determining the shared savings payment the ACO earned in the Start Printed Page 46173 applicable performance years under its prior agreement period(s). The earlier version of the prior savings adjustment adopted in the June 2015 final rule also included a provision to scale the average per capita prior savings by a factor related to the sharing rate. Under this former policy, the ACO's average per capita prior savings were multiplied against its average final sharing rate across the prior agreement period. The average final sharing rate was determined using an average of the ACO's quality performance in each performance year of the prior agreement period (80 FR 32789). The proposed policy of applying a 50 percent scaling factor to the pro-rated positive average per capita prior savings is a simplification of the older approach. The sharing rates vary within the Shared Savings Program's tracks/levels. Within an ACO's agreement period under the BASIC track's glide path, differing sharing rates will apply depending on the ACO's level of participation. Under the BASIC track, the maximum sharing rate is 40 percent under one-sided model Levels A and B, and 50 percent under two-sided model Levels C, D, and E (§ 425.605(d)). Under the ENHANCED track the maximum sharing rate is 75 percent (§ 425.610(d)). We also note several proposals described elsewhere in this proposed rule would affect the sharing rates: the proposal to apply sharing rates not to exceed one-half of the maximum amount within each Level of the BASIC track for eligible low revenue ACOs (section III.G.5.f. of this proposed rule); and the proposal to use a sliding scale in determining shared savings based on the ACO's quality performance for ACOs that meet the proposed alternative quality performance standard (section III.G.4.b. of this proposed rule). For simplicity, we believe it would be appropriate to apply a consistent scaling factor in calculating the prior savings adjustment when an ACO is lower spending relative to its regional service area. We believe that a 50 percent scaling factor is appropriate because it represents a middle ground between the maximum sharing rate of 75 percent under the ENHANCED track and the lower sharing rates available under the BASIC track, and also takes into account the opportunity for ACOs to earn shared savings on a sliding scale under the proposed alternative quality performance standard. For ACOs that are higher spending relative to their regional service area, we propose to calculate the final adjustment to the benchmark by adding the pro-rated average per capita prior savings to the ACO's negative regional adjustment calculated as proposed in section III.G.5.c.(5) of this proposed rule and in the proposed new regulation at § 425.656. If this sum is positive, we propose that the ACO would receive a prior savings adjustment in place of the negative regional adjustment equal to the lesser of 50 percent of the positive sum and 5 percent of national per capita FFS expenditures for assignable beneficiaries. We are proposing to apply the 50 percent scaling factor to the positive sum of the ACO's regional adjustment and the pro-rated average per capita prior savings instead of to the total pro-rated average per capita savings in order to strengthen incentives for ACOs to remain in the program by increasing the portion of the pro-rated average per capita savings that is added to the regional adjustment in determining the final adjustment to the benchmark. The cap to the adjustment at 5 percent of national per capita FFS expenditures for assignable beneficiaries mirrors the proposed methodology described previously for determining the prior savings adjustment for ACOs with a positive regional adjustment. If the sum of the ACO's negative regional adjustment and its pro-rated average per capita prior savings is negative, the ACO would receive a reduced negative regional adjustment equal to the negative sum. In this case, the prior savings adjustment would not be subject to a 50 percent scaling factor because we believe that it would be appropriate to give the ACO the full benefit of generated prior savings when doing so would still not result in an overall positive adjustment to the benchmark that would be likely to inflate the ACO's benchmark. We believe this approach would also strengthen the incentive for ACOs that are higher spending than their regional service area to remain in the program and continue generating savings. We note we are also proposing to reduce the current 5 percent cap on negative regional adjustments to 1.5 percent (see section III.G.5.c.(5) of this proposed rule). If this proposal is finalized, the sum of the pro-rated average per capita prior savings and the negative regional adjustment would, necessarily, be less than 1.5 percent of national per capita FFS expenditures for assignable beneficiaries. We propose to use the following steps to calculate the prior savings adjustment: • Step 1: Calculate total per capita savings or losses in each performance year that constitutes a benchmark year for the current agreement period. For each performance year we would determine an average per capita amount reflecting the quotient of the ACO's total updated benchmark expenditures minus total performance year expenditures divided by performance year assigned beneficiary person years. CMS would apply the following requirements in determining the amount of per capita savings or losses for each performance year: ++ The per capita savings or losses would be set to zero for a performance year if the ACO was not reconciled for the performance year. ++ If an ACO generated savings for a performance year but was not eligible to receive a shared savings payment for that year due to noncompliance with Shared Savings Program requirements, the per capita savings for that year would be set to zero. ++ For a new ACO that is identified as a re-entering ACO, per capita savings or losses would be determined based on the per capita savings or losses of the ACO in which the majority of the ACO participants in the re-entering ACO were participating. • Step 2: Calculate average per capita savings. Calculate an average per capita amount of savings by taking a simple average of the values for each of the 3 performance years as determined in Step 1, including values of zero, if applicable. CMS would use the average per capita amount of savings to determine the ACO's eligibility for the prior savings adjustment as follows: ++ If the average per capita value is less than or equal to zero, the ACO would not be eligible for a prior savings adjustment. The ACO would receive the regional adjustment to its benchmark. ++ If the average per capita value is positive, the ACO would be eligible for a prior savings adjustment. • Step 3: Apply a proration factor to the per capita savings calculated in Step 2 equal to the ratio of the average person years for the 3 performance years that immediately precede the start of the ACO's current agreement period (regardless of whether these 3 performance years fall in one or more prior agreement periods), and the average person years in benchmark years for the ACO's current agreement period, capped at 1. If the ACO was not reconciled for one or more of the 3 years preceding the start of the ACO's current agreement period, the person years from that year (or years) would be excluded from the averages in the numerator and the denominator of this ratio. For a new ACO that is identified as a re-entering ACO, the person years of the ACO in which the majority of the ACO participants of the re-entering ACO were participating would be used in the numerator of the calculation. This ratio Start Printed Page 46174 would be redetermined for each performance year during the agreement period in the event of any changes to the number of average person years in the benchmark years as a result of changes to the ACO's certified ACO participant list, a change to the ACO's beneficiary assignment methodology selection under § 425.400(a)(4)(ii), or changes to the beneficiary assignment methodology. • Step 4: Determine final adjustment to benchmark. Compare the pro-rated positive average per capita savings from Step 3 with the ACO's regional adjustment, determined as specified in the proposed new regulation at § 425.656, expressed as a single per capita value by taking a person-year weighted average of the Medicare enrollment type-specific regional adjustment values. ++ If the regional adjustment, expressed as a single value, is negative or zero, calculate the sum of the regional adjustment value and the pro-rated positive average per capita savings value and determine the final adjustment as follows: —If the sum is positive, the ACO would receive a prior savings adjustment in place of the negative regional adjustment equal to the lesser of 50 percent of the sum of the pro-rated average per capita savings and the regional adjustment and 5 percent of national per capita FFS expenditures for Parts A and B services under the original Medicare FFS program in BY3 for assignable beneficiaries identified for the 12-month calendar year corresponding to BY3. The adjustment would be applied as a flat rate to the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. —If this sum is negative, this would constitute the amount of the negative regional adjustment applied to the ACO's historical benchmark. The adjustment would be applied as a flat dollar amount to the historical benchmark expenditures for the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. ++ If the regional adjustment, expressed as a single value, is positive, the ACO would receive an adjustment to the benchmark equal to the higher of the following: —The positive regional adjustment amount. The adjustment would be applied separately to the historical benchmark expenditures for each of the following populations of beneficiaries according to the methodology for calculating the regional adjustment (as proposed under § 425.656(c)): ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. —A prior savings adjustment equal to the lesser of 50 percent of the pro-rated positive average per capita savings value and 5 percent of national per capita FFS expenditures for Parts A and B services in BY3 for assignable beneficiaries identified for the 12-month calendar year corresponding to BY3. The adjustment would be applied as a flat dollar amount to the historical benchmark expenditures for each of the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. Note that an implication of using an ACO's prior performance to calculate the prior savings adjustment is that at the time we determine the preliminary historical benchmarks, an ACO entering a new agreement period that completed a performance year that corresponds to BY3 of its new agreement period will not have prior savings data yet available for that year. In this case, we anticipate completing financial reconciliation for that performance year midway through the first performance year of the ACO's new agreement period. Accordingly, to determine the preliminary historical benchmark for the first year of the ACO's new agreement period, we would calculate the prior savings adjustment using zero savings in BY3. We would then update the calculation at the time we calculate the ACO's final historical benchmark to incorporate any applicable BY3 savings. As a result, production and release of final historical benchmarks may need to be delayed until after the calculation and release of financial reconciliation results for the preceding performance year. Tables 55 through 58 present hypothetical examples to demonstrate how the adjustment for prior savings would work in practice. Start Printed Page 46175 Start Printed Page 46176 Start Printed Page 46177 Start Printed Page 46178 We believe that incorporating an adjustment for prior savings, when the adjustment for prior savings would be more advantageous for ACOs than the regional adjustment, would limit the negative ratchet effects of benchmark rebasing. Under the existing benchmarking methodology, the savings an ACO achieves in one agreement period can reduce its rebased benchmark for the subsequent agreement period either directly by reducing the historical spending that forms the basis for its rebased benchmark or indirectly by reducing regional expenditures in the ACO's regional service area leading to negative (or smaller positive) regional adjustments. Under the proposal to incorporate an adjustment for prior savings, ACOs that have demonstrated prior savings would receive higher benchmarks under the following scenarios: • ACOs with a negative regional adjustment would receive either a smaller negative regional adjustment or a positive adjustment for prior savings, depending on the relative size of the negative regional adjustment and their pro-rated average prior savings. Start Printed Page 46179
We believe the proposed methodology to take the greater of the regional adjustment and the adjustment for prior savings when the regional adjustment is positive, and to net out a negative regional adjustment with the prior savings adjustment when the regional adjustment is negative, would prevent the proposed policy from resulting in unduly large benchmarks. While no ACOs would receive a lower benchmark as a result of this policy, numerical modeling of the proposed policy using PY 2020 data suggests that approximately 22 percent of all ACOs would receive a higher benchmark under this policy. Among ACOs that would receive a higher benchmark, the average net effect on per capita benchmark expenditures would be approximately $130 measured across each of the four enrollment types. When the historical benchmark is adjusted for changes in severity and case mix between BY3 and the performance year as proposed under § 425.652(a)(10) and updated for growth in expenditures between BY3 and the performance year as proposed under § 425.652(b), the portion of the historical benchmark attributable to the prior savings adjustment would also be updated for changes in severity and case mix and growth in expenditures at the enrollment type level. This is consistent with the way in which the regional adjustment that is currently calculated under § 425.601(a)(8) (and would be calculated under propose § 425.656), is updated at the time of financial reconciliation to reflect changes in severity and case mix and growth in expenditures. If the portion of the benchmark attributable to prior savings were not updated for changes in severity and case mix and growth in expenditures, this could result in smaller benchmarks if the updates for severity and case mix and growth in expenditures are positive (which is typical in past experience). Thus, including the prior savings adjustment in these updates would tend to result in larger benchmarks for those ACOs that receive a prior savings adjustment to their benchmark. We believe that this is appropriate because the prior savings adjustment is based on reductions in expenditures in previous performance years. To the extent that updates to the benchmark for changes in severity and case mix and growth in expenditures suggest that the benchmark should be increased, we believe that it is appropriate to increase the size of the prior savings adjustment proportionally. Similarly, in the less likely scenario that updates for severity and case mix and growth in expenditures are negative, we believe it is appropriate to commensurately decrease the size of the prior savings adjustment. We propose that the methodology for calculating the average per capita prior savings amount, including the use of a proration factor to account for any upward growth in the ACO's assigned population in the benchmark years of the current agreement as compared to the size of the assigned population when the ACO was reconciled for the corresponding performance years in its prior agreement period(s), would be specified in a new provision at § 425.658 applicable for agreement periods beginning on January 1, 2024, and in subsequent years. This new section would also specify the approach to determining an ACO's eligibility for the prior savings adjustment. Further, we propose to specify in § 425.652(a)(8) the approach for comparing the pro-rated average prior savings amount calculated under § 425.658 with the ACO's regional adjustment amount described in the new provision at § 425.656(c), to determine the applicability of the prior savings adjustment, the regional adjustment, or a combination of these two adjustments. We also propose to specify at § 425.652(a)(9) that for the second and each subsequent performance year during the term of the ACO's agreement period, we would redetermine the proration factor used in calculating the prior savings adjustment under § 425.658 to account for any changes in the ACO's assigned beneficiary population in the benchmark years due to the addition and removal of ACO participants or ACO providers/suppliers in accordance with § 425.118(b), a change to the ACO's beneficiary assignment methodology selection under § 425.400(a)(4)(ii), or changes to the beneficiary assignment methodology. Refer to section III.G.5.i. of this proposed rule for a discussion of the organization of the proposed new provisions in 42 CFR part 425, subpart G. We seek comment on this proposal to adjust the ACO's historical benchmark for savings generated in the ACO's prior agreement period. (5) Reducing the Impact of the Negative Regional Adjustment(a) BackgroundIn earlier rulemaking we have discussed our use of the Secretary's discretion under section 1899(d)(1)(B)(ii) of the Act to adjust the historical benchmark by “such other factors as the Secretary determines appropriate” in order to adjust ACO historical benchmarks to reflect FFS expenditures in the ACO's regional service area (81 FR 37962). As described elsewhere within this section of this proposed rule (section III.G.5.c.(1)), CMS initially established a regional adjustment in a benchmark rebasing methodology that applied to ACOs entering a second agreement period beginning on January 1, 2017, January 1, 2018, or January 1, 2019 (§ 425.603(c) through (g)), prior to applying this adjustment program wide beginning with agreement periods starting on July 1, 2019, and in subsequent years (§ 425.601(a)(8)). In accordance with § 425.601(a)(8), for ACOs in agreement periods beginning on or after July 1, 2019, we adjust historical benchmark expenditures by Medicare enrollment type (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries) by a percentage of the difference between the average per capita expenditure amount for the ACO's regional service area and the average per capita amount of the ACO's historical benchmark (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. For an ACO that has lower spending compared to its regional service area, the weight applied to the regional adjustment is 35 percent for the first agreement period in which the ACO is subject to a regional adjustment and 50 percent in the ACO's second and subsequent agreement periods subject to a regional adjustment. For an ACO that has higher spending compared to its regional service area, the weight is 15 percent for the first agreement period in which the ACO is Start Printed Page 46180 subject to a regional adjustment, increasing to 25 percent, 35 percent, and 50 percent, for the second, third, and fourth and subsequent agreement periods that an ACO is subject to a regional adjustment, respectively. We cap the per capita dollar amount of the regional adjustment for each Medicare enrollment type at a dollar amount equal to positive or negative 5 percent of national per capita FFS 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 (§ 425.601(a)(8)(ii)(C)) (referred to herein as positive or negative 5 percent of national per capita FFS expenditures for assignable beneficiaries, and as the “symmetrical cap;” terms which we consider to be synonymous). Table 59 illustrates how the regional adjustment is calculated under the current policy. For this hypothetical ACO, assumed to be in its first agreement period subject to a regional adjustment, the ACO has lower spending than its regional service area for the ESRD and aged/dual eligible populations (that is, the difference between the ACO's average per capita regional expenditures and the ACO's average per capita historical benchmark expenditures is positive) and higher spending for its disabled and aged/non-dual eligible populations (that is, the difference between the ACO's average per capita regional expenditures and the ACO's average per capita historical benchmark expenditures is negative). The weighted average difference between the region and the ACO, which is used to calculate the ACO's regional adjustment, is determined first by multiplying the difference between average per capita FFS expenditures for the ACO's regional service area and the ACO's average per capita historical benchmark expenditures for each Medicare enrollment type by its respective enrollment type proportion and then summing across the four enrollment types. In this example, because the weighted average is negative (−$495), the ACO is considered to have higher (overall) spending than its regional service area. Thus, the weight used to calculate the regional adjustment for this ACO based on the schedule of weights described in § 425.601(f) is 15 percent. This regional adjustment percentage weight is applied to the difference between the ACO's average per capita regional expenditures and the ACO's average per capita historical benchmark expenditures for each enrollment type (whether positive or negative) to obtain the uncapped regional adjustment for each enrollment type. When comparing these uncapped values to the symmetrical cap of 5 percent of national per capita FFS expenditures for assignable beneficiaries, only the ACO's positive ESRD adjustment is constrained by the cap. The ultimate impact of the symmetrical cap is to increase the ACO's overall weighted average regional adjustment from −$74 to −$77. As discussed in the “Regulatory Background” (section III.G.5.c.(1) of this proposed rule), the current schedule of weights described in § 425.601(f)) and the positive or negative 5 percent cap on the regional adjustment described in § 425.601(a)(8)(ii)(C)) were finalized in the December 2018 final rule (83 FR 68017 through 68024). These policies were designed to address a dynamic where the regional adjustment could provide overly inflated benchmarks for ACOs that are relatively low spending compared to their region, while ACOs with higher spending compared to their region may find little value in remaining in the program when faced with a significantly reduced benchmark. We also explained our belief that these policies would make the benchmark more achievable for ACOs that care for medically complex patients and are high spending compared to their region, thereby encouraging their continued participation, while at the same time preventing windfall shared savings payments for ACOs that have relatively low spending levels relative to their region (83 FR 67822). As discussed in the section entitled “Overview of Considerations for Modification to the Benchmarking Methodology” (section III.G.5.c.(2) of this proposed rule), we now believe that the existing negative 5 percent cap may not limit the negative regional adjustment enough to provide sufficient incentive for participation among ACOs serving high cost, medically complex populations. We are concerned that setting the cap on negative regional adjustments at negative 5 percent may limit opportunities for these beneficiaries, who arguably have the greatest need, to receive coordinated care, as well as potential savings for the Trust Funds. Therefore, we believe it is important to further reduce the impact of negative regional adjustments, particularly for ACOs caring for high cost populations, including high-risk patients and beneficiaries dually eligible for Medicare and Medicaid, beyond what is allowed under the current regulation at § 425.601(a)(8)(ii)(C). (b) Proposed RevisionsWe propose to institute two policy changes designed to limit the impact of Start Printed Page 46181 negative regional adjustments on ACO historical benchmarks and further incentivize program participation among ACOs serving high cost beneficiaries:
The choice of a negative 1.5 percent cap is informed by CMS' experience with use of a 2 percent cap on negative regional expenditure adjustments under the Global and Professional Direct Contracting Model (to be redesigned and renamed as the ACO Realizing Equity, Access, and Community Health (REACH) Model beginning January 1, 2023), as well as considerations related to the potential longer-term vision for use of an administratively set benchmark under which a negative discount for less efficient ACOs could be approximately 1.6 percent over the ACO's agreement period as described in our comment solicitation on Incorporating an Administrative Benchmarking Approach into the Shared Savings Program (section III.G.7. of this proposed rule). Under this proposal, we would continue to apply a cap equal to positive 5 percent of national per capita expenditures for assignable beneficiaries to positive regional adjustments for each enrollment type. Table 60 illustrates how the cap would be applied asymmetrically to positive and negative regional adjustments under this proposal. The hypothetical ACO in this example had a mix of positive and negative regional adjustments across the four enrollment types. The ACO's uncapped ESRD adjustment is positive and above the positive 5 percent cap. Therefore, it falls from $4,450 to $4,299 when the cap is applied. The ACO's uncapped aged/non-dual eligible adjustment is outside the new negative 1.5 percent cap and thus falls from −$259 to −$158 when the cap is applied. The ACO's disabled and aged/dual eligible adjustments are both under the applicable caps and are unaffected. The ACO's overall weighted average regional adjustment (calculated by multiplying the adjustment for each enrollment type by the corresponding enrollment type proportion and then summing across the four enrollment types) falls from −$74 to −$7 when the cap is applied. Note that under the current policy with a symmetrical cap equal to 5 percent of national per capita expenditures for Parts A and B services for assignable beneficiaries, only the ACO's ESRD adjustment would be constrained. The ACO's aged/non-dual eligible adjustment would remain at −$259 and the ACO's overall adjustment would actually become more negative (−$77) after capping (as shown in Table 59). For negative regional adjustments, we also propose to apply an offset factor based on the following: [A] the ACO's overall proportion of BY3 assigned beneficiaries that are dually eligible for Medicare and Medicaid (including dually eligible ESRD, disabled, and aged beneficiaries) [260] and [B] the ACO's weighted average prospective HCC risk score for BY3 taken across the four Medicare enrollment types. Before taking this weighted average, the risk score for each enrollment type would first be renormalized by dividing by the national mean risk score for the assignable FFS population for that enrollment type identified for the calendar year corresponding to BY3. Specifically, the offset factor would be calculated as: Offset factor = [A] + ([B]−1) This offset factor would be applied to negative regional adjustments after the negative 1.5 percent cap is applied. The offset factor would be subject to a minimum of zero and a maximum of one. We would apply the offset factor by subtracting its value from 1 and multiplying this difference by the negative regional adjustment for each Medicare enrollment type, calculated as: Final regional adjustment = Negative regional adjustment × (1−Offset factor) The higher an ACO's proportion of dual eligible beneficiaries or the higher its risk score, the larger the offset factor would be and the larger the reduction to the overall negative regional adjustment. If the offset factor is equal to the maximum value of one, the ACO would not receive a negative regional adjustment (that is, the negative weighted average regional adjustment would be fully offset). If the offset factor is equal to the minimum value of zero, the ACO would receive no benefit from the offset factor. To illustrate how the offset would be calculated and applied, assume that the hypothetical ACO from Table 60 had a proportion of dual eligible beneficiaries of 0.220 and a weighted average prospective HCC risk score for BY3 of Start Printed Page 46182 1.389. The offset factor for this ACO would be calculated as: Offset factor = 0.220 + (1.389−1) = 0.609 This factor would be applied as illustrated in Table 61 by multiplying the negative regional adjustment for each applicable Medicare enrollment type by 1 minus the offset factor or 0.391. Here, the offset factor would be applied to the regional adjustments for the disabled and aged/non-dual eligible populations, as both are negative, but not to the regional adjustments for the ESRD and aged/dual eligible populations, which are both positive. Taking the weighted average across the enrollment types following application of the offset factor shows that the ACO's overall weighted regional adjustment goes from −$7 before the offset to $78 after the offset, a positive per capita impact of $85. We note that it is possible for an ACO to benefit from one aspect of this proposed policy, but not the other. For example, ACOs that have negative regional adjustments that are below the negative 1.5 percent cap will not be affected by the proposed reduction to the cap but could still benefit from the proposed offset factor. Alternatively, an ACO whose negative adjustment is reduced by the negative 1.5 percent cap would receive no further benefit from the offset factor if it has a low proportion of dual eligible beneficiaries or a low risk score such that the offset factor equals 1. We simulated the combined impact of these policy proposals using data from PY 2020 historical benchmarks for ACOs in agreement periods starting on or after July 1, 2019. The results of this simulation are summarized in Table 62. Under these policy proposals, the negative regional adjustment for almost every ACO that had a negative regional adjustment under current policy (40 out of 43 ACOs) would have been reduced (or eliminated), with an average per capita impact of approximately $114. ACOs with higher weighted-average BY3 prospective HCC risk scores and higher proportions of dual eligible Medicare and Medicaid beneficiaries had overall greater reductions in their negative regional adjustments. Four ACOs in the simulation had an offset factor of 1, meaning they received a full offset to their negative regional adjustments. An additional 170 ACOs that had a positive weighted average regional adjustment under the current policy but that had at least one enrollment type with a negative regional Start Printed Page 46183 adjustment would also have benefitted from the combined policy. The average per capita impact among these ACOs was smaller at around $5. We believe that the impacts observed in our simulation are likely to grow larger as more ACOs progress further in the program and are subject to higher weights in the calculation of the regional adjustment, and as more ACOs that serve high cost and medically complex populations join the program. We considered whether to make the proposed changes applicable only to ACOs that would have had a negative weighted average regional adjustment under the current policy (that is, ACOs for which the regional adjustment has an overall negative impact on the per capita historical benchmark). However, we believe that applying the lower cap and the offset factor at the enrollment type level is more straightforward and will have the opportunity to benefit ACOs that may be serving high risk populations in at least one, but not all Medicare enrollment types. We seek comment on these proposed changes to the calculation of the regional adjustment for agreement periods beginning on January 1, 2024, and in subsequent years. These proposed changes would be reflected in the proposed new regulation at § 425.656. We also propose to specify in paragraph (a)(8) of the proposed new regulation at § 425.652, also applicable for agreement periods beginning on January 1, 2024, and in subsequent years, the approach for comparing the pro-rated average prior savings amount (described in the proposed new provision at § 425.658(b)(3)(ii), and as discussed in section III.G.5.c.(4) of this proposed rule) with the ACO's regional adjustment amount (described in the proposed new provision at § 425.656(c)), to determine the applicability of a prior savings adjustment, the regional adjustment, or a combination of these two adjustments. (6) Alternative Options for Addressing Concerns About the Effect of an ACO's Assigned Beneficiaries on Regional FFS Expenditures in Establishing, Adjusting, Updating, and Resetting the ACO's Historical BenchmarkACOs and other interested parties have expressed concerns with CMS' 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. In the CY 2022 PFS proposed rule (86 FR 39291 through 39294), we sought comment on a number of potential approaches to addressing these concerns, as well as any unintended consequences that may result from removing an ACO's assigned beneficiaries from regional calculations. We summarized comments received in the CY 2022 PFS final rule (86 FR 65296 through 65302). In sections III.G.5.c.(3) through (5) of this proposed rule, we are proposing a package of three proposals: incorporating a prospective, external factor in the growth rates used in updating the benchmark; adjusting rebased benchmarks to account for an ACO's prior savings; and reducing the impact of negative regional adjustments on ACO benchmarks. We believe this package of proposals would, among other things, address concerns associated with including an ACO's own beneficiaries on its regional FFS expenditures. For example, the proposed inclusion of the ACPT in the growth rates used to update the benchmark based on a three-way blend would reduce the impact of including an ACO's assigned beneficiaries in the regional component of the blend. Under the proposal to use the higher of the prior savings adjustment or positive regional adjustment, the proposed prior savings adjustment could increase the historical benchmark for an ACO whose regional adjustment could have been decreased by the inclusion of its own assigned beneficiaries in the regional expenditure calculation. We considered alternative options to this package of three proposals described in sections III.G.5.c.(3) through (5) of this proposed rule, that would more directly reduce the effect of the ACO's own beneficiaries on its regional FFS expenditures: (1) removing an ACO's assigned beneficiaries from the assignable beneficiary population used in regional expenditure calculations; and (2) expanding the definition of the ACO's regional service area to use a larger geographic area to determine regional FFS expenditures. We note that these related approaches were among the policies we discussed and on which we sought comment in the CY 2022 PFS proposed rule. We also considered whether to use a combination of these two alternative approaches under which we would expand the ACO's regional service area in combination with removing an ACO's assigned beneficiaries from the assignable beneficiary population used in calculating regional FFS expenditures. In evaluating these alternative approaches, we considered the comments we received in response to that comment solicitation (summarized in the CY 2022 PFS final rule) and considered the extent to which each alternative would address three core concerns (or dynamics) previously described in section III.G.5.c.(2) of this proposed rule and summarized here:
We also considered the extent to which the alternatives could lead to other unintended consequences including introducing excessive benchmark volatility or creating incentives for market consolidation. We note some of these alternatives may require use of our authority under section 1899(i)(3) of the Act to implement alternative benchmarking methodologies that diverge from the requirements of section 1899(d)(1)(B)(ii) of the Act, including alternative approaches to updating the historical benchmark. In order to use our authority under section 1899(i)(3) of the Act, 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. As of the time of this proposed rule, we have not performed an analysis of the extent to which the alternative approaches described in this section of this proposed rule would meet the requirements of section 1899(i)(3) of the Act, when use of this authority would be necessary for implementing such approaches within the Shared Savings Program's financial methodology. In the remainder of this section, we describe in more detail the alternative options that we considered, as well as our assessment of the ability of each alternative to address the three core concerns we articulated and other factors considered earlier in this section. Start Printed Page 46184 We are again seeking comment on these alternative options with interested parties now having the opportunity to consider their merits relative to the package of policies we are proposing in sections III.G.5.c.(3) through (5) of this proposed rule. We are also seeking comment on certain operational factors that we would need to address with greater specificity if we were to finalize any of the alternatives. We will consider the comments received on these alternative options along with the comments on the proposed package of policies in the development of our final policy, and may consider adopting one or both of the alternatives discussed in this section in lieu of the package of policies we are proposing in section III.G.5.c.(3) through (5) of this proposed rule. Alternative 1: Removing an ACO's Assigned Beneficiaries From the Assignable Beneficiary Population Used in Regional Expenditure CalculationsUnder the first alternative considered, which aligns with suggestions made by some ACOs and other interested parties, we would exclude an ACO's assigned beneficiaries from the population of assignable beneficiaries in the ACO's regional service area used to determine the regional FFS expenditures used in all benchmarking calculations including trending and updating the benchmark and calculating the regional adjustment. If we were to adopt this first alternative to remove the ACO's own assigned beneficiaries but not also adopt the alternative to expand the ACO's regional service area under a combined approach, the ACO's regional service area would remain as all counties where one or more beneficiaries assigned to the ACO reside (as defined under § 425.20). If we were to adopt a combined alternative, we would consider a modified definition of the ACO's regional service area. To remove an ACO's assigned beneficiaries from the regional expenditure calculation, we would use the mathematical approach described in the CY 2022 PFS proposed rule (86 FR 39292 and 39293), which relies on the premise that per capita risk adjusted 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 [261] 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 for (a), (b), and regional market share (all data elements already computed under the current benchmarking methodology) 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. As such, and by leveraging existing data elements, we believe this approach would pose relatively limited operational burden. As described in the CY 2022 PFS final rule, some of the commenters responding to our initial comment solicitation indicated CMS' mathematical approach was “directionally correct,” relatively simple, and would work well in nearly every case while using data that CMS already produces (86 FR 65299 and 65300). However, we share the concerns raised by several commenters that an approach to remove an ACO's assigned beneficiaries from the assignable population could incentivize ACOs to “cherry-pick” healthier, lower-cost patients and could unfairly penalize ACOs that specialize in more medically-complex, higher-cost patients, running counter to one of the core dynamics we seek to address (86 FR 65300 and 65301). Similarly, we are also concerned that this approach would incentivize market consolidation, as ACOs may anticipate a benefit to maintaining the largest market share in the region if their own assigned beneficiaries are removed from the assignable population. Additionally, removing an ACO's assigned beneficiaries from the calculation of regional FFS expenditures could yield unstable estimates due to small sample sizes in areas with high program penetration and/or in rural areas. As a result, an approach that would remove an ACO's assigned beneficiaries from the assignable population used to calculate regional FFS expenditures could result in a situation where the ACO's assigned population is relatively healthier and less costly than the assignable beneficiary population in the regional service area, which in turn would result in higher benchmarks for ACOs and thereby greater shared savings payments and reduced shared losses. More generous benchmark updates resulting from this approach could jeopardize CMS' use of the statutory authority under section 1899(i)(3) of the Act to adopt such an alternative approach. We believe these concerns are relevant to whether we adopt this alternative alone or adopt a combined approach, under which we would both remove the ACO's own assigned beneficiaries from the regional expenditure calculation and expand the ACO's regional service area for purposes of that calculation. Expanding the regional service area may also mitigate the concern about unstable estimates due to small sample sizes. While we believe that this first alternative would partially address one of our core concerns summarized at the start of this section by removing an ACO's own impact on the regional expenditures used in its benchmark calculations, it would not directly address the collective impact of multiple ACOs that may be operating in the same regional service area. Under the proposed changes designed to increase participation in the Shared Savings Program, discussed elsewhere within this proposed rule, we would expect this issue to grow more prominent over the coming years.[262] Additionally, we believe that removing an ACO's own assigned beneficiaries from the regional expenditure calculation would be less effective at mitigating the ratchet effect than our proposed package of policies. For example, while this alternative might address how the ACO's prior performance affects regional factors used for purposes of calculating an ACO's rebased historical benchmark, this alternative would not address the concern that actual assigned beneficiary expenditures used in establishing an ACO's rebased historical benchmark may already be reduced by the ACO's prior success in reducing expenditures for its own assigned beneficiary population. The proposed adjustment Start Printed Page 46185 for prior savings described in section III.G.5.c.(4) of this proposed rule would more directly address this concern by adding a portion of the ACO's prior savings during the benchmark years back into the rebased benchmark. Further, our proposal to include the ACPT in a three-way blended update factor as described in section III.G.5.c.(4) of this proposed rule would more directly “decouple” the update factor from actual observed expenditures, including expenditure reductions that are a result of savings already achieved by the ACO, than simply removing the ACO's own beneficiaries from the regional expenditure calculation. One option that has been suggested by commenters is to remove all Shared Savings Program assigned beneficiaries from the assignable beneficiary population used to calculate each ACO's regional expenditures. After careful consideration, at this time we decline to consider removing all Shared Savings Program assigned beneficiaries from the assignable beneficiary population used to calculate each ACO's regional expenditures, as we have concerns about the short- and long-term sustainability and soundness of such an approach given the Agency's goal to expand participation in accountable care. We believe that under the current level of program participation, an approach that would remove all Shared Savings Program assigned beneficiaries from the assignable population for each ACO's regional service area would yield unstable estimates of regional FFS expenditures for some ACOs, even if we were to expand the definition of an ACO's regional service area. Over time, we would expect this issue to worsen as Shared Savings Program participation expands. If we were to seek to finalize the first alternative of removing an ACO's assigned beneficiaries from the calculation of regional expenditures either by itself or in the combination with expanding our definition of an ACO's regional service area in lieu of our proposed package of policies, we anticipate that we would potentially need to adjust the weights currently used in calculating the regional adjustment to the historical benchmark. Under the current regulations, for ACOs that have lower average spending than their regional service area, we use a weight of 35 percent in the first agreement period that an ACO is subject to a regional adjustment and a weight of 50 percent in the second and subsequent agreement periods the ACO is subject to a regional adjustment. If an ACO was serving an assigned population that is markedly healthier than other assignable beneficiaries in the ACO's regional service area, removing the ACO's assigned beneficiaries from the population used to compute regional expenditures would increase the magnitude of the regional adjustment, all else being equal. This could potentially lead to a dramatic increase in program costs as higher regional adjustments could translate to higher shared savings payments. Thus, we would potentially need to consider reducing the weights used to calculate the regional adjustment to protect the Medicare Trust Funds. Determining the appropriate adjustment to the weights may be complicated by potential resulting consolidation. For example, assume for illustration purposes that the regional adjustment weights were reduced by 10 percentage points to bring the overall impact of regional adjustments back in line with the existing program design (that is, the weighting would be reduced from 35 to 25 percent in the first agreement period if positive, 50 percent to 40 percent in succeeding agreement periods if positive, etc.). If ACOs consolidate in order to concentrate the residual regional spending on fewer higher spending assignable beneficiaries, then the weights may need to be further reduced to offset the further increase in regional adjustments for consolidated ACOs. Alternative 2: Expanding the Regional Service AreaThe second alternative we considered in place of the package of policies that we are proposing would seek to reduce an ACO's influence on expenditures in its regional service area by expanding the ACO's regional service area. While we did not outline a specific approach in the CY 2022 PFS proposed rule (86 FR 39294), we sought comment on basing regional expenditure calculations on larger geographic areas, such as using State-level data or 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 expenditures). We also sought comment on what would constitute heavy market penetration by an ACO in its regional service area if we were to use an approach that would consider the ACO's level of penetration in determining whether to expand the ACO's regional service area. For example, one potential approach to expanding the regional service area would be to define an ACO's regional service area to include all States in which at least one of the ACO's assigned beneficiaries resides and calculating regional expenditures as a weighted average of State-level risk adjusted expenditures, with the weights reflecting the proportion of the ACO's total assigned beneficiaries residing in each State. This approach would therefore mimic the current calculation, but replace county-level data with State-level data. Another possible approach would be to follow the existing methodology, but replace county-level risk adjusted expenditure values with State-level risk adjusted expenditure values for the corresponding State only for counties where an ACO has market share above a specified threshold, such as 50 percent. Such a blended approach would maintain greater geographic specificity than an approach that relies exclusively on State-level data, while still reducing the influence of an ACO's own beneficiaries in areas where the impacts may be most acute. In its comment responding to our solicitation, MedPAC favored altering the calculation of regional spending 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 removing ACO assigned beneficiaries from the calculation of regional FFS expenditures, noting 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). Other commenters also supported expanding the regional service area for the purposes of calculating regional FFS expenditures 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 suggested expanding the regional service area to include all contiguous counties for ACOs that have high market penetration (for example, when an ACO's assigned beneficiary population in a county exceeds 50 percent), with allowances for a lower threshold under special circumstances. For a full summary of the considerations and comments received, refer to the CY 2022 PFS final rule (86 FR 65301 and 65302). Like MedPAC, we believe that adopting only this second alternative to expand the regional service area would reduce the impact of an ACO's own expenditures on its regional Start Printed Page 46186 expenditures without introducing incentives for favorable patient selection or concerns about increased volatility that may result from the first alternative of excluding an ACO's assigned beneficiaries from the population of assignable beneficiaries used to determine regional FFS expenditures. However, like that first alternative, expanding the regional service area might not address concerns about ACOs' collective market penetration. We also believe that this second alternative or a combined approach would do less to “decouple” the ACO's benchmark from observed FFS spending than the package of policies that we are proposing, and thus would likely be more limited in countering the ratchet effect. By contrast, our proposal to incorporate the ACPT into the growth rates used to update the benchmark would ensure that a portion of the update will remain unaffected by observed FFS spending. Furthermore, we have concerns that use of a market penetration threshold may drive further market consolidation as ACOs seek to meet such a threshold. If we were to decide to finalize this second alternative or a combined approach in lieu of our proposed package of policies, there are a number of operational factors that we would need to address with greater specificity, including, but not limited to: what alternative geographic area we would use, whether we would replace county-level data with data based on an alternate geographic area or use a blend, and, if using a blend, at what threshold it would be triggered, and what weights would be applied when aggregating expenditures across geographic areas. On the balance, we believe that our proposed package of policies described in sections III.G.5.c.(3) through (5) of this proposed rule would collectively be more effective at addressing the core concerns we articulated than the two alternatives described or a combined approach, and would avoid some of the alternatives' potential unintended consequences. However, we seek further comment on these alternatives, including various operational considerations we would need to specify if we were to finalize either alternative 1, alternative 2, or a combined approach. As stated previously, we will consider the comments received on these alternative options and the related operational considerations along with the comments on the proposed package of policies in the development of our final policy, and may consider adopting one or both of the alternatives discussed in this section in lieu of the package of policies we are proposing in section III.G.5.c.(3) through (5) of this proposed rule. d. Calculating County FFS Expenditures To Reflect Differences in Prospective Assignment and Preliminary Prospective Assignment With Retrospective Reconciliation(1) BackgroundUnder the current regulation at § 425.601, CMS uses risk adjusted county-level FFS expenditures, determined based on expenditures for assignable beneficiaries identified for the 12-month calendar year corresponding to the relevant benchmark or performance year, to calculate factors used in establishing, adjusting and updating the ACO's historical benchmark. Specifically, we use these risk adjusted county-level FFS expenditures to determine the ACO's regional service area expenditures, which are used to calculate the regional adjustment in accordance with § 425.601(a)(8) and the blended national-regional growth rates used to trend forward expenditures for BY1 and BY2 to BY3 dollars (§ 425.601(a)(5)), and to update the ACO's historical benchmark between BY3 and each performance year in the ACO's agreement period (§ 425.601(b)). To calculate the risk adjusted regional expenditure amounts under § 425.601(d) for each Medicare enrollment type, we first calculate risk adjusted expenditures for the relevant benchmark year or performance year for assignable beneficiaries in each county in the ACO's regional service area in accordance with § 425.601(c). We then weight these county-level risk adjusted expenditure amounts by the proportion of the ACO's assigned beneficiaries residing in each county, and sum across all counties in the ACO's regional service area. Additionally, we use county-level assignable beneficiary person years in combination with the ACO's assigned beneficiary person years by county to calculate an ACO's share of assignable beneficiaries in the ACO's regional service area as described in § 425.601(a)(5)(v). These shares are, in turn, used to determine the weights used in calculating the blended national-regional trend and update factors as described in §§ 425.601(a)(5)(iv) and (v) and 425.601(b)(4). The assignable population of beneficiaries used to calculate the county level values described above is identified in accordance with the definition of “assignable beneficiary” under § 425.20. Specifically, an assignable beneficiary means a Medicare FFS beneficiary who receives at least one primary care service with a date of service during a specified 12-month assignment window from a Medicare-enrolled physician who is a primary care physician or who has one of the specialty designations included in § 425.402(c). When first proposing to incorporate regional and national factors based on the assignable beneficiary population in the February 2016 proposed rule (81 FR 5843 through 5845), we discussed our consideration of which assignment window to use to identify the assignable population used to calculate inputs to the program's financial calculations. Specifically, we considered using the 12-month period based on a calendar year which aligned with the assignment window for preliminary prospective assignment with retrospective reconciliation, or an offset 12-month period which aligned with the assignment window for prospective assignment (for example, October through September preceding the calendar year). We proposed, and ultimately finalized, use of the 12-month period based on the calendar year for all ACOs, regardless of the ACO's assignment methodology (81 FR 37985 through 37989). In the February 2016 proposed rule (81 FR 5843 and 5844), and as restated in the June 2016 final rule (81 FR 37985 and 37986), we expressed our belief that it is important to calculate regional and national FFS factors consistently program-wide, so as not to advantage or disadvantage an organization simply on the basis of the assignment methodology that applied under its track. We also noted our belief that this consistency would help to ensure a level playing field in markets where multiple ACOs are present and would also simplify program operations. We indicated that we would monitor for observable differences in the health status (for example, as identified by prospective HCC risk scores) and expenditures of the assignable beneficiaries identified using the 12-month calendar year assignment window, as compared to assignable beneficiaries identified using the offset assignment window (for example, October through September preceding the calendar year) and would, if warranted, address the need for additional adjustments to account for the use of assignable beneficiaries identified using an assignment window that is different from the assignment window used to assign beneficiaries to the ACO through future rulemaking. In addition to these inputs based on county-level assignable beneficiary data, the Shared Savings Program's financial calculations also use the assignable Start Printed Page 46187 beneficiary population to calculate a variety of factors based on national FFS expenditures, including:
Mean risk scores used to renormalize ACO- and county-level risk scores (see discussion in 83 FR 68007 through 68013). Having gained experience using factors based on the assignable beneficiary population since PY 2017, and based on our monitoring of differences in expenditure and risk scores among beneficiaries identified using an assignment window based on the calendar year versus an offset assignment window, we have concluded that there exists a systematic bias in the calculations using county-level expenditures that favors ACOs under prospective assignment. Based on historical data, we have observed that for a given calendar year, risk adjusted expenditures for populations identified based on the offset assignment window are systematically lower than risk adjusted expenditures for populations identified based on the calendar year assignment window, all else equal. In the calculation of the regional adjustment, the favorable bias arises for ACOs under prospective assignment because we are comparing risk adjusted expenditure levels between populations identified based on different assignment windows for BY3: the ACO's own assigned beneficiary population identified based on the offset assignment window, and expenditures for the assignable population of beneficiaries in the ACO's region identified based on the calendar year assignment window. This mismatch causes the ACO's spending to look “low” relative to the regional spending, leading to a larger positive (or smaller negative) regional adjustment than we would observe if the assignment windows used to identify the two populations were consistent. Based on modeling using historical benchmarks for ACOs participating in the 6-month performance year from July 1, 2019, through December 31, 2019, and after accounting for regional adjustment weighting and capping, we estimate that actual regionally adjusted historical benchmarks were 0.2 percent to 1.9 percent higher for ACOs under prospective assignment than they would have been if the regional adjustment had been calculated using risk adjusted regional expenditures for assignable beneficiaries identified using the offset assignment window used under prospective assignment. The median estimated bias was 1.0 percent. We believe the program-wide impact of this bias was likely low in the initial years that the regional adjustment was in effect because only a subset of ACOs were originally eligible for the regional adjustment (ACOs that renewed for a second agreement period starting in January 2017, January 2018, or January 2019), and a relatively small share of those ACOs were under prospective assignment (ACOs participating in Track 3 or the Track 1+ ACO Model). Starting with agreement periods beginning on July 1, 2019, all ACOs became eligible to receive a regional adjustment and to select their assignment methodology in accordance with §§ 425.226(a)(1) and 425.400(a)(4)(ii). With this latter change, the share of ACOs under prospective assignment grew considerably, from around 17 percent in PY 2019 to 38 percent in PY 2022. Because of this, we believe that the bias has a larger impact currently than in earlier years. Additionally, while risk adjusted expenditure trends have generally been consistent for prospectively and retrospectively determined assignable populations, this stable relationship was disrupted in the PHE for COVID-19 when decreased utilization led to expenditures for prospectively determined populations falling more sharply in CY 2020 than for retrospectively determined populations (due to an increase in the number of beneficiaries that did not utilize any care after being prospectively assigned to an ACO). This appears to have generated an additional 1.0 percentage point increase in measured savings (relative to total benchmark) for ACOs under prospective assignment in PY 2020 beyond the effect of the biased regional adjustment. However, we note that between CY 2020 and CY 2021 expenditures grew more quickly for prospectively determined populations, causing cumulative trends from years preceding the PHE for COVID-19 to CY 2021 to return to a roughly parallel state for the two populations. Although the disruption of expenditure trends between prospective and retrospectively assignable populations was temporary in this case, the disruption of stable expenditure trends during the PHE for COVID-19 highlights the possibility of future biases in the blended national-regional growth factor. If the blended growth factor is based on an assignable population with a different expenditure growth trend than the expected trend in expenditures of an ACO's assigned population, an ACO could receive an artificial increase or decrease in savings. Without correction, we believe that the impact of this bias has the potential to grow costlier to the Trust Funds over time. For one, more ACOs will be subject to higher weights used in calculating the regional adjustment as they progress in the Shared Savings Program, which is expected to lead to larger regional adjustments and, by extension, larger biases than those estimated in our analysis using benchmark data from the 6-month performance year beginning July 1, 2019, in which most ACOs were subject to the lowest regional adjustment weights. Second, as more ACOs move to the ENHANCED track with its 75 percent sharing rate, aggregate savings against a favorably biased benchmark will be shared by ACOs at a higher rate. Preventing further influence of the bias, as would be achieved under the proposed approach, is important for ensuring good stewardship of Medicare Trust Fund dollars. Addressing this bias in Shared Savings Program calculations for ACOs under prospective assignment would also ensure a more level playing field for ACOs under both assignment methodologies, and would improve the comparability of ACOs' performance under the Shared Savings Program irrespective of the ACO's chosen assignment methodology. Further, if left unresolved, this bias would need to be taken into account as part of the regulatory impact analysis for evaluating proposed modifications to policies under the Shared Savings Program, and in considering whether CMS has met the requirements for use of other payment models under section 1899(i)(3) of the Act. The authority to use other payment models under section 1899(i)(3) of the Act is necessary for implementing key aspects of the Shared Savings Program, including the two-sided models and the blended national-regional growth factors used to update the historical benchmark (as discussed within section III.G.5.c.(3) of this proposed rule), as well as the proposal to provide AIPs to eligible ACOs (discussed within section III.G.2 of this proposed rule). This authority is contingent on the statutory requirement that other payment models adopted under section 1899(i)(3) of the Act must be determined to improve the quality and efficiency of items and services furnished to Medicare FFS beneficiaries and not to increase program spending relative to a baseline estimated for the Start Printed Page 46188 Shared Savings Program were it not to employ modifications authorized under section 1899(i)(3) of the Act. A predictable favorable bias would increase program spending (particularly in combination with modifications like two-sided risk sharing that require authority from section 1899(i)(3) of the Act), and therefore, jeopardize CMS' ability to satisfy the requirements of section 1899(i)(3) of the Act for use of other payment models. We believe modification to the methodology for calculating regional FFS expenditures is necessary and timely to mitigate the observed favorable bias for ACOs under prospective assignment. (2) Proposed RevisionsTo remove the favorable bias and bring greater precision to the calculation of factors based on regional FFS expenditures, we are proposing to modify the calculation of risk adjusted regional expenditures used in the regional adjustment and in the regional component of the blended factors used to trend and update the benchmark (including, if finalized, the three-way blend proposed in section III.G.5.c.(3) of this proposed rule). Under this proposal, for agreement periods beginning on January 1, 2024, and in subsequent years, we would calculate risk adjusted regional expenditures using county-level values computed using an assignment window that is consistent with an ACO's assignment methodology selection for the performance year under § 425.400(a). That is, for ACOs selecting prospective assignment, we would use an assignable population of beneficiaries that is identified based on the offset assignment window (for example, October through September preceding the calendar year) and for ACOs selecting preliminary prospective assignment with retrospective reconciliation, we would continue to use an assignable population of beneficiaries that is identified based on the calendar year assignment window. We believe that removing the current mismatch in the assignment window used to determine the assignable population, and the assigned population for ACOs under prospective assignment would create a more equitable historical benchmark across assignment methodologies and help protect the Trust Funds. For consistency, we are also proposing to use an assignable population identified using an assignment window that corresponds to an ACO's selected assignment methodology to calculate other factors based on county-level data, namely, the weights used in computing the blended trend and update factors. At this time, we are not proposing to change the way we would compute national factors that require identifying assignable populations. That is, all factors used in calculations that are based on the national assignable FFS population would continue to be computed using an assignable population identified based on the calendar year assignment window. This choice is driven by two factors. First, for simplicity, we favor using the same set of national values for all ACOs. Second, we do not believe the national factors, as currently computed, contribute to the current bias that we have observed and which is the motivation for the proposed policy changes. While using a national assignable population based on an offset assignment window to compute the national component of trend and update factors could help to further protect against unanticipated biases in those calculations, the national component represents a small portion of the blend for most ACOs. Thus, the additional protection provided would be limited. However, we intend to continue monitoring how national assignable expenditure trends hinge on the selection of assignment methodology, and may return to this issue in future rulemaking if significant biases exist that may systemically impact the national component of the trend and update factors. We currently make available public use files (PUFs) containing the county level expenditures, risk scores and assignable beneficiary person years for each calendar year on the data.cms.gov website, specifically: (1) County-level Aggregate Expenditure and Risk Score Data on Assignable Beneficiaries PUF,[263] and (2) Number of ACO Assigned Beneficiaries by County PUF.[264] Interested parties are able to use these files to replicate the calculation of risk adjusted regional expenditures or the weights used in the blended trend and update factors. We also provide ACOs with program reports that include information on the geographic distribution of their assigned beneficiary populations which can also be used along with the county-level data based on the assignable population for modeling purposes. If this proposal is finalized, we anticipate we would make two sets of county-level values publicly available for each calendar year: we would continue to provide county-level data on the assignable population identified based on the calendar year assignment window and would also make available county-level data based on the assignable population identified using the offset assignment window. Additionally, we would update the public use files that reflect the distribution of each ACO's assigned beneficiary population by county to include a field indicating each ACO's assignment methodology selection for the applicable performance year. We believe additional data will facilitate modeling of the proposed changes to the calculation of county-level FFS expenditures used in Shared Savings Program benchmark calculations. Concurrent with the issuance of this proposed rule, we are making available through the Shared Savings Program website at www.cms.gov/sharedsavingsprogram/ data files containing risk adjusted county-level FFS expenditures for 2018-2020 calculated based on an assignable beneficiary population identified using an offset assignment window. The changes we are proposing would be specified in the proposed new regulations at §§ 425.652, 425.654, and 425.656. Refer to section III.G.5.i. of this proposed rule for a discussion of the organization of the proposed new provisions in 42 CFR part 425, subpart G. We note that in order to finalize the proposed changes to the regional component of the update factor we would need to use our statutory authority under section 1899(i)(3) of the Act. We refer readers to section III.G.5.c.(3) and the Regulatory Impacts Analysis (section VII.) of this proposed rule for related discussions around the use of this authority with respect to the proposed modifications to the update factor. We seek comment on these proposals. e. Improving the Risk Adjustment Methodology to Better Account for Medically Complex, High Cost Beneficiaries and Guard Against Coding Initiatives(1) BackgroundCurrently, for ACOs in agreement periods beginning on or after July 1, 2019, we account for changes in severity and case mix of the ACO's assigned Start Printed Page 46189 beneficiary population when establishing the benchmark for an agreement period and also in adjusting the benchmark for each performance year during the agreement period. In accordance with § 425.601(a)(3), in establishing the benchmark, we adjust expenditures for changes in severity and case mix using CMS Hierarchical Condition Category (CMS-HCC) prospective risk scores (herein referred to as prospective HCC risk scores). Pursuant to § 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 § 425.605(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 prospective HCC 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 (referred to herein as the “3 percent cap”). This cap is the maximum increase in prospective HCC risk scores allowed for each agreement period, such that any positive adjustment between BY3 and any performance year in the agreement period cannot be larger than 3 percent. That is, the prospective HCC 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.[265] The 3 percent cap was finalized through the December 2018 final rule (83 FR 68013) to address concerns with the prior approach for risk adjustment, which used a methodology that differentiated between newly assigned and continuously assigned beneficiaries, as defined in § 425.20. The issues raised by interested parties included concerns that the risk adjustment methodology did not adequately adjust for changes in health status among continuously assigned beneficiaries between the benchmark and performance years and concern that performing risk adjustment separately for newly and continuously assigned beneficiaries created uncertainty around benchmarks and made it difficult for ACOs to anticipate how risk scores would affect their financial performance (refer to 76 FR 67916 through 67919, 80 FR 32777 through 32778, 81 FR 37962 through 37968, 83 FR 68008 through 68013). As a result, in the December 2018 final rule, we finalized the use of prospective HCC 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, for agreement periods beginning on July 1, 2019, and in subsequent years (83 FR 68013). We believe that this current policy has several advantages relative to the original risk adjustment methodology distinguishing between newly and continuously assigned beneficiaries, including: allowing for some upward growth in prospective HCC risk scores between the benchmark period and the performance year for an ACO's entire assigned beneficiary population, providing better recognition for changes in beneficiary health status between the benchmark period and the performance year, and providing greater clarity for ACOs than the previous methodology, while still limiting the impact of ACO coding initiatives. However, interested parties remain concerned about the program's risk adjustment methodology, including the 3 percent cap. In the CY 2022 PFS proposed rule, we solicited comment on several issues related to the Shared Savings Program's risk adjustment methodology (86 FR 39294 and 39295)—
For a full summary of the comments submitted in response to our comment solicitation, we refer readers to the relevant discussion in the CY 2022 PFS final rule (86 FR 65302 through 65306). Among the comments received, many commenters expressed concern about the existing 3 percent cap on positive risk score growth, as well as the absence of a cap (or floor) on negative adjustments to account for risk score decreases. Several commenters indicated that the current 3 percent cap on risk score growth is unfair over a 5-year period, suggesting that the cap is too low over a period of this length. Additionally, several commenters suggested that the existing policy is 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. These concerns are similar to certain comments made in response to the original proposal for the 3 percent cap and summarized in the December 2018 final rule (83 FR 68010 through 68012). Additionally, 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. This concern was also raised in response to the original proposal for the current policy (83 FR 68012). Several commenters on the proposal recommended that any cap be applied at the aggregate level rather than the enrollment type level, with one commenter suggesting that we cap the prospective HCC risk ratios in the aggregate across the four beneficiary enrollment types to account for smaller sample sizes and resulting higher volatility for certain enrollment types. Start Printed Page 46190 Many of the comments received in response to the comment solicitation in the CY 2022 PFS proposed rule also expressed concern that the current policy places a cap on the ACO's risk score growth but does not restrict regional risk score growth that is reflected in the regional component of the update factor, noting that this penalizes ACOs in markets where a region's risk score growth exceeds the 3 percent cap (86 FR 65304). Other commenters, notably MedPAC, expressed support for CMS' considerable caution in the area of risk adjustment, 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 (86 FR 65304). (2) Proposed RevisionsIn response to these concerns, we considered three options to modify the existing 3 percent cap on risk score growth: (1) Account for all changes in demographic risk scores for the ACO's assigned beneficiary population between BY3 and the performance year prior to applying the 3 percent cap on positive adjustments resulting from changes in prospective HCC risk scores, and apply the cap in aggregate across the four Medicare enrollment types (ESRD, disabled, aged/dual eligible, aged/non-dual eligible); (2) Apply the 3 percent cap in aggregate across the four Medicare enrollment types (ESRD, disabled, aged/dual eligible, aged/non-dual eligible) without first accounting for changes in demographic risk scores for the ACO's assigned beneficiary population between BY3 and the performance year; and (3) Allow the cap on an ACO's risk score growth 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, where the percentage applied would be equal to 1 minus the ACO's regional market share (continuing our consideration of the approach described in the CY 2022 PFS proposed rule (86 FR 39294)). We believe the first two options for modifications to the risk adjustment methodology (applying the cap on risk score growth in aggregate across Medicare enrollment types, with or without first accounting for changes in demographic risk scores for the ACO's assigned beneficiary population between BY3 and the performance year) would address several of the concerns raised by interested parties by: accounting for higher volatility in prospective HCC risk scores for certain enrollment types due to smaller sample sizes; allowing for higher benchmarks than the current risk adjustment methodology for ACOs that care for larger proportions of beneficiaries in aged/dual eligible, disabled and ESRD enrollment types (which are more frequently subject to the cap on risk score growth currently); and continuing to safeguard the Trust Funds by limiting returns from coding initiatives. We believe the third option (to allow the cap on an ACO's risk score growth 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) would address some commenters' concerns about the possible impacts of regional prospective HCC risk score growth, but would not address the multiple other concerns addressed by options 1 and 2. We also note that the approach described in the second option includes a component of the first option (applying the cap on an ACO's risk score growth in aggregate across Medicare enrollment types). We considered the third option independently from the first and second options, and did not consider using the third option in combination with either the first or second option. That is, we did not consider an approach under which we would account for the difference between the 3 percent cap and the risk score growth in the ACO's regional service area (third option) in combination with applying a cap on risk score growth in aggregate across Medicare enrollment types, with or without first accounting for changes in demographic risk scores for the ACO's assigned beneficiary population between BY3 and the performance year (the first and second options, respectively). We view these two approaches to be inconsistent with each other, as the third approach allows an ACO's risk score growth to rise above 3 percent based on risk score growth in the ACO's regional service area, whereas the first and second options would retain the 3 percent cap, but apply it at the aggregate level (with or without first accounting for changes in demographic risk scores for the ACO's assigned beneficiary population between BY3 and the performance year). After careful consideration and modelling of the impacts of these three potential modifications to the existing 3 percent cap on positive prospective HCC risk score growth, we are proposing to use the authority granted by section 1899(d)(1)(B)(ii) of the Act to adjust the benchmark for beneficiary characteristics and other such factors as the Secretary determines to be appropriate, to modify the existing 3 percent cap on risk score growth using the first option. We are also seeking comment on the second and third options as potential alternatives to the proposed approach. We will consider the comments received on these alternative options along with the comments on our proposal to adopt the first option in the development of our final policy, and may consider adopting one of these alternatives in place of the proposed approach if we conclude that it would better address the concerns with the current risk adjustment methodology. Under our proposal of the first option, an ACO's aggregate prospective HCC risk score would be subject to a cap equal to the ACO's aggregate growth in demographic risk scores between BY3 and the performance year plus 3 percentage points. Specifically, we would:
Demographic risk scores are based on certain demographic attributes that do not vary with the beneficiary's health condition, such as age, sex, Medicaid status, and original reason for Medicare entitlement.[266] Unlike prospective HCC risk scores, demographic risk scores are not subject to coding intensity because they do not use diagnosis information. Accounting for all changes in demographic risk scores for the ACO's assigned beneficiary population between BY3 and the performance year prior to applying the 3 percent cap on positive prospective HCC risk score growth could allow for higher benchmarks than the current methodology for ACOs that have experienced increases in health risk among their assigned beneficiary populations, while still safeguarding the Start Printed Page 46191 Trust Funds by limiting returns due to coding initiatives. We note that the CMS Innovation Center's Global and Professional Direct Contracting (GPDC) Model, which will transition to the redesigned and renamed Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH) Model on January 1, 2023, will also take into account the underlying demographics of a model participant's aligned beneficiary population when determining whether risk score growth will be capped starting in PY 2024.[267] Under this proposal, the positive 3 percent cap (after accounting for changes in demographic risk scores) would also apply in aggregate across the four Medicare enrollment types (ESRD, disabled, aged/dual eligible, and aged/non-dual eligible). In other words, we would calculate a single aggregate value for the cap equal to the dollar-weighted average growth in demographic risk scores across the four enrollment types plus 3 percentage points. We would only apply this cap to risk score growth for a particular enrollment type if the aggregate growth in prospective HCC risk scores, calculated as the dollar-weighted average growth in prospective HCC risk scores across the four enrollment types, exceeds the value of the cap. We believe this would make it less likely that the prospective HCC risk scores for Medicare enrollment types with smaller populations, typically populations of ESRD, disabled, or aged/dual eligible beneficiaries, would be subject to the cap. These smaller populations are more likely to experience random variation in risk score growth as a relatively small number of assigned beneficiaries with large changes in prospective HCC risk scores can have an outsized impact on the average score for the Medicare enrollment type. To implement the new cap, we would follow these steps: • Step 1: Determine demographic risk score growth for each Medicare enrollment type. Demographic risk score growth is measured as the ratio of the ACO's performance year demographic risk score for an enrollment type to the ACO's BY3 demographic risk score for that enrollment type. Before calculating these demographic risk ratios, the demographic risk scores for each enrollment type for each year would be renormalized by dividing by the national mean demographic risk score for that enrollment type for that year. • Step 2: Calculate the dollar-weighted average demographic risk ratio across the four enrollment types to obtain a single aggregate dollar-weighted average demographic risk ratio. The dollar weight for each enrollment type would be equal to historical benchmark expenditures for that enrollment type divided by the sum of historical benchmark expenditures across all enrollment types. Historical benchmark expenditures for each enrollment type would be calculated as per capita historical benchmark expenditures for that enrollment type multiplied by the ACO's BY3 assigned beneficiary person years for that enrollment type. The aggregate dollar-weighted average demographic risk ratio would be computed by multiplying the risk ratio for each enrollment type by its respective dollar weight and then summing across the four enrollment types. Note that the approach of using an aggregate dollar-weighted average in this calculation would be similar to the approach used in the Shared Savings Program's original benchmarking methodology to determine whether demographic factors would be used to adjust risk scores for an ACO's continuously assigned beneficiaries.[268] • Step 3: Calculate the sum of the aggregate dollar-weighted average demographic risk ratio from Step 2 and 0.030. This would represent the aggregate cap. • Step 4: Determine prospective HCC risk score growth for each Medicare enrollment type. Prospective HCC risk score growth would be measured as the ratio of the ACO's performance year prospective HCC risk score for that enrollment type to the ACO's BY3 prospective HCC risk score for that enrollment type. Before calculating these prospective HCC risk ratios, the prospective HCC risk scores for each enrollment type for each year would be renormalized by dividing by the national mean prospective HCC risk score for that enrollment type for that year. • Step 5: Calculate the aggregate growth in prospective HCC risk scores by calculating the dollar-weighted average prospective HCC risk ratio across the four enrollment types to obtain a single aggregate dollar-weighted average prospective HCC risk ratio, using the same dollar weights and the same approach described in Step 2. • Step 6: Determine if the ACO will be subject to the cap. If the ACO's aggregate dollar-weighted average prospective HCC risk ratio determined in Step 5 is less than the aggregate cap determined in Step 3, no cap would apply to the prospective HCC risk ratio for any enrollment type, even if the prospective HCC risk ratio for a given enrollment type is higher than the aggregate cap. If the ACO's aggregate dollar-weighted average prospective HCC risk ratio determined in Step 5 is greater than or equal to the aggregate cap determined in Step 3, proceed to Step 7. • Step 7: Compare the prospective HCC risk ratio for each enrollment type calculated in Step 4 to the aggregate cap determined in Step 3. If the prospective HCC risk ratio for a given enrollment type is greater than the aggregate cap, the prospective HCC risk ratio for that enrollment type would be set equal to the aggregate cap. If the prospective HCC risk ratio for a given enrollment type is less than or equal to the aggregate cap, no cap would apply to the prospective HCC risk ratio for that enrollment type. The resulting prospective HCC risk ratios would then be multiplied by the ACO's historical benchmark expenditures for the relevant Medicare enrollment type 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. Table 63 provides a numeric example of this proposed methodology for a hypothetical ACO that is determined to be subject to the cap: Start Printed Page 46192 For this hypothetical ACO, the dollar-weighted average demographic risk ratio is 1.026, meaning that demographic risk score growth averaged across the four enrollment types was 2.6 percent from BY3 to the performance year for the ACO's assigned beneficiaries, when measured against national mean risk score growth. To calculate the cap, we would add 0.03 to this value, arriving at an aggregate cap of 1.056. This ACO is determined to be subject to the cap because its dollar-weighted average prospective HCC risk ratio of 1.070 was higher than the aggregate cap. When comparing the aggregate cap to the prospective HCC risk ratio for each individual enrollment type, risk score growth for both the aged/dual eligible and aged/non-dual eligible enrollment types would be constrained by the cap. In this example, the aggregate cap that is ultimately applied is higher than the current 3 percent cap, meaning that this hypothetical ACO would benefit from the proposed policy relative to the current policy. In the second numeric example described in Table 64, the ACO's aggregate demographic risk ratio is less than 1 and its aggregate cap of 1.028 is less than the current effective risk score cap of 1.030. In this case, the ACO's dollar-weighted average prospective HCC risk ratio of 1.013 is below the aggregate cap meaning that no cap would be applied to the prospective HCC risk score growth for any enrollment type, even though the ACO's ESRD, disabled, and aged/dual eligible populations all have prospective HCC risk ratios above the aggregate cap. This ACO would also benefit from the proposed policy relative to the current policy, with its benefit solely stemming from the use of an aggregate cap. While the examples above show ACOs that would benefit from the proposed risk adjustment policy relative to the current policy, there are ACOs that would receive a lower updated benchmark under this proposed policy, all else being equal. Namely, ACOs with a dollar-weighted average demographic risk ratio less than 1 found to be subject to the aggregate cap (which by default, will be less than 1.030) will have their upward risk score growth constrained more by the proposed aggregate cap than the existing 3 percent cap. We simulated the impact of this proposed policy change using performance year 2020 financial reconciliation data from ACOs in agreement periods beginning on or after July 1, 2019. This simulation found that 45 percent of ACOs would have had a higher updated benchmark with the proposed policy compared to the current policy, 5 percent would have had a lower updated benchmark with the proposed policy, and 50 percent would have been unaffected (that is, because they were not subject to any cap under either policy). Fifty-three ACOs had their prospective HCC risk ratio capped for at least one Medicare enrollment type under the proposed policy, compared to 177 ACOs under the current policy. Among ACOs that were capped under the current policy but not the proposed policy, many had prospective HCC risk score growth above 1.030 for one or more of the typically smaller enrollment types (that is, ESRD, disabled, aged/dual eligible) but not for their aged/non-dual eligible population. Table 65 illustrates that 47 percent of ACOs were subject to the current 3 percent cap imposed at the enrollment type level for one or more of the ESRD, disabled or aged/dual eligible Start Printed Page 46193 enrollment types versus 17 percent for aged/non-dual eligible. Under the proposed policy, the share would fall to 14 percent for both groups. Based on this modeling, we believe that a significant share of ACOs would either be unaffected by or benefit from the proposed policy, especially those with increases in health risk as measured by demographic risk ratios, while a small share would do worse, likely reflecting decreases in health risk for their assigned beneficiary population as measured by demographic risk ratios. Additionally, ACOs would be much less likely to have prospective HCC risk ratios for ESRD, disabled, and aged/dual eligible Medicare enrollment types capped under this proposed policy which would improve the incentives for treating these medically complex, high cost populations. At the same time, we believe that this proposed policy would continue to be protective of the Trust Funds by continuing to limit incentives for coding intensity, as it would retain the 3 percent cap on growth in prospective HCC risk scores after accounting for all changes in demographic risk scores for the ACO's assigned beneficiary population. Under the second option that we considered, we would continue to employ a fixed 3 percent cap on positive adjustments to prospective HCC risk scores, but we would apply the cap at the aggregate level. Specifically, the current 3 percent cap on risk score growth would apply in aggregate across the four Medicare enrollment types (ESRD, disabled, aged/dual eligible, and aged/non-dual eligible) instead of being applied separately for the population of beneficiaries in each Medicare enrollment type. We would only apply the current 3 percent cap on risk score growth for a particular enrollment type if the ACO's aggregate growth in prospective HCC risk scores, calculated as the dollar-weighted average growth in prospective HCC risk scores across the four enrollment types, exceeds the value of the cap. One advantage of this second, alternative option over the proposed approach, which allows aggregate prospective HCC risk score growth above 3 percent when aggregate demographic risk score growth is positive, is that no ACOs would receive a lower updated benchmark under this methodology compared to the current approach. However, according to our simulations using performance year 2020 financial reconciliation data from ACOs in agreement periods beginning on or after July 1, 2019, while around 5 percent of ACOs would have had higher benchmarks under this second, alternative approach compared to the proposed approach, around 12 percent would have had lower benchmarks under this approach compared to the proposed approach. Thus, we believe that this second, alternative approach would, in aggregate, be less advantageous to ACOs than the proposed approach. Under the third option that we considered, which we also described in the CY 2022 PFS proposed rule (86 FR 39294), we would allow the cap on an ACO's risk score growth 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. The percentage applied would be equal to 1 minus the ACO's regional market share. For example, if regional risk score growth for a particular enrollment type was 5 percent and the ACO's regional market share was 20 percent, we would increase the cap on the ACO's risk score growth for that enrollment type by an amount equal to the difference between the regional risk score growth and the existing cap (2 percent) multiplied by one minus the ACO's regional market share (80 percent). Thus, the ACO would face a cap for this enrollment type equal to 4.6 percent instead of 3 percent (3 percent + (2 percent × 80 percent)). This approach would raise the existing cap while limiting the ability for ACOs with high penetration in their regional service areas to increase their cap by engaging in coding intensity initiatives that significantly raise their regions' prospective HCC risk scores. While this third, alternative option could potentially mitigate concerns raised by some commenters about the impacts of regional prospective HCC risk score growth, modeling suggested that relatively fewer ACOs would benefit under this alternative approach as compared to the proposed methodology incorporating demographic risk score growth. A key reason for this is that a relatively small share of ACOs affected by the existing 3 percent cap on risk score growth operated in regional service areas where regional risk score growth was greater than 3 percent. Furthermore, we still have concerns that allowing the cap on an ACO's risk score growth to increase with regional risk score growth could incentivize ACOs, particularly those highly penetrated in their regional service areas, to engage in coding behavior that would increase their cap, even if this incentive would be mitigated to some degree by limiting the allowable increase in the cap based on the ACO's market share. We believe that our proposed methodology would avoid this undesired incentive while still accounting for changes in health risk for an ACO's assigned beneficiary population to a greater extent than the current policy and would also help to address cases where regional risk score growth stems from higher volatility due to small sample sizes or shifting demographics within a regional service area. Our modeling suggests that a majority of ACOs that operate in regions with risk score growth in excess of 3 percent for at least one Medicare enrollment type would have had a higher updated benchmark under the proposed policy than the current policy. In addition, we believe that our proposal to incorporate a prospective, external factor in the growth rates used to update the historical benchmark (see section III.G.5.c.(3) of this proposed rule) would further help to mitigate concerns raised by some commenters about the impacts of regional risk score growth, by decreasing the weight placed on the two-way blend of national and regional growth rates when updating an ACO's Start Printed Page 46194 historical benchmark for each performance year in the ACO's agreement period. Although requested by some commenters, we decline to consider an approach that would limit the impact of prospective HCC risk score decreases at this time. As we have described in past rulemaking (83 FR 68011), we remain concerned that such approach would encourage favorable risk selection. If ACOs seek to attract low-cost beneficiaries or avoid high-cost beneficiaries, they could lower their performance year expenditures without any corresponding adjustment to their benchmark due to the cap on negative prospective HCC risk adjustments. We continue to believe that this effect would be detrimental to medically complex patients, who may miss the opportunity to receive better coordinated care through an ACO, as well as to the Medicare Trust Funds. We also decline to consider an approach that would impose a direct cap on risk score growth in an ACO's regional service area, as requested by some commenters as we are concerned that such an approach would create adverse incentives for coding behavior, especially for ACOs that are highly penetrated in their regional service areas. Currently, ACOs that are highly penetrated in their regional service area have a disincentive to engage in coding initiatives, as it could increase risk score growth in their regional service area and potentially decrease the value of the regional component of their update factor. Capping risk score growth in an ACO's regional service area could change the incentives and encourage ACOs to engage in coding initiatives. We propose to revise the regulations governing risk adjustment under the BASIC track and the ENHANCED track at § 425.605(a)(1) and § 425.610(a)(2), respectively, to reflect the proposed modifications to the risk adjustment methodology. We seek comment on the proposed changes to the risk adjustment methodology for agreement periods beginning on or after January 1, 2024. While we believe that the modifications that we are proposing to the program's risk adjustment methodology in conjunction with other policies we are proposing in this proposed rule would provide the best balance between addressing concerns raised by interested parties and limiting incentives for coding intensity and risk selection, we also seek comment on the two alternatives considered. We will consider the comments received on these alternative options along with the comments on our proposed changes to the risk adjustment methodology, and may consider adopting one of these alternatives in place of the proposed approach if we conclude that it would better address the concerns with the current risk adjustment methodology. f. Increased Opportunities for Low Revenue ACOs to Share in Savings(1) BackgroundIn the November 2011 final rule (76 FR 67927 through 67929), we explained that a goal of the Shared Savings Program is to use a portion of the savings (the difference between the ACO's actual expenditures and the benchmark) to encourage and reward participating ACOs for coordinating the care for an assigned beneficiary population in a way that controls the growth in Medicare expenditures for that patient population while also meeting the established quality performance standards. However, we also acknowledged that observed savings can also occur as a result of normal year-to-year variations in Medicare beneficiaries' claims expenditures in addition to the ACO's activities. Thus, even if an ACO engages in no activities to improve the quality and efficiency of the services it delivers, in certain cases, differences between the benchmark expenditures and assigned patients' expenditures would be observed during some performance periods merely because of such normal variation. Consequently, section 1899(d)(1)(B)(i) of the Act requires us to specify an MSR to account for the normal variation in expenditures, based upon the number of Medicare FFS beneficiaries assigned to the ACO. As we stated in the November 2011 final rule, the MSR should be set in a way that gives us some assurance that the ACO's performance is a result of its interventions, not normal variation in expenditures. However, we also do not want an outcome where savings that have been earned are not recognized. Establishing an MSR on the basis of standard inferential statistics that take into account the size of an ACO's beneficiary population provides confidence that, once the savings achieved by the ACO exceed the MSR, the change in expenditures represents actual performance improvements by the ACO as opposed to normal variations. There are several policy implications associated with the methodology used to set the MSR. A higher MSR would provide greater confidence that the shared savings amounts reflect real quality and efficiency gains, and offer greater protection to the Medicare Trust Funds. However, due to the larger barrier to achieving savings, a higher MSR could also discourage potentially successful ACOs, especially physician-organized ACOs and smaller ACOs in rural areas, from participating in the program. In contrast, a lower MSR would encourage more potential ACOs to participate in the program, but would also provide less confidence that shared saving amounts are a result of improvements in quality and efficiency made by an ACO. In the original rulemaking establishing the Shared Savings Program, we stated that we believed that the most appropriate policy concerning determination of the “appropriate percent” for the MSR would achieve a balance between the advantages of making incentives and rewards available to successful ACOs and prudent stewardship of the Medicare Trust Funds. In the November 2011 final rule, we finalized an approach wherein the MSR and MLR are calculated as a percentage of the ACO's updated historical benchmark (see §§ 425.604(b) (Track 1), 425.606(b) (Track 2)). In the June 2015 final rule, we finalized an approach to offer Track 2 ACOs and ACOs in the new Track 3 (subsequently renamed the ENHANCED track) the opportunity to select the MSR/MLR that will apply for the duration of the ACO's 3-year agreement period from several symmetrical MSR/MLR options (80 FR 32769 through 32771, and 80 FR 32779 and 32780; §§ 425.606(b)(1)(ii) and 425.610(b)(1)). We explained our belief that offering ACOs a choice of MSR/MLR will encourage ACOs to move to two-sided risk, and that ACOs are best positioned to determine the level of risk they are prepared to accept. For instance, ACOs that are more hesitant to enter a performance-based risk arrangement may choose a higher MSR/MLR, to have the protection of a higher threshold before the ACO would become liable to repay shared losses, thus mitigating downside risk, although the ACO would in turn be required to meet a higher threshold before being eligible to receive shared savings. ACOs that are comfortable with a lower threshold of protection from risk of shared losses may select a lower MSR/MLR to benefit from a corresponding lower threshold for eligibility for shared savings. We also explained our belief that applying the same MSR/MLR methodology in both of the risk-based tracks reduces complexity for CMS' operations and establishes more equal footing between the risk models. ACOs participating in the Track 1+ Model were also allowed Start Printed Page 46195 the same choice of MSR/MLR to be applied for the duration of the ACO's agreement period under the Track 1+ Model.[269] ACOs applying to a two-sided model (Track 2, Track 3 or the Track 1+ Model) could select from the following options:
In the December 2018 final rule, we finalized policies governing the MSR/MLR for ACOs in the BASIC track at § 425.605(b). Under the final policies, ACOs in a one-sided model of the BASIC track's glide path have a variable MSR based on the number of beneficiaries assigned to the ACO (§ 425.605(b)(1)). The variable MSR (ranging from 3.9 percent for ACOs with 5,000 assigned beneficiaries to 2.0 percent for ACOs with 60,000 or more assigned beneficiaries) is determined using the same methodology that was used for Track 1. ACOs in a two-sided model of the BASIC track are able to choose among the MSR/MLR options that are available to ACOs in the ENHANCED track. ACOs participating under Level A or B of the BASIC track's glide path will choose an MSR/MLR, ranging from zero to 2 percent (in 0.5 percent increments), or that is variable based on number of beneficiaries assigned to the ACO, before the start of their first performance year in a two-sided model (§ 425.605(b)(2)(i)). This selection will occur before the ACO enters Level C, D or E of the BASIC track's glide path, depending on whether the ACO is automatically transitioned to a two-sided model (Level C or E) or elects to more quickly transition to a two-sided model within the glide path (Level C, D, or E), and will be in effect for the duration of the agreement period that the ACO is under two-sided risk (§ 425.605(b)(2)(ii)). In addition to the MSR/MLR, we also use an ACO's quality score as part of the determination of eligibility for and calculation of shared savings and shared losses. In the CY 2021 PFS final rule, we adopted a new regulation at § 425.512(a) to reflect the new quality performance requirements under the Shared Savings Program for performance year 2021 and subsequent performance years. For performance years beginning on January 1, 2021, and subsequent performance years, if the ACO meets the quality performance standard established under § 425.512, the ACO will share in savings at the maximum sharing rate based on the ACO's track/level of participation (refer to Table 66). The final sharing rate is applied to an ACO's savings on a first dollar basis up to the applicable performance payment limit, expressed as a percentage of the ACO's updated benchmark. As discussed in the November 2011 final rule and during subsequent rulemaking cycles, we have received comments from ACOs and other interested parties expressing concerns regarding the MSR/MLR methodology and proposing revisions. Commenters responding to the April 2011 proposed rule [270] expressed concern that the proposed (and later finalized) methodology for establishing the MSR on a sliding scale based on population size would disadvantage smaller ACOs, including ACOs likely to form in rural areas and those largely comprised of small- and medium-sized physician practices, and discourage their participation by setting too high a bar on shared savings (76 FR 67928 and 67929). Some commenters considered the potential long-term consequences of this dynamic, indicating it could ultimately result in diminished provider competition in some markets or stifle the development of innovative care coordination strategies. Further, as other commenters indicated, smaller ACOs are likely to be in greatest need of additional capital to support start-up and operational expenses. Some commenters suggested that the MSRs that apply to smaller ACOs based on their number of assigned beneficiaries may make it impossible for these ACOs to ever share in savings. Additionally, a number of commenters offered that other proposed policies under the Shared Savings Program, including, for example, the Start Printed Page 46196 rigorous quality performance standards and the requirement that all ACOs ultimately accept downside performance risk, are sufficient to ensure savings are a result of actions by ACOs and obviate the need for an MSR. One commenter suggested a blended approach such that if an ACO exceeds the 2 percent MSR, it would be eligible for a lower sharing rate, but would not receive the full sharing rate unless it exceeded its statistically adjusted MSR. In the December 2018 final rule (83 FR 67924 through 67928), we summarized commenters' responses to the proposals described in August 2018 proposed rule related to the MSR and MLR. One commenter asked that CMS reconsider its proposals in order to “lessen restrictions and remove barriers to participation in risk sharing arrangements,” but did not specify which aspects of the MSR/MLR proposals they believed to be restrictive or to create barriers. A number of commenters supported a combination of a lower MSR and higher sharing rates for low revenue ACOs participating in the BASIC track and offered several different alternatives. Commenters explained that combining a lower MSR and higher final sharing rate was necessary to ensure there are sufficient and attainable incentives to support ACOs' efforts to improve quality and lower cost, to provide early returns on investments as well as predictability of savings and the financial support ACOs need to ensure successful participation, and to incentivize low revenue and physician‐led ACOs to participate in the redesigned participation options under the Shared Savings Program. While it remains important to ensure performance payments are not based on normal expenditure fluctuations, we believe modification to our MSR policy would provide payments to ACOs with the greatest need for shared savings, in particular smaller, rural ACOs which tend to be less capitalized, allowing for investments in care redesign and quality improvement activities. This modification would also align with the other changes we are proposing to the participation options and financial methodologies under the Shared Savings Program to encourage participation by new ACOs and ACOs that focus on underserved populations, such as the proposal to offer AIPs to new low revenue ACOs joining the BASIC track as described in section III.G.2. of this proposed rule. (2) Proposed RevisionsWe are proposing to use our authority under section 1899(i)(3) of the Act, for the use of other payment models, to expand the eligibility criteria to qualify for shared savings to enable certain low revenue ACOs participating in the BASIC track to share in savings even if the ACO does not meet the MSR as required under section 1899(d)(1)(B)(i) of the Act. Specifically, we are proposing to modify the relevant provisions of § 425.605 to specify that ACOs participating in the BASIC track that do not meet the MSR requirement, but do meet the quality performance standard or the proposed alternative quality performance standard under § 425.512 and otherwise maintain eligibility to participate in the Shared Savings Program, would qualify for a shared savings payment if the following criteria are met:
Eligible ACOs that meet the quality performance standard required to share in savings at the maximum sharing rate would receive half of the maximum sharing rate for their level of participation (20 percent instead of 40 percent under Levels A and B, and 25 percent instead of 50 percent under Levels C, D, and E). For eligible ACOs that do not meet the quality performance standard required to share in savings at the maximum sharing rate but meet the proposed alternative quality performance standard, the sharing rate would be further adjusted according to the proposal described in section III.G.4.b. of this proposed rule, which would reinstate a sliding scale approach for determining shared savings. This calculation would use an ACO's quality performance score, which would reflect the inclusion of health equity adjustment bonus points as proposed in section III.G.4.b.(7) of this proposed rule, if finalized. A numerical example is provided in Table 67. Start Printed Page 46197 This approach would apply to low revenue ACOs entering an agreement period in the BASIC track beginning January 1, 2024, and in subsequent years. High revenue ACOs in the BASIC track, ACOs below 5,000 assigned beneficiaries at the time of financial reconciliation, and ACOs in the ENHANCED track would not be eligible for this option. We are proposing that this policy would apply to all ACOs meeting the criteria, including new, renewing, and re-entering ACOs, in order to provide incentives both for new ACOs to join the Shared Savings Program and for existing ACOs to remain in the program. This differs from the proposed eligibility criteria for AIPs listed in section III.G.2.a.(2) of this proposed rule, which are limited to ACOs that are new to the Shared Savings Program with the intent of lowering barriers to entry. Although as described in section III.G.2.b.(2) of this proposed rule we are proposing to revise our regulations to permit otherwise eligible ACOs that are inexperienced with performance-based risk Medicare ACO initiatives to elect to participate in one, 5-year agreement period under a one-sided model of the BASIC track's glide path regardless of revenue status, we believe it would be appropriate to limit this proposed policy change to the low revenue ACOs in the BASIC track in order to direct the payments to ACOs with the greatest need for capital, in particular smaller, rural ACOs which tend to be less capitalized, allowing for investments in care redesign and quality improvement activities. We do not believe it is necessary or appropriate to extend this opportunity to high revenue ACOs as these ACOs, which tend to include institutional providers and are typically larger and better capitalized, have the potential to exert more influence, direction, and coordination over the full continuum of care, and thus have a greater potential to achieve the level of savings necessary to meet the MSR. We believe that by retaining the requirement that high revenue ACOs meet or exceed their MSR, we will drive more meaningful systematic change by the ACOs that have the greatest potential to achieve significant change in spending. Furthermore, we note that our proposal to exclude ACOs with fewer than 5,000 assigned beneficiaries at the time of financial reconciliation aligns with the requirement under section 1899(b)(2)(D) of the Act and § 425.110 that an ACO have at least 5,000 assigned beneficiaries and guards against the heightened risk—absent an MSR—that any savings are the result of random variation. We simulated the impact of this proposal using financial reconciliation data from performance years 2020, 2019, and 2019A.[271] There were 80, 109, and 60 positive within corridor ACOs (that is, ACOs that had performance year expenditures below benchmark expenditures but did not meet the MSR and did not receive shared savings payments) in each year, respectively. Of these positive within corridor ACOs, 35 ACOs in 2020 and 2019 and 18 ACOs in 2019A would have met the criteria described in this section and received a shared savings payment under our proposed policy change. On average, the positive within corridor ACOs that would benefit from the proposed policy change had fewer assigned beneficiaries in all 3 performance years and a larger share of these ACOs were classified as rural in performance years 2020 and 2019.[272] We believe by offering additional opportunities for low revenue ACOs to share in savings, this proposed approach could increase participation in the Shared Savings Program by providing an incentive for new ACOs to join the program and for existing ACOs to remain in the program. In addition, this proposal would enable low revenue ACOs, which are most in need of additional capital, to make investments in care redesign and quality improvement activities, and would also recognize incremental improvements in care by ACOs that receive AIPs. To exercise our authority under section 1899(i) of the Act, we must determine that a payment model under which certain low revenue ACOs participating in the BASIC track may Start Printed Page 46198 qualify for shared savings payments even when the MSR as required under 1899(d)(1)(B)(i) is not met, will improve the quality and efficiency of items and services furnished under the Medicare program, and that program expenditures under the alternative methodology would be equal to or lower than those that would result under the statutory payment model. By supporting expanded and sustained participation by ACOs in the Shared Savings Program, we believe this proposed approach would allow for lower growth in Medicare FFS expenditures. We also believe this proposed approach would lead to improvement in the quality of care furnished to Medicare FFS beneficiaries because participating ACOs would have an incentive to perform well on quality measures in order to maximize the shared savings they may receive. Further, the proposed approach would provide additional capital to enable low revenue ACOs to make investments in care redesign and quality improvement activities, potentially leading to improvements in the quality and efficiency of items and services furnished to Medicare FFS beneficiaries. We also believe this proposal, along with many of the other proposals in this proposed rule, would expand participation among ACOs serving higher cost beneficiaries for whom the savings potential is greater (relative to ACOs serving lower cost beneficiaries that may already find the current regional adjustment methodology an adequate incentive to participate in the program), and among low revenue ACOs, which have historically performed well in the program. For example, in performance year 2018, about 49 percent of low revenue Shared Savings Program ACOs shared in savings compared to 28 percent of high revenue ACOs. These proportions were 63 percent and 40 percent in PY 2019, 69 percent and 40 percent in PY 2019-A, and 75 percent and 59 percent in PY 2020.[273] Lastly, as discussed in the Regulatory Impact Analysis (see section VII. of this proposed rule), this proposed change is not expected to result in a situation in which all policies adopted under the authority of section 1899(i) of the Act, when taken together, result in more spending under the program than would have resulted under the statutory payment methodology in section 1899(d) of the Act. We are proposing to amend the regulation at § 425.605, which governs calculation of shared savings and shared losses under the BASIC track, to specify an exception to the MSR requirement for eligible ACOs participating in an agreement period beginning on January 1, 2024, and in subsequent years, in a new provision at § 425.605(h). We are also proposing modifications to the provisions in § 425.605(d)(1) specifying the calculation of the final sharing rate for the different levels of the BASIC track. Further we are proposing conforming changes to §§ 425.100(b)(1), 425.605(a), 425.605(b)(3), and 425.605(c)(2) to reflect this exception to the MSR requirement. We seek comment on this proposal to expand the criteria ACOs can meet to qualify for shared savings under the BASIC track. g. Ongoing Consideration of Concerns About the Impact of the Public Health Emergency (PHE) for COVID-19 on ACOs' ExpendituresOn January 31, 2020, Health and Human Services Secretary, Alex M. Azar II, declared a PHE for the United States to aid the nation's healthcare community in responding to COVID-19 (hereafter referred to as the PHE for COVID-19). On March 11, 2020, the World Health Organization (WHO) publicly characterized COVID-19 as a pandemic. On March 13, 2020, the President of the United States declared the COVID-19 outbreak a national emergency. The term “Public Health Emergency,” as defined in the regulation at § 400.200, identifies the PHE determined to exist nationwide as of January 27, 2020, by the Secretary under Section 319 of the Public Health Service Act on January 31, 2020, as a result of confirmed cases of COVID-19, including any subsequent renewals. This determination was, as of this publication, subsequently renewed on April 21, 2020, July 23, 2020, October 2, 2020, January 7, 2021, April 15, 2021, July 19, 2021, October 15, 2021, January 14, 2022, and April 12, 2022. In the March 31st COVID-19 IFC (85 FR 19267 and 19268) and the May 8th COVID-19 IFC (85 FR 27573 through 27587) we adopted several modifications to policies under the Shared Savings Program in response to the PHE. In the March 31st COVID-19 IFC (85 FR 19267 and 19268), we removed the restriction which prevented the application of the Shared Savings Program extreme and uncontrollable circumstances (EUC) 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 have been unable to completely and accurately report quality data for 2019 due to the PHE for COVID-19. In the May 8th COVID-19 IFC (85 FR 27573 through 27587), we modified certain Shared Savings Program policies to: (1) allow ACOs whose current agreement periods expired on December 31, 2020, the option to extend their existing agreement period by 1 year; (2) allow ACOs in the BASIC track's glide path the option to elect to maintain their current level of participation for PY 2021; (3) adjust certain program calculations to remove payment amounts for episodes of care for treatment of COVID-19; and (4) 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. As discussed in the May 8th COVID-19 IFC (85 FR 27578 through 27582) and in accordance with § 425.611, all Parts A and B fee-for-service (FFS) payment amounts for an episode of care for treatment of COVID-19 are excluded from the following Shared Savings Program calculations:
As part of the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, Medicare sequestration adjustments were Start Printed Page 46199 temporarily suspended. This suspension has been further extended through subsequent legislation. Most recently, the Protecting Medicare and American Farmers from Sequester Cuts Act extended the suspension through March 31, 2022. From April 1, 2022, to June 30, 2022, sequestration will be 1 percent. Starting July 1, 2022, sequestration will increase to 2 percent. When full Medicare sequestration is in effect, we are required to make a 2 percent reduction to shared savings payments that is applied before applying an ACO's shared savings limit. As a result of the suspension of sequestration in 2020 and 2021, shared savings payments made in 2020 and 2021 were roughly 2 percent higher than they would have been otherwise for ACOs that did not earn shared savings in excess of their shared savings limit. In December 2017, we issued an interim final rule with comment period entitled “Medicare Program; Medicare Shared Savings Program: Extreme and Uncontrollable Circumstances Policies for Performance Year 2017” (hereinafter referred to as the “December 2017 IFC”), which appeared in the Federal Register on December 26, 2017 (82 FR 60912 through 60919). In the December 2017 IFC, we established a policy for mitigating shared losses for Shared Savings Program ACOs participating in a performance-based risk track, when the ACO's assigned beneficiaries were located in geographic areas that were impacted by extreme and uncontrollable circumstances, such as hurricanes, wildfires, or other triggering events, during PY 2017. In the CY 2019 PFS final rule (83 FR 59707), we extended the extreme and uncontrollable circumstances policy finalized for PY 2017 to PY 2018 and subsequent performance years. We apply determinations made under the Quality Payment Program with respect to whether an extreme and uncontrollable circumstance has occurred and the affected areas. Further, we have sole discretion to determine the time period during which an extreme and uncontrollable circumstance occurred and the percentage of the ACO's assigned beneficiaries residing in the affected areas. The Secretary's declaration of the PHE for COVID-19 in January 2020 triggered the Medicare Shared Savings Program's Extreme and Uncontrollable Circumstances Policy. The extreme and uncontrollable circumstances of the PHE for COVID-19 began in January 2020, and will apply nationwide for the duration of the PHE for COVID-19. As set forth in §§ 425.605(f) (applicable to ACOs in two-sided models of the BASIC track) and 425.610(i) (applicable to ACOs in the ENHANCED track), we reduce the amount of an ACO's shared losses by an amount determined by multiplying the shared losses by the percentage of the total months in the performance year affected by an extreme and uncontrollable circumstance, and the percentage of the ACO's assigned beneficiaries who reside in an area affected by an extreme and uncontrollable circumstance. The PHE for COVID-19 was considered an extreme and uncontrollable circumstance that applied to all counties in the United States for the entirety of PY 2020 and PY 2021, and no ACOs were liable for shared losses for those performance years as any such losses were fully mitigated by the adjustment for extreme and uncontrollable circumstances. As a result of forgoing the 2021 application cycle for new applications, agreement periods starting in 2022 are the first agreement periods for which 2020 and 2021 serve as benchmark years for ACOs in the Shared Savings Program. Interested parties have expressed concern that the policy adjustments made in response to the PHE for COVID-19 may not fully address the potential for relatively lower expenditures resulting from lower utilization by non-COVID-19 patients. For example, in 2020, Parts A and B FFS expenditures decreased by 7 percent nationally compared to 2019. This decrease in utilization and expenditures could result in relatively lower benchmark year expenditures for ACOs in agreement periods beginning in 2022, 2023 or 2024 for which 2020 and/or 2021 are benchmark years. Several interested parties have suggested alternative approaches to establishing benchmarks for ACOs for which 2020 and 2021 are benchmark years, including using alternative years (such as 2017, 2018, and 2019), or differently weighting COVID-19 affected years in the calculation of financial benchmarks. The impact of COVID-19 was not uniform for all areas of the country as surges occurred in different geographic areas at different times. Removing specific years from benchmark calculations would have varied effects on different geographic areas depending on when COVID-19 had the largest impact in those areas. We believe such approaches could produce mixed results; one analysis performed by the Institute for Accountable Care [274] estimated that 55 percent of ACOs would have lower benchmarks if 2020 were dropped from the benchmark period. OACT's analysis of current data indicates that ACOs exhibiting sharp declines in spending in 2020 tend to show rebounds in spending in 2021 such that historical benchmarks averaged across a base period including both 2020 and 2021 would appear to represent a reasonable basis from which to update ACO spending targets going forward. Due to the rebound in 2021 national expenditures, which increased by roughly 8.4 percent between 2021 Q1 (lowest observed expenditures since the PHE for COVID-19 began) and 2021 Q4, we believe that the current blended national-regional trend and update factors will be sufficient to address and mitigate the impact of the start of the PHE for COVID-19 on benchmark year expenditures. ACOs that did not experience such an increase in spending between 2021 Q1 and 2021 Q4 would still be subject to a regional adjustment that could beneficially impact their benchmark determination. The proposal described in section III.G.5.c.(3) of this proposed rule to utilize a three-way blend of the ACPT/national-regional growth rates to update benchmarks would further mitigate any potential adverse effects of the PHE for COVID-19 on historical benchmarks while also protecting against unanticipated variation in performance year expenditures and utilization resulting from a future PHE. We seek comment on this analysis regarding the impact of the PHE for COVID-19 on Shared Savings Program ACOs' expenditures. In addition, we will continue to monitor the impact of the PHE for COVID-19 to determine whether any further changes may be necessary to account for the effects of this PHE or future PHEs. h. Proposed Supplemental Payment for Indian Health Service and Tribal Hospitals and Hospitals Located in Puerto RicoAs discussed in the December 2018 final rule (83 FR 67856 and 67857), we exclude Indirect Medical Education (IME), Disproportionate Share Hospital (DSH) and uncompensated care payments from ACOs' assigned and assignable beneficiary expenditure calculations because we do not wish to incentivize ACOs to avoid the types of providers that receive these payments, and for other reasons described in earlier rulemaking (76 FR 67919 through 67922, and 80 FR 32796 through 32799). Start Printed Page 46200 In the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28396 through 28398), we are proposing to use our exceptions and adjustments authority under section 1886(d)(5)(I) of the Act to establish a new supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico, beginning in FY 2023. As explained in the FY 2023 IPPS/LTCH PPS proposed rule, we have determined that this supplemental payment is necessary to avoid causing undue long-term financial disruption to IHS/Tribal hospitals and hospitals located in Puerto Rico as a result of a proposed change in the data used to determine uncompensated care payments for these hospitals beginning in FY 2023. In order to align Shared Savings Program policies with updates made to Medicare FFS payment policies, we are proposing to exclude this supplemental payment for IHS/Tribal Hospitals and hospitals located in Puerto Rico from the determination of Medicare Parts A and B expenditures for purposes of calculations under the Shared Savings Program, if the proposal to establish this new supplemental payment is finalized in the FY2023 IPPS/LTCH PPS final rule. Further, for consistency with our current approach of using total revenue, including IME, DSH and uncompensated care payments, in Shared Savings Program calculations of ACO participant revenue,[275] we propose to similarly include the proposed supplemental payment to IHS/Tribal hospitals and hospitals located in Puerto Rico in such calculations for the performance year beginning January 1, 2023, and subsequent performance years. More specifically, ACO participant revenue is used in determining whether an ACO is a low revenue ACO or high revenue ACO as defined in § 425.20, and in determining the revenue-based loss sharing limits under two-sided models of the BASIC track's glide path in accordance with § 425.605. Because this proposed new supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico is intended to prevent disruptions due to a change in the uncompensated care payment methodology for these hospitals and uses these hospitals' FY 2022 uncompensated care payments as the starting point for this calculation, we believe that it should be treated consistently with how we currently treat uncompensated care payments in Shared Savings Program calculations. We seek comment on this proposed change to the determination of Medicare Parts A and B expenditures for purposes of calculations under the Shared Savings Program, including the determination of benchmark and performance year expenditures, as well as the calculation of ACO participant revenue. In the November 2011 final rule (76 FR 67919), we explained that section 1899(d) of the Act provides flexibility to adjust the benchmark for IME and DSH payments, and certain other adjustments to Parts A and B payments. Section 1899(d)(1)(B)(ii) of the Act states, among other things, that the benchmark shall be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate. However, when it comes to performance year expenditures, section 1899(d)(1)(B)(i) of the Act provides authority to adjust expenditures in the performance period for beneficiary characteristics, but does not provide authority to adjust for “other factors.” Thus, we noted that while we could make some adjustments to the benchmark pursuant to section 1899(d)(1)(B)(ii) of the Act, to exclude certain payments, we could not make similar adjustments in our calculation of performance year expenditures. In the November 2011 final rule (76 FR 67921 and 67922), we adopted an alternate payment methodology that excluded IME and DSH payments from ACO benchmark and performance year expenditures, as authorized by section 1899(i) of the Act. We have maintained this approach to excluding IME and DSH payments across all Shared Savings Program calculations of benchmark and performance year expenditures, as specified in 42 CFR part 425, subpart G. Consistent with our longstanding policy with respect to excluding IME and DSH payments from benchmarking and performance year expenditures, we are proposing to use our authority under section 1899(i)(3) of the Act to use other payment models to remove the proposed supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico from performance year expenditures. To exercise our authority under section 1899(i)(3) of the Act to use other payment models, we must demonstrate that the payment model would improve the quality and efficiency of items and services furnished under the Medicare program and that program expenditures under the alternative methodology would be equal to or lower than those that would result under the statutory payment model. Because we are proposing to exclude the supplemental payment from benchmark year expenditures using our authority under section 1899(d)(1)(B)(ii) of the Act, removing this payment from performance year expenditures would ensure greater parity between benchmark and performance year expenditure calculations. Further, by removing the proposed supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico from performance year expenditures we can reward more accurately actual decreases in unnecessary utilization of health care services. Excluding supplemental payments for IHS/Tribal hospitals and hospitals located in Puerto Rico from performance year expenditure calculations ensures these payments do not make it more challenging for an ACO to generate shared savings as compared to its updated historical benchmark. We also note that, for ACOs participating under two-sided models of the BASIC track's glide path, excluding the supplemental payment from performance year expenditures may help to mitigate the amount of losses generated by an ACO, although including the supplemental payment in the calculation of ACO participant revenue used to determine the revenue-based loss sharing limit may result in a relatively higher loss sharing limit used in determining an ACO's shared losses. Considering the balance of these factors we believe that the proposed approach could help ensure participation of IHS/Tribal hospitals and hospitals located in Puerto Rico in ACOs, and their engagement in the accountable care model. In turn, this could result in Medicare beneficiaries receiving higher quality, better coordinated and more cost-efficient care in these settings. We also do not expect that excluding the proposed new supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico from performance year expenditures will result in greater payments to ACOs than would otherwise have been made if this proposed new supplemental payment were included. We will continue to reexamine this policy in the future to ensure that the requirement under section 1899(i)(3)(B) of the Act that an alternative payment model not result in additional program expenditures continues to be satisfied. In the event that we later determine that the payment model established under section 1899(i)(3) of the Act no longer meets this requirement, we would Start Printed Page 46201 undertake additional notice and comment rulemaking to make adjustments to the payment model to assure continued compliance with the statutory requirements. We propose to modify the provisions of the existing regulations describing calculations of benchmark year and performance year expenditures to incorporate a reference to the exclusion of the proposed new supplemental payment for IHS/Tribal hospitals and hospitals located in Puerto Rico, if finalized, for the performance year beginning January 1, 2023, and subsequent performance years, and to include this exclusion in proposed new sections of the regulations as follows:
i. Organization and Structure of the Regulations Text Within 42 CFR Part 425 Subpart G; Technical and Conforming ChangesSince the Shared Savings Program was established in 2012, the benchmarking methodology has been specified in several sections of the Shared Savings Program regulations within 42 CFR part 425, subpart G. Section 425.601 specifies the methodology for establishing, adjusting, and updating the benchmark for agreement periods beginning on July 1, 2019, and in subsequent years. Sections 425.602 and 425.603 specify the benchmarking methodology applicable to earlier agreement periods for new and renewing ACOs, respectively. To date, we have tended to include the entirety of the benchmarking methodology applicable to ACOs, based on their agreement period start date, within a single section of the regulations. However, there are currently a limited number of unused sections within the range between §§ 425.600 and 425.613, and no remaining sections in sequential order immediately following the existing benchmarking sections. A variety of other provisions are contained within subpart G. Specifically, § 425.600 specifies selection of risk models. The methodology for calculation of shared savings or losses (as applicable) under each of the Shared Savings Program's financial models is specified within §§ 425.604 (Track 1), 425.605 (BASIC track), 425.606 (Track 2), and 425.610 (ENHANCED track). Several sections specify particular requirements or exceptions relating to determining performance for ACOs in earlier performance years: § 425.608 applied to determine first year performance for ACOs beginning their participation in the program on April 1 or July 1, 2012; and § 425.609 applied to determine performance for a 6-month performance year (or performance period) during CY 2019. Section 425.611 specifies adjustments to Shared Savings Program calculations to address the COVID-19 pandemic. Section 425.612 specifies waivers of payment rules and other Medicare requirements, including the SNF 3-day rule waiver, and § 425.613 addresses expanded use of telehealth services furnished by physicians or other practitioners participating in applicable Shared Savings Program ACOs. We have considered how to restructure the regulations to incorporate the proposed modifications to the benchmarking methodology in this proposed rule. One consideration is that the existing provisions of the regulations under subpart G are referred to within programmatic material, including guidance and technical specifications documents. For continuity and clarity, we believe it is important to maintain the organization of the existing provisions, as opposed to renumbering these existing sections. We also considered the need for a regulations text structure that would organize the details for the multiple aspects of the benchmarking calculations, each of which is detailed and complex. Lastly, as discussed in section III.G.2. of this proposed rule, we are proposing to specify the policies governing the proposed AIPs in a new section of the regulations at § 425.630. For these reasons, we are proposing to specify the proposed modifications to the benchmarking methodology for agreement periods beginning on January 1, 2024, and in subsequent years in a series of new regulations at §§ 425.650 through 425.660. We propose the following organization and structure for subpart G of the regulations:
We also propose to make certain technical and conforming changes to the following provisions to reflect our proposal to add new regulations at Start Printed Page 46202 §§ 425.652 through 425.660 to establish the benchmarking methodology applicable to all agreement periods starting on January 1, 2024, and in subsequent years.
++ In § 425.600(f)(4), add a reference to § 425.656(d) in § 425.600(f)(4)(ii) and a reference to § 425.652(c) in § 425.600(f)(4)(iii); ++ Revise § 425.601 to specify that it applies to agreement periods beginning on or after July 1, 2019, and before January 1, 2024; ++ Add references to § 425.652 in §§ 425.605(a), 425.605(a)(2), 425.605(d)(1)(iii)(D)( 2), 425.605(d)(1)(iv)(D)( 2), 425.605(d)(1)(v)(D)( 2), 425.610(a), and 425.610(g); ++ Add reference to § 425.652(a)(10) in § 425.610(a)(3); ++ Add reference to § 425.654(a) in § 425.611(c)(2)(i); ++ Add reference to § 425.652(a)(4) in § 425.611(c)(2)(ii)(A); ++ Add reference to § 425.654(a)(3) in § 425.611(c)(2)(ii)(B); ++ Within § 425.611(c)(2)(iii), remove the specific reference to 5 percent of national per capita FFS expenditures for assignable beneficiaries, to account for the proposed modifications to the cap on the regional adjustment as specified in section III.G.5.c.(5) of this proposed rule, and to add a reference to § 425.656(c)(3), which refers to the cap of 5 percent of the national per capita expenditure amount applied to positive regional adjustments, and the cap of 1.5 percent of the national per capita expenditure amount applied to negative regional adjustments for ACOs in agreement periods beginning on January 1, 2024, and in subsequent years; and add a reference to § 425.652(a)(8)(iv) which refers to the cap equal to 5 percent of the national per capita expenditure amount that is applied in calculating the prior savings adjustment; and ++ Add references to § 425.652(a)(5)(ii) (referring to the national component of the blended growth rates used to trend forward BY1 and BY2 expenditures to BY3) and § 425.652(b)(2)(i) (referring to the national component of the blended growth rate used to update the benchmark) in § 425.611(c)(2)(v).
We also propose to correct the following inadvertent errors in cross-references:
Additionally, we believe it is appropriate to specify in the proposed new regulation at § 425.656(e) a narrower set of special rules for determining the weights used in calculating the regional adjustment for certain ACOs that previously participated in the Shared Savings Program. In the December 2018 final rule (83 FR 68024), we established § 425.601(e)(2)(ii) which specifies that for renewing or re-entering ACOs whose prior agreement period benchmark was calculated according to § 425.603(c), we consider the agreement period the ACO is entering upon renewal or re-entry in combination with either of the following in determining the weight used in the regional adjustment calculation in the ACO's new agreement period: (A) The weight previously applied to calculate the regional adjustment to the ACO's benchmark in the ACO's most recent prior agreement period; or (B) For new ACOs that are identified as re-entering ACOs, we consider the weight previously applied to calculate the regional adjustment to the benchmark for the ACO in which the majority of the new ACO's participants were participating previously. With the agreement period beginning on January 1, 2022, all ACOs continuing their participation in the Shared Savings Program that were previously under the benchmarking rebasing methodology specified in § 425.603 are now participating under the benchmarking methodology specified in § 425.601. However, it is possible that an ACO that participated in a second agreement period beginning on January 1, 2017, January 1, 2018, or January 1, 2019, and whose rebased benchmark was established in accordance with § 425.603(c), and whose participation agreement expired without having been renewed, or whose participation agreement was terminated under § 425.218 or § 425.220, may seek to re-enter the Shared Savings Program. Therefore, we believe it is necessary to maintain special rules for determining the weights used in the regional adjustment calculation for re-entering ACOs. Accordingly, we propose to incorporate the policies that currently apply to re-entering ACOs under § 425.601(e)(2)(ii) in the new regulation at § 425.656(e). Lastly, we propose to remove from the existing regulations on calculating county expenditures and regional expenditures an extraneous step in the calculation specified under § 425.601(d)(3). This provision specifies that CMS weights aggregate expenditure values determined for each population of beneficiaries according to Medicare enrollment type to reflect the proportion of the ACO's overall beneficiary population in the applicable Medicare enrollment type for the relevant benchmark or performance year. However, at no point in the calculation do we actually combine the risk adjusted regional expenditures across the four Medicare enrollment types to determine a single risk adjusted regional expenditure value. Risk adjusted regional expenditures are incorporated in all relevant calculations at the Medicare enrollment type level. Similarly, as part of our proposal to establish a new regulation at § 425.654 to govern the calculation of county expenditures and regional expenditures for agreement periods beginning on January 1, 2024, and in subsequent years, we would also omit this extraneous step in the calculation. 6. Reducing Undue Administrative Burden and Other Policy Refinementsa. OverviewWe are dedicated to reducing unnecessary ACO and CMS administrative burden where possible. In response to requests from interested parties from prior rules, we are proposing 2 burden reduction proposals and 2 policy refinements in this proposed rule. If finalized in the CY 2023 PFS final rule, the policy proposals and refinements would be implemented January 1, 2023. Specifically, we propose the following, which are discussed in more detail in sections (b) through (e) below:
• Amend the beneficiary notification requirements at § 425.312 to reduce the frequency of certain beneficiary notifications from once annually to once in an agreement period, and to further clarify the settings in which ACO participants are expected to make required beneficiary notifications by displaying signs in their facilities. Start Printed Page 46203
We anticipate that, collectively, these proposals would significantly reduce administrative burden in the Shared Savings Program. b. Proposal To Modify Marketing Material Review Requirements(1) BackgroundThe Shared Savings Program regulations define “marketing materials and activities” at § 425.20 to include, without limitation, “general audience materials” and activities used or conducted by or on behalf of the ACO, or by ACO participants, or ACO providers/suppliers when used to educate, solicit, notify, or contact Medicare beneficiaries or providers and suppliers about the Shared Savings Program. General audience materials include brochures, advertisements, outreach events, letters to beneficiaries, web pages, data-sharing opt-out letters, mailings, and social media. The following beneficiary communications are not marketing materials and activities: certain informational materials customized or limited to a subset of beneficiaries; materials that do not include information about the ACO, its ACO participants, or its ACO providers/suppliers; materials that cover beneficiary-specific billing and claims issues or other specific individual health-related issues; educational information on specific medical conditions; written referrals for health care items and services; and materials or activities that do not constitute “marketing” under 45 CFR 164.501 and § 164.508(a)(3)(i). In addition, the Shared Savings Program regulations impose certain marketing requirements at § 425.310 regarding the content and approval of marketing materials and activities. Specifically, under § 425.310(c), all marketing materials and activities must: (1) use template language developed by CMS, if available; (2) not be used in a discriminatory manner or for discriminatory purposes; (3) comply with § 425.304 regarding beneficiary incentives; and (4) not be materially inaccurate or misleading. Under § 425.310(a), marketing materials may be used 5 business days following their submission to CMS if: (1) The ACO certifies compliance with all the marketing requirements under this section; and (2) CMS does not disapprove the marketing materials or activities. Under § 425.310(b), marketing materials and activities are deemed approved after the initial 5-day review period. In other words, if CMS has not disapproved of the marketing submission within 5 days, the ACO may use the submitted marketing materials. CMS may subsequently issue a written notice of disapproval at any time, including after the expiration of the initial 5-day review period, at which point the ACO must discontinue use of the disapproved marketing materials. Per § 425.310(d), failure of an ACO to comply with the marketing requirements will subject the ACO to pre-termination actions sets forth in § 425.216, termination from the program under § 425.218, or both. As indicated in the November 2011 final rule (74 FR 67948), we finalized these marketing policies as an aspect of patient-centeredness, indicating that we believed it would be appropriate and consistent with the purpose and intent of the statute to limit and monitor the use of ACO-related marketing activities and materials to ensure that such communications and marketing are used only for appropriate purposes, such as notification that a beneficiary's healthcare provider is participating in the ACO, issuance of any CMS-required notices, or notification of provider or ACO terminations. We indicated that we were sensitive to the operational burden imposed on ACOs by these marketing requirements, such as the ACO bearing sole responsibility for collecting and submitting to CMS all marketing materials in use by the ACO, ACO participants, and ACO providers/suppliers, and we noted our desire to balance this burden with the need for appropriate beneficiary protections. Historically, the majority of marketing submissions for the Shared Savings Program are approved upon review or are found not to constitute marketing materials and activities, as defined at § 425.20. For example, in 2021, of 241 Shared Savings Program marketing material submissions reviewed by CMS, 163 (~68 percent) of those submissions were approved, while only 1 submission (0.4 percent) was denied. For the remaining 77 submissions (~32 percent), 58 submissions did not to meet the definition of marketing materials and activities; 9 were approved after the ACO responded with additional information or resubmitted revised materials; 9 were withdrawn for unspecified reasons, and 1 was neither approved nor denied and remained in non-compliant status. We believe that marketing materials and activities are important communications between an ACO and its patients and participants, and we remain committed to patient-centered care, patient engagement, and program transparency in the Shared Savings Program. However, given the breakdown of marketing material review dispositions, the time and resources CMS currently expends to review all submitted marketing materials, and the additional effort for ACOs to submit these materials prior to use, we believe the current submission requirements create an unnecessary administrative burden for both CMS and ACOs that is not outweighed by the benefits of the current policy. (2) Proposal To Modify Regulations on Review of ACO Marketing MaterialsTo reduce unnecessary administrative burden, we propose to remove the requirement at § 425.310(a) that ACOs submit marketing materials and activities to CMS before use, but would maintain the requirement that ACOs must provide marketing materials upon request. Additionally, we propose to remove the provisions in § 425.310(b) regarding deemed approval of marketing materials and activities after a 5-day review period. We note that ACOs must continue to comply with all Shared Savings Program regulations, including the marketing material content requirements that currently appear at § 425.310(c). Our proposed policy does not affect an ACO's obligation to comply with marketing content requirements, and we propose to retain the authority to request the submission of marketing materials and activities at any time. We propose that if we determine an ACO's marketing materials and activities to be non-compliant, we will issue a written notice of disapproval under proposed § 425.310(b)(1). In addition, we propose that ACOs must discontinue (and must require its ACO participants, ACO providers/suppliers, and other individuals or entities performing functions or services related to ACO activities to discontinue) use of any disapproved materials or activities. Under our proposal, we would retain language stating that the failure to comply with the requirements of § 425.310 will subject the ACO to the penalties set forth in § 425.216, termination under § 425.218, or both. We believe that the existing marketing material content requirements and our proposed policy to review marketing materials and activities upon request would provide sufficient safeguards and Start Printed Page 46204 appropriate patient protections. Additionally, beneficiaries may express concerns regarding ACO marketing materials by utilizing the 1-800-MEDICARE hotline, contacting their healthcare provider, or submitting a complaint to the Medicare Ombudsman's office, while ACOs and other interested parties may use any of these avenues, as well as express concerns via the Shared Savings Program mailbox or via their ACO coordinators. We would codify our proposal by revising § 425.310 to remove existing references to CMS' collection, review, and approval of marketing materials. Specifically, we propose to remove the marketing material file and use requirement at § 425.310(a) so that they may be used without prior approval. We propose that § 425.310(a) would set forth without change the marketing material content requirements that currently appear in paragraph (c) (for example, the requirement to use template language and not be materially inaccurate or misleading). We propose to revise paragraph (b) to remove language at § 425.310 (b)(1) regarding deemed approval after expiration of a 5-day review period and to retitle the section “Monitoring.” Under proposed paragraph (b)(1), CMS may request the submission of marketing materials and activities at any time, and if CMS determines that the marketing materials and activities do not comply with the content requirements of paragraph (a), CMS will issue written notice of disapproval to the ACO. Proposed paragraph (b)(2) sets forth without change language that currently appears § 425.310(b)(2)(ii) regarding the duty to cease use of disapproved marketing materials and activities. Finally, proposed paragraph (c) would set forth without change the sanctions provision that currently appears at § 425.310(d). If finalized, our proposed modifications to § 425.310 would become effective on January 1, 2023. We believe that, if finalized, this proposal would reduce administrative burden for both CMS and for ACOs, while maintaining program integrity and beneficiary protections. We believe the revised regulation would provide sufficient safeguards and appropriate patient protections. c. Proposal To Modify Beneficiary Notification Requirements(1) BackgroundUnder § 425.312(a), an ACO is required to ensure that Medicare FFS beneficiaries are notified of the following: (1) that each ACO participant and its ACO providers/suppliers are participating in the Shared Savings Program; (2) the beneficiary's opportunity to decline claims data sharing; and (3) the ability to, and process by which, the beneficiary may identify or change identification of a primary care provider for purposes of voluntary alignment. Section 425.312(a)(2) sets forth the manner in which ACOs or ACO participants are required to notify beneficiaries of this information. ACO participants must post signs in their facilities and, in settings in which beneficiaries receive primary care services, make standardized written notices available upon request. In addition, in the case of an ACO that has selected preliminary prospective assignment with retrospective reconciliation, the ACO or ACO participant must provide each FFS beneficiary with a standardized written notice prior to or at the first primary care visit of the performance year (§ 425.312(a)(2)(ii)). Finally, 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 (§ 425.312(a)(2)(iii)). We periodically receive inquiries from ACOs seeking clarification as to the types of facilities in which signs are required to be posted. In addition, ACOs have continued to express concern regarding the obligation to provide an annual standardized notification prior to or at a beneficiary's first primary care service visit of the performance year. Specifically, ACOs state that such notices may confuse beneficiaries, who misinterpret the notice and believe that it signifies a change to their Medicare benefits or otherwise represents an undesirable or disadvantageous change regarding their health care services. ACOs assert that this confusion may cause a beneficiary to opt out of data sharing, which could result in less cohesive care, duplicative or unnecessary medical tests, or contraindicated prescription drug therapy. ACOs have reported that the information in the beneficiary information notice is unclear and that the frequency of notifications containing identical information is redundant. According to ACOs, the beneficiary notices also cause unnecessary administrative burden to ACOs because ACOs retain documentation that the notices were sent, and ACOs may be required to perform additional follow-up for patients contacting ACOs with questions regarding the notice. CMS remains committed to program transparency. Beneficiary notices are important communication tools, and we believe that ACOs are in the best position to communicate with beneficiaries regarding their care and the purposes for Medicare claims data sharing. We want to ensure that beneficiaries understand the advantages of their participation in ACOs, that their data is secure, that only the minimum necessary data is collected, and how this data is used for purposes of improving the quality of care for beneficiaries in the Shared Savings Program. We are working to improve the beneficiary notice to ensure that the content of the notice utilizes plain language and is beneficiary-friendly, as well as affirming patient choice and clarifying the beneficiary's opportunity to decline claims data sharing. (2) Proposal To Clarify Location of Beneficiary Notification SignageACOs and ACO participants frequently ask whether CMS requires signage to be posted in all facilities or only those where primary care services are provided. Although we believe the existing regulation text is clear on this point, we wish to provide clarification in this proposed rule that ACO participants are required to post beneficiary notification signs in all of their facilities, whether or not primary care services are provided in every facility. Accordingly, we propose to modify § 425.312(a)(2)(i) to move the requirement for standardized written notices available to the newly proposed, redesignated § 425.312(a)(2)(ii). With this modification, CMS clarifies that an ACO participant must post signs in “all” of its facilities and make standardized written notices available upon request in “all” settings in which beneficiaries receive primary care services. Signage notifies the entirety of a patient population that the facility participates in an ACO and is therefore qualitatively different from standardized written notices provided directly to individual patients in conjunction with primary care service visits. We note that the requirement to furnish standardized written notices upon the request of a beneficiary applies only in settings or facilities in which beneficiaries receive primary care services. We are not proposing to expand the care settings in which standardized written notices must be furnished to beneficiaries upon request. (3) Proposal To Reduce the Frequency of Annual Standardized Written NoticesIn addition to providing standardized written notices to beneficiaries upon Start Printed Page 46205 request, ACOs and ACO participants are currently required to furnish standardized written notices prior to or at the first primary care visit of the performance year (§ 425.312(a)(2)(iii), (iv)). We continue to believe that requiring periodic beneficiary notifications affords ACOs and ACO participants an opportunity for direct engagement with the beneficiary, thereby serving to strengthen the beneficiary's relationship with the ACO and ACO participants from whom the beneficiary may receive care. The requirement promotes program transparency and empowers patients with the knowledge of the ACO's mission, data sharing requirements, and ACO operations, thereby allowing patients to make informed decisions about where they receive care. Therefore, we intend to retain the beneficiary notification policies, but in the interest of an overall reduction in administrative burden, we propose to modify § 425.312(a) to reduce the frequency with which an ACO or ACO participant must furnish standardized written notifications to beneficiaries from up to 5 times per agreement period to once per agreement period. We also propose to implement a new follow-up beneficiary communication that we expect will reduce beneficiary confusion and improve beneficiary comprehension. Our proposed changes would become effective January 1, 2023. First, we propose to revise the requirements regarding annual beneficiary notifications, which currently appear at § 425.312(a)(2)(ii) and (iii). Specifically, at proposed § 425.312(a)(2)(iii), we propose 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 each FFS beneficiary with a standardized written notice at least once during an agreement period. Similarly, at proposed § 425.312(a)(2)(iv), we propose to provide that, in the case of an ACO that has selected prospective assignment, the ACO or ACO participant must provide each prospectively assigned beneficiary with a standardized written notice at least once during an agreement period. In either case, the standardized written notice must be furnished prior to or at the first primary care service visit during the first performance year in which the beneficiary receives a primary care service from an ACO participant, and the notice must be in the form and manner specified by CMS. Second, in the interest of ensuring program transparency, maintaining beneficiary protections, reducing beneficiary confusion, and improving beneficiary comprehension, we propose at § 425.312(a)(2)(v) to require the ACO or ACO participant to follow up with each beneficiary to whom it furnished the standardized written notice pursuant to proposed § 425.312(a)(2)(iii) or (iv). We propose that the follow-up communication may be verbal or written and must occur no later than the earlier of the beneficiary's next primary care service visit or 180 days from the date the first standardized written notice was provided. The follow up communication must afford the beneficiary an additional opportunity to ask any outstanding questions they may have, thereby reducing any potential beneficiary confusion and improving their understanding of the advantages of value-based care. The follow-up communication may be provided in any manner, so long as the form of the follow up communication includes a meaningful opportunity for beneficiaries to ask questions and engage with a representative of the ACO or ACO participant with regard to the beneficiary notice. Because of the flexibility granted to ACOs in communicating key features of the beneficiary notification, we propose that ACOs track and document how this beneficiary communication is implemented and make this documentation available to CMS upon request. ACOs should administer the communication in the way that best suits their beneficiary population. We believe that while the follow-up communication would be most effective when occurring during a primary care service visit, it may be delivered in another manner. We note that while it is permissible to provide the standardized written notice again during the course of the follow-up communication, simply providing the same standardized written notice as the full extent of the follow-up communication is not sufficient to satisfy the proposed requirements at 425.412(a)(v), since doing so would not allow for an opportunity to engage the beneficiary and ensure they have the chance to ask any questions they may have as a result of receiving the standardized written notice. The implementation of the follow-up communication does not create a new benefit or billable service and therefore, no additional payment will be made for the follow-up communication. We are actively engaged in efforts to improve beneficiary notification materials, which include gathering feedback from beneficiaries and beneficiary representatives to make improvements as to how we disseminate information to beneficiaries. Further, we will work expeditiously to provide any updated and new materials as they become available. Although our proposal will reduce the frequency with which beneficiaries will receive the information that appears in standardized written notices, we note that this information is also readily available via signage in ACO facilities, as well as in the Medicare & You handbook. Additionally, we will maintain the requirement for ACO participants to make the notice available upon request in all settings in which beneficiaries receive primary care services. We note that ACOs and ACO participants may choose to provide the standardized written notice or follow-up beneficiary engagement communications more frequently than once per agreement period, and we would support their efforts to do so. We seek comment on the proposed frequency of the notification and whether our proposal will reduce net burden and mitigate any potential beneficiary confusion. d. Streamline SNF 3-Day Rule Waiver Application Review ProcessUnder section 1861(i) of the Act, beneficiaries must have a prior inpatient hospital stay of no fewer than 3 consecutive days to be eligible for Medicare coverage of inpatient skilled nursing facility (SNF) care (the SNF 3-day rule). Section 1819(a) of the Act defines a SNF, in part, as an institution (or a distinct part of an institution) that is not primarily for the care and treatment of mental diseases but is primarily engaged in providing the following to residents: skilled nursing care and related services for residents who require medical or nursing care; or rehabilitation services for the rehabilitation of injured, disabled, or sick persons. The Medicare SNF benefit applies to beneficiaries who require a short-term intensive stay in a skilled nursing facility or rehabilitation facility, or both. In the CY 2015 Shared Savings Program final rule (80 FR 32692), CMS used its authority under section 1899(f) to waive the SNF 3-day rule under section 1861(i) of the Act in order to carry out the provisions of section 1899 of the Act by offering ACOs that have accepted two-sided risk under the Shared Savings Program more flexibility under FFS Medicare to provide appropriate care for beneficiaries in the most appropriate care setting. CMS believes this is an opportunity to provide experienced, risk-bearing ACOs Start Printed Page 46206 with additional flexibilities to increase quality and decrease costs. The waiver is codified in the Shared Savings Program regulations at § 425.612(a)(1). Specifically, for PY 2017 and subsequent performance years, CMS waives the SNF 3-day rule for eligible beneficiaries that are assigned to an ACO participating in a two-sided model (or as provided in § 425.612(a)(1)(iv) during a grace period for beneficiaries excluded from prospective assignment to such an ACO) and who receive covered post-hospital extended care services furnished by an eligible SNF that has entered into a written agreement to partner with the ACO (a “SNF Affiliate”). An ACO is eligible to use the SNF 3-Day Rule Waiver if the ACO participates in performance-based risk (for example, Levels C, D, or E of the BASIC track or the ENHANCED track) and has a SNF affiliate list. All other statutory and regulatory provisions regarding Medicare Part A post-hospital extended care services continue to apply. An eligible ACO may apply for a programmatic waiver of the SNF 3-day rule to allow its assigned beneficiaries to receive coverage for inpatient SNF care without a prior 3-day inpatient hospital stay when admitted to a SNF affiliate. A SNF affiliate is a SNF that has executed a written agreement with an eligible ACO that meets the requirements of § 425.612(a)(1)(iii)(B) and is included on the ACO's SNF affiliate list. If the SNF affiliate is eligible to be included in the CMS 5-star Quality Rating System, it must have and maintain an overall rating of 3 or higher (§ 425.612(a)(1)(iii)(A)). It is important to note that the Shared Savings Program SNF 3-Day Rule Waiver does not create a new benefit or extend Medicare SNF coverage to patients who could be treated in outpatient settings or who require long-term custodial care. Also, the SNF 3-Day Rule Waiver does not restrict a beneficiary's choice of provider or supplier. A beneficiary will continue to have the option to seek care from any Medicare FFS provider or supplier, including from a SNF or other facility that is not an affiliate of an ACO participating in the Shared Savings Program. If a beneficiary that is assigned to an ACO chooses to receive care from a SNF or other facility that is not an affiliate of the ACO, normal Medicare requirements apply, including the requirement for a 3-day inpatient hospitalization. The SNF 3-Day Rule Waiver is intended to provide ACOs that are participating in certain performance-based risk tracks with additional flexibility to increase quality and decrease costs. (1) SNF 3-Day Rule Waiver Application ProcessAn ACO participating or applying to participate in performance-based risk within the BASIC track under § 425.605 or the ENHANCED track under § 425.610 may request to use the SNF 3-Day Rule Waiver at the time of application to participate in the program or during its agreement period. The waiver request must be submitted in a form and manner and by a deadline specified by CMS, which typically occurs once each year. Any ACO, including those applying for the waiver during the term of an existing participation agreement, must apply during the annual application process. Current regulations require that an ACO submit an application demonstrating that it has the capacity to identify and manage beneficiaries who would either be directly admitted to a SNF or admitted to a SNF after an inpatient hospitalization of fewer than 3 days. Under § 425.612(a)(1)(i), to be eligible to use the SNF 3-Day Rule Waiver, an ACO must submit supplemental application materials that include, but are not limited to, a list of SNFs with whom the ACO will partner (that is, a SNF affiliate list), along with executed written SNF affiliate agreements between the ACO and each listed SNF, in addition to 3 narratives describing how the ACO plans to implement the waiver. The narratives must include: the communication plan between the ACO and its SNF affiliates, a care management plan for beneficiaries admitted to a SNF affiliate, and a beneficiary evaluation and admission plan approved by the ACO medical director and the healthcare professional responsible for the ACO's quality improvement and assurance processes. Historically, the SNF 3-Day Rule Waiver originated from the CMS Innovation Center's Pioneer ACO and Next Generation ACO Models. These models included application questions (answered by the ACO in a narrative format) which, while not codified in regulation, were transformed into plan narrative requirements in the Shared Savings Program SNF 3-Day Rule Waiver application. In the CY 2015 Shared Savings Program final rule (80 FR at 32805), we discussed a variety of issues that could be addressed in these narratives, such as the protocol that will be followed by ACOs for evaluating and approving admissions to a SNF under the waiver and consistent with the beneficiary eligibility requirements and the education and training for eligible SNFs regarding waiver requirements. We have not set forth specific ways that ACOs must address issues in their plan narratives because we believe the ACO is in the best position to establish its protocols, develop SNF training, and otherwise determine how to best coordinate care for patients transferred to their SNF affiliates. After successfully implementing the Shared Savings Program SNF 3-Day Rule Waiver for several performance years, we determined in 2017 that some application requirements were burdensome for both CMS and ACOs, did not add value to the application review, or were not permitted by regulation. For example, the SNF 3-Day Rule Waiver application originally included a narrative describing any financial relationships between an ACO, SNF affiliate and acute care hospital. Because the Shared Savings Program regulations do not prohibit ACOs or SNFs from having financial arrangements with acute care hospitals, nor do they require such arrangements, we discontinued the submission of this narrative. Previously, ACOs also submitted documentation for each proposed SNF affiliate demonstrating they met minimum star rating requirements. Because CMS could obtain the required star rating information directly from the CMS Care Compare website, this application submission requirement was discontinued. We removed the requirement for these two application elements in the CY 2018 PFS final rule (82 FR 52976). At the time of these modifications, CMS chose to retain the three narratives related to an ACO's communication plan, care management plan, and beneficiary evaluation and admission plan without establishing specific criteria for an ACO's process for implementing the SNF 3-Day Rule Waiver. We have since found that these plan narratives have not aided in our ability to evaluate an ACO's capacity to identify and manage beneficiaries who may be admitted to a SNF affiliate beyond what is otherwise established within the application. These narratives describe the plans that exist and that the ACO will adhere to requirements for beneficiary eligibility set forth in the waiver, but the program continues to provide operational flexibility to ACOs to develop their own internal processes and protocols. Start Printed Page 46207 (2) Proposal To Modify the CMS Review Process for ACOs Applying for a Shared Savings Program SNF 3-Day Rule WaiverWe remain committed to reducing unnecessary application and/or program burden where possible and consider application attestations as a way of streamlining processes when appropriate. The submission of the three remaining narratives has largely functioned as a mechanism for ACOs to confirm they have established operations for communicating between the ACO and its SNF affiliates, establishing a care management plan, and beneficiary evaluation and admission plan. The existence of the three narrative plans provides some assurance of an ACO's capacity to identify and manage beneficiaries who may be admitted to a SNF affiliate. However, as a payer, we do not have the experience that would be required to evaluate the appropriateness of the contents of these plans. Therefore, to reduce CMS burden, we propose to remove the requirement to submit the plan narratives and instead propose to require ACOs to certify that they have a communication plan, care management plan, and beneficiary evaluation and admission plan in place prior to SNF 3-Day Rule Waiver approval. Such plans should continue to address the issues we previously discussed in the CY 2015 Shared Savings Program final rule at 80 FR 32805. ACOs must continue to develop robust processes to implement the 3-Day Rule Waiver and to successfully transition care for their identified FFS beneficiaries and must be able to provide upon request a narrative describing their communication plan, care management plan, and beneficiary evaluation and admission plan. If our proposed policy is finalized, an ACO would be subject to compliance action if it fails to submit, upon CMS request, the narratives about its capacity to manage patients under the waiver. The proposed attestation requirement retains oversight for ensuring that an ACO has the capacity to identify and manage beneficiaries while reducing burden during the application process. Furthermore, we have determined that other provisions of our regulations provide sufficient safeguards to ensure that CMS can assess an ACO's capacity to identify and manage beneficiaries who would be either directly admitted to a SNF or admitted to a SNF after an inpatient stay of less than 3 days. We have found that these experienced, risk-bearing ACOs focus on care coordination and clinically-integrated, patient-centered care. Such investments in care coordination not only improve patient outcomes, but also serve to reduce the cost of care. In addition, our ongoing oversight and program compliance monitoring of the use of the waiver by ACOs helps us to ensure that ACOs have the capacity to identify and manage beneficiaries who are admitted to a SNF under the SNF 3-Day Rule Waiver. In summary, we propose to amend § 425.612(a)(1)(i)(A) to require that an ACO applying to use the SNF 3-Day Rule Waiver must submit an attestation that it has established plan narratives (communication plan, care management plan, and beneficiary evaluation and admission plan) and will make them available to CMS upon request. We are making minor revisions to the narrative language by replacing “the communication plan” with “a communication plan” in § 425.612(a)(1)(i)(A)( 1). We expect that, when implemented, our proposal will reduce the application review burden on CMS, as well as the burden on ACOs to submit this information. e. Updating Shared Savings Program Data Sharing Regulations To Recognize ACOs Structured as Organized Health Care Arrangements (OHCAs) for Data Sharing PurposesIn the CY 2022 PFS final rule (86 FR 65261), we stated that we were considering whether it would be appropriate to revise the regulations at §§ 425.702(c) and 425.704(b) to allow data sharing with a Shared Savings Program ACO that has structured its relationship with its ACO participants as an OHCA, as that term is defined in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations at 45 CFR 160.103. This was in response to commenters who shared concerns about collecting patient-level all-payer data (eCQMs/MIPS CQM) from patients who were not assigned to the ACO. These commenters cited HIPAA and patient consent concerns related to sharing non-Medicare patient information with the ACO and with CMS for a population that is not assigned to the ACO and indicated that obtaining this consent would be an additional burden. As we explained in the CY 2022 PFS final rule (86 FR 65261), we believe the disclosure of this all-payer data to CMS as required by § 414.1340(a) is permitted by the HIPCAA Privacy rule under the provision that permits disclosures of protected health information (PHI) as “required by law.” [276] We also encouraged ACOs and their ACO participants to consult with their legal counsel 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 this data to CMS. Nevertheless, these comments prompted us to consider whether the current Shared Savings Program regulations provide sufficient flexibility regarding different arrangements permitted under HIPAA. In the CY 2022 PFS final rule, we stated that we were specifically considering potential revisions to the regulations at §§ 425.702(c) and 425.704(b) to permit data sharing with an ACO structured as an OHCA. We are now proposing those changes as part of this proposed rule. In the April 2011 proposed rule (76 FR 19528, 19556), we discussed the importance of data sharing and beneficiary protections in light of existing HIPAA requirements. We noted that ACO participants and ACO providers/suppliers are also covered entities, provided they are health care providers as defined by 45 CFR 160.103 and they or their agents electronically engage in one or more HIPAA standard transactions, such as for claims, eligibility or enrollment transactions. We also stated that an ACO may itself be a HIPAA covered entity if it is a health care provider that conducts such transactions or may qualify as the business associate of its covered entity ACO participants and ACO providers/suppliers based on the quality assessment and improvement activities that the ACO is conducting on behalf of those ACO participants and ACO providers/suppliers (76 FR 19556). In the November 2011 final rule (76 FR 67846 through 67851), we established requirements for data sharing with ACOs that are designed around the HIPAA provisions for “health care operations” disclosures. These provisions permit CMS to disclose PHI without obtaining individual authorization for the health care operations activities of the recipient of the data (that is, the ACO).[277] As we explained in the CY 2015 PFS final rule (80 FR 32692), ACOs work with their ACO participants and ACO providers/suppliers to evaluate their performance, conduct quality assessment and improvement activities, perform care coordination activities, and conduct population-based activities relating to improved health for their assigned beneficiary population. When done by Start Printed Page 46208 or on behalf of a covered entity, these are activities that would qualify as health care operations under the first and second paragraphs of the definition of “health care operations” at 45 CFR 164.501 (76 FR 19558). Therefore, in the Shared Savings Program data sharing regulations at §§ 425.702(c)(2) and 425.704(b), we have focused on ACOs that are themselves HIPAA-covered entities, or that are acting as business associates on behalf of their ACO participants and ACO providers/suppliers who are HIPAA-covered entities. We believe that most ACOs are acting as business associates of their covered entity ACO participants (the providers and suppliers that are part of the ACO). However, we believe it is possible that some ACOs may choose to operate as an OHCA. An OHCA is another type of entity that is recognized under the HIPAA regulations. An OHCA is a distinct entity from a covered entity or a business associate under HIPAA, although it is made up of covered entities. As most relevant to Shared Savings Program ACOs, under 45 CFR 160.103, an OHCA is defined to include an organized system of health care in which more than one covered entity participates and in which the participating covered entities hold themselves out to the public as participating in a joint arrangement and participate in specified joint activities such as quality assessment and improvement activities and payment activities.[278] In addition, the purpose of the OHCA is that participants in such clinically integrated settings are able to share health information freely not only for purposes of care, but also to improve their joint operations (65 FR 82494). The HIPAA Privacy Rule has specific provisions relevant to OHCAs. For example, under 45 CFR 164.506(c)(5), a covered entity that participates in an OHCA may disclose PHI about an individual to other participants in the OHCA for any health care operations activities of the OHCA. We note that the Office for Civil Rights (OCR) and the Office of the National Coordinator for Health Information Technology (ONC) have recognized in joint guidance that ACOs may operate as OHCAs.[279] An ACO that operates as an OHCA would be able to share PHI among the covered entities in the OHCA without getting authorization from individuals for the health care operations of the OHCA and would be permitted to share PHI for the health care activities of the OHCA without entering into BAAs with each other.[280] Effective for performance year 2023 and subsequent performance years, we propose to modify the Shared Savings Program data sharing regulations at §§ 425.702(c)(2) and 425.704(b) to specify that ACOs acting as OHCAs may request aggregate reports and beneficiary-identifiable claims data from CMS, respectively. As outlined above, these proposed changes would recognize an OHCA as an additional organizational structure under which an ACO can request data from CMS. Our intention is to update the data sharing regulations to reflect how ACOs may be structured and provide flexibility with respect to the different arrangements permitted under HIPAA for purposes of data sharing. Separately, we believe that an OHCA structure potentially could address some of the concerns that commenters have raised about ACOs collecting and reporting all-payer data to CMS as required under the APP. However, we note that our proposal is limited to the Shared Savings Program regulations governing CMS' data sharing with ACOs and is not intended to affect or modify any existing obligations under the HIPAA Privacy Rule. It is the ACOs' responsibility to consult with their legal counsel and others as necessary to determine how to structure their arrangements with their ACO participants and ACO providers/suppliers to comply with HIPAA requirements. 7. Seeking Comment on Incorporating an Administrative Benchmarking Approach Into the Shared Savings Programa. Background on Longer Term Approach to Benchmarking Under the Shared Savings ProgramWe have set a goal that 100 percent of Original Medicare beneficiaries will be in a care relationship with accountability for quality and total cost of care by 2030.[281] Achieving this goal will require significant growth in the number of ACOs participating in the Shared Savings Program, or the number of beneficiaries served by existing ACOs, or both. Benchmarks are a core policy instrument for providing sufficient incentives for ACOs to enter and remain in the Shared Savings Program, with significant implications on impacts to the Medicare Trust Funds. The benchmark is a cost target used to determine savings or losses for an ACO compared to performance year expenditures for its assigned beneficiary population and, importantly, to create incentives for ACOs to reduce spending and generate savings, which will be shared by the ACO and CMS; by extension, these savings opportunities also create incentives for providers and suppliers to participate in ACOs. Many factors need to be considered in establishing benchmarks including the variability in the composition of ACOs, the beneficiary populations they serve, and their experience with accountable care models, as well as the need to protect the Trust Funds and minimize unintended consequences such as market consolidation and patient risk selection. In this section of this proposed rule, we describe and seek comment on a modified benchmarking methodology which may boost participation, increase savings to the Medicare Trust Fund and make long-term participation in the Shared Savings Program possible for more ACOs. Currently, we establish, adjust, update and reset the historical benchmark under the Shared Savings Program in accordance with § 425.601. An ACO's benchmark is established based on historical expenditures for a population of beneficiaries that would have been assigned to that ACO in the 3 years prior to the start of its agreement period. In establishing the benchmark, we adjust the benchmark based on the ACO's spending relative to its service area (referred to as the regional adjustment). For each performance year of the ACO's 5-year agreement period, we risk adjust the benchmark for changes in severity and case mix of the ACO's assigned beneficiaries, and we update the benchmark using growth rates that are a blend of observed national and regional FFS spending trends. We reset (or rebase) the ACO's benchmark at the start of the ACO's second and each subsequent agreement period. Refer to section III.G.5. of this proposed rule for a more detailed description of the statutory and regulatory background of the Shared Savings Program's current benchmarking methodology and certain benchmark calculations, as well as proposed modifications to the current Start Printed Page 46209 benchmarking methodology for agreement periods starting on January 1, 2024, and in subsequent years. ACOs and other interested parties have expressed concerns about the effects of current benchmarking methods on ACOs' incentives to generate savings, the extent to which they are able to share in those savings, and thus the incentives for ACOs to enter and remain in the program over the long-term. Specifically, there are two ways in which the use of factors based on realized FFS spending (which reflects any ACO spending reductions) can lead to lower benchmarks, which we will refer to as “ratchet” effects: (1) downward pressure on an individual ACO's benchmark resulting from the impact of its achieved spending reductions on its historical benchmark expenditures, regional adjustment, and update factor; and (2) downward pressure on benchmarks due to program-wide spending reductions across all ACOs. The first type of ratchet effect occurs at the individual ACO level, when an ACO's own savings reduce its benchmark, which can occur when we reset the historical benchmark at the start of the ACO's second or subsequent agreement period. When the benchmark years correspond to performance years from the ACO's preceding agreement period, the benchmark reflects a portion of any spending reductions achieved by the ACO. A ratchet effect can also occur through the use of factors based on the regional FFS expenditures to adjust the benchmark and update an ACO's benchmark; specifically, when an ACO reduces spending, it also reduces average spending in its region, thereby lowering the regional adjustment to its benchmark. This effect becomes more prominent as an ACO has increasing market share in its region. Critically, ACOs must be able to retain the ability to achieve savings over the long-term to have an incentive to take the steps necessary to generate them, as there are costs associated with delivering care outside of the fee-for-service construct and in running an ACO to lower (and maintain) reduced spending levels. The second type of ratchet effect occurs at the program level, where overall program success can apply downward pressure on ACOs' benchmarks through the method for updating benchmarks each performance year for changes in expenditures between Base Year 3 (BY3) and the performance year. We determine the update factor retrospectively using a blend of realized national and regional FFS expenditure growth rates, which incorporates the collective impact of ACOs on spending across Original Medicare. As a greater portion of Medicare FFS beneficiaries are assigned to ACOs, this program level ratcheting effect increasingly diminishes incentives to participate in the Shared Savings Program. If all beneficiaries enrolled in the Original Medicare FFS program under Parts A and B were assigned to an ACO, calculating the update factor based on realized spending growth rates would necessitate that some ACOs would experience expenditure growth in excess of the update factor (and forgo shared savings), even if all ACOs reduced spending growth. That is, an ACO would have to reduce spending more than the average ACO in order to earn savings, all else equal (absent regional adjustments to historical benchmarks). Similarly, program-wide savings lower the average per capita amounts of expenditures for an ACO's regional service area which are used in computing the regional adjustment to the historical benchmark. As ACOs' benchmarks converge toward average realized FFS spending, approximately half of ACOs will necessarily be given benchmarks below their spending at the start of their current agreement period, even if all ACOs have generated spending reductions relative to the counterfactual (that is, what spending would have been without the ACO). This downward pressure of program success on benchmark updates means that ACOs collectively keep less of the savings they generate. In the context of CMS' strategic objective to increase the number of Medicare beneficiaries in a care relationship with quality and total cost of care accountability, we anticipate that this program level ratcheting effect will become more pronounced with the growth in the number of beneficiaries assigned to ACOs, further weakening incentives to participate in the Shared Savings Program with the potential for impeding progress towards the fulfillment of this same goal. For illustrative purposes, consider a scenario in which all Original Medicare beneficiaries are receiving the plurality of their primary care from an ACO provider/supplier, and thus are assigned to an ACO. Assume that FFS expenditure growth in the absence of ACOs would be 5 percent each year, but that ACOs, on average, slow expenditure growth to 3 percent each year. Under the current benchmarking approach, the update factor applied to an ACO's benchmark would be 3 percent, matching the average overall FFS expenditure growth rate under 100 percent ACO penetration. However, because 3 percent is the average growth rate, there will be ACOs with both higher and lower growth rates than 3 percent, meaning that some ACOs' growth in expenditures will outpace their benchmarks, even if they reduced spending relative to the counterfactual. In this example, an ACO that limited expenditure growth to 4 percent would (ignoring regional adjustments to the benchmark) show losses, despite reducing spending relative to the 5 percent growth rate expected without ACOs. Figure 2 provides a visual example of this scenario. provides a visual example of this scenario. Start Printed Page 46210 MedPAC and researchers are also examining the Shared Savings Program benchmarking methodology and have noted many of the above concerns. MedPAC has discussed ratchet effects in ACO benchmarks in its November 2021 public meeting [282] and January 2022 public meeting,[283] with the general consensus that eliminating ratcheting effects is essential for the long-term sustainability of the Shared Savings Program. Many of the commissioners discussed a longer-term approach under which CMS would update ACOs' benchmarks annually using “exogenous” factors, meaning factors not impacted by the individual or collective performance of ACOs. Under this approach, which has also been referred to as administratively set benchmarks, benchmarks may be set prospectively based on projected growth in volume and intensity of FFS services, with guardrails in place to account for actual changes in FFS prices, demographics, and large projection errors. McWilliams, Chen, and Chernew have also raised concerns about ACO benchmark ratchet effects in outlining a blueprint for ACO benchmark changes in a recent white paper.[284] Addressing these ratchet effects may also improve the experience of beneficiaries assigned to ACOs. ACOs are incentivized through sharing savings to provide services to beneficiaries that may not have been traditionally reimbursed under Medicare FFS. However, because any costs incurred in providing such services are not reflected in observed FFS spending but may help to reduce that spending and thus result in the ratcheting down of future benchmarks, incentives to provide such services are diminished. We anticipate that addressing these ratchet effects under the current benchmarking methodology will allow ACOs and their ACO participants to provide additional services and therefore improve the beneficiary experience in ACOs. We have used a variety of approaches to mitigate the effect of ACO performance on their historical benchmarks, as described in earlier rulemaking and as summarized in section III.G.5. of this proposed rule, including: adjusting the ACO's rebased benchmark to account for savings generated by the ACO in its prior agreement period (§ 425.603(b)(2), June 2015 final rule, 80 FR 32788 through 32791); subsequently replacing the prior savings adjustment with an approach that incorporated factors based on regional FFS expenditures in resetting the ACO's benchmark through a regional adjustment (§ 425.603(c) through (f), June 2016 final rule, 81 FR 37953 through 37991); in addition, more recent modifications to use blended national-regional growth factors to trend and update the ACO's historical benchmark help ameliorate the ACO-specific ratchet effect caused by the use of regional trends to update benchmarks in areas where ACOs contribute substantially to regional trends (§ 425.601(a)(5), (b), December 2018 final rule, 83 FR 68005 through 68030). In particular, the regional adjustment has reduced the impact of rebasing by partially decoupling an ACO's benchmark from its prior savings performance. Importantly, this adjustment also begins to converge benchmarks toward a consistent basis within a region, which we believe is an important objective for creating equitable payment within a market that rewards ACOs for relative efficiency. However, recent experience suggests that the regional adjustment may have led to selective participation, with 80-87 percent of ACOs subject to a regional adjustment having spending below their region for performance years 2017 through 2020, as shown in Table 68.[285] Start Printed Page 46211 Furthermore, as shown in Table 69, selective participation effects are stronger for ACOs subject to downside risk, with 92-100 percent of ACOs having positive regional adjustments. This suggests that as ACOs are required to participate under performance-based risk and higher levels of downside risk, these selective participation effects may continue to grow. Setting aside the net costs to the Trust Funds from subsidizing participation by ACOs with spending already below their region, the chief concern with this pattern of participation under the current methodology is that the providers/suppliers with the greatest savings potential (those with high spending relative to their region) have fewer incentives to participate. Through the benchmarking changes proposed in section III.G.5. of this proposed rule, we seek to more immediately address certain ratchet effects and features within the existing benchmarking methodology that result in selective participation. Specifically, the proposals to incorporate a prior savings adjustment, mitigate the impact of the negative regional adjustment, and to modify the benchmark update to incorporate a prospective, external factor (ACPT) are intended to address these dynamics. In this RFI, we seek comment on broader changes to the benchmarking methodology that may be needed to further strengthen incentives for providers and suppliers to participate in the Shared Savings Program and generate savings while preserving a mechanism for convergence to a consistent regional benchmarking approach that does not elicit selective participation. b. Administratively-Established Benchmarks as a Potential Solution To Address Benchmarking ConcernsIn this section, we describe and seek comment on a direction for future benchmarking that is designed to create a sustainable pathway for long term program savings for both ACOs and CMS and to address interested parties' concerns around ratcheting. Within this section, we provide an overview of and discuss details of key components of this approach. This approach involves separating benchmarking update factors from realized FFS expenditure growth through the implementation of a prospective, administratively set annual growth rate to update benchmarks. Under this approach, benchmarks would be allowed to rise above realized FFS expenditure growth as ACOs generate savings, allowing ACOs to retain more of their savings and thus strengthening incentives to participate and achieve savings. Over time, use of this administratively set growth rate would allow for a wedge to accrue between average benchmarks and realized spending reductions, offering greater and more sustainable savings opportunities over the long-term for both Medicare and ACOs. Importantly, average benchmark growth would only exceed realized FFS spending growth to the extent that ACOs reduce spending, such that benchmarks remain at or below FFS spending levels projected in the absence of ACO participation. A graphic depiction of administratively-established benchmarking is provided in Figure 3. Start Printed Page 46212 In concert with shifting from a benchmark update based on observed, or realized, FFS expenditure growth to a prospectively set trend that does not ratchet benchmarks downward as ACOs slow observed FFS expenditure growth, we are considering approaches that would minimize rebasing effects between agreement periods. An administratively set benchmarking approach also offers a path for converging benchmarks gradually towards a common risk-adjusted rate in each region, which we anticipate would mitigate selective participation and improve the savings potential of the program. Allowing benchmarks to remain above observed FFS spending as ACOs lower spending also allows convergence of benchmarks to a regional rate that is above average regional FFS spending. Accordingly, convergence would not require ACOs operating in the same region to outcompete each other to accrue savings and should not discourage participation by ACOs with above average observed spending to the same extent that they are discouraged under the present methodology. As long as ACOs are generating savings collectively, this approach would allow all ACOs a chance to earn shared savings while reducing overall spending relative to projections and protecting the Trust Funds. In addition, benchmarks that exceed FFS spending would give ACOs flexibility to meet beneficiary needs through alternative modes of care such as virtual care or care management programs that have not traditionally been reimbursed under FFS. Through the design of this approach, we believe CMS could address the selective participation effects that currently discourage participation by ACOs with higher spending compared to their regional services area. For example, we are considering an approach that would remove the negative regional adjustment to ACO historical benchmarks. This approach would mean that an ACO with spending above its regional average would receive a historical benchmark set at the ACO's average historical FFS expenditures, rather than below its historical spending levels due to the negative regional adjustment. Ultimately, we envision such an approach would generate sufficient spending reductions for higher spending providers and suppliers such that CMS could consider a further modified benchmarking methodology under which ACOs' benchmarks would be calculated using a regionally consistent baseline. This longer-term option is discussed in section III.G.7.d. of this proposed rule. To maintain the divergence between benchmarks and realized FFS expenditures, regional baselines would be set to incorporate accrued FFS expenditure reductions relative to projected growth, rather than setting regional baselines at average FFS spending, which would effectively claw back the accrued savings. We consider regionally consistent benchmarks to be an important objective for the longer-term sustainability of the Shared Savings Program in that it would create equitable payment within a market by rewarding ACOs for their relative efficiency. Such an approach could also reduce complexity relative to both the current methodology (including the proposed changes described in section III.G.5. of this proposed rule) and the administratively established benchmark methodology used to generate convergence. We invite comments on these concepts and on the design of an administratively established benchmarking methodology. In the remaining discussion in this section of this proposed rule, we provide additional details on the key features of an administrative benchmarking concept to inform commenters' consideration of this approach, including the administratively established update and discount factors, the continued use of certain factors in establishing and adjusting an ACO's historical benchmark, the convergence to a regional benchmark, and considerations for the post-convergence phase. We also welcome comments on the stages for implementing such an approach within the Shared Savings Program, particularly on an initial convergence phase and a post-convergence phase, and any other considerations related to this approach that we have not addressed in this proposed rule. We note that any such modifications to the benchmarking methodology would need to be adopted through notice and comment rulemaking. We are continuing to consider the financial impact of this modified approach, and are also considering other modifications to the design of the Start Printed Page 46213 Shared Savings Program that may be needed along with an administratively established benchmarking methodology, including potential changes to the program's participation options and financial models (level of risk and potential reward). We seek comment on any additional modifications to the design of the Shared Savings Program that should be considered in conjunction with administratively set benchmarks. Lastly, we note that a number of the features of an administratively established benchmarking methodology diverge from the benchmarking requirements under section 1899(d)(1)(B)(ii) of the Act and would require the use of our authority under section 1899(i)(3) of the Act. Under section 1899(i)(3) of the Act, in order to use a payment model other than the payment model described in section 1899(d) of the Act, 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. Accordingly, we also seek comment on the extent to which the use of administratively set benchmarks might have the potential to improve the quality and efficiency of care furnished to Medicare beneficiaries and any anticipated impact on Medicare expenditures. We will consider the information submitted as part of any determination of whether to propose in future rulemaking to implement aspects of an administratively-established benchmarking methodology in the Shared Savings Program. c. Establishing an Administrative Benchmark Update Factor(1) OverviewUnder the administratively-established benchmarking concept, we would continue to utilize an ACO's historical FFS expenditures to establish the ACO's historical benchmark. However, we would modify the existing methodology to fully remove negative regional adjustments to the benchmark. We would otherwise retain much of the existing methodology for calculating the historical benchmark, including, if finalized, the proposed changes detailed in section III.G.5. of this proposed rule. When setting the historical benchmark, we would continue to calculate the annualized and truncated per capita expenditures for beneficiaries who would have been assigned to the ACO using the 3 most recent years prior to the start of the agreement period for each of the four Medicare enrollment types. We would then trend the BY1 and BY2 expenditures forward to BY3, using the existing blend of national and regional FFS expenditure growth rates, adjust for health risk using the CMS-HCC model, and apply benchmark year weights to the trended, risk-adjusted expenditures for each Medicare enrollment type. The benchmark year weights would remain as follows: for new ACOs, BY1 (10 percent), BY2 (30 percent), BY3 (60 percent), and for ACOs in their second or subsequent agreement period, each benchmark year is weighted equally. As described in the following sections, we would apply an alternative approach to annually updating the ACO's historical benchmark, using an OACT-projected ACPT factor, and applying a discount to the benchmark update to support savings to the Medicare program; the discount factor would vary based on the ACO's regional efficiency to converge benchmarks gradually between ACOs with higher and lower spending compared to their regions. We also further explain that with the use of a discount factor, we would no longer apply a negative regional adjustment. We conclude this section with an overview of the steps for the calculation for the administratively-established benchmark update factor. (2) Use of Accountable Care Prospective Trend in the Benchmark UpdateWe are considering an approach that would transition the proposed three-way blend between the prospective ACPT and retrospectively determined regional and national growth rates (as described in section III.G.5.c. of this proposed rule) to an entirely prospectively set trend. This approach would further decouple benchmark updates from growth in realized FFS expenditures, thereby strengthening incentives for ACOs to participate in the Shared Savings Program and achieve savings. OACT annually develops and publishes United States Per Capita Cost (USPCC) growth projections for Medicare spending. As described in section III.G.5.c. of this proposed rule, we are proposing that OACT would calculate an ACPT, based on a modification of the existing USPCC growth projections used annually for establishing Medicare Advantage rates. We envision that an ACPT, with some additional modifications as described below, would serve as the core component of the administratively set benchmark update under the longer-term approach. We are considering how to calculate and apply the ACPT in a manner that maintains a consistent national benchmark update trend across ACOs for a given performance year, independent of when the ACO's agreement period began. We are considering an approach under which we would establish an ACPT every 5 years which would apply during that 5-year window. For example, if we were to establish an average annual trend for the years 2025 through 2029, we would then calculate a new average annual trend for the years 2030 through 2034, then for 2035 through 2039, and so on for each subsequent period.[286] An ACO's update factor for a given performance year would be derived from the average annual trend established for the 5-year window that includes the applicable performance year. For example, an ACO beginning its 5-year agreement period in 2025 would have a single update factor trend for all performance years under the agreement period. For illustration, Table V.D1 from the 2021 Medicare Trustees Report [287] projects overall per capita spending growth for Medicare Parts A and B at an annualized rate of 5.1 percent from a 2024 base year to what would be a fifth performance year in 2029. Note that this projected spending growth serves as an illustrative proxy for what a corresponding ACPT might show, though it is based on a different methodology that is not customized to the mix of spending categories included in Shared Savings Program benchmark calculations. In contrast, an ACO beginning its 5-year agreement period in 2027 would have one trend rate for its first 3 performance years (2027, 2028, and 2029) and another for its last 2 performance years (2030 and 2031), as the update factor would be reset every 5 calendar years. This update factor would not change for the duration of the 5-year period in response to changes to the OACT projection, with the exception of an adjustment for changes to the price and demographic components of the ACPT trend as described below, or to account for extreme and uncontrollable circumstances. We would plan to continue to apply the update factor as a flat dollar, risk-adjusted amount, consistent with the methodology for the Start Printed Page 46214 proposed use of ACPT in a three-way blend described in section III.G.5.c. of this proposed rule. We are considering further refinements to calculating the ACPT as part of a longer-term approach for updating benchmarks using entirely administratively set update factors. For example, we are considering maintaining separate projections within the ACPT for price growth, volume/intensity growth, and demographic factors (with potential exceptions for certain service types such as Part B drugs, which are not currently projected using disaggregated growth assumptions). This disaggregation of these factors could be utilized in ACO benchmark updates (for service types where possible), as ACOs are anticipated to have impacts on volume/intensity growth but have minimal impact on price growth and demographic factors. Therefore, the ACPT volume-intensity trend would be held constant for the duration of the agreement period, but retrospective adjustments could be made annually to account for any differences between projected and actual price growth and demographic factors. This would mitigate the effects of unexpected changes in assignable beneficiary demographics, as well as of inflationary pressures or other price changes on ACOs benchmarks. We would also incorporate adjustments to the ACPT to account for changes in relative price levels across counties, as has been done in other ACO initiatives that use national trend projections, such as the Next Generation ACO Model. By incorporating annual adjustments for changes in price and demographics, we expect that the administrative growth projection will exceed the observed volume/intensity growth, as ACOs generate savings relative to the growth projection. However, we are considering adding potential guardrails to the administrative growth projection in early years to ensure that forecasting error does not unfairly penalize ACOs or discourage participation. One option is to phase-in the administrative trend over the first 5 years, increasing the weighting of the administrative trend component of the update in the three-way blend calculation from 33 percent in PY1 to 50 percent in PY2, 75 percent in PY3, and 100 percent thereafter. Another option would be to limit the contribution of forecasting error to savings and loss calculations during the first 5 years of the new methodology. For example, a floor could be set such that the national mean benchmark could not fall more than 2 percent below national mean FFS spending. CMS may consider applying either or both of these guardrail options as part of a prospectively-set update factor. As detailed in section III.G.5.c. of this proposed rule, we are proposing a prior savings adjustment with a 50 percent scaling factor for renewing and re-entering ACOs. Together, this proposed change and the changes to the benchmark update described in this RFI would act to limit the impact of an ACO's performance on its own benchmark. Increasing the 50 percent scaling factor for prior savings adjustments could be considered to further limit the impact of rebasing. The prospective update factor would remove this link within an agreement period and the prior savings adjustment would mitigate the impact of rebasing between agreement periods. After benchmarks converge to a regional baseline (as discussed in section III.G.7.d. of this proposed rule), the link between an ACO's savings and its subsequent benchmark would be severed completely. We anticipate that these changes would create and improve long-term incentives for ACOs to generate savings. We would also need to establish a process for considering additional factors when recalculating the ACPT prospective update factor every 5 years. One factor may be the size of the accrued wedge between benchmarks and realized FFS spending. It is vital that ACOs are permitted to retain savings in subsequent agreement periods for there to be a strong incentive to generate savings. Allowing a permanent wedge between benchmarks and FFS spending is also vital to giving ACOs flexibility to meet patient needs by providing care that has been traditionally unreimbursed under FFS, such as care management programs or services addressing social needs. Should this wedge grow excessive, however, the update trend may need to be slowed to recover more savings for the Medicare program and its beneficiaries. Over time, updated OACT ACPT projections would also come to reflect the impact of ACOs on spending, and therefore we may need to use other external indices as factors in determining the preset benchmark update factor to ensure that ACOs continue to retain accrued savings. We seek comment on these considerations for calculating an ACPT to be used as an administratively set benchmark update factor. We seek comment on the 5-year intervals for establishing an ACPT, and alternative approaches that would tie the ACPT to an ACO's agreement period. We also seek comment on approaches to accounting for price growth and demographic factors versus volume/intensity and considerations for guardrails to protect against projection error. Finally, we seek comment on approaches to updating the ACPT that would ensure it does not overly reflect ACOs' collective impact on spending. (3) Discount FactorUnder the approach we are considering for implementing a common risk-adjusted regional benchmark (described in section III.G.7.d. of this proposed rule) that encourages participation by both historically efficient (spending below regional average) and inefficient (spending above regional average) ACOs, we believe there would need to be a period of gradual convergence in spending between efficient and inefficient ACOs, while allowing benchmarks for both to remain above realized FFS spending as ACOs generate savings. Therefore, we are seeking comment on the approach of subtracting a modest annual discount factor from the fixed 5-year ACPT growth trend based on the relative efficiency of the ACO. For example, if the projected ACPT trend was 5.1 percent annual growth, an ACO with a 0.2 percent discount factor would have a benchmark update factor based on a 4.9 percent annual growth rate (5.1 percent minus 0.2 percent). Overall, these discount factors would be intended to provide realistic targets that encourage participation by ACOs and providers and suppliers with spending above their regional average. Once in the program, these ACOs and providers and suppliers would have incentives to generate savings, and thus, gradually converge their spending more in line with historically lower spending ACOs. To determine what discount would be applied to an ACO's update factor, we would calculate a measure of the ACO's regional efficiency. We would compare the ACO's historical spending (the weighted-average spending for the ACO in benchmark year 3 to a regional benchmark (the weighted-average regional FFS expenditures for benchmark year 3). This calculation would be similar to the approach used to determine the difference between the average per capita expenditures for the ACO's regional service area, and the average per capita amount of the ACO's historical benchmark under § 425.601(a)(8)(ii)(A). The discount would vary according to the regional efficiency of each participating ACO but, importantly, would not grow if an ACO successfully lowers spending (as it would under the current regional Start Printed Page 46215 adjustment methodology). Sample discount factors are shown in Table 70. If an ACO's historical spending was greater than its regional benchmark, we would apply a discount to the amount of the benchmark update, scaled such that a larger discount is applied for ACOs with increasingly higher spending (less efficient) compared to their regional benchmark. No discount would be applied to the update amount for ACOs with spending 2 percent or more below their regional benchmark. Applying larger discount factors to less efficient ACOs would converge benchmarks towards regionally consistent levels, allowing CMS to remove negative regional adjustments as further discussed in section III.G.7.c.(4) of this proposed rule while still driving convergence. We have observed that ACOs make significant changes in composition of ACO participant TINs during an agreement period, by adding and removing ACO participants. To account for ACO participant TIN changes, we would recalculate the ACO's discount factor for each performance year of the agreement period based on its regional efficiency using the composition of its ACO participant TINs for the applicable performance year. That is, we would use the ACO's certified ACO participant list for the performance year to determine the ACO's historical spending based on expenditures for the beneficiaries who would have been assigned to the ACO in benchmark year 3 and determine the ACO's regional service area for calculating the ACO's regional benchmark, and thus its regional efficiency. We seek comment on this approach for calculating and applying a discount factor in determining the amount of an ACO's benchmark update. We seek comment on the intervals of the discount we described, and alternative approaches such as use of a sliding scale in determining the discount amount. We also seek comment on approaches to ensuring the discount is reflective of the ACO's regional efficiency, including the approach of recalculating the discount factor to reflect changes in an ACO's regional efficiency as a result of changes in the ACO's composition during its agreement period. (4) Removal of Negative Regional Adjustments to the BenchmarkIn accordance with § 425.601(a)(8), we apply a regional adjustment in establishing the ACO's historical benchmark, which is equal to a percentage of the difference between the average per capita amount of expenditures for the ACO's regional service area for BY3 and the ACO's historical benchmark. In the administratively-established benchmarking concept, we would no longer apply negative regional adjustments to the benchmark, although positive regional adjustments would remain. Under this approach, ACOs with higher than average historical spending would begin with a benchmark calculated solely using their historical experience. This would encourage providers and suppliers with higher historical spending relative to their region to participate in the Shared Savings Program, while continuing to reward ACOs with lower-than-average historical spending for their efficiency relative to their region. This approach builds on the policies proposed in section III.G.5.c.(5) of this proposed rule to mitigate the impact of the negative regional adjustment on ACOs, particularly those caring for high-risk populations. We are also considering approaches for addressing a potential concern that efficient ACOs would be disincentivized from adding less efficient providers and suppliers as ACO participants because it would reduce their regional adjustment. One approach would be to scale an ACO's initial, larger positive regional adjustment based on the overlap in beneficiaries that would have been aligned to the ACO using the ACO's initial ACO participant list and its updated ACO participant list. In this way, an ACO with spending below its regional average would retain its advantage conferred by the regional efficiency adjustment under its initial ACO participant list (to the extent it retains those ACO participants) while also being able to pursue the expanded savings opportunity afforded by the new benchmarking approach by adding less efficient providers and suppliers to its ACO participant list. We seek comment on this approach, and considerations related to removing the negative regional adjustment in establishing the ACO's historical benchmark under an administratively-established benchmark approach. We also seek comment on considerations for limiting disincentives for efficient ACOs to add less efficient providers and suppliers. (5) Detailed Administratively-Established Benchmark Update CalculationThe following is a step-by-step example of the administratively-established benchmark update calculation on which we are seeking comment: • Step 1: Calculate the historical benchmark according to the existing Shared Savings Program benchmarking methodology (including, if finalized, the proposed changes detailed in section III.G.5. of this proposed rule), without applying negative regional adjustments. • Step 2: Risk-adjust the historical benchmark to account for changes in severity and case mix between BY3 and the performance year for each enrollment type. • Step 3: Apply the update factor to the risk-adjusted historical benchmark for each enrollment type, calculated as follows: ++ Start with the overall OACT-projected Shared Savings Program ACPT 5-year projected trend [288] Start Printed Page 46216 applicable for the ACO based on the start of its agreement period and the performance year for each enrollment type.[289] The update rate over an agreement period may include ACPT projected trends from more than one 5-year period if the ACO's agreement period does not align with the 5-year cycle for ACPT calculation. ++ Apply the average projected trend based on the number of years between BY3 and the performance year. ++ Apply any retrospective adjustments to the trend based on divergence between the price and demographic components of the ACPT projected trend and observed price trends and demographic changes. This retrospective adjustment would be calculated annually after the end of each performance year only for the price and demographic components (no such adjustment would be made for the volume-intensity component). ++ Subtract the relevant discount factor (as per the examples in Table 70, based on the regional efficiency of the ACO in BY3) from the adjusted trend for each year between BY3 and the performance year to determine the ACO's trend percentage. ++ Multiply the ACO's trend percentage by the average national ACPT value for assignment eligible beneficiaries (adjusted to reflect the ACO's relative risk in each eligibility category) to determine the flat dollar update amount. ++ Apply any guardrails as described in section III.G.7.c.(2) of this proposed rule. ++ Add the flat dollar update amount to the ACO's risk-adjusted historical benchmark for the applicable enrollment type. • Step 4: Calculate a single per capita benchmark amount by taking a weighted average across each enrollment type. d. Convergence to Regional Benchmarks; Post-Convergence PhaseUltimately, this administratively-established benchmark approach would be partially intended to drive ACOs towards regional spending convergence, such that the Shared Savings Program could consider further benchmarking changes under which benchmarks would be established on a regionally consistent risk-adjusted basis across ACOs in the same area. This post-convergence phase would completely eliminate ratcheting effects by removing rebasing and would also decouple benchmarks from an ACO's historical spending, thereby creating a sustainable benchmarking approach that would support high ACO participation levels and reward ACOs for increased efficiency. Regionally consistent benchmarking has precedent in other CMS models and programs. Medicare Advantage benchmarks are established using beneficiary risk scores and the Medicare Advantage Ratebook of county risk-standardized benchmarks, as described in §§ 422.258 and 422.306. In the ACO REACH Model,[290] the baseline component of the benchmark will be calculated either entirely or in part using a rate book with county benchmark expenditures and beneficiary risk scores. The Shared Savings Program calculates risk-adjusted county FFS expenditures for individual calendar years using a comparable approach, as discussed in section III.G.5.d. of this proposed rule. ACO benchmarks in this post-convergence phase would be calculated based on a rate book of risk-standardized average per capita rates at the county level and beneficiary level risk scores. Crucially, the initial per capita county rates would reflect the average benchmark levels in the county, inclusive of the accrued wedge between benchmarks and realized spending, as opposed to reflecting average expenditures. An ACO's benchmark would be the product of its average beneficiary risk score, weighted by assigned beneficiary months, and its average regional benchmark rate, calculated as the weighted average of the county rates, weighted by the number of months of experience contributed by assigned beneficiaries residing in each county. The administratively set update factor described above would continue to be applied to ACO benchmarks in the post-convergence phase to determine average benchmark growth. As an example, say an ACO has assigned beneficiaries that reside entirely in two counties (County A and County B), with 50 percent of the assigned beneficiary population in each county. If the rate book rate for County A is $1,300 per beneficiary per month (PBPM) and the rate for County B is $1,100 PBPM, then the ACO's average regional benchmark rate would be $1,200 PBPM. If the ACO's assigned beneficiaries have an average risk score of 1.5, then the risk-adjusted benchmark would be $1,800 PBPM, pending application of the update factor. A regionally consistent benchmarking approach as described above would likely involve an annual determination of county rates tied to the publication of the rate book. The convergence phase would be intended to converge benchmarks toward some level above realized spending, but below predicted spending absent ACOs, assuming ACOs generate savings. We are considering several approaches for developing county per capita rates. One method under consideration would be to calculate risk-standardized average per capita expenditures and apply a scalar adjustment that accounts for prior savings or the accrued wedge. Alternatively, another approach could involve developing county rates by calculating a weighted average benchmark across ACO-assigned and unassigned beneficiary populations in the county. In either case, we would continue to use an administratively-established factor to update county rates over time; however, we anticipate the need for a process to monitor the size of the wedge within a region (the risk-adjusted difference between the benchmark and FFS spending) and to establish bounds that restrict regional rates from exceeding a certain level above FFS spending. We anticipate that the convergence phase will last between 5-10 years, depending on participation rates and the pace of spending convergence within regions. We expect ACO spending will converge within regions under the changes described in preceding sections of this RFI because the incentives for providers and suppliers with high spending for their region to participate in ACOs and lower spending would be much stronger, and the ACOs in which those providers and suppliers participate would have strong savings potential. Convergence in risk-adjusted spending may also be fostered by improvements to the risk adjustment methodology. Convergence in spending would not have to be complete, however, to transition to a post-convergence phase in which benchmarks are set based on a common regional rate that is risk-adjusted for an ACO's aligned population characteristics. We expect some continued variation in ACO spending, but the convergence to regional rates would still provide all ACOs an opportunity to lower spending below their benchmarks. Still, the timing for Start Printed Page 46217 transitioning to the post-convergence phase is important, as it may cause a significant shift in benchmarks for many ACOs as the baseline component shifts from population-specific to regionally consistent. In order to maintain participation, it would be essential that this phase does not occur until a sufficient portion of providers are below the administratively projected regional benchmark. If the convergence phase takes longer than 5 years, we would need to address the potential rebasing effects for ACOs renewing for subsequent agreement periods under the new benchmarking approach. One approach would be to completely eliminate rebasing, and use the historical benchmark period from an ACO's first agreement period under the new benchmarking approach for subsequent agreement periods until the post-convergence phase. This approach would most directly eliminate rebasing effects, but would risk weakening the accuracy of the historical baseline expenditures as the number of years separating the baseline period and performance year increases. In prior rulemaking, we have acknowledged concerns about an approach that depends on older historical data in benchmark calculations (see, for example, February 2016 proposed rule, 81 FR 5832 through 5834, 5865 and 5866), including operational complications and potential biases that result from use of older historical data when the ACO's composition of providers and suppliers changes over time. These complicating circumstances may become more pronounced with a longer convergence period and a larger gap between the historical benchmark and performance period. An alternative approach would be to continue to use a baseline period of 3 years directly proceeding the start of the agreement period, but with ACO-specific adjustments to limit rebasing effects. For example, we are considering approaches that would build on the proposal, discussed in section III.G.5.c. of this proposed rule, to add prior ACO savings into subsequent benchmarks, with weighting to address changes in ACO composition. We seek comment on—
e. Request for Comment on Addressing Health Equity Through BenchmarkingConsistent with the Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (E.O. 13985), we are committed to advancing equity in health and healthcare for all individuals and addressing inequities that exist in our policies and programs that serve as barriers to equal opportunity. The term “equity” is defined in E.O. 13985 as “the consistent and systematic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities that have been denied such treatment . . . .” Benchmarks based on historically observed spending may be inequitable to the extent that historical patterns reflect existing inequities in both access to care and the provision of care. We are interested in considering how direct modification of benchmarks to account for existing inequities in care can be used to advance health equity. Direct increases to benchmarks for historically underserved populations would grant additional financial resources to health care providers accountable for the care of these populations, and may work to offset historical patterns of underspending that influence benchmark calculation. Furthermore, setting payment in excess of current spending for groups experiencing disadvantage would incentivize ACOs to attract those groups with care and enhancements valued by these beneficiaries. Pairing such benchmark changes with monitoring of use of resources, quality, and outcomes can ensure that increased benchmarks are being used to address care inequities, rather than solely generating increased shared savings potential for ACOs benefitting from positive benchmark adjustments. The redesigned ACO REACH Model [291] will be implementing a benchmark adjustment to address historical health inequities within CMS ACO initiatives, with the intent of incentivizing ACOs to seek out and form relationships with historically underserved beneficiaries. The ACO REACH benchmark adjustment is calculated at the beneficiary level, and provides for a $30 per beneficiary per month (PBPM) increase to an ACO's benchmark for each assigned beneficiary classified as being in the top decile of underserved beneficiaries across all beneficiaries in the ACO REACH Model. The adjustment is designed in a budget neutral manner, in which benchmarks will be reduced by a smaller $6 PBPM adjustment for each assigned beneficiary classified as being in the bottom five deciles. Beneficiaries will be stratified using a composite measure that incorporates a combination of ADI (percentile score from 1-100) and Dual Medicaid Status (Medicare only vs. Full or Partial Dual Eligibility). The area-level measure (Area Deprivation Index) [292] captures local socioeconomic factors correlated with medical disparities and underservice, while the beneficiary level measure (Dual Medicaid Status) captures economic challenges directly affecting individual beneficiaries' ability to access high-quality care. Because ADI is measured as a percentile (continuous variable), while Medicaid Status is a binary metric, a simple blending of the variables would underweight the ADI. Therefore, CMS will calculate the measure by starting with the ADI for a given beneficiary's census block group of residence (scored from 0-99 based on percentile relative to the nation), and applying a 25-point increase to the score for dually eligible beneficiaries. For example, a dually eligible beneficiary residing in a census block group with an ADI in the 75th percentile would receive a score of 75 + 25, for a total of 100. Each ACO will then receive a net benchmark adjustment based on the number of its assigned beneficiaries in each category. For example, an ACO with 100 beneficiaries scoring in the top decile and 500 beneficiaries in the bottom five deciles in a given month would receive a net neutral benchmark impact for that month [($30 PBPM × 100)—($6 PBPM × 500) = 0]. The ACO REACH health equity benchmark adjustment addresses Start Printed Page 46218 inequity in benchmarks calculated primarily using historical expenditures, where historical underspending for underserved beneficiaries informs benchmarks. In the context of the benchmarking approach outlined elsewhere in this section of this proposed rule, our intent would be to converge spending to the point where benchmarks can be calculated on a regionally consistent basis, which would address equity concerns associated with entrenched historical underspending. By utilizing risk-standardized regional rates to derive benchmarks, rather than blends of historical and regional spending that can entrench inappropriately low levels of spending for populations with unmet needs, the new benchmarking approach would facilitate setting benchmarks above current levels of spending for providers caring for underserved populations. Such adjustments could be implemented within the estimation of the predictive model of spending used for risk adjustment (the CMS-HCC model) or in a post-estimation benchmark adjustment as in ACO REACH so that benchmarks would support optimal rather than current spending for historically marginalized groups. These adjustments would not only act to correct resource disparities but also establish incentives for ACOs to attract underserved groups with enhanced care. Likewise, these and other approaches could be employed to preserve (if not expand) existing payment differentials that set payment higher for certain providers. Equity-motivated benchmark adjustments could be implemented, for example, to support additional funding for safety net providers (for example, CAHs, RHCs, and FQHCs). In other cases, add-on payments, such as DSH and IME, might continue to be carved out of ACO benchmarks and performance year expenditures, as they are now. We seek comment on other policy adjustments that should be considered for benchmark setting in the post-convergence phase. We seek comment on—
H. Medicare Part B Payment for Preventive Vaccine Administration Services1. Statutory BackgroundUnder section 1861(s)(10) of the Act, Medicare Part B covers both the vaccine and its administration for the specified preventive vaccines—the influenza, pneumococcal, and hepatitis B virus (HBV) vaccines. Under sections 1833(a)(1)(B) and 1833(b)(1) of the Act, respectively, there is no applicable beneficiary coinsurance, and the annual Part B deductible does not apply for these vaccinations or the services to administer them. 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 hospital outpatient department (HOPD), rural health clinic (RHC), or Federally qualified health center (FQHC). We note that many other preventive vaccine products are not specified for Medicare Part B coverage under section 1861(s)(10) of the Act, such as the shingles vaccine, and instead are covered and paid for under Medicare Part D. Section 1861(s)(10)(A) of the Act, as amended by section 3713 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) includes the COVID-19 vaccine and its administration in the same subparagraph as the influenza and pneumococcal vaccines and their administration. We implemented this change in the interim final rule with comment period titled, “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency,” published in the November 6, 2020 Federal Register (85 FR 71145 through 71150). In that rule, we 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. In section III.H.5. of this proposed rule, we propose to permanently codify regulatory changes published in the November 6, 2020 IFC. 2. Refinement to the Payment Amount for Preventive Vaccine Administrationa. Background for Medicare Part B Payment for Administration of Influenza, Pneumococcal, HBV VaccinesVaccine 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. Prior to CY 2022, we had 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. Payments for the administration of the preventive vaccines by these suppliers are geographically adjusted based on the location of where the service was performed. Under the Outpatient Prospective Payment System (OPPS), we assign a payment rate for administering these preventive vaccines and the payment rates are applicable for preventive vaccine administration services by hospitals and home health agencies. 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 provided a discussion in the CY 2022 PFS final rule on the history of the valuation of the three HCPCS codes, G0008, G0009, and G0010, which describes the services to administer an influenza, pneumococcal, and HBV vaccine, respectively (86 FR 65180 through 65182). We explained that we generally had established payment rates for the three codes 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). Additionally, we stated that using this methodology resulted in reductions in Start Printed Page 46219 the payment rates for the preventive vaccine administration services over several years and raised concerns from interested parties. Therefore, we attempted to address the reduction in payment rates for these vaccine administration HCPCS codes in the CY 2020 and CY 2021 PFS final rules (84 FR 62798 and 85 FR 84626 through 84628, respectively) by maintaining the CY 2019 payment rate for all three codes. In rulemaking for the CY 2022 PFS, we continued efforts to establish payment for vaccine administration services on a long-term basis. In the CY 2022 PFS proposed rule (86 FR 39220 through 39224), we included a comment solicitation requesting information that specifically identifies the resource costs and inputs that should be considered when determining the payment amount for vaccine administration services. In the CY 2022 PFS final rule (86 FR 65183 through 65187), we discussed the feedback received from a wide variety of interested parties in response to our comment solicitation. In that rule, we explained that we agreed with commenters on the need to establish stable payment rates that consider the costs associated with administering the preventive vaccines included in the Part B preventive vaccine benefit. In particular, we agreed 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 agreed with commenters who stated that we should decouple payment for these vaccine administration services from the crosswalk to the PFS and treat them independently. Additionally, in the CY 2022 PFS final rule (86 FR 65185), we explained that based on the history and status of payment for preventive vaccine administration and given the concerns gathered through the comment solicitation we believed that we needed 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 believed that the timing was appropriate for establishing a predictable payment rate for preventive vaccine administration since the PHE had ignited a hypervigilance for infectious diseases. Therefore, for CY 2022, we finalized 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. We explained that since the administration of the preventive vaccines described under section 1861(s)(10) of the Act are finalized independent of the PFS, that these payment rates will be updated as necessary independently of the valuation of any specific codes under the PFS. b. Background for Medicare Part B Payment for Administration of COVID-19 VaccinesIn the CY 2022 PFS final rule we stated that under the authority provided by section 3713 of the CARES Act, we have established 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.[293] We also provided a detailed history on how the initial payment rates for the administration of the COVID-19 vaccines were determined and how the payment policy evolved to a rate of $40 per dose (86 FR 65181 and 65182). As discussed above in this section, in the CY 2022 PFS proposed rule (86 FR 39220 through 39224) we included a comment solicitation requesting information that specifically identifies the resource costs and inputs that should be considered when determining a payment amount for preventive vaccine administration. As part of the comment solicitation, we requested feedback specifically related to the circumstances and costs associated with furnishing the COVID-19 vaccines to ensure we took these into consideration when determining our payment policy. In the CY 2022 PFS final rule (86 FR 65185), we discussed the feedback received in response to our comment solicitation with regard to the COVID-19 pandemic. In that rule, we recognized 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. However, after the PHE, 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. For example, while we may see annual vaccination for COVID-19 similar to influenza, these vaccinations may happen in a more predictable manner, which would provide healthcare settings more time and ability to plan ahead for future vaccination needs. In addition, we noted 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. For example, we believe recurrent staffing costs for COVID-19 vaccines may mirror the staffing needs for the administration of the yearly influenza vaccine. At the same time, we recognized 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 believed that it was 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 align with the payment rate for the administration of other Part B preventive vaccines (86 FR 65185). c. Proposed Adjustment to the Payment Amount for Administration of Preventive Vaccines for Geographic LocalityOur method of paying for the administration of preventive vaccines has varied over time. Prior to March 1, 2003, we paid for the administration of an influenza, pneumococcal, or HBV vaccine, at the same rate as CPT code 90782 for the year corresponding to the date of service on the claim.[294] For dates of service on or after March 1, 2003 through December 31, 2021, the vaccine administration payment rates for an influenza, pneumococcal, or HBV vaccine were established through notice-and-comment rulemaking using a crosswalk to the payment rate for similar services paid under the PFS, Start Printed Page 46220 such as, CPT code 96372 ( Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular) or CPT code 36000 ( Introduction of needle or intracatheter, vein). Using the direct crosswalk to a similar service under the PFS requires applying the PFS payment calculation. This formula that uses a HCPCS code's relative value units (RVUs) for work, practice expense (PE), and malpractice (MP) adjusted by the location where the service is furnished (that is, geographic practice cost indices (GPCIs)). The GPCIs reflect the relative costs of work, PE, and MP in an area compared to the average national costs for furnishing the service. Thus, in order to calculate the payment for the vaccine administration codes, the work, PE, and MP RVUs are adjusted by the GPCIs to reflect the variations in the costs of furnishing the services. For CY 2022, we decoupled payment for these vaccine administration services from the PFS crosswalk and finalized a payment rate of $30 for the administration of an influenza, pneumococcal, or HBV vaccine and a payment rate of $40 for the administration of COVID-19 vaccines. However, in the CY 2022 PFS final rule, we inadvertently neglected to address a geographic adjustment policy for these payment rates and instead, noted only that payments would be geographically adjusted. When we posted the CY 2022 payment rates for preventive vaccine administration to the seasonal influenza web page, we posted locality-specific payment rates based on application of the PFS GPCIs to the finalized payment rate.[295] Similarly, when we posted the CY 2022 payment rates for the COVID-19 vaccine administration to the COVID-19 vaccine web page, we posted locality-specific payment rates based on application of the PFS GPCIs to the finalized payment rate.[296] In this proposed rule, we are proposing a geographic adjustment policy that would apply to preventive vaccine administration services for CY 2023 and subsequent years. We continue to believe that it is appropriate to adjust the payment amount for the administration of preventive vaccines to reflect cost differences for each geographic locality. For example, suppliers' costs for rent or employee wages could vary significantly across different geographic areas. We also continue to believe that the geographic variation in costs of administering preventive vaccines provided by suppliers such as physicians, NPPs, and mass immunizers is similar to the geographic variation in the cost of physicians' services paid under the PFS. Since we have decoupled payment for these vaccine administration services from the PFS crosswalk and finalized a payment rate for them, we believe the next step in establishing appropriate payment for preventive vaccine administration services independent of the PFS would be to consider a more independent approach to geographic payment adjustment. The PFS GPCIs reflect cost differences for each geographic locality for each of the three distinct components of PFS services (work, PE, and MP). In contrast, the payment rate we have established for administration of the flu, pneumococcal, and HBV preventive vaccines is a flat rate payment of $30, and for the administration of COVID-19 vaccines is a flat rate payment of $40. As such, a single adjustment factor could be used to apply the geographic locality adjustment for these services. In addition to calculating the three component GPCIs (work, PE and MP) to adjust payment under the PFS, under section 1848(e)(2) of the Act, we also calculate a Geographic Adjustment Factor (GAF) for each fee schedule area and, as we explain below, we are proposing to use this GAF described in § 414.26 to geographically adjust payment for preventive vaccine administration services beginning for CY 2023. Specifically, we are proposing to use the GAF to adjust the payment to reflect the costs of administering preventive vaccines in each of the PFS fee schedule areas. The GAF is calculated using the three component GPCIs under the PFS (work, PE, and malpractice), and is calculated for each PFS fee schedule area as the weighted composite of all three GPCIs for each fee schedule area using the national GPCI cost share weights. The GAF, which is described under our regulation at § 414.26, is further discussed in section II.D. of this proposed rule, and the specific proposed GAF values for each fee schedule area are posted in Addendum D to this proposed rule. We also considered continuing to adjust the payment amount for administration of preventive vaccines by applying the PFS GPCIs to reflect cost differences for each geographic area. However, to effectuate this adjustment, this method would require a crosswalk to the RVUs established under the PFS for a CPT code that describes a similar service and is reflective of the mix of work, PE and MP for preventive vaccine administration services. Having recently disconnected payment for preventive vaccine administration services from the PFS through rulemaking as explained above, we did not believe it would be appropriate to continue connecting these payments to the PFS in this way for purposes of geographic adjustment. We have opted to propose use of the GAFs to adjust payment for the preventive vaccine administration services for geographic cost differences beginning for CY 2023. As we discuss above and in the CY 2022 PFS final rule (86 FR 65180-65194), we engaged the preventive vaccine community and established a stable payment amount for preventive vaccine administration that is based on resource costs. Since calculation of the GAFs incorporates the fundamental relative cost structure of the PFS GPCIs, but is a single factor that is weighted by the overall relative share of the three PFS component GPCIs, we believe application of the single GAF to geographically adjust the payment rate for preventive vaccine administration services based on costs in a given locality would be a more appropriate, streamlined approach to geographic adjustment that results in similar payment. Additionally, this method avoids the need to refer to the component RVUs for any particular reference service that is valued under the PFS, and thus gets us closer to updating the preventive vaccine administration rates independent of the PFS. We propose to amend our regulation at § 410.152 to codify the use of the GAFs for each PFS fee schedule area to adjust payment amounts for the preventive vaccine administration services (influenza, pneumococcal, HBV, and COVID-19) to reflect the cost differences in furnishing these services in different fee schedule areas. We note that under this proposal, beginning January 1, 2023 we would apply the GAF to the $40 payment amount for COVID-19 vaccine administration service so long as the EUA declaration is still in place, as discussed in section III.H.4.d.i. of this proposed rule. We also note that we discuss payment for the administration of COVID-19 monoclonal antibody products in section III.H.4. of this proposed rule. We invite public comment on our proposal to adjust the payment amount for the administration of preventive vaccines for geographic cost variations using the GAF. We also welcome comments on any other factors that could be used to make this payment adjustment to reflect geographic cost differences. Start Printed Page 46221 In this proposed rule, we are also proposing to amend our regulations to codify the payment amount established for administration of preventive vaccines in the CY 2022 PFS final rule and the proposed method for adjusting this rate for cost differences in each geographic locality. We note, as discussed in section III.H.2.d. of this proposed rule, we are proposing additional revisions to § 410.152 to reflect an annual adjustment to the payment amount for administration of preventive vaccines to reflect changes in cost using the Medicare Economic Index (MEI). We also note that § 410.152(h) currently contains outdated payment policies for pneumococcal vaccine administration. Therefore, in this proposed rule we propose to revise § 410.152 by replacing the current paragraph (h) to reflect the following:
We solicit comment on these proposals and the proposed amendments to the regulation text. d. Proposed Annual Adjustment to the Payment Amount for Administration of Preventive Vaccines To Reflect Changes in CostAs part of the comment solicitation in the CY 2022 PFS proposed rule, we requested feedback on whether CMS should 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. Some commenters provided feedback in response to this specific inquiry. 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 under the PFS to CPT code 96372. In response to those comments, we stated that we would 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 increase in the MEI, to the payment rate in order to reflect increases in costs faced by providers and suppliers that furnish the service; and that we plan to address updating the payment rate for Part B preventive vaccine administration in future rulemaking. We believe that finalizing a $30 payment amount that is adjusted for geographic locality for the service to administer preventive vaccines in CY 2022 was the first step in the development of a Part B payment methodology that provides predictable payment to the providers/suppliers furnishing these vaccines. For CY 2023, we discuss below how we propose to annually update the $30 payment amount to account for changes in costs associated with furnishing the service. To account for the change in costs of administering preventive vaccines, we are proposing to update the payment amount (that is, $30) established in the CY 2022 PFS final rule for the administration of preventive vaccines based upon the annual increase to the MEI. The MEI is defined in section 1842(i)(3) of the Act and is used to update payment amounts in other healthcare settings. For example, the MEI is used to update the non-drug component of the OTP payment bundle and is also used to update the fixed-dollar payment amount for the originating site facility fee for Medicare telehealth services. The MEI is a fixed-weight input price index that reflects the physicians' own time and the physicians' practice expenses, with an adjustment for the change in economy-wide, private nonfarm business total factor productivity. The MEI was last revised in the CY 2014 PFS final rule with comment period (78 FR 74264) and the proposal to rebase and revise the MEI for CY 2023 can be found in section II.M. of this proposed rule. The current forecast of the increase in the MEI for CY 2023 is 3.8 percent based on the proposed 2017-based MEI. We note that the CY 2023 MEI increase factor for the final rule will be based on historical data through the 2nd quarter of 2022. In developing the proposed method to update the payment amount for administering preventive vaccines, we considered other potential update factors, such as the Bureau of Labor Statistics Consumer Price Index for All Items for Urban Consumers (Bureau of Labor Statistics #CUUR0000SA0 ( https://www.bls.gov/cpi/data.htm). The Consumer Price Index for All Items (CPI-U) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. However, we concluded that a healthcare-specific update factor, such as the MEI, would be more appropriate for suppliers that administer preventive vaccines than the CPI-U, which measures general inflation, as the MEI would more accurately reflect the change in the prices of goods and services included in the vaccine administration service. We also considered using a labor-specific series for the inflation factor since a main source of the expenses related to the administration of vaccines are related to the staff who administer them. For example, we considered the Employment Cost Index (ECI)—Wages and salaries for All Civilian workers in Hospitals (current forecast through CY 2023 is 4.2 percent) or the ECI—Wages and salaries for All Civilian workers in Health care and social assistance (current forecast through CY 2023 is 3.8 percent). However, we concluded that an update factor that takes into account other costs, such as the MEI, would be more appropriate for suppliers that administer preventive vaccines than the ECI. We note that under this proposal, beginning January 1, 2023 we would Start Printed Page 46222 update the $40 payment amount for COVID-19 vaccine administration service based upon the proposed 2017-based MEI so long as the EUA declaration is still in place, as discussed in section III.H.4.d.i. of this proposed rule. We also note that we discuss payment for the administration of COVID-19 monoclonal antibody products in section III.H.4. of this proposed rule. Accordingly, we propose to annually update the payment amount for administration of preventive vaccines based upon the most recently available historical annual growth in the MEI available at the time of rulemaking. We propose to codify this proposal in tandem with the revisions discussed above in section III.H.2.c. of this proposed rule under § 410.152. We invite public comment on this proposal. We also welcome comments on potential approaches to updating payment rates for administration of preventive vaccines other than the MEI that could be used as an annual adjustment to account for the change in costs associated with administering preventive vaccines. e. Summary of Proposals and ImplementationIn summary, for CY 2023 we propose to annually update the payment amount for the administration of Part B preventive vaccines based upon the increase in the MEI. Additionally, we propose to adjust this payment amount to reflect cost differences for the geographic locality based upon the fee schedule area where the preventive vaccine is administered using the GAF. These adjustments would apply to HCPCS codes G0008, G0009, and G0010 effective January 1, 2023. With regard to COVID-19 vaccine administration, we stated in the CY 2022 PFS final rule that we will maintain the current payment rate of $40 per dose, which is geographically adjusted as described above, 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. For example, if the COVID-19 PHE ends in CY 2022, the payment amount for COVID-19 vaccine administration would change from $40 to $30 effective January 1, 2023, and we would apply the proposed geographic adjustments and the proposed annual update as proposed for the other preventive vaccine administration services as discussed above. We note, as discussed in section III.H.4.d.i. of this proposed rule, we are proposing to clarify that this policy would be dependent on the declaration under section 564 of the FD&C Act (EUA declaration) for drugs and biological products. Several CPT codes used for billing COVID-19 vaccine administration and a list of effective COVID-19 vaccine administration codes is available on the CMS web page.[297] 3. In-Home Additional Payment for Administration of COVID-19 Vaccinesa. BackgroundOn June 9, 2021, we announced a new add-on payment with a national rate of approximately $35.00 when a COVID-19 vaccine is administered in the home, and on August 24, 2021, we expanded the circumstances under which the in-home add-on payment is available.[298 299] 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 [300] 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). The total national average payment to providers and suppliers administering a COVID-19 vaccine in the home is $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 using PFS GPCIs as discussed in section III.H.2.c. of this proposed rule. In the CY 2022 PFS final rule (86 FR 65187 and 65188), we provide a detailed explanation on how the payment amount was established. 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 will continue to evaluate the needs of Medicare patients and these policies, and address them in the future, as needed. In the CY 2022 PFS proposed rule (86 FR 39224 through 39226), we included a comment solicitation to collect feedback on these policies and potential future changes. As part of the comment solicitation, we requested feedback related to our definition of “home”, program integrity concerns, changes that we should consider, costs associated with administering COVID-19 vaccines in the home, and whether outside of a PHE there is a need to vaccinate people in the home rather than going to a health care provider or supplier. In the CY 2022 PFS final rule (86 FR 65188 through 65190), we discussed the feedback received and that commenters overwhelmingly recommended that we continue making the additional payment beyond the end of the PHE, with many also supporting extending the payment to other preventive vaccines, either permanently or until the end of the PHE. Commenters emphasized the importance of increasing vaccination rates and making vaccines available to vulnerable homebound beneficiaries who face barriers including chronic illness, financial and social precarity, and lack of access to digital resources. In that rule, we agreed with commenters that the added costs and compelling needs required CMS to adopt the in-home add-on payment rate for COVID-19 vaccine administration. In addition, we stated that since we did not expect those needs or costs to diminish immediately with the end of the PHE, we believed 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 anticipated that additional COVID-19 vaccine booster doses will be needed. In addition, we believed 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 finalized continuation of the additional payment of $35.50 when a COVID-19 vaccine is administered in a beneficiary's home under certain circumstances until end of the calendar year in which the PHE ends. As we discussed in the CY 2022 PFS final rule, extending the availability of the in-home add-on payment past the end of the PHE maximizes access to COVID-19 vaccines for vulnerable homebound beneficiaries during the gradual return to normal conditions following the formal termination of the PHE. We also explained that this Start Printed Page 46223 extension of payment past the end of the PHE affords CMS the opportunity to monitor vaccine uptake data (86 FR 65189). b. Conditions for Billing HCPCS Code M0201In 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. In the CY 2022 PFS final rule, we provide a detailed discussion on how we established the certain conditions under which the code can be used, and the situations we contemplated to arrive at our final payment policy (86 FR 65187 and 65188). For purposes of this add-on payment for in-home COVID-19 vaccine administration, the following requirements apply when billing for HCPCS code M0201: [301 302]
++ 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; ++ They have a condition that makes them more susceptible to contracting a pandemic disease like COVID-19; or ++ They are generally unable to leave the home, and if they do leave home, it requires a considerable and taxing effort.
++ 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 (including assisted living facilities participating in the CDC's Pharmacy Partnership for Long-Term Care Program when their residents are vaccinated through this program); ++ A patient's home that is made provider-based to a hospital during the PHE for COVID-19; or ++ Communal spaces of a multi-unit or communal living arrangement.
++ An institution that 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.[303] The COVID-19 vaccine must be administered 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. HCPCS code M0201, as noted in the code descriptor, can be billed only once per individual home per date of service. 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. c. Proposal for CY 2023Subsequent to the CY 2022 PFS final rule, we have received suggestions from interested parties that this in-home add-on payment should be applied more broadly to all preventive vaccines, and concerns that discontinuation of the payment would negatively impact access to preventive vaccines for vulnerable homebound beneficiaries. While we agree with these concerns, we also believe that we need to learn more about the populations served through the current in-home add-on payment, and other potential populations that may not have been able to access a COVID-19 vaccine despite the availability of the in-home add-on payment, to understand the barriers they face in receiving vaccinations in their home versus in the community. We also need to consider potential program integrity concerns. We believe continuing the additional payment for at-home COVID-19 vaccinations for another year would provide us time to track utilization and trends associated with its use to inform the policy for CY 2024. At this time, we are not extending the policy to include the other preventive vaccines. One of the reasons we established this rate is to account for the post-administration time that the health care professional must spend in the home to monitor the patient after administration of the COVID-19 vaccine. Administration of the COVID-19 vaccine typically involves monitoring the patient for at least 15-30 minutes post-injection which is not the general administration protocol for other vaccines. The in-home add-on payment helps to account for the costs associated with special handling of the vaccine and the extra time spent with the patient when a vaccine is administered in the home. Therefore, for CY 2023 we propose to continue the additional payment of $35.50 when a COVID-19 vaccine is administered in a beneficiary's home under the certain circumstances described above in section III.H.3.b of this proposed rule. We are also proposing to adjust this payment amount for geographic cost differences as we do the payment for the preventive vaccine administration service. That is, for CY 2023, we would adjust this payment amount to reflect cost differences for the geographic area based upon the fee schedule area where the COVID-19 vaccine is administered using the GAF. In addition, for CY 2023, we would update the $35.50 by the CY 2023 MEI as we proposed to do for the other preventive vaccine administration services. Both proposals are discussed above in section III.H.2.c. and III.H.2.d. of this proposed rule, respectively. We believe that this policy will continue to provide access to beneficiaries who would otherwise have difficulty getting vaccinated, while we continue to monitor utilization and receive information to be considered in developing our policy for the future. We welcome comments and suggestions on steps we could take related to program integrity and beneficiary protections associated with payments for administering preventive vaccines in the home, including the COVID-19 vaccine and other preventive vaccines under Medicare Part B. 4. Clarification on Policies for COVID-19 Vaccine and Monoclonal Antibody Productsa. BackgroundUnder section 319 of the Public Health Service (PHS) Act (42 U.S.C. 247d), the Secretary can declare a public health emergency (PHE) if he determines that: (1) a disease or disorder Start Printed Page 46224 presents a PHE; or (2) a PHE, including significant outbreaks of infectious diseases or bioterrorist attacks, otherwise exists. A PHE declaration allows the Secretary to take certain actions in response to the PHE. In addition, a PHE declaration under section 319 of the PHS Act can be a necessary step in authorizing the Secretary to take a variety of discretionary actions to respond to the PHE under the statutes HHS administers.[304] If the criteria under section 564 of the FD&C Act are met, the Secretary may make a declaration that the circumstances exist justifying an emergency use authorization (EUA) of unapproved drugs, devices, or biological products, or of approved drugs, devices, or biological products for an unapproved use.[305] On January 31, 2020, under section 319 of the PHS Act, the Secretary determined that a PHE as a result of confirmed cases of 2019 Novel Coronavirus existed nationwide and had 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, most recently on April 12, 2022.[306] On March 27, 2020, the Secretary declared that circumstances exist justifying the authorization of emergency use of drugs and biological products during the COVID-19 pandemic, pursuant to section 564 of the FD&C Act, subject to the terms of any authorization issued under that section (85 FR 18250 through 18251). This latter declaration enabled the Commissioner of Food and Drugs to issue an EUA for a drug or biological product if the Commissioner reasonably concludes that, among other criteria, based on the totality of available scientific evidence, the product may be effective in diagnosing, treating or preventing such disease or condition, and the product's known and potential benefits when used to diagnose, prevent, or treat such disease or condition, outweigh its known and potential risks. b. Timing Distinction Between Section 319 of the PHS Act and Section 564 of the FD&C Act DeclarationsDeclarations under section 319 of the PHS Act generally last for 90 days, but may be extended [307] by the Secretary. After each extension, the declaration lasts for 90 days or until the Secretary declares the emergency no longer exists, whichever occurs first. In contrast, an emergency declaration pursuant to section 564 of the FD&C Act (an “EUA declaration”) continues until specifically terminated.[308] An EUA declaration may remain in effect beyond the duration of the section 319 PHE declaration. When an EUA declaration is to be terminated, notice of termination will be published in the Federal Register that provides a reasonable period of advance notice to the public that the EUA declaration is being terminated, to permit manufacturers, health care facilities, providers, patients, and other interested parties to transition away from EUA products and the policies that support them. c. Medicare Part B Coverage and Payment of COVID-19 Vaccine and Therapeutic Monoclonal Antibody ProductsAt the time of drafting this proposed rule, three COVID-19 vaccines are authorized or approved for use in the US to prevent COVID-19.[309] FDA has approved licensure of Pfizer-BioNTech and Moderna COVID-19 mRNA vaccines for use in certain individuals, but there are also individuals for whom these vaccines continue to be available under an EUA. FDA has limited the authorized use of the Janssen-manufactured COVID-19 viral vector vaccine to individuals 18 years of age and older for whom other FDA-authorized or licensed COVID-19 vaccines are not accessible or clinically appropriate, and to individuals 18 years of age and older who elect to receive the Janssen COVID-19 vaccine because they would otherwise not receive a COVID-19 vaccine. In addition, there are other COVID-19 vaccines that are not licensed or authorized under an EUA, but are in Phase 3 clinical trial.[310] Regarding availability of COVID-19 monoclonal antibody products, there are no monoclonal antibody products approved for the treatment or prevention of COVID-19. There are five authorized monoclonal antibody COVID-19 products; four are authorized for the treatment of COVID-19 and one is authorized as pre-exposure prophylaxis for prevention of COVID-19.[311] We note that each of the four monoclonal antibody products for treatment or post-exposure prevention of COVID-19 that have been granted an EUA is not authorized for use in geographic regions where infection was likely caused by a non-susceptible variant. Due to data indicating decreased activity for three of these treatments against Omicron variants currently in wide circulation, only one of these treatments is currently authorized in any U.S. region until further notice by FDA. In the interim final rule with comment (IFC) period titled, “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency,” which appeared in the November 6, 2020 Federal Register , we discussed how we believed it is appropriate for Medicare to consider any EUA under section 564 of the FD&C Act issued for a COVID-19 vaccine during the PHE to be tantamount to a license under section 351 of the PHS Act for the sole purpose of considering such a vaccine to be described in section 1861(s)(10)(A) of the Act (85 FR 71145 through 71148). That is, even though section 3713 of the CARES Act refers to a COVID-19 vaccine “licensed under section 351 of the PHS Act,” CMS could consider any vaccine for which FDA issued an EUA during the PHE, when furnished consistent with terms of the EUA, to be eligible for Medicare coverage and payment. Subsequent to the November 6, 2020 IFC and discussed in the CY 2022 PFS final rule (86 FR 65190 through 65194), when COVID-19 monoclonal antibody products were granted EUAs during the PHE for COVID-19, we made the determination to cover and pay for them under the Part B vaccine benefit in section 1861(s)(10) of the Act. This determination effectively extended the policy decision for COVID-19 vaccines to COVID-19 monoclonal antibody products, that is, that an EUA under section 564 of the FD&C Act issued for a COVID-19 monoclonal antibody Start Printed Page 46225 product during the PHE is tantamount to a license under section 351 of the PHS Act for the sole purpose of considering such a COVID-19 monoclonal antibody product to be described in section 1861(s)(10)(A) of the Act. The decision to cover and pay for monoclonal antibody products used to treat COVID-19 under the Part B 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 Part B vaccine benefit also means that beneficiaries are not responsible for any cost sharing for the product or the service to administer it. We note that under the Part B preventive vaccine benefit, Medicare pays for the vaccine product (when such product is not free to the provider/supplier, as is the case for COVID-19 vaccines as of the publication of this rule) and its administration. Typically, payment for the vaccine product is made at 95 percent of the AWP, but some healthcare settings, such as RHCs, are paid at 100 percent of their reasonable cost. Typically, payment for the administration of the preventive vaccine shots is approximately $30 per dose, but again, some healthcare settings are paid at 100 percent of their reasonable cost. In contrast, payment for administration of COVID-19 monoclonal antibody products under the Part B preventive vaccine benefit depends on the route of administration, and whether the product is furnished in a healthcare setting or in the beneficiary's home. As discussed in more detail in the CMS COVID-19 Monoclonal Toolkit, payment for administration of monoclonal antibodies can range from $150.50 to $750.00.[312] In the CY 2022 PFS final rule (86 FR 65179 through 65193) we discussed several steps CMS has taken to promote broad and timely access to COVID-19 vaccines and monoclonal antibody products used to treat COVID-19 paid for under the Part B preventive vaccine benefit, during the PHE for COVID-19. We specifically discussed the unique circumstances providers and suppliers face when administering COVID-19 vaccines and recognized the difficulty 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 Medicare payment history. We finalized the policy to 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 (86 FR 65186). In the CY 2022 PFS final rule, we contemplated how to cover and pay for COVID-19 monoclonal antibody products following the end of the PHE for COVID-19, including whether we should align their payment and coverage with other biologicals (86 FR 65190 through 65194). After review of the comments received, we agreed with commenters who recommended CMS transition to treating monoclonal antibody therapies used to treat COVID-19 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. We noted that Medicare considers other monoclonal antibody products—that is, monoclonal antibody products used in the treatment of other health conditions—to be “biologicals,” and Medicare pays for them based on the methodology in section 1847A of the Act when they are furnished in physician offices or ambulatory infusion clinics, and under a similar methodology under the hospital OPPS. 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. In the CY 2022 PFS final rule, we also explained that the public health needs that prompted coverage of monoclonal antibody products used to treat COVID-19 paid for under the Medicare Part B vaccine benefit will gradually stabilize 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. In addition, we stated that 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, when such treatments are used consistent with the scope and conditions of authorization in the relevant EUA (while in effect). In the CY 2022 PFS final rule, we recognized that once an EUA declaration is terminated,[313] EUAs issued under that declaration will no longer remain in effect,[314] 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 (86 FR 65192). d. Clarification of Medicare Part B PoliciesIn light of the timing distinctions between a PHE declared under section 319 of the PHS Act and an EUA declaration under section 564 of the FD&C Act, we have reconsidered the policies finalized in the CY 2022 PFS final rule and believe a clarification is necessary. Throughout our discussions and specifically in policy statements related to payment and coverage for COVID-19 vaccines and monoclonal antibody products, we have used phrases such as, “through the end of the calendar year in which the PHE ends” and “effective January 1 of the year following the year in which the PHE ends.” While we acknowledge that the intent at the time was to refer to the declaration under section 319 of the PHS Act, we have reconsidered this position in light of the fact that the March 27, 2020 EUA declaration under section 564 of the FD&C Act is distinct from, and not dependent on, the PHE declaration under section 319 of the PHS Act. Therefore, an EUA for a drug or biological product issued pursuant to the March 27, 2020 EUA declaration may remain in effect beyond the duration of the section 319 declaration if all statutory conditions are met.[315] On further consideration, we believe that Start Printed Page 46226 our goal to promote broad and timely access to COVID-19 vaccines and COVID-19 monoclonal antibody products, will be better served if our policies with respect to payment for these products, as addressed in the November 2020 IFC and CY 2022 PFS final rule, continue until the EUA declaration for drugs and biological products (see 85 FR 18250) is terminated. Therefore, we propose to clarify our policies as stated below. In section III.H.4.f of this proposed rule, Table 71 displays the CY 2023 Part B payment for preventive vaccine administration if the EUA declaration persists into CY 2023 and Table 72 displays the Part B payment for preventive vaccine administration beginning January 1, 2023, if the EUA declaration ends on or before December 31, 2022. i. COVID-19 Vaccines and Their AdministrationCMS 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 March 27, 2020 EUA declaration under section 564 of the FD&C Act (EUA declaration) for drugs and biological products ends. Effective January 1 of the year following the year in which the EUA declaration 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. We note a summary of proposals for Part B preventive vaccine administration for CY 2023 is discussed in section III.H.2.e. of this proposed rule. ii. In-Home Administration of COVID-19 VaccinesWe note that the policy for in-home administration of COVID-19 vaccines was also discussed in the CY 2022 PFS final rule and we finalized that 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. However, in section III.H.3 of this proposed rule, we discuss proposals for this policy for CY 2023. We are proposing to continue the in-home additional payment of $35.50 for administering COVID-19 vaccines for CY 2023, which is no longer tied to the end of the declaration under section 319 of the PHS Act. iii. Monoclonal Antibody Products Used for Treatment or for Post-Exposure Prophylaxis of COVID-19We propose to continue to pay for COVID-19 monoclonal antibody products under the Medicare Part B vaccine benefit through the end of the calendar year in which the EUA declaration under section 564 of the FD&C Act for drugs and biological products is terminated. Until the end of the calendar year in which the EUA declaration for drugs and biological products is terminated, we will maintain the payment rate for administering a COVID-19 monoclonal antibody product used for treatment or for post-exposure prophylaxis of COVID-19 in a healthcare setting, as well as the payment rates for administering a COVID-19 monoclonal antibody product in the home as described on the CMS COVID-19 Monoclonal Toolkit.[316] Effective January 1 of the year following the year in which the EUA declaration for drugs and biological products ends, CMS would pay physicians and other suppliers for covered COVID-19 monoclonal antibody products used for the treatment or for post-exposure prophylaxis of COVID-19 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 antibody therapies similar to the way they are paid for administering other complex biological products (86 FR 65192). As we explain above, since an EUA for a drug or biological product issued pursuant to the March 27, 2020 EUA declaration may remain in effect beyond the duration of the section 319 declaration, we contemplated our proposed policies summarized in section III.H.2.e of this proposed rule. Since we do not know when FDA would terminate the March 27, 2020 EUA declaration, we believe that we need to give notice on how these proposals would impact payments for administering COVID-19 monoclonal antibody products in the event the EUA declaration persists in CY 2023. Therefore, beginning January 1, 2023, we propose to apply the GAF to the payment amount for the administration of monoclonal antibody products used for treatment or for post-exposure prophylaxis of COVID-19 so long as the EUA declaration is still in place. We believe that it is appropriate to continue to adjust this payment amount to reflect cost differences for each geographic area. Regarding an update based upon the MEI beginning January 1, 2023, we would not extend the proposal to update the payment amount for the administration of these products. We believe that the payment amounts established for the administration of monoclonal antibody products used for treatment or for post-exposure prophylaxis of COVID-19 were approximations intended to reflect resource costs associated with furnishing these particular services during the pandemic response and generally corresponding to the time frame the EUA declaration is effective. We also note that some of the resource costs reflected in those rates, such as costs to establish the necessary operational infrastructure, may dissipate over time, even as the pandemic persists. Consequently, we do not believe it would be appropriate to establish annual updates to reflect increased costs that would likely be offset to some extent by reduced costs given the more established infrastructure and delivery approaches. We point out, too, that the current payment rates effective during the years in which the PHE continues correspond with OPPS New Tech payment amounts that are intended to serve as estimates of overall costs, in contrast to more finely tuned amounts that are typically subject to annual updates (increases or reductions) to reflect greater efficiency. Therefore, we are proposing to maintain the current rates for CY 2023 for administration of a COVID-19 monoclonal antibody product used for treatment or for post-exposure prophylaxis of COVID-19, and to not update these rates based on the increase in the MEI. e. Monoclonal Antibody Products Used as Pre-Exposure Prophylaxis for Prevention of COVID-19As we mention in section III.H.4.c of this proposed rule, there are no monoclonal antibody products approved by the FDA for the treatment or prevention of COVID-19 as of the publication of this proposed rule. However, there are currently three COVID-19 products authorized under an EUA; two are authorized for the treatment of COVID-19, and one is authorized as pre-exposure prophylaxis for prevention of COVID-19.[317] The Start Printed Page 46227 monoclonal antibody product for use as pre-exposure prophylaxis prevention of COVID-19 was granted an EUA subsequent to the CY 2022 PFS final rule. Therefore, our policies regarding coverage of COVID-19 monoclonal antibody products as finalized in the CY 2022 PFS final rule, and clarified in section III.H.4. of this proposed rule, do not address monoclonal antibody products used as pre-exposure prophylaxis for prevention of COVID-19. Nevertheless, we note that when this COVID-19 monoclonal antibody pre-exposure prophylactic product was granted an EUA, we promptly provided payment and coverage for it under the Part B vaccine benefit in section 1861(s)(10) of the Act as we discuss in section III.H.4.c and as we have done for the other COVID-19 monoclonal antibody products.[318] We recognize that there are certain individuals for whom these pre-exposure prophylactic products may be their only preventive option against COVID-19. These individuals would include, for example, those who are not currently infected with COVID-19, who have not had a known recent exposure to an individual infected with COVID-19, and for whom vaccination with any available COVID-19 vaccine is not recommended due to a history of severe adverse reaction (for example, severe allergic reaction) to a COVID-19 vaccine(s) and/or COVID19 vaccine component(s). Therefore, we are proposing to clarify that our policy of coverage and payment under the Part B vaccine benefit for monoclonal antibody products includes those used as pre-exposure prophylaxis for prevention of COVID-19. In addition, to ensure the aforementioned beneficiaries have access to COVID-19 pre-exposure prophylactic products, we propose to continue the existing policy to pay for these products and their administration under the Part B vaccine benefit even after the EUA declaration for drugs and biological products is terminated, so long as after the EUA declaration is terminated, such products have market authorization. Since we propose to pay for pre-exposure prophylaxis monoclonal antibody products for COVID-19 under the Part B vaccine benefit, we also propose to apply the GAF to the payment amount for the administration of those monoclonal antibody products, effective January 1, 2023. However, at this time we are not proposing to update the payment amount with the MEI beginning January 1, 2023. The payment amounts established for the administration of monoclonal antibody products used as pre-exposure prophylaxis for COVID-19 were intended to account for resource costs associated with pandemic response, and like the payment amounts for administration of other COVID-19 mAbs, reflects an approximation. Therefore, we are proposing to maintain the current amount without a specified update mechanism, but also seek comment on how best to consider refining rates for administration of this specific kind of product in the future. We solicit comment on these proposals. f. Summary of Payment Amounts for CY 2023 With or Without an EUA Declaration for Drugs and BiologicalsDue to the uncertainty surrounding the future of the EUA declaration for drugs and biological products, and our proposed policies that plan for both a continuation or termination of that EUA, we are including Tables 71 and 72 that summarize our proposals in both scenarios. Start Printed Page 46228 5. Regulatory Updates and Conforming ChangesIn the interim final rule with comment (IFC) period titled, “Additional Policy and Regulatory Revisions in Response to the COVID- 19 Public Health Emergency,” which appeared in the November 6, 2020 Federal Register , we published several changes to the regulations governing Part B preventive vaccines and their administration, in order to include the COVID-19 vaccine and its administration (85 FR 71147). Since Section 3713 of the CARES Act added the COVID-19 vaccine and its administration to section 1861(s)(10)(A) of the Act in the same subparagraph as the flu and pneumococcal vaccines and their administration, the COVID-19 vaccine was similarly added in several regulations regarding the influenza, pneumococcal, and hepatitis B virus (HBV) vaccinations. We intend to finalize the following regulatory changes, which were adopted in the November 6, 2020 IFC:
In the course of developing the proposed changes to § 410.152 described above at III.H.2.c., we came across several outdated and incomplete regulations regarding Part B preventive vaccines and vaccine administration. We propose updates and corrections to the following regulations:
I. Medical Necessity and Documentation Requirements for Nonemergency, Scheduled, Repetitive Ambulance Services1. Background-Nonemergency, Scheduled, Repetitive Ambulance Servicea. General DiscussionSection 1861(s)(7) of the Act states that, for the purposes of Medicare, the term “medical and other health services” includes ambulance services, but only “where the use of other methods of transportation is contraindicated by the individual's condition, but only to the extent provided in regulations.” Regulations at § 410.40 govern Medicare coverage of ambulance services. Under § 410.40(e), Medicare Part B covers ground (land and water) and air (fixed-wing and rotary-wing) ambulance transport services only if they are furnished to a Start Printed Page 46229 Medicare beneficiary whose medical condition is such that other means of transportation are contraindicated. The beneficiary's condition must require both the ambulance transportation itself and the level of service provided for the billed services to be considered medically necessary. Section 410.40(e) provides that nonemergency transportation by ambulance is appropriate if either the beneficiary is bed-confined, and it is documented that the beneficiary's condition is such that other methods of transportation are contraindicated; or, if his or her medical condition, regardless of bed confinement, is such that transportation by ambulance is medically required. For a beneficiary to be considered bed-confined, § 410.40(e) states that all of the following criteria must be met: (1) the beneficiary is unable to get up from bed without assistance; (2) the beneficiary is unable to ambulate; and (3) the beneficiary is unable to sit in a chair or wheelchair. Section 410.40(e) further provides that bed confinement is not the sole criterion in determining the medical necessity of ambulance transportation, but is one factor that is considered in medical necessity determinations. In all cases, a beneficiary's condition must be documented appropriately for coverage of services. In the “Medicare Program; Coverage of Ambulance Services and Vehicle and Staff Requirements” final rule with comment period [319] (64 FR 3637, January 25, 1999) (hereinafter referred to as the “January 25, 1999 final rule”), we finalized language at § 410.40(d)(3) to require ambulance providers or suppliers, in the case of nonemergency, unscheduled, ambulance services to obtain a physician certification statement (PCS). There, we explained that: (1) nonemergency ambulance service is a Medicare service furnished to a beneficiary for whom a physician is responsible, and, therefore, the physician is responsible for the medical necessity determination; and (2) the PCS would help to ensure that the claims submitted for ambulance services are reasonable and necessary, because other methods of transportation are contraindicated (64 FR 3648). We further stated that we believed the requirement would help to avoid Medicare payment for unnecessary ambulance services that are not medically necessary even though they may be desirable to beneficiaries. However, in the January 25, 1999 final rule we also addressed the ability of ambulance providers or suppliers to obtain a written order from the beneficiary's attending physician and agreed with interested parties that while it is reasonable to expect that an ambulance provider or supplier could obtain a pre-transport PCS for routine, scheduled trips, it is less reasonable to impose such a requirement on unscheduled transports, and that it was not necessary that the ambulance providers and suppliers have the PCS in hand prior to furnishing the service. To avoid unnecessary delays for unscheduled transports, we finalized a requirement that required documentation can be obtained within 48 hours after the ambulance transportation service has been furnished. In the “Medicare Program; Fee Schedule for Payment of Ambulance Services and Revisions to the Physician Certification Requirements for Coverage of Nonemergency Ambulance Services” final rule with comment period [320] (67 FR 9100) (hereinafter referred to as the “February 27, 2002 final rule”), in response to interested parties response, we modified our documentation regulations, noting that we had been made aware of instances in which ambulance providers and suppliers, despite having provided ambulance transports, were experiencing difficulty in obtaining the necessary PCS within the required 48-hour timeframe through no fault of their own. We stated that the 48-hour period remained the appropriate period of time, but, with respect to unscheduled, or scheduled but non-repetitive nonemergency ambulance transports, created alternatives for ambulance providers and suppliers unable to obtain a PCS. We finalized an alternative at § 410.40(e)(3)(iii) where ambulance providers and suppliers unable to obtain a PCS from the attending physician could obtain a signed certification ( not a physician certification statement) from certain other staff. At that time, we identified, at § 410.40 (a)(iii), several staff members, including a physician assistant (PA), nurse practitioner (NP), clinical nurse specialist (CNS), registered nurse (RN), and a discharge planner as staff members able to sign such a non-physician certification statement. The only additional constraints were: (1) that the staff be employed by the beneficiary's attending physician or by the hospital or facility where the beneficiary is being treated and from which the beneficiary is transported; and (2) that the staff have personal knowledge of the beneficiary's condition at the time the ambulance transport is ordered or the service is furnished. Since being finalized in the February 27, 2002 final rule, § 410.40(e)(2) has stated that Medicare covers medically necessary nonemergency, scheduled, repetitive ambulance services if the ambulance provider or supplier, before furnishing the service to the beneficiary, obtains a written order from the beneficiary's attending physician certifying that the medical necessity requirements of paragraph (e)(1) of this section are met (67 FR 9132). In the November 16, 2012 final rule with comment period [321] (77 FR 68892), we finalized provisions currently at § 410.40(e)(2), incorporating nearly the same provision found at § 410.40(e)(3)(v) to clarify that a PCS does not, in and of itself, demonstrate that a nonemergency, scheduled, repetitive ambulance service is medically necessary for Medicare coverage. As we note above, the 1861(s)(7) definition of “ambulance service” in the context of Medicare expresses the clinical medical necessity requirement that the use of other methods of transportation is contraindicated by the individual's condition, but only to the extent provided in regulations. In the November 15, 2019 final rule [322] (84 FR 62568), in response to interested parties' requests, we clarified the requirements for certification statements based on potential confusion surrounding the format, content, and use of both PCS and non-physician certification statements. Further, we added licensed practical nurses (LPNs), social workers and case managers as individuals listed at § 410.40 (a)(iii) who may sign the non-physician certification Start Printed Page 46230 statement if the ambulance provider or supplier is unable to obtain the attending physician's signature within 48 hours of the transport. Other factors have significantly altered the Medicare ambulance benefit, notably section 637 of the American Taxpayer Relief Act of 2012 (Pub. L. 112-240, enacted January 2, 2013) (ATRA), which required a 10-percent reduction in fee schedule payments for nonemergency (BLS transports of beneficiaries with ESRD) to and from both hospital-based and freestanding renal dialysis treatment facilities, for non-emergent dialysis services. Section 53108 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, enacted February 9, 2018) increased the payment reduction of fee schedule payments for BLS transports to and from renal dialysis treatments, from ATRA's 10 percent to 23 percent. The Department of Health and Human Services (HHS) Office of Inspector General (OIG) has published numerous reports about Medicare's ambulance benefit and has concluded that this benefit is highly vulnerable to abuse. In September 2015, in a report titled, “Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports,” [323] the OIG reported that approximately one in five ambulance suppliers had questionable billing, and that suppliers that had questionable billing provided nonemergency basic life support transports more often than other suppliers. In addition, in June 2013, MedPAC published a report that included an analysis of nonemergent ambulance transports to dialysis facilities. The report showed that transports to and from dialysis facilities continue to grow and represent a large share of non-emergent ambulance claims. In the 5-year period between 2007 and 2011, the volume of transports to and from a dialysis facility increased 20 percent, more than twice the rate of all other ambulance transports combined. In 2011, ambulance transports to and from dialysis facilities accounted for nearly $700 million in Medicare spending or approximately 13 percent of Medicare expenditures on ambulance services. The report further found that certain States had dramatically higher spending on ambulance transportation for dialysis treatment than other States. We believe that the provisions that we propose here are consistent with MedPAC's recommendations that the agency promulgate national guidelines to more precisely define medical necessity requirements. This will ensure consistent application of the benefit across beneficiary populations, regardless of geographic location. Under section 1115A of the Act, CMS initiated the testing of the Repetitive, Scheduled Non-Emergent Ambulance Transport (RSNAT) Prior Authorization Model, which tested whether prior authorization helped to reduce expenditures while maintaining or improving quality of care. Beneficiaries who qualify for these services are typically transported to receive either cancer treatment or dialysis, although there are other services for which this type of transportation is needed. Section 515 of the Medicare Access and CHIP Reauthorization Act (Pub. L. 114-10, enacted April 16, 2015) (MACRA), required this model to be expanded to include eight States and the District of Columbia, not later than January 1, 2016. Also in section 515 of MACRA, Congress amended section 1834(l) of the Act to require the model be expanded to all States, beginning January 1, 2017, to the extent that the expansion that Congress required above satisfied certain criteria specified at 1115A(c) of the Act. We released two Interim Evaluation Reports [324] and a Final Evaluation Report [325] on the model. The Final Evaluation Report, similar to the two Interim Evaluation Reports, found that the model was successful in reducing nonemergency, scheduled, repetitive ambulance transport spending and total Medicare spending while maintaining the overall quality of and access to care. In comparison to groups of similar States, the model reduced nonemergency, scheduled, repetitive ambulance transport use by 72 percent and expenditures by 76 percent, for Medicare beneficiaries with end-stage renal disease (ESRD) and/or severe pressure ulcers in the model States, resulting in a reduction of approximately $750 million in expenditures. This decrease in nonemergency, scheduled, repetitive ambulance transport expenditures contributed to a 2.4 percent ($1 billion over the first 5 years of the model) decrease in total Medicare fee-for-service (FFS) expenditures among beneficiaries with ESRD and/or pressure ulcers relative to the comparison groups. Overall, the findings suggested that the model had few to no adverse effects on quality of care or access to care. On March 28, 2018, CMS' Chief Actuary certified that expansion of the model would reduce program spending under the Medicare program, thereby satisfying the requirements of section 1115A(c)(2) of the Act for expansion of the model. Based on the CMS Chief Actuary certification and the first Interim Evaluation Report, the HHS Secretary determined that the model met the statutory criteria for expansion under sections 1115A(c)(1) and (c)(3) of the Act. Therefore, on September 22, 2020, CMS announced that it would expand the model nationwide under section 1834(l)(16) of the Act.[326] The 8 participating States and the District of Columbia were transitioned to the national model on December 2, 2020. After a delay due to the COVID-19 public health emergency, HHS began expanding the model nationwide through multiple phases starting on December 1, 2021. HHS continues the expansion throughout fiscal year 2022. Inconsistent application of payments for medically necessary, nonemergent, repetitive, scheduled ambulance services has the potential to disproportionately and substantially impact communities of color, underserved communities (including rural communities), and modest-income beneficiaries. Further, these communities may disproportionately suffer from conditions for which nonemergent, repetitive, scheduled ambulance services are necessary, creating access to care issues with corresponding clinical complications. We believe that improving clarity in our regulatory provisions will have positive impacts on the health and well-being of beneficiaries. Therefore, we are proposing and requesting public comment on policy clarifications to ensure beneficiaries receive the care they need. b. Legal AuthoritiesThe legal authority for our proposed provision is section 1861(s)(7) of the Act that provides general authority for the ambulance benefit and grants the Secretary authority to prescribe regulations for the administration of the benefit. 2. Proposed Revision to § 410.40We seek public comment on proposed language that clarifies documentation and medical necessity requirements for Start Printed Page 46231 nonemergency, scheduled, repetitive ambulance services, by modifying § 410.40(e)(2)(ii). Section 410.40 describes the Medicare Part B ambulance benefit, generally. Because medical necessity is a requirement of the statutory requirement at section 1861(s)(7) of the Act, the requirements for coverage are more fully explained in paragraph (e) of § 410.40, starting with general rules covering all Part B ambulance services, and the special rules that only apply to nonemergency, scheduled, repetitive ambulance services are situated in paragraph (e)(2). For the reasons discussed above, we propose to modify existing language in § 410.40(e)(2)(ii) and add additional language to provide needed clarity and ensure consistent application of the nonemergency, scheduled, repetitive ambulance service benefit. We solicit comments on our proposal. We propose at § 410.40(e)(2)(ii) to retain the existing language stating that in all cases, the provider or supplier must keep appropriate documentation on file and, upon request, present it to CMS (OMB control number 0938-0969). We are maintaining the language that states that the ambulance service must meet all program coverage criteria including vehicle and staffing requirements. We are also maintaining the language that states that a signed PCS does not alone demonstrate that transportation by ground ambulance was medically necessary. We are clarifying that the PCS, and additional documentation from the beneficiary's medical record, may be used to support a claim that transportation by ground ambulance is medically necessary. Further, we are clarifying that the PCS and additional documentation must provide detailed explanations, that are consistent with the beneficiary's current medical condition, that explains the beneficiary's need for transport by an ambulance, as described at 410.41(a). Finally, we are clarifying that coverage includes observation or other services rendered by qualified ambulance personnel, as described in 410.41(b). J. Medicare Provider and Supplier Enrollment and Conditions of DMEPOS Payment1. Enrollment Processa. General DiscussionSection 1866(j)(1)(A) of the Act requires the Secretary to establish a process for the enrollment of providers and suppliers into 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 entering and inappropriately billing Medicare. Since 2006, we have undertaken rulemaking efforts to outline our enrollment procedures. These regulations are generally codified 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 this 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 section III.J. of this proposed rule, we propose several changes to our existing Medicare provider enrollment regulations. (We note that section III.K of this proposed rule addresses a proposed change to one of our Medicaid provider enrollment provisions.) b. Legal AuthoritiesThere are two principal categories of legal authorities for our proposed Medicare provider enrollment provisions:
With respect to our Medicaid proposal in section III.K. of this proposed rule: • Section 1902(kk)(3) of the Act,[327] as amended by section 6401(b) of the Affordable Care Act, which mandates that States require providers and suppliers to comply with the same disclosure requirements established by the Secretary under section 1866(j)(5) of the Act.[328]
2. Proposed Medicare Enrollment Provisionsa. Expansion of Authority To Deny or Revoke Based on OIG Exclusion and Associated Definitionsi. OIG ExclusionsUnder §§ 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 or administrative or management services personnel furnishing services payable by a Federal health care program, of the provider or Start Printed Page 46232 supplier is excluded by the OIG. We propose several changes related to these authorities. First, we would expand the categories of parties listed within these denial and revocation provisions to include: (1) managing organizations; and (2) officers and directors of the provider or supplier if the provider or supplier is a corporation. Consistent with sections 1124 and 1124A of the Act (and depending upon the specific enrollment transaction and provider type involved), these parties must be reported on the provider's or supplier's Form CMS-855 or, for Medicare diabetes prevention program (MDPP) suppliers, the Form CMS-20134. Although they are not explicitly listed in §§ 424.530(a)(2) and 424.535(a)(2), we have generally considered these individuals and entities to be parties that exercise managing control over the provider or supplier in a vein similar to managing employees. Section 1124(a)(3) of the Act specifically includes officers and directors within its definition of persons with an ownership or control interest. (Emphasis added.). To clarify our longstanding position via rulemaking and to help prevent excluded managing organizations, officers, and directors from posing a program integrity threat to Medicare, we propose to incorporate these persons and organizations within the two aforementioned regulatory paragraphs. ii. DefinitionsIn light of our addition of “managing organization,” “officer”, and “director” to §§ 424.530(a)(2) and 424.535(a)(2), as well as some uncertainty in the provider community regarding the scope of these terms, we propose to define them in § 424.502. “Managing organization” would mean an entity that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the provider or supplier, either under contract or through some other arrangement. This definition mirrors the definition of “managing employees” in § 424.502, with the exception of the latter's references to individuals. To maintain consistency with the “managing employee” definition and to ensure that all parties exercising any degree of operational control over the provider or supplier are reported on the Form CMS-855 and Form CMS-20134 applications, we believe our proposed definition is appropriate. We would define “officer” as an officer of a corporation, regardless of whether the provider or supplier is a non-profit entity. Section 1124(a) of the Act requires the disclosure of officers if the entity is a corporation; we propose to include the same reference to corporations to align with this statutory provision. In addition, providers have sometimes inquired as to whether officers of a non-profit corporation must be reported. While section 1124(a) of the Act does not mention the for-profit or non-profit status of the corporation, we have always required non-profit corporation officers to be disclosed. In our view, the particular proprietary status of the corporation is less important from a program integrity standpoint than ensuring that persons who exercise control over the provider or supplier do not present payment safeguard risks. We believe this warrants the inclusion of non-profit corporations within our proposed definition. In a similar context, we propose to define “director” as a director of a corporation, regardless of whether the provider or supplier is a non-profit entity. To further clarify the definition, however, we propose that “director” includes any member of the corporation's governing body irrespective of the precise title of either the board or the member; said body could be a board of directors, board of trustees, or similar body. We have received questions over the years from non-profit corporations regarding the need to disclose information on the application about volunteer or ceremonial board members. We have long required such persons to be reported for two reasons. First, we believe section 1124(a) of the Act is clear that all directors must be listed. Again, it does not distinguish between for-profit and non-profit entities, nor, for that matter, between paid and voluntary board members. Therefore, we have concluded that our interpretation of section 1124(a) of the Act is fully consistent with the language therein. Second, the corporate governing body of a provider or supplier usually exercises clear control over the latter. Even if certain members, such as volunteers, have less day-to-day control of the provider or supplier than other members, they can still (depending on the board's specific powers) influence the entity's operations and oversight, perhaps more so than certain individuals currently included within §§ 424.530(a)(2) and 424.535(a)(2), such as administrative personnel. Consequently, we believe that our proposed definition of “director” aligns with both the Act and our existing policy. iii. Contracted PersonnelWe also propose to add a new paragraph to §§ 424.530(a)(2) and 424.535(a)(2) to clarify that the persons and entities listed in those two regulatory provisions include, but are not limited to, W-2 employees and contracted parties of the provider or supplier. We have traditionally applied §§ 424.530(a)(2) and 424.535(a)(2) to affected parties (such as supervising physicians) regardless of their W-2 status; this is consistent with the definition of “managing employee” in § 424.502, which does not exclude contracted personnel from its purview. We believe, and it has been our experience, that parties with whom the provider or supplier contracts are often as involved with the provider's or supplier's operations as W-2 employees; for instance, a provider may contract with medical personnel to furnish the majority of the health care services it furnishes. Given our stance that the specific employment status of the party is less crucial from a payment safeguard perspective than the fact that the person or entity is acting on the provider's or supplier's behalf, we believe that this regulatory clarification is needed. Under this change, we would redesignate the introductory paragraph of existing § 424.530(a)(2) as § 424.530(a)(2)(i). Current §§ 424.530(a)(2)(i) and (ii) would be redesignated as § 424.530(a)(2)(i)(A) and (B), respectively. Our new paragraph concerning contracted personnel would be new § 424.530(a)(2)(ii). Similar structural revisions would be made to § 424.535(a)(2). b. Expansion of Authority To Deny or Revoke Based on a Felony ConvictionUnder §§ 424.530(a)(3) and 424.535(a)(3), respectively, CMS may deny or revoke enrollment if the provider or supplier, or any owner or managing employee of the provider or supplier was, within the preceding 10 years, convicted of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries. We propose to expand these two regulatory provisions to include therein managing organizations, officers, and directors (as we proposed to define those terms in § 424.502.) As previously explained, we are obligated to protect the Medicare program, the Trust Funds, and beneficiaries. Similar to exclusions, we are concerned that persons and entities that have engaged in felonious behavior could, through their association with the provider or Start Printed Page 46233 supplier, present program integrity risks. We again acknowledge that, for instance, certain directors (in their individual capacity) might not have as much daily oversight of the provider's or supplier's operations as other persons within the organization. Yet we maintain that membership on a governing body involves the exercise of at least a minimum degree of control. Accordingly, we believe that our proposed expansion of §§ 424.530(a)(3) and 424.535(a)(3) is warranted. For reasons similar to those behind proposed §§ 424.530(a)(2)(ii) and 424.535(a)(2)(ii), we would add new paragraphs at §§ 424.530(a)(3)(iii) and 424.535(a)(3)(iv) clarifying that these two provisions also apply to contracted parties. c. Reversal of Revocation or DenialSections 424.535(e) and 424.530(c) state that if a revocation or denial, respectively, was due to a prior adverse action (such as a sanction, exclusion, or felony) against a provider's or supplier's owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care or administrative or management services personnel furnishing services payable by a Federal health care program, the revocation or denial may be reversed if the provider or supplier terminates and submits proof that it has terminated its business relationship with that party within 30 days of the revocation or denial notification. To maintain consistency with our aforementioned changes to §§ 424.530(a) and 424.535(a), we propose to add managing organizations, officers, and directors to §§ 424.535(e) and 424.530(c). d. Medicare Revocation Based on Other Program TerminationSections 424.535(a)(12)(i) states, in part, that CMS can revoke enrollment if the provider or supplier is terminated, revoked, or otherwise barred from participation in a State Medicaid program or any Federal health care program. However, under § 424.535(a)(12)(ii) revocation cannot occur unless and until the provider or supplier has exhausted all applicable appeal rights. The meaning of the latter language has caused uncertainty regarding situations where the provider or supplier does not appeal the program termination at all. Our position has always been that, in such cases, revocation under § 424.535(a)(12)(i) can ensue once the initial period to file an appeal has ended; that is, CMS need not wait until the expiration of every subsequent appellate period that would have applied had the provider or supplier appealed. To clarify this via rulemaking, we propose to add the language “or the timeframe for filing an appeal has expired without the provider or supplier filing an appeal” to the end of § 424.535(a)(12)(ii). e. Categorical Risk Designation—Ownership Changes and Adverse Actionsi. BackgroundUnder the authority granted to us by section 6401(a) of the Affordable Care Act (which amended section 1866(j) to the Act), § 424.518 outlines levels of screening by which CMS and its MACs review initial applications, revalidation applications, and applications to add a practice location. These screening categories and requirements are based on a CMS assessment of the level of risk of fraud, waste, and abuse posed by a particular type of provider or supplier. In general, the higher the level of risk that a certain provider or supplier type poses, the greater the level of scrutiny with which CMS will screen and review providers or suppliers within that category. There are three levels of screening in § 424.518: high, moderate, and limited. Irrespective of which level a provider or supplier type falls within, the MAC performs the following screening functions upon receipt of an initial enrollment application, a revalidation application, or an application to add a new location:
Providers and suppliers at the moderate and high categorical risk levels must also undergo a site visit. Furthermore, for those at the high screening level, the MAC performs two additional functions under § 424.518(c)(2). First, the MAC requires the submission of a set of fingerprints for a national background check from all individuals who maintain a 5 percent or greater direct or indirect ownership interest in the provider or supplier. Second, it conducts a fingerprint-based criminal history record check of the Federal Bureau of Investigation's Integrated Automated Fingerprint Identification System on all individuals who maintain a 5 percent or greater direct or indirect ownership interest in the provider or supplier. These additional verification activities are meant to correspond to the heightened risk involved. There currently are only four provider or supplier types that fall within the high categorical risk level under § 424.518(c)(1): newly/initially enrolling home health agencies (HHAs); newly/initially enrolling DMEPOS suppliers; newly/initially enrolling Medicare Diabetes Prevention Program (MDPP) suppliers; and newly/initially enrolling opioid treatment programs (OTPs). ii. Current Grounds for Risk Level Increase (or “Bump Up”)Under § 424.518(c)(3)(i) and (ii), CMS adjusts a particular provider's or supplier's screening level from “limited” or “moderate” to “high” if the provider or supplier:
The screening level will also be raised to “high” under § 424.518(c)(3)(iii) if: (1) CMS lifts a temporary moratorium (per § 424.570) for a particular provider or supplier type; and (2) a provider or supplier that was prevented from enrolling (based on the moratorium) applies for Medicare enrollment within 6 months after the moratorium was lifted. The general purpose of § 424.518(c)(3) is to ensure that providers and suppliers that have certain adverse actions imposed against them are reviewed with a concomitant level of scrutiny. iii. AnalysisSection 424.518 was implemented in 2011, and we have been screening providers and suppliers in accordance therewith since then. However, we have been concerned that § 424.518 lacks clarity on two critical matters. First, and as alluded to previously, § 424.518 outlines screening requirements for initial enrollment applications, revalidation applications, and practice location additions. Yet it does not specifically address: • Change of ownership (CHOW) applications under § 489.18; or Start Printed Page 46234
Section 424.518's current dearth of clear applicability to these two situations effectively means that a high-risk level provider or supplier can have a new owner without the latter having to undergo the important scrutiny that fingerprint-based criminal background checks furnish. That is, in promulgating § 424.518 in 2011, we recognized the uniquely critical role that owners often play in the provider's or supplier's operations by restricting our fingerprinting requirement to such persons. To mandate the fingerprinting of owners with initial applications, revalidations, and new practice locations but not with the aforementioned two transactions that specifically focus on the disclosure of new owners would be both an inconsistency and a program integrity risk. The second issue involves the risk-level elevation criteria in § 424.518(c)(3). There are numerous health care entities that have multiple enrollments under their organizational umbrella. (To illustrate, Health Care System X, Inc. may have within its corporate structure a small hospital, four physician groups, two skilled nursing facilities, a DMEPOS supplier, and an OTP provider, all of which are separately enrolled in Medicare but with Health Care System X, Inc. identified as their legal business name.) Situations can arise where an organization with multiple enrollments has had an action described in § 424.518(c)(3) imposed against it or against one of its enrollments. Consider the following examples:
The adverse actions described in these two examples fall within the scope of events that would trigger an increase in risk level under § 424.518 to “high.” There has been uncertainty among interested parties, particularly provider organizations with multiple enrollments, as to the extent of the risk-level elevation in these cases. That is, the issue is whether an adverse action imposed with respect to a particular enrollment applies strictly to said enrollment or also applies to all of the provider's or supplier's other enrollments, meaning that the screening level for these additional enrollments would, too, be raised to “high.” Under this latter approach, which has generally been our policy, the following would occur under aforementioned Examples 1 and 2:
We believe the foregoing approach is warranted because we have historically viewed § 424.518(c)(3) in the broad context of applying to the controlling provider or supplier at large and not necessarily being confined to one of its enrollments. The central consideration, in our view, is the risk that the behavior at issue poses to the Trust Funds and to the safety of our beneficiaries. Even if, for instance, a Medicaid termination occurred with only one of the entity's enrollments, this raises serious questions about the organization's oversight of the enrolled providers and suppliers under its control. We believe that the overriding need to protect the Medicare program justifies heightened examination of the other enrollments within the organization's domain. iv. Specific Regulatory RevisionsGiven the prior discussion and for reasons already outlined, we propose the following changes to § 424.518. First, the opening paragraph of § 424.518 references initial applications, revalidation applications, and practice location additions as falling within § 424.518's purview. We propose to add to this paragraph the following transactions:
The reporting of any new owner (regardless of ownership percentage) via a change of information or other enrollment transaction (such as a full or partial certified supplier ownership change) under Title 42. Second, we propose to clarify in § 424.518(c)(1) that the provider and supplier types included therein—once enrolled—are subject to high-risk screening if they are submitting a § 489.18 change of ownership application or an application to report a new owner (as described in the previous paragraph). As a technical elucidation, we would also change the language in paragraph (c)(1) that reads, CMS has designated the following home health agencies and suppliers of DMEPOS as “high” categorical risk to CMS has designated the following provider and supplier types as “high” categorical risk. This would merely clarify that certain providers and suppliers other than HHAs and DMEPOS suppliers (such as OTPs) fall within the purview of paragraph (c)(1). Third, the introductory language in § 424.518(c)(3) states that CMS adjusts the screening level from limited or moderate to high if any of the previously cited adverse actions against the provider or supplier occur. To clarify the extent of such adjustments, we propose to add a new paragraph (c)(4). We would state therein that any adjustment under paragraph (c)(3) would also apply to all other enrolled and prospective providers and suppliers that have the same legal business name (LBN) and tax identification (TIN) number as the provider or supplier for which the risk level under (c)(3) was originally raised. We believe using an LBN-TIN combination as the barometer for application of (c)(3) to other providers and suppliers is proper for two reasons. First, providers and suppliers with the same LBN and TIN are generally closely related in certain legal and operational aspects (for instance, similar ownership or management). Such alignment between these parties, in our view, warrants a concomitant level of review in the event paragraph (c)(3) is invoked. Second, utilizing an LBN-TIN standard in paragraph (c)(4) would likely offer more clarity and definiteness for interested parties regarding paragraph (c)(3)'s applicability than a potentially more nebulous standard, such as “within a common business structure.” Start Printed Page 46235 f. Categorical Risk Designation—Skilled Nursing Facilities (SNFs)SNFs are currently in the limited-risk screening category under § 424.518. However, CMS in recent years has become increasingly concerned about certain problems within the SNF community, particularly potential and actual criminal behavior. Indeed, a specific concern raised in several government reports involves patient abuse. For instance, the United States Government Accountability Office (GAO) published an analysis on January 14, 2022 titled “Health Care Capsule: Improving Nursing Home Quality and Information” (GAO-22-105422). In this report, the GAO identified gaps in CMS' prior oversight of nursing homes that make it more difficult to prevent patient abuse. Another GAO report, titled “Nursing Homes: Better Oversight Needed to Protect Residents from Abuse” (GAO-19-433), was published in June 2019.[329] The study aimed to: (1) determine the trends and types of nursing home patient abuse in recent years; and (2) evaluate CMS' oversight that is intended to ensure residents are free from abuse. The report concluded, among other things, that patient abuse deficiencies found on State surveys more than doubled between 2013 and 2017.[330] It also noted inconsistencies as to when State survey abuse findings or allegations of abuse are referred to law enforcement.[331] The subject of background checks was also addressed. The GAO interviewed various interested parties and determined that nursing homes without adequate staff screening mechanisms (such as background checks) could result in hiring staff with histories of abuse.[332] It added that because “staff screening through background checks and the nurse aide registry is not coordinated across the country, there are gaps that could enable individuals who committed crimes in one state to obtain employment at a nursing home in another state. . .Staff from a nursing home we visited said the prevention of abuse `starts with hiring the right staff' and noted the importance of conducting background checks and checking references for prospective employees.”[333] The OIG, too, has opined on this matter. In a September 2020 report titled, “National Background Check Program for Long-Term Care Providers: Assessment of State Programs Concluded in 2019” (OEI-07-20-00180), the OIG noted that patient abuse, patient neglect, and misappropriation of property have been detected as problems harmful to beneficiaries receiving long-term care. Somewhat akin to the previously mentioned June 2019 GAO report, the OIG stated that, per various studies, some nurse aides who were convicted of abuse, neglect, or theft had previous criminal convictions that could have been found through background checks of prospective employees.[334] The OIG added that such employee background checks can help protect long-term care beneficiaries.[335] Our aforementioned concerns regarding problematic activity in the nursing home arena are not limited to patient abuse. Numerous recent cases have highlighted issues regarding fraud or improper billing among nursing home owners or operators. For instance: • In April 2019, a jury found an owner of nursing homes and assisted living facilities in Florida guilty of 20 charges related to health care fraud. The United States Department of Justice (DOJ) noted that the owner's actions were part of the largest health care fraud scheme ever charged by the DOJ. It involved over $1.3 billion in fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary, or were procured through the payment of kickbacks.[336] • In July 2021, a Virginia nursing home operator was sentenced to 2 years in prison for defrauding Medicaid after submitting more than $188,000 in false claims.[337] • In March 2022, the DOJ settled a False Claims Act case with a Georgia nursing home for $400,000. The matter involved allegations that the nursing home deliberately billed Medicare for services that were not reasonable, necessary, and skilled.[338] • A nursing home entity based in Georgia (which operates nursing homes across the country) agreed in May 2021 to pay $11.2 million to resolve allegations that it: (1) violated the False Claims Act by causing its nursing homes to bill the Medicare program for rehabilitation therapy services that were not reasonable, necessary or skilled; and (2) billed Medicare and Medicaid for substandard skilled nursing services.[339] • In January 2020, a New York man pled guilty in federal court to embezzlement and tax offenses related to his operation of nursing homes in Connecticut.[340] • Also in 2020, a Pennsylvania nursing home chain and its related companies agreed to pay more than $15 million to settle claims that the chain provided medically unnecessary rehabilitation therapy to residents in order to meet revenue goals, instead of clinical needs.[341] • A California corporation and 27 affiliated nursing homes in the State agreed in July 2020 to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary.[342] • In June 2019, four Illinois nursing facilities and a physical therapy center agreed to pay $9.7 million to resolve civil allegations that they violated the False Claims Act by providing unnecessary services to increase Medicare payments.[343] • A Tennessee-based nursing home chain agreed in February 2018 to pay more than $18 million in allowed claims to resolve a lawsuit brought by the DOJ and the State of Tennessee against them for billing the Medicare and Medicaid programs for substandard nursing home services.[344] The disconcerting number of recent cases involving fraud and improper billing by nursing home owners and operators, as well as the OIG and GAO reports concerning patient abuse at the nursing homes these individuals oversee, requires, in our view, strengthened protections of the Medicare program and its nursing home beneficiaries. Indeed, CMS has an obligation to safeguard the integrity of Start Printed Page 46236 both the Trust Funds and the services that nursing home patients receive. Financial malfeasance and beneficiary abuse are unacceptable, and we believe that more closely scrutinizing the owners of nursing homes through our existing criminal background checks under § 424.518 can help detect potential criminal or abusive behavior at the nursing home before it begins. To illustrate, if a SNF owner is found through a fingerprint-based background review to have been convicted of battery, sexual assault, or other serious crime, this could raise significant concerns as to whether this conduct will be repeated during the owner's oversight or management of the facility. A SNF owner with an embezzlement conviction might be more inclined to divert the SNF's funds to his personal use (and away from monies otherwise intended for beneficiary care) than a different owner; he or she might also be more willing to tolerate malfeasance in the nursing home or to hire persons with criminal records. As two of the aforementioned OIG and GAO reports indicated with respect to nursing home employees, background reviews can prove helpful in screening individuals for possible problematic behavior. We, too, have found our fingerprint-based criminal background checks of great assistance in detecting felonious behavior by the owners of high-risk providers and suppliers. Given the prevalence of recent unacceptable behavior by nursing home overseers and the OIG and GAO-documented instances of nursing home beneficiary abuse, we propose to revise § 424.518 to move initially enrolling SNFs into the high-level of categorical screening; revalidating SNFs would be subject to moderate risk-level screening. Requiring all SNF owners with 5 percent or greater ownership to submit fingerprints for a criminal background check would help us detect parties potentially posing a risk of fraud, waste, or abuse and, with this, the threat of patient abuse. In addition, our proposal, which we believe would assist in protecting Medicare Trust Fund dollars and beneficiaries, aligns with the Biden-Harris Administration's initiative to improve nursing home accountability.[345] Previously, we referenced our authority under §§ 424.530(a)(3) and 424.535(a)(3) to deny or revoke enrollment based on a felony conviction within the previous 10 years; this includes a felony conviction against an owner of the provider or supplier. Notwithstanding our foregoing concerns about felonious activity by nursing home owners, we emphasize that our authority under §§ 424.530(a)(3) and 424.535(a)(3) is discretionary, meaning that we are not required to exercise it in every case. g. DMEPOS Payment Denial Based on Violation of Supplier StandardIn comparison to most other provider and supplier types, DMEPOS suppliers have long presented to the Medicare program an elevated risk of fraud, waste, and abuse. In recognizing this threat, CMS over the years has established particularly stringent requirements that DMEPOS suppliers must meet in order to enroll and maintain enrollment in Medicare. These include, but are not limited to, requiring:
The foregoing policies are meant to help ensure that Medicare enrolls and pays only those DMEPOS suppliers that are legitimate businesses capable of serving as reliable partners of the Medicare program. In furtherance of this aim, § 424.57(b) contains five separate conditions of payment that DMEPOS suppliers must meet to receive payment. These include, for example: (1) submission of a completed application to enroll in Medicare; and (2) furnishing a DMEPOS item only on or after the date CMS issued the supplier a billing number. Noncompliance with any DMEPOS condition of payment in § 424.57(b) can result in a revocation under § 424.57(e)(1). In addition, § 424.57(c) lists a number of enrollment standards with which DMEPOS suppliers must comply at all times. Should the supplier fail to meet any of the 30 standards, revocation under § 424.57(e)(1) is warranted. One such enrollment standard, codified in § 424.57(c)(1)(ii)(A), provides that if the State requires licensure to furnish certain items or services, the DMEPOS supplier must be licensed to provide the item or service. We have encountered situations where an unlicensed DMEPOS supplier furnishes items for an extended period. The supplier then terminates its enrollment or CMS revokes the supplier's enrollment under § 424.57(e)(1) effective 30 days after the DMEPOS supplier is sent notice of the revocation per § 405.874. Tens of thousands of Medicare dollars were placed at great risk because the supplier was furnishing items and services while unlicensed up to the point of its termination of enrollment. We see this as a potential vulnerability. Notwithstanding the aforementioned guardrails to stop DMEPOS fraud, initially enrolling DMEPOS suppliers remain at a high-risk screening designation, which we believe warrants heightened scrutiny to help ensure that all DMEPOS requirements are met. It would be inconsistent with our obligation to protect the Medicare Trust Funds to permit payment for items and services furnished while the supplier was non-compliant with the licensure requirements of § 424.57(c)(1)(ii)(A). Indeed, State licensure is a uniquely important program integrity protection because it helps ensure that the supplier meets certain minimum requirements of competency under State law to perform the services or furnish the items in question. Further, DMEPOS licensure, more than perhaps any other supplier standard in § 425.57(c), constitutes an additional level of vetting (that is, at the State level) that, in conjunction with our provider enrollment screening under 42 CFR part 424, subpart P and the provisions of § 424.57, is not necessarily duplicated with respect to requirements existing only at the Federal level. To illustrate, if a particular requirement in § 424.57(c) is also a prerequisite for State licensure, two reviews of the supplier's compliance will be performed: once at the State level and once at the Medicare enrollment level. Such multiple levels of verification that State licensure combined with Federal requirements can help ensure that the supplier is a bonafide and legitimate business. Given the foregoing, we propose to add a new condition of payment in paragraph (b)(6) in § 424.57. Said condition would state that in order to receive payment for a furnished DMEPOS item, the supplier must have been in compliance with all conditions of payment in 424.57(b) as well as with § 424.57(c)(1)(ii)(A) at the time the item or service was provided. We note that section 1834(j)(1)(B)(ii)(I) of the Act requires, as a condition for obtaining a supplier number, that the DMEPOS supplier comply with all applicable State and Federal licensure and regulatory requirements. A DMEPOS supplier cannot receive payment unless it is enrolled and, as part of that, has a supplier number. Since compliance Start Printed Page 46237 with licensure requirements is a specific statutory prerequisite for a DMEPOS supplier to be enrolled and because payment cannot occur without enrollment, we believe it logically follows that section 1834(j)(1)(B)(ii)(I) of the Act constitutes sufficient legal authority for our proposal. K. State Options for Implementing Medicaid Provider Enrollment Affiliation ProvisionOn September 10, 2019, we published a final rule with comment period in the Federal Register titled “Program Integrity Enhancements to the Provider Enrollment Process” (84 FR 47794). Several provisions therein implemented section 1866(j)(5) of the Act. Section 1866(j)(5)(A) of the Act requires Medicare, Medicaid, and Children's Health Insurance Program (CHIP) providers and suppliers to disclose any current or previous direct or indirect affiliation with a provider or supplier that—(1) has uncollected debt; (2) has been or is subject to a payment suspension under a Federal health care program; (3) has been or is excluded by the OIG from Medicare, Medicaid, and CHIP; or (4) has had its Medicare, Medicaid, or CHIP billing privileges denied or revoked. Under section 1866(j)(5)(B) of the Act, the Secretary may deny enrollment based on such an affiliation if the Secretary determines that the affiliation poses an undue risk of fraud, waste, or abuse. The above-mentioned statutory requirements were implemented in §§ 424.502 and 424.519 with respect to Medicare enrollment and 42 CFR 455.101 and 455.107 for Medicaid and CHIP enrollment. The general purpose of the affiliation disclosure requirement is to help combat fraud, waste, and abuse by enabling CMS and the States to: (1) better track certain current and past relationships between and among different providers and suppliers; and (2) identify and take action on affiliations among providers and suppliers that pose an undue risk to Medicare, Medicaid, or CHIP. In terms of the scope and timing of the disclosure requirement, section 1866(j)(5)(A) of the Act states that providers and suppliers submitting an application for enrollment or revalidation of enrollment in Medicare, Medicaid, or CHIP must make the disclosures in a form and manner and at such time as determined by the Secretary. Based in part on concerns about the potential burden on the provider community in disclosing affiliations on every initial and revalidation application (and pursuant to the aforementioned statutory authorization regarding the form, manner, and timing for submitting disclosures), current regulations outline a “phased in” approach to implementing the disclosure requirements, pending further rulemaking. For Medicare enrollment, § 424.519(b) states that providers and suppliers must submit affiliation disclosures upon a CMS request. CMS will make these requests when it determines that an initially enrolling or revalidating provider or supplier may have at least one affiliation meeting certain criteria specified in the regulation. For Medicaid and CHIP enrollments, § 455.107(b) requires each State, in consultation with CMS, to select one of the following two options for implementing the disclosure requirement:
The central operational difference between these two Medicaid and CHIP options is that the first requires disclosures with every initial and revalidation application (assuming the provider is not Medicare-enrolled) while the second requires disclosures with the applications only upon the State's request. On a broader level, the second option permits the State to undertake a slower, phased-in implementation. That is, rather than require all initially and revalidating non-Medicare-enrolled providers to report their affiliations, the State may, in consultation with CMS, adopt the more targeted approach of requiring disclosures upon request, mirroring the approach adopted in § 424.519(b) for Medicare. We believe that affording options gives States greater flexibility in implementing the affiliation disclosure requirements. Despite this goal, existing § 455.107(b)(1)(ii) holds that the State cannot change options once its selection has been made. Our concern at the time of promulgating § 455.107(b) was that switching options after one of them is implemented could lead to logistical and administrative complications and, perhaps, confusion in the provider community as to what the State requires. However, after consultations with the States and after analyzing data regarding the submission of affiliation disclosures to date, we do not believe § 455.107(b)(1)(ii) needs be so restrictive. A number of States are seeking greater discretion in their operationalization of § 455.107(b). They believe that requiring the State to continue implementing its selected option without change could hinder its operations and/or its program integrity efforts if that option is proving impracticable or inefficient for that particular State. We share these States' concerns and agree that increased flexibility is warranted. To this end, we are proposing to revise § 455.107(b)(1)(ii) to read that a State may, in consultation with CMS, change its selection under § 455.107(b) (after it has been made) from § 455.107(b)(2)(ii) to § 455.107(b)(2)(i). However, we would not permit a change from § 455.107(b)(2)(i) to § 455.107(b)(2)(ii). This is because the former option more thoroughly implements section 1866(j)(5)(A) of the Act, and thus, furnishes greater program integrity protections by requiring all enrolling or revalidating providers to disclose affiliations while § 455.107(b)(2)(ii) requires disclosure in more limited circumstances. As noted in the previously mentioned September 10, 2019 final rule with comment period: “Section 1866(j)(5) of the Act requires every provider and supplier (regardless of the relative risk they may pose) to disclose affiliations upon initial enrollment and revalidation. All States that choose the second option will therefore eventually be required to collect affiliation disclosures from their providers upon the submission of each initial and revalidation application” (84 FR 47816). Consistent with the phased-in approach adopted in that rule and in the interest of protecting the Medicaid program and CHIP from fraud, waste, and abuse, we believe it is appropriate to allow States the flexibility to move from the second, more limited implementation option to the first, more robust option. Conversely, we do not believe that States that chose the full implementation option in § 455.107(b)(2)(ii) should be permitted to scale back their approach by changing their selection to the more limited “upon request” option. Start Printed Page 46238 L. Requirement for Electronic Prescribing for Controlled Substances for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD Plan1. Previous Regulatory ActionIn the CY 2021 PFS final rule and CY 2022 PFS final rule, we finalized policies for the EPCS requirement specified in section 2003 of the SUPPORT Act (Pub. L. 115-271, October 24, 2018). We refer readers to 86 FR 65361 through 65370 for the complete details of the statutory requirements and those finalized policies. Specifically, in the CY 2022 PFS final rule, we finalized multiple proposals related to EPCS. First, we finalized our proposal to extend the date of compliance actions to no earlier than January 1, 2023, and for prescribers writing Part D controlled substances prescriptions for beneficiaries in long-term care (LTC) facilities, we extended the date on or after which we will pursue compliance actions from January 1, 2022 to January 1, 2025 (86 FR 65364 and 65365). Second, we finalized our proposal to require prescribers to electronically prescribe at least 70 percent of their Schedule II, III, IV, and V controlled substances that are Part D drugs, except in cases where an exception or waiver applies (86 FR 65366). Third, we finalized multiple proposals related to the classes of exceptions specified by section 2003 of the SUPPORT Act (86 FR 65366 through 65369): (1) we amended § 423.160(a)(5) by adding paragraph (a)(5)(i), which is the 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; (2) we amended § 423.160(a)(5) by adding paragraph (a)(5)(ii), which created an exception for prescribers who issue 100 or fewer controlled substance prescriptions for Part D drugs per calendar year as determined using prescription drug event (PDE) claims data as of December 31st of the preceding year; (3) we amended § 423.160(a)(5) by adding paragraph (a)(5)(iii) to create an exception for prescribers located in the geographic area of an emergency or disaster declared by a Federal, State or local government entity; and (4) we amended § 423.160(a)(5) by adding paragraph (a)(5)(iv) to create an exception for prescribers who have received a CMS-approved waiver because the prescriber is unable to conduct EPCS due to circumstances beyond the prescriber's control, respectively. We did not adopt exemptions for prescribers issuing prescriptions for individuals who are residents of a nursing facility and eligible for Medicare and Medicaid benefits, or for prescribers issuing prescriptions for individuals enrolled in hospice. Finally, we finalized our proposal to limit compliance actions with respect to compliance from January 1, 2023 through December 31, 2023, to a non-compliance letter sent to prescribers that we believe are violating the EPCS requirement (86 FR 65370). 2. Evaluation of ComplianceIn the CY 2022 PFS final rule, we discussed the EPCS policy, exceptions, and a compliance threshold. Specifically, we stated that starting in CY 2023, CMS would begin initial EPCS compliance actions (86 FR 65363). We believe it is important to provide a general timeline that describes the general process by which prescriber compliance will be evaluated. Previously, we stated that some exceptions would be evaluated on the basis of Prescription Drug Event (PDE) data from the preceding year as opposed to the evaluated year. We recognize that prescriber practices may change from year to year and believe it is inconsistent to evaluate exceptions and compliance on the basis of PDE data from the preceding year as opposed to the year under evaluation. To that end, we aim to use PDE data from the evaluated year (that is, the current year) as soon as it becomes available to ensure that the data is relevant to the prescriber's practices in the evaluated year. For example, evaluation of CY 2023 prescriber practices will be based on CY 2023 PDE data, though the evaluation will not begin until late CY 2024 and will be based on the PDE data used in the Part D Payment Reconciliation for CY 2023. Following the PDE availability and our evaluation for exceptions and compliance, CMS will begin addressing prescriber noncompliance by issuing non-compliance letters as previously described in the CY 2022 PFS final rule (86 FR 65370). Additionally, in this proposed rule, we propose to extend the existing non-compliance action of sending letters to non-compliant prescribers for the EPCS program implementation year (January 1, 2023 through December 31, 2023) to the following year (January 1, 2024 through December 31, 2024). We are also proposing a change to the data source used to identify the geographic location of prescribers to inform the recognized emergency exception. Starting in CY 2025, CMS plans to begin increasing the severity of penalties for noncompliant prescribers, from issuance of non-compliance letters to other penalties, using the same timeline established here. Therefore, we are seeking further public comment on potential penalties for noncompliant prescribers in section III.L.4. of this proposed rule. 3. Proposed Changes to Exceptionsa. Cases Where Prescribers Issue Only a Small Number of Part D PrescriptionsIn the CY 2022 PFS final rule we finalized our proposal to amend § 423.160(a)(5) by adding § 423.160(a)(5)(ii), which created 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 are not required to meet the EPCS requirement. We referred to this exception as one for small prescribers. For a complete discussion of this topic please see the CY 2022 PFS final rule (86 FR 65366 and 65367). We note that we intended to implement this proposal by examining PDE claims as of December 31 of the prior year to determine which prescribers fall within this exception. We stated CMS will use the previous year's data to determine whether the prescriber falls under this exception for the year-in-question. We are now proposing to modify the exception to better align the timeframes of data used to evaluate each exception. We note that, other than the small prescriber exception, every exception described in the CY 2022 PFS final rule is evaluated based on data from the same year to which the exception is applied. For instance, in the case of a recognized emergency, an exception would be granted during the period of time in the year in which the emergency took place, and the emergency would not be considered for an exception in the following year's compliance evaluation, except to the extent that the emergency continued into the following year. Similarly, for purposes of § 423.160(a)(5)(ii), we believe that it is consistent to consider the prescriptions issued during the evaluation period, rather than the previous year, in case there are year-over-year changes. In this manner, we believe this proposal is a more consistent approach than the existing requirement to utilize claims data from the prior year to assess whether a prescriber issues 100 or fewer Part D controlled substance prescriptions. Therefore, we are proposing to change the year from which PDE data is used from the preceding year to the current evaluated year when CMS determines Start Printed Page 46239 whether a prescriber qualifies for an exception based on the number of Part D controlled substance claims. To effect this change, we are proposing to modify the exception at § 423.160(a)(5)(ii), which states, “Prescriber issues 100 or fewer controlled substance prescriptions for Part D drugs per calendar year as determined using CMS claims data as of December 31st of the preceding year,” by changing “CMS claims data as of December 31st of the preceding year” to “CMS claims data with dates of service as of December 31st of the current year.” If finalized, this proposal would become effective for CY 2023 and for subsequent years. Thus, for CY 2023 EPCS compliance, the small prescriber exception would be assessed using CY 2023 PDE data based on our proposed change. Additionally, a prescriber's compliance status would be evaluated based on PDE data with a `Date of Service' within the evaluated calendar year using PDE data, which Part D sponsors must submit by mid-way through the following year. For an example of how we propose this to work in practice, consider the following illustration. Prescriber A had fewer than 100 Medicare Part D controlled substances prescriptions in CY 2022, and therefore, was excepted from EPCS compliance for CY 2022. During the first quarter of CY 2023, she issues 85 Part D controlled substance prescriptions. After Prescriber A crosses the threshold of more than 100 Part D controlled substance prescriptions, she must reach the compliance threshold of electronically prescribing at least 70 percent of all her prescribed Part D Schedule II, III, IV, and V controlled substances in CY 2023. If she does not utilize EPCS for at least 70 percent of Part D controlled substance prescriptions in CY 2023, including those prescribed prior to reaching the 100 Part D controlled substances prescriptions threshold, she would be subject to a compliance action based on failing to meet the requirement at § 423.160(a)(5), unless another exception applied. PDEs with a Date of Service between January 1, 2023 to December 31, 2023 with a submission date on or before the PDE submission deadline for 2023 (that is, June 28, 2024) would be included in the compliance analysis. If our proposal is finalized, neither CMS nor an individual prescriber will be able to determine until after the evaluation year whether or not the individual prescriber qualifies as a “small prescriber” for purposes of § 423.160(a)(5)(ii), unless the prescriber tracks the number of Medicare Part D controlled substance prescriptions the prescriber issues during the evaluation year. This is in comparison to our existing policy, where CMS would not determine if prescribers qualify as a “small prescriber” until the middle of the evaluation year when the PDE data from the prior year becomes available. Despite the delay in identifying which prescribers qualify for the small prescriber exception, we believe this proposal will better identify small prescribers for purposes of EPCS compliance and simplify the program by aligning the time periods of the exceptions. We also believe that prescribers will be able to more clearly understand their Medicare Part D controlled substance prescribing patterns throughout the first two years of the EPCS program, where the only action for non-compliance is a letter. We seek comment on our proposal to modify the exception at § 423.160(a)(5)(ii) and on the possibility that prescribers would avoid prescribing controlled substances to Medicare beneficiaries, particularly where they are approaching the 100 Part D controlled substances prescriptions threshold late in a calendar year, in order to remain a small prescriber. Additionally, recognizing some prescribers are expecting CMS to use the CY 2022 PDE to assess whether the exception at § 423.160(a)(5)(ii) applies for purposes of CY 2023 EPCS compliance, we seek comment on an alternative for the CY 2023 year only. In the alternative, we would recognize a prescriber as a small prescriber for purposes of the exception at § 423.160(a)(5)(ii) if the prescriber had fewer than 100 Part D controlled substances prescriptions in 2022 or fewer than 100 Part D controlled substances prescriptions in 2023. We did not propose this option because we thought it would be simpler to have a single set of exceptions for the program versus different rules for different years. Additionally, we believed the risk to prescribers who may change their small prescriber status would be low as the action for non-compliance for CY 2023 is a letter. b. Cases of Recognized EmergenciesIn the CY 2022 PFS final rule (86 FR 65367 and 65368), we finalized our proposal to adopt an exception at § 423.160(a)(5)(iii), 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 stated that 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 finalized our proposal to determine whether a prescriber qualifies for this exception based on whether the prescriber's National Council for Prescription Drug Programs (NCPDP) Pharmacy Database address is located in the geographic area of an emergency or disaster declared by a Federal, State or local government entity, which is reflected in the text of § 423.160(a)(5)(iii). Since, as stated in the CY 2022 PFS proposed and final rules, we had intended this exception to avoid unduly burdening prescribers during difficult situations, CMS would like to again 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. We have determined that the NCPDP Pharmacy Database contains pharmacy addresses as opposed to prescriber addresses. Because it is likely that the address of a prescriber differs from that of the pharmacy where a prescription is filled, and the prescriber might be located at an address within an emergency or disaster area when the pharmacy is not, we believe the NCPDP database may not always be an appropriate data source to inform the exception based on emergencies such as natural disasters, pandemics, or similar situations where there is an environmental hazard. It is our intention that the EPCS exception apply to where the prescriber is located, not where the pharmacy is located, to the extent that the locations differ. We believe the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) would have the most current address information for prescribers who are enrolled in Medicare. Additionally, this is the data source that the Quality Payment Program's Merit-based Incentive Payment System (MIPS) uses to determine if a MIPS eligible clinician is located in an area that has been affected by extreme and uncontrollable circumstances (82 FR 53895 through 53900). Therefore, for prescribers who have an address in PECOS, we propose to use the PECOS address instead of the of the NCPDP Pharmacy Database address to determine whether the exception at § 423.160(a)(5)(iii) is applicable. We are concerned however, that not all prescribers would be enrolled in Medicare and therefore their addresses would not be in PECOS. In situations where prescribers do not have a PECOS address, we propose to use the prescriber address in the National Plan and Provider Enumeration System Start Printed Page 46240 (NPPES) data. We propose to revise the text of § 423.160(a)(5)(iii) accordingly. Additionally, we seek public comment on whether using NPPES, NCPDP, or some other database is appropriate when there is no prescriber address in PECOS. We also seek comment on an alternative of using NPPES as the source of addresses for all prescribers. We believe this data may have information for all prescribers, but that providers may not update their address as often as they do in PECOS. Finally, we seek comment on other potential data sources that could be used to verify a prescriber's address for purposes of § 423.160(a)(5)(iii). 4. PenaltiesSection 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 through rulemaking. In the CY 2022 PFS proposed and final rules, we sought feedback from interested parties on whether CMS should impose penalties and if so, what penalties should be imposed. We are continuing to examine 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 to enforce State mandates. In our ongoing implementation of the EPCS requirement, we continue to seek input to 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, where appropriate, should they not have EPCS set-up. We continue to need additional time to gather more feedback from interested parties on the most effective and most appropriate type of penalties. In the CY 2022 PFS final rule, we finalized our proposal to limit CY 2023 compliance actions to a non-compliance letter sent to prescribers that are violating the EPCS requirement. a. Timing for Issuing Non-Compliance LettersIn this proposed rule, we are proposing to adjust the period of time during which CMS will issue non-compliance letters. With respect to the period of time during which CMS non-compliance actions will consist of sending letters to prescribers that we believe are violating EPCS requirements, we are proposing to extend the existing compliance action of sending letters to non-compliant prescribers from the CY 2023 EPCS program implementation year (January 1, 2023 through December 31, 2023) to the CY 2024 year (January 1, 2024 through December 31, 2024). If adopted, CMS compliance actions will consist of CMS sending letters to prescribers who we believe are violating the EPCS requirement between January 1, 2023 and December 31, 2024. The content of the letters would remain unchanged. These letters would 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 are seeking public comment on this proposal. b. Request for Information Relating to Potential Future EPCS PenaltiesConsistent with the CY 2022 PFS final rule, we continue to be interested in identifying additional meaningful penalties to enforce the EPCS requirement. Therefore, we are seeking public comment on additional penalties that CMS may impose to enforce the EPCS requirement. Such penalties would go into effect no sooner than January 1, 2025 if we extend the timeframe during which we will issue non-compliance letters, as we have proposed. There are a range of options that we are exploring, and we believe feedback from interested parties will help us to develop meaningful and appropriate penalties in the future. We are currently considering the following non-exhaustive list of penalties for non-compliant prescribers: • Requiring a non-compliant prescriber to enter into a corrective action plan, which would require the non-compliant prescriber to comply with the EPCS requirement within 2 years prior to applying other potential actions outlined in this section. Some commenters previously recommended corrective action plans be used prior to applying penalties. CMS seeks comment on what types of elements and actions should be in a corrective action plan that encourages use of EPCS without being overly burdensome. We seek comment on whether a corrective action plan would be perceived as overly burdensome to non-compliant prescribers and whether a 2-year timeframe is reasonable and appropriate. We also seek comment on whether a corrective action plan should be applied prior to other potential actions described in this section or whether a corrective action plan should be established in parallel with other actions. • Posting a non-compliant prescriber's name on the CMS website and identifying the prescriber as non-compliant. CMS seeks comment on whether this action would be sufficient to persuade prescribers to alter their behavior. We seek comment on whether beneficiaries and interested parties would be able to utilize this information to their benefit. • Public reporting of EPCS compliance status, including that a prescriber is non-compliant, on the Care Compare website. CMS seeks comment on whether this action would be sufficient to persuade prescribers to alter their behavior. We seek comment on whether beneficiaries and interested parties would be able to utilize this information to their benefit. • Referral of non-compliant prescribers to the DEA to support potential investigations. We request comment on an option under which CMS would provide the list of the EPCS non-compliant prescribers to the DEA to supplement current investigations and activities. The DEA would have the sole authority to use the information as permitted under DEA regulations and applicable law. CMS seeks comment on whether interested parties envision this as being an effective option for enforcing EPCS compliance. We seek comment on whether interested parties have any recommendations that increase the effectiveness of this potential option. We seek comment on whether CMS should consider the duration of EPCS non-compliance prior to referring the prescriber to the DEA and whether a corrective action plan should be considered prior to referring the prescriber. • Sharing the list of EPCS non-compliant prescribers with the States. CMS seeks comment on whether interested parties believe sharing the list of EPCS non-compliant prescribers with State level entities would be beneficial to the enforcement of EPCS compliance. We seek comment on how States may use this information to further assist CMS' efforts to enforce the EPCS requirement. • Referral for potential fraud, waste and abuse review. CMS seeks comment on whether it should refer Medicare enrolled prescribers who consistently do not comply with the EPCS requirement for a fraud, waste, and abuse investigation to be undertaken by CMS. Multiple years of non-compliance may be a significant enough issue to consider a review for potential fraud, waste and abuse investigation. We seek Start Printed Page 46241 comment on whether we should consider the duration of EPCS non-compliance when considering such a referral and whether other factors should also warrant an internal referral. • For penalties involving referral of non-compliant prescribers to the DEA and other entities, our intent is to supplement the current activities of these entities rather than to create new regulatory actions. We envision that information sent to these entities would be for use at the discretion of the recipient. We are interested to know if interested parties believe there is any utility in referring non-complaint prescribers to the DEA, other CMS internal centers, or the States. If so, we seek comment on in what manner this data can be used to supplement EPCS compliance enforcement. Any penalty involving the posting of compliance status on CMS websites would be done in a manner consistent with relevant statutory authority. For instance, we note that any potential posting of compliance information on the Care Compare website would have to be done consistent with statutory authority potentially including, but not necessarily limited to, authority in section 10331 of the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (March 23, 2010); section 1848(q)(9) of the Act; and regulatory authority at 42 CFR 414.1395. Section 10331(a)(2)(G) of the ACA states that to the extent scientifically sound measures that are developed consistent with the requirements of this section are available, such information, to the extent practicable, shall include other information as determined appropriate by the Secretary. As we stated above and in the CY 2022 PFS final rule, we believe there are multiple advantages to the electronic prescribing of controlled substances: 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. We also stated that EPCS may reduce the burden on prescribers who need to coordinate and manage paper prescriptions among staff, patients, facilities, other care sites, and pharmacies. For these and potentially other reasons, we believe the EPCS compliance efforts directly relate to prescriber performance and quality, and related patient experience, as contemplated by section 10331(a)(2) of the ACA. We are seeking comment from interested parties on these and other options they may suggest for penalties to enforce EPCS compliance. We are interested in public comments that address:
M. Medicare Ground Ambulance Data Collection System (GADCS)1. Background on Ambulance ServicesSection 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 is 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 BackgroundSection 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 (ground ambulance organizations) 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 required 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 required 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 Start Printed Page 46242 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 311 of the Consolidated Appropriations Act, 2022 (Pub. L. 117-103) amended section 1834(l)(17)(F)(i) to delay the deadline for MedPAC to submit its report to Congress on the ground ambulance data collection system study until the second June 15th following the date the Secretary transmits data for the first representative sample of ground ambulance organizations. Section 1834(l)(17)(I) of the Act states that the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.) does not apply to the collection of information required under section 1834(l)(17) of the Act. 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 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. We refer 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. In the CY 2022 PFS final rule (86 FR 65306 through 65317), we finalized a number of updates to the Medicare Ground Ambulance Data Collection System, including: (1) 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; (2) aligning the timelines for the application of penalties for not reporting data with our new timelines for data collection and reporting and the data collected will be publicly available beginning in 2024; and (3) revisions to the Medicare Ground Ambulance Data Collection Instrument that include better accounting for labor hours across different categories of personnel and better distinguishing between accrual and cost basis accounting methodologies. We refer the reader to our CY 2022 PFS final rule (86 FR 65306-65317) for more specifics on the revisions to the Medicare Ground Ambulance Data Collection System. 3. Proposed Revisions to the Medicare Ground Ambulance Data Collection InstrumentAs 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 73 includes a high-level summary of the 13 sections of the Medicare Ground Ambulance Data Collection Instrument. Start Printed Page 46243 As described in the CY 2022 PFS final rule (86 FR 65307), we made several changes to the instrument instructions and questions to improve clarity and reduce burden for respondents. A printable version of the current instrument instructions and questions is available in English and Spanish on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html. 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 four primary channels. First, we receive email and other written communication from ground ambulance organizations via the CMS Ambulance Data Collection email inbox ( ) 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, we answer questions live from interested parties during webinars, dedicated question and answer sessions, and other educational sessions. As with the emailed questions described above, live question and answer exchanges sometimes identify opportunities for clarifying instrument language. Third, our contractor asked a small number of ground ambulance organizations to test the most recent version of the Medicare Ground Ambulance Data Collection Instrument. Feedback from this preliminary testing effort was helpful to identify some additional opportunities for clarification. Fourth, 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 four sources described above, we are proposing the following further 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 group our proposed changes and clarifications into four broad categories:
A draft of the updated instrument that includes all of the CY 2023 proposed changes to review and provide Start Printed Page 46244 comments on is posted on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html. a. Editorial Changes for Clarity and ConsistencyWe are proposing 14 editorial changes to improve the clarity of instrument instructions and questions. We do not believe these changes substantively affect the meaning of any instruction or question. The first three proposed changes would apply throughout the entire Medicare Ground Ambulance Data Collection Instrument. Specifically, we are proposing to:
The fourth and fifth proposed changes focus on Section 1 (General Survey Instructions) in the instrument as we are proposing to:
The remainder of proposed changes in this category focus on editorial changes to specific instrument questions or instructions in Sections 2 (Organizational Characteristics) through Section 6 (Service Mix). Specifically, we are proposing to:
The 11th and 12th proposed changes apply to Section 7 (Labor Costs) where we are proposing to:
The 13th proposed change applies to Section 9 (Vehicle Costs) as we are proposing to:
The 14th and final proposed change in this category relates to Section 13 (Revenue). Specifically, we are proposing to:
We invite comments on these 14 proposed editorial changes for clarity and consistency. b. Updates To Reflect the Web-Based SystemWe are in the process of developing the web-based GADCS portal and programmed instrument that ground ambulance organizations will use to report data. The printable instrument noted several cases where the ultimate instrument functionality and wording hinges on the specifications and implementation of the GADCS portal and programmed instrument, for example around account creation, programmed skip logic, and pop-up warnings. We are proposing 13 changes to the printable instrument so that it better matches our current plans and Start Printed Page 46245 expectations for the programmed instrument. We believe these changes will help ground ambulance organizations referencing the printable instrument understand how the data they have collected should be entered in the programmed instrument on the GADCS portal. We are proposing to:
We propose the specific text: “Your organization must report the required information prior to [INSERT DATE], which is 5 months after the end of its data collection period. You can enter the required information over multiple sittings. The system will save your responses after every screen, or whenever you hit the “Save” button at the bottom of your screen. When you log in again later, you can pick up where you left off. After you enter all required information, a Certifier at your organization will review the entire response and either request changes or certify the information. [Note: This instruction will be updated to reflect the capabilities of the programmed instrument.]” This description provides readers of the printable instrument a clearer sense of the functionality they should expect from the programmed instrument.
• Move Section 7.2, Question 4 (“Does your organization contract with a medical director, rather than employing them directly?”) to earlier in Section 7, immediately following Section 7, Question 1, to become Section 7, Question 2. The existing Section 7, Question 2 item (asking about staff categories not used by the organization) would be renumbered as Section 7, Question 3. With the current flow of Section 7 in the printable instrument, organizations contracting with a medical director must confusingly answer a question on why they do not employ a medical director before they report that they contract with one. Asking whether the organization contracts with a medical director earlier in Section 7 enables the programmed instrument to better adapt later questions in Section 7 related to medical directors. For example, organizations indicating earlier in Section 7 that they contract with a medical director will not need to be asked why they do not employ a medical director.
The remaining proposed changes in this category (changes 6-12) aim to harmonize and clarify programming notes throughout the instrument related to ground ambulance organizations that also provide other services (for example, fire departments, or “shared services” as we describe them in the instrument). The programming notes in the printable instrument are meant to provide context to readers on the ultimate functionality of the programmed instrument within the constraints of a static document. Some of these programming notes have been broadened and updated since the initial version of the printable instrument while others have not. We believe some ground ambulance organizations may want to respond to questions as if they were shared services, even if they do not meet the specific programming notes laid out in the printable instrument. Broadly, we are proposing to expand or remove programming notes restricting certain responses for follow-up questions for shared services. We believe this will provide respondents with more flexibility to respond to questions in a way that best matches their characteristics, services, and organizational structure. Specifically, for changes to programming notes, we are proposing to: Start Printed Page 46246
We invite comments on these proposals aiming to better align the printable instrument with the functionality of the programmed instrument and system. c. Clarifications Responding to Feedback From Interested Parties Questions and TestingWe are proposing 12 instrument changes stemming from feedback we received from emailed questions, during live question and answer and other educational sessions, and via preliminary testing. Specifically, we are proposing to:
• Add guidance throughout Sections 7 through 13 related to allocating a share of expenses and revenue attributable to ground ambulance operations versus other operations (for example, fire, police, or hospital operations). Several ground ambulance Start Printed Page 46247 organizations and other interested parties have posed questions to CMS asking for clarification on the specific methods they should use to allocate certain amounts prior to reporting information to GADCS. Allocating expenses is crucial for ground ambulance organizations that also provide other services or functions. If amounts are not allocated appropriately, the expenses and revenue reported to GADCS may be higher or lower than the actual expenses and revenue related to organizations' ground ambulance operations. The current instrument instructions allow ground ambulance organizations to use their current allocation approach or any reasonable alternative. The additional guidance in the instrument would provide an example allocation approach relevant to each section. For example, in fire department-based organizations, respondents can allocate dispatch, fire truck, and firefighter/EMT labor expenses using the share of total responses that are medical calls for service and/or involve a fully staffed and equipped ambulance. As another example relevant to fire department-based organizations, Medicare providers, and some other organizations, respondents can allocate facility expenses based on the share of square footage used by ground ambulance operations. While organizations looking for guidance on an approach could adopt these allocation methods, all organizations would remain free to use alternative allocation methods.
The remaining proposed changes in this category relate to clarifying skip logic and response categories. Specifically, we are proposing to:
++ Change the note in this question that reads “(excluding labor for medical director if accounted for in Question 1 above or in the labor section)” to read “(excluding labor for medical director which must be included in Section 11 Question 1 or in the labor section)” because expenses associated with Medical Directors may be reported either in Section 7 (Labor Costs) or in Section 11, Question 1. ++ Delete the cost category “Overhead allocation from parent organization/central office” as we already provide Start Printed Page 46248 places to report these costs throughout relevant sections of the instrument. ++ Move the “Miscellaneous administrative fees/costs . . .” category to the end of the “Administrative and General Expenses” section to improve flow. ++ Clarify that fees for “Licenses” should “(Include professional or any other license fees not reported elsewhere in the instrument. Do not include any vehicle license fees previously reported in the Vehicles Section.)” We invite comments on these proposals focusing on improving instrument clarity and consistency in response to feedback from interested parties. d. Typos and Technical CorrectionsThe final category of our proposed changes to the instrument address technical corrections and typos. We propose 10 corrections to the data collection instrument. Specifically, we propose to:
We invite comments on these proposals to address typos and technical clarifications. 4. Proposed Automation Process for Submitting a Hardship Exemption Request and Informal Review RequestIn the CY 2020 PFS final rule (84 FR 62895), we codified the hardship exemption requirement at § 414.626(d). We stated that a ground ambulance organization can apply for a hardship exemption request based on a significant hardship, such as a natural disaster, bankruptcy, or other similar situation, that the Secretary determines interfered with the ability of the ground ambulance organization to submit such information in a timely manner for the data collection period selected by the ground ambulance organization. Specifically, § 414.626(d)(1) states that to request a hardship exemption, the ground ambulance organization must submit a request form (accessed on the Ambulances Services Center website ( https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html) to CMS within 90 calendar days of the date that CMS notified the ground ambulance organization that it would receive a 10 percent payment reduction as a result of not submitting sufficient information under the data collection system. The request form must include all of the following: Ground ambulance organization name; NPI number; Ground ambulance organization address; Chief executive officer and any other designated personnel contact information, including name, email address, telephone number and mailing address (must include a physical address, a post office box address is not acceptable); Reason for requesting a hardship exemption; Evidence of the impact of the hardship (such as photographs, newspaper or other media articles, financial data, bankruptcy filing, etc.); Date when the ground ambulance organization would be able to begin collecting data under paragraph (b) of this section; and Date and signature of the chief executive officer or other designated personnel of the ground ambulance organization. Section 414.626 (d)(2) states that CMS will provide a written response to the hardship exemption request within 30 days of its receipt of the hardship exemption form. In the CY 2020 PFS final rule (84 FR 62896), we also codified the process to request an informal review process under which a sampled ground ambulance organization may seek an informal review of a determination that is subject to the 10 percent reduction in payment at § 414.626(e). Section 414.626(e) outlines the notification of non-compliance and informal review. First, for notification of non-compliance, a ground ambulance organization selected under § 414.626 (c) for a year that does not sufficiently report data under paragraph (b) of this section will receive written notification from CMS that it will receive a payment reduction under § 414.610(c)(9). Second, with respect to informal review, a ground ambulance organization that receives a written notification under § 414.610 (e)(1) of a payment reduction under § 414.610(c)(9) may submit a request for an informal review within 90 days of the date it received the notification by submitting all of the following information: ground ambulance organization name; NPI number; chief executive officer and any other designated personnel contact Start Printed Page 46249 information, including name, email address, telephone number and mailing address with the street location of the ground ambulance organization; ground ambulance organization's selected data collection period and data reporting period; and a statement of the reasons why the ground ambulance organization does not agree with CMS' determination and any supporting documentation. In the CY 2020 PFS final rule (84 FR 62897), we stated that the hardship exemption and informal review requests should be submitted to the Ambulance ODF mailbox ( ). We have been looking for ways to streamline both the hardship exemption request and informal review request and have determined that the most efficient method would be to require that the ground ambulance organizations submit a web-based form via the Medicare Ground Ambulance Data Collection System instead of submitting the requests via our Ambulance ODF mailbox. This method would be simpler, less burdensome, and less prone to error to track and process all incoming hardship exemption requests and informal review requests. We intend to launch the web-based portal that ground ambulance organizations can use to submit their hardship exemption and informal review requests in late 2022. We will share more information about the web-based portal when available. We are also proposing in this proposed rule to update our regulations to give us the necessary flexibility to specify how ground ambulance organizations should submit these requests, including to our web-based portal once that portal is operational. Specifically, we are proposing to revise § 414.626(d)(1) and (e)(2) to state that these requests must be submitted in the form and manner specified by CMS. As we stated in the CY 2020 PFS final rule (84 FR 62895) and in § 414.626(d)(1), the hardship exemption request form may be accessed on the Ambulances Services Center website for reference. We invite comments on this proposal. N. Proposal To Revise HCPCS Level II Coding Procedures for Wound Care Management Products1. Backgrounda. Healthcare Common Procedure Coding System (HCPCS) Level II Coding ProceduresSection 1833(e) of the Act provides that no payment shall be made to any provider of services or other person under Medicare Part B unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under that part. In order to process claims and determine payment for items and services under Medicare, CMS needs a way to appropriately identify the items and services billed. CMS has established certain codes for providers and suppliers to use to identify items and services on claims. Medicare receives over 1 billion electronic claims per year. The HCPCS is a standardized coding system used to identify particular items and services on claims submitted to Medicare, Medicaid, and other health insurance programs in a consistent and orderly manner. The HCPCS is divided into two principal subsystems, referred to as HCPCS Level I and HCPCS Level II. The HCPCS Level I code set is comprised of Current Procedural Terminology (CPT®) codes [346] and the HCPCS Level II code set is used primarily to identify items, services, supplies, and equipment that are not identified by CPT® codes. HCPCS Level II codes were originally created for use by government insurers including Medicare. On August 17, 2000, HHS published a final rule (65 FR 50312) in which it adopted HCPCS Level II codes as the standard code set to be used by all payers for, among other things, health care equipment and supplies not described by CPT® codes, for use in Health Insurance Portability and Accountability Act of 1996 (HIPAA) transactions (45 CFR 162.1002). The HCPCS Level II coding system was selected as the standard code set, in part, because of its wide acceptance among both public and private insurers. With few exceptions,[347] HCPCS Level II codes are maintained by CMS, which is responsible for making decisions about additions, revisions, and discontinuations of the codes. CMS maintains the code set for Medicare but, because HCPCS Level II is a standard code set designated for use under HIPAA by all payers, CMS also considers the needs of other payers, including both government and private insurers, in establishing and maintaining codes. HCPCS Level II codes are alpha-numeric codes that begin with an alphabetical letter followed by four numeric digits. Currently, there are almost 8,000 HCPCS Level II codes that represent categories of like items and services. Each code includes a text descriptor (code text) that identifies the category of items and services encompassed in the code. HCPCS Level II codes are generally organized into lettered categories that loosely describe the types of codes under that letter; [348] however, the lettered categories are not dispositive, meaning that they are not all inclusive of the types of items and services described in the heading for each lettered category. Anyone may submit a request to CMS for modifying the HCPCS Level II code set. Three types of coding revisions to the HCPCS may be requested: (1) that a new code be added (this may include requests to split an existing code category into its components or into subcategories); (2) that the language used to describe an existing code be changed; and (3) that an existing code be discontinued. Applicants that choose to submit a HCPCS Level II code application must submit their application using the online application portal known as the Medicare Electronic Application Request Information SystemTM (MEARIS[TM] ).[349] The procedures by which the public submits and CMS evaluates code applications to modify the HCPCS Level II code set have been primarily included in guidance documents released on the CMS website at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo. We update and release the HCPCS Level II dataset files to our contractors and the public via our website on a quarterly basis. Start Printed Page 46250 Prior to 2020, CMS received and reviewed HCPCS Level II code applications and typically made related coding changes annually, including releasing updated coding files. However, in November 2019, we announced updates to our HCPCS Level II coding procedures to enable shorter and more frequent HCPCS Level II code application cycles beginning in January 2020, as part of our initiative to facilitate launching new products into the marketplace for providers and patients. Specifically, we implemented a process under which HCPCS Level II code applications for drugs and biological products may be submitted and are reviewed quarterly and HCPCS Level II code applications for non-drugs and non-biological products may be submitted and are reviewed biannually. The current coding procedures provide an opportunity for applicants who are dissatisfied with our coding decisions in a quarterly or biannual cycle an opportunity to reapply in a subsequent quarterly or biannual cycle. We release decisions on coding actions on both a quarterly and biannual basis for the respective coding cycle in the same format we used prior to 2020 to announce annual decisions. Additional information pertaining to CMS' HCPCS Level II coding decisions and procedures is available on the CMS website at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo. b. Food and Drug Administration (FDA) Regulation of Wound Care Management ProductsThe FDA regulates wound care management products based on a variety of factors, including intended use. Certain wound care management products are considered Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps) that are regulated by the FDA solely under section 361 of the Public Health Service (PHS) Act and the regulations in 21 CFR part 1271 (“361 HCT/Ps”). To be regulated as a 361 HCT/P, the product must meet the four criteria set forth in 21 CFR 1271.10(a):
For 361 HCT/Ps, establishments that perform one or more steps in the manufacture of the HCT/Ps must register and list their HCT/Ps annually in FDA's electronic Human Cell and Tissue Establishment Registration System (eHCTERS), but premarket review and approval are not needed. FDA acceptance of an establishment registration and HCT/P listing form does not constitute a determination that an establishment is in compliance with applicable FDA rules and regulations or that the HCT/P is licensed or approved by FDA (21 CFR 1271.27(b)). Consistent with our proposal in section II.J. of this proposed rule to replace the term “skin substitutes” with “wound care management products,” we will use the term “wound care management products” in our description of the products and related to our proposals below. Other wound care management products that are regulated by the FDA as devices may be subject to premarket review through a 510(k) premarket notification submission in accordance with section 510(k) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and implementing regulations in subpart E of 21 CFR part 807, through the premarket approval (PMA) application process under section 515 of the FD&C Act and regulations in 21 CFR part 814, through a De Novo classification request (De Novo request) under the section 513(f)(2) of the FD&C Act, or are exempt from premarket notification requirements. A 510(k) is a premarket submission made to the FDA to demonstrate that the device to be marketed is as substantially equivalent to a legally marketed device that is not subject to PMA (section 510(k), 510(n), 513(f)(1), or 513(i) of the FD&C Act).[350] A PMA is the most stringent type of premarket device submission and is required for approval of Class III medical devices.[351] The De Novo request provides a marketing pathway to classify novel medical devices for which general controls alone, or general and special controls, provide reasonable assurance of safety and effectiveness for the intended use, but for which there is no legally marketed predicate device. Devices that are classified into class I or class II through a De Novo request may be marketed and used as predicates for future premarket notification [510(k)] submissions, when applicable.[352] 2. Proposal To Revise the Requirements Necessary To Obtain a HCPCS Level II Code for Wound Care Management ProductsAs of May 2022, there are approximately 150 unique HCPCS Level II codes that describe wound care management products. Prior to 2021, all of these products, including those regulated by the FDA as devices, were assigned a Q code as they were generally considered to be biological products and in the office-setting, these products were paid using the methodology under section 1847A of the Act, which, in many cases, is based on the average sales price (ASP) plus a statutorily mandated 6 percent add-on. In addition, as part of the HCPCS Level II application, CMS required proof of how the product was regulated by the FDA to assist in verification that the product was medical and legally on the market. For example, we required the 510(k) clearance letter or the PMA approval letter for wound care management products that were regulated by the FDA as devices.[353] For 361 HCT/Ps, we required proof that the manufacturer registered and listed their HCT/P with the FDA pursuant to 21 CFR part 1271, for products regulated as 361 HCT/Ps. Beginning in 2020, in accordance with section 1833(e) of the Act, CMS concluded that each application requesting a HCPCS Level II code for a wound care management product described in the application as a 361 HCT/P include a letter from the FDA's Tissue Reference Group (TRG) recommending that the product appears Start Printed Page 46251 to meet the criteria for regulation solely under section 361 of the PHS Act and the regulation in 21 CFR part 1271. This information is necessary for CMS to determine, for coding purposes, how the product should be classified. For example, such information may be necessary to determine whether the product should be coded as a different type of single source biological product rather than as a 361 HCT/P wound care management product.[354] The collection of this additional information was intended to assist us in appropriately classifying for purposes of assigning a HCPCS Level II code when these medical products are 361 HCT/P wound care management products, biological products, drugs, or other.[355] In the CY 2022 PFS final rule (86 FR 65121), we also finalized that ten specific 510(k)-cleared wound care management products for which we received a HCPCS Level II code application would be payable in the physician office setting as contractor priced products that are billed separately from the procedure to apply them. In the latter part of 2021, we published final decisions that assigned an A code to each of these ten 510(k)-cleared wound care management products, with an effective date of January 1, 2022. These final decisions are located on the CMS website at https://www.cms.gov/files/document/2021-hcpcs-application-summary-supplemental-coding-cycle-updated-04062022.pdf. We subsequently discovered that we had inadvertently assigned an A code to one product (bio-ConneKt Wound Matrix) for which a Q code, Q4161, had already been assigned. As such, we updated the Supplemental Coding Cycle decision document in December 2021 to remove the A code assignment for bio-ConneKt Wound Matrix while retaining A code assignments for the other nine 510(k)-cleared wound care management products. Following the Supplemental Coding Cycle, we assigned additional A codes for three 510(k)-cleared wound care products with an effective date of April 1, 2022 for which we received a first-time HCPCS Level II application in the Second Biannual, 2021 HCPCS Coding Cycle.[356] a. General Coding Proposal for All Wound Care Management ProductsIn this proposed rule, we are proposing to uniformly classify wound care management products (that are not regulated by FDA as drugs or biological products that would otherwise be eligible for separate payment under section 1847A of the Act) consistently in the HCPCS Level II code set based on information presented to CMS as described in additional detail below, effective January 1, 2024. That is, we propose that the assignment of A codes to all wound care management products that are not drugs or biological products would continue with respect to products for which a HCPCS Level II code is requested for the first time, as well as for wound care management products to which we previously assigned a Q code. See below for further details, as we propose that certain wound care management products will need to submit additional information to CMS prior to the assignment of an A code. This proposal aligns with our proposal in section II.J. of this proposed rule that all wound care management products would be eligible for coverage under section 1861(s)(2)(A) of the Act as incident to supplies that are commonly furnished in the physician office setting. As stated in the CY 2021 Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Policy Issues and HCPCS Level II Proposed Rule (85 FR 70374), HCPCS Level II codes are generally organized into lettered categories that loosely describe the types of codes under that letter. Q codes are used to identify products separately payable as drugs and biologicals under Medicare Part B; such products are priced using 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. A codes are used to identify transportation services and medical and surgical supplies. We believe that the assignment of an A code to all wound care management products that are not drugs or biological products [357] that would otherwise be eligible for separate payment under section 1847A of the Act would better reflect what the product is for purposes of assigning a code as this approach aligns with the payment proposal in section II.J. of this proposed rule that would establish a consistent pricing methodology by pricing all wound care management products as incident to supplies. We also believe this proposed policy would provide a more consistent and transparent approach to coding for wound care management products. b. Further Detail on 361 HCT/P ProposalsWith respect to 361 HCT/P wound care management products, we propose to no longer evaluate HCPCS Level II coding applications for such products on a quarterly basis beginning January 1, 2024,[358] and to instead evaluate them through our biannual coding cycles for non-drugs and non-biological products. We believe our proposal to assign A codes to all wound care management products that are not drugs or biological products and to review these products in the same biannual coding cycle aligns with the payment proposal in section II.J. of this proposed rule, as CMS uses the biannual cycles to review code applications for non-drugs and non-biological products and section II.J is proposing to price these products as incident to supplies. We note that the biannual coding cycle includes preliminary coding determinations and an opportunity for written and public comment, which may assist manufacturers and CMS in reconciling any discrepancies with information submitted to us or addressing questions about a product that we may raise; we believe this dialogue will be productive for all involved. Manufacturers of products described as 361 HCT/Ps that have already been assigned a Q code must also provide documentation from the FDA (that is, the TRG recommendation letter) that indicates how the product is or appears to be regulated by the FDA.[359] This Start Printed Page 46252 information would be part of a HCPCS Level II re-application submitted via MEARISTM and would be part of a public meeting for consideration. We are proposing to allow a 12-month period from the effective date of the CY 2023 final rule (that is, January 1, 2024) to allow for re-application submissions. We believe this proposed deadline for re-application submission would provide sufficient time for applicants to communicate with the FDA in regard to the TRG recommendation letter, as applicable. Manufacturers with an existing Q code for products described as 361 HCT/Ps who would need to re-apply for an A code are encouraged to submit their request for a TRG recommendation to the FDA as soon as feasible to ensure that they receive the recommendation in time to include it with the re-application. After a public meeting and appropriate review by CMS, we propose to discontinue all existing Q codes for wound care management products and to establish new A codes for such products that have submitted the appropriate documentation. We propose to make the effective date of the new A codes to coincide with the discontinuation date of the corresponding Q codes such that there would be no gap between the effective dates of the discontinued codes and the newly established codes. Based on our biannual coding process for non-drugs and non-biological products, we anticipate the new A codes would take effect on October 1, 2024. If a re-application is not submitted, CMS proposes to discontinue the Q code in the quarterly update cycle following the proposed deadline for re-application submission (that is, January 1, 2024), which we anticipate would take effect on April 1, 2024. We are also proposing to collect additional information in support of HCPCS Level II code applications for these products. Under our proposal, all first-time applications for 361 HCT/Ps would need to continue to be supported, as we started in 2020, with documentation from the FDA (that is, the TRG recommendation letter) that indicates how the product is or appears to be regulated by the FDA. That is, for a product that is described by the applicant as a 361 HCT/P, we are proposing that the first-time application or re-application would need to provide a recommendation letter from the FDA's TRG which would aid in our determination of how the product should be classified for coding purposes. The FDA TRG recommendation letter assists us in recognizing whether a product is a wound care management product, separately payable drug or biological product, or otherwise and aids us in issuing an appropriate code consistent with our coding conventions.[360] We note that a recommendation letter from FDA's TRG would be necessary in other circumstances, such as when a product manufacturer seeks a change to a current code descriptor or presents other information to us in which a product's market status or other event has changed and the manufacturer believes a code should be revised. CMS will notify the public of all future coding decisions for wound care management products through its standard process of posting decisions for each coding cycle on the HCPCS web page on CMS.gov ( https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Prior-Years-CMS-HCPCS-LevelII-Coding-Decisions-Narrative-Summary). c. SummaryIn summary, we are proposing: (1) that the assignment of A codes to all wound care management products (that are not regulated by FDA as drugs or biological products that would otherwise be eligible for separate payment under section 1847A of the Act) would continue with respect to products for which a HCPCS Level II code is requested for the first time, as well as for wound care management products to which we previously assigned a Q code; (2) to discontinue all existing Q codes for wound care management products; (3) to, prior to the assignment of an A code, require products with an existing Q code that were described by the applicant as a 361 HCT/P to submit a HCPCS Level II re-application within 12 months of the effective date of the final rule (that is, January 1, 2024); (4) to require a recommendation letter from the FDA's TRG to be submitted as part of the HCPCS Level II application for all wound care management products described by the applicant as a 361 HCT/P, regardless if it is a first time application or re-application for a product with an existing Q code; and (5) to evaluate HCPCS Level II coding applications for all 361 HCT/P wound care management products through our biannual coding cycles for non-drugs and non-biological products, rather than on a quarterly basis, beginning January 1, 2024. We are seeking comments on these proposals. We also seek comment on whether any codes have been unintentionally omitted from the list of wound care management products for which new code applications would need to be submitted or new A-codes would be issued for devices that are 510(k)-cleared, PMA-approved, or classified into class I or class II through a De Novo request (Table 74) and should similarly be subject to this proposal. Start Printed Page 46253 Start Printed Page 46254 Start Printed Page 46255 For all 361 HCT/Ps for which CMS has issued a Q code with an effective date on or after October 1, 2021, as shown in Table 75, we propose to discontinue the Q code and issue an A code, effective on the same date as the other products discussed in this proposal (that is, October 1, 2024). We are not proposing to require resubmission of a HCPCS Level II coding application for these HCT/P wound care management products because the applications already included a TRG recommendation letter from the FDA. We propose to take a similar approach for all new 361 HCT/Ps in which Q codes are issued before January 1, 2024. Start Printed Page 46256 We welcome comment on all of these proposals. IV. Updates to the Quality Payment ProgramA. CY 2023 Modifications to the Quality Payment Program1. Executive Summarya. OverviewThis section of the proposed rule sets forth changes to the Quality Payment Program starting January 1, 2023, except as otherwise noted for specific provisions. The CY 2023 performance period/2025 MIPS payment year continues to move the Quality Payment Program forward to focus more on our measurement efforts, refine how clinicians would be able to participate in a more meaningful way through the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs), 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, 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 2023, 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 are eligible to 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. 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 MVPs to 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. As we make long-term improvements, continue evolving MIPS policies, and plan to begin implementing MVPs in 2023, we remain committed to our program goals. We are aligning with broader CMS initiatives, such as the CMS National Quality Strategy ( https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Legacy-Quality-Strategy), 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 National Quality Strategy is to shape a resilient, high-value American health care system to achieve high-quality, safe, equitable, and accessible care for all. This strategy aims to promote the highest quality outcomes and safest care for all individuals. It also focuses on a person-centric approach as individuals journey across the continuum of care and across payer type. The goals of the strategy incorporate lessons learned from the PHE for COVID-19 to inform both short and long-term direction for our health care system as well as support the creation of a more equitable, safe, and outcomes-based health care system for all individuals. The planned implementation of MVPs aligns with many of the objectives and goals the CMS National Quality Strategy will strive to achieve. Through the proposals we describe below, we intend to continue improving 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 interested parties to help guide efforts to advance health equity throughout CMS quality programs. We previously finalized an MVP development process involving the submission of MVPs by interested parties for our consideration (85 FR 84849 through 84850). We believe the MVP development process should also consider feedback from the general public outside of the notice and comment rulemaking process through which MVPs are adopted. Therefore, we are proposing to modify the MVP development process such that were Start Printed Page 46257 CMS to receive a new candidate MVP, evaluate it through the MVP development process and determine it “ready” for feedback, CMS would post a draft version of the MVP on the Quality Payment Program website ( https://qpp.cms.gov/) and solicit feedback from interested parties as well as the general public for a 30-day period. In addition, we previously established a process for soliciting interested party recommendations for potential updates to established MVPs. On an annual basis, beginning in January, interested parties may submit their recommendations for the revision of an established MVP, and that input is accepted on a rolling basis throughout the year. We believe the MVP maintenance process should also consider feedback from the general public outside of the notice and comment rulemaking process through which MVPs are revised. Therefore, we are proposing that after we review the submitted recommendations to revise established MVPs, and identify any feasible and appropriate revisions to established MVPs, we would host an annual public facing webinar, open to interested parties and the general public through which they may offer their feedback on potential revisions to the MVPs. Moreover, in the CY 2022 PFS final rule (86 FR 65998 through 66031), we finalized seven MVPs that will be available for reporting beginning with the CY 2023 performance period/2025 MIPS payment year. We are proposing revisions to these seven MVPs based on the proposed removals of certain activities from the improvement activities inventory and the addition of other relevant existing quality measures for MVP participants to select from. Through this rulemaking cycle, we are proposing five additional new MVPs:
The MVP framework aims to reduce complexity and burden, move towards more meaningful measurement, capture the patient voice, and move to higher value care. We are continuing to explore opportunities to advance health equity in accordance with the CMS Framework for Health Equity 2022-2023,[361] across all CMS programs and policies, including the MVP framework. We are considering how MVPs should evolve to better promote higher value care and APM participation by both primary care and specialist clinicians. We are seeking public comment, through a request for information (see section IV.A.7.b of this proposed rule), on ways to integrate MVPs into APP reporting and how to best facilitate specialty clinician reporting of quality performance measures (in addition to the APP) that reflect the specialty services provided. b. Subgroup ReportingTo support clinicians in their transition to subgroup reporting, subgroup reporting will be voluntary for the CY 2023, 2024, and 2025 performance periods/2025, 2026, and 2027 MIPS payment years. Multispecialty groups that choose to report through an MVP will be required to participate as subgroups beginning with CY 2026 performance period/2028 MIPS payment year. As discussed in section IV.A.8.e. of this proposed rule, we are proposing the following policies for subgroups: • Subgroup description requirement: To allow flexibility for groups to explore the different ways they could utilize subgroups, we are not proposing any restrictions related to the composition of a subgroup. Instead, we are proposing that a group must submit a description of each subgroup at the time of registration. We believe that the subgroup description would help us understand the underlying rationale for how groups placed clinicians in a subgroup and help us utilize these characteristics to shape subgroup criteria in the future. • Limitation of one subgroup per TIN-NPI combination: A TIN could choose to form more than one subgroup for reporting MVPs. However, due to operational complexity, we are proposing that an individual eligible clinician, as represented by a TIN/NPI combination may register for no more than one subgroup within a group's TIN. • Subgroup determination period: We are proposing that CMS will apply the low-volume threshold criteria for a subgroup as described under § 414.1318(a)(1) using information from the first segment of the applicable MIPS determination period. • Subgroup scores for administrative claims measures and cost measures: We are proposing that subgroups are scored on each selected population health measure based on their affiliated group score, if available and that if the subgroup's affiliated group score is not available, each such measure is excluded from the subgroup's total measure achievement points and total available measure achievement points. We are also proposing that subgroups are scored on the cost measures included in the MVP that they select, based on their affiliated group score, if available. If the affiliated group score is not available, the measure is excluded from the subgroup's total measure achievement points and total available measure achievement points, as described under § 414.1380(b)(2)(i) through (v). We believe that these policies would help address the issues identified with assessing performance of the administrative claims measures at the subgroup level. • Scoring for subgroups that register but do not report: We are proposing that we will not assign a score for subgroups that register but do not submit data for an applicable performance period. 2. Major APM Provisions(a) APM Entity ReportingWe are proposing to introduce the option for APM Entities to report the Promoting Interoperability performance category at that APM Entity level. (b) APM Entity Level Reporting of Promoting Interoperability Performance CategoryWe are proposing to introduce a voluntary reporting option for APM Entities to report the promoting interoperability performance category at the APM Entity level beginning with the 2023 performance period. (c) Request for Information Regarding QP Determination Calculations at the Individual Eligible Clinician LevelWe are including a comment solicitation regarding sunsetting the use of APM Entity level QP determinations and instead making QP determinations at the individual eligible clinician level only. (d) Payment Based on Quality MeasuresWe propose revisions to the regulations to clarify that the criterion for Advanced APMs that payment must be based on quality measures can be met through the use of a single quality measure that meets the criteria specified at § 414.1415(b)(2) and (b)(3). We are also proposing conforming changes in the Other Payer Advanced APM regulations. (e) Generally Applicable Nominal Amount StandardWe are proposing to permanently establish the generally applicable revenue-based nominal amount standard at 8 percent of the average Start Printed Page 46258 estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities for the applicable QP Performance Period, beginning with the 2023 QP Performance Period. We are also proposing conforming changes in the Other Payer Advanced APM regulations. (f) Medical Home Model 50 Eligible Clinician LimitWe propose to apply the 50 eligible clinician limit directly to the APM Entity participating in the Medical Home Model, and to no longer look to the parent organization for the APM Entity. We would identify the eligible clinicians in the APM Entity on each of the three QP determination dates (March 31, June 30, and August 31). This policy would become effective in Performance Year 2023. We are also proposing conforming changes in the Other Payer Advanced APM regulations which will require that the eligible clinician pursuing the option provide the relevant information. (g) Request for Information Regarding the Transition From APM Incentive Payments to the Enhanced PFS Conversion Factor Update for QPsWe are including a comment solicitation regarding the gap in statutory financial incentives for QPs in the 2025 payment year, and the difference in potential financial incentives between QPs and MIPS eligible clinicians in payment years beginning in 2026. 3. Other MIPS and APM Policies(a) Quality Performance CategoryIn section IV.A.10.c.(1)(b) of this proposed rule, we are proposing the following: expand the definition of the term high priority measure to include health equity quality measures; change the CAHPS for MIPS case-mix adjustor for “Asian language survey completion” to use instead the “language other than English spoken at home” variable; increase the data completeness criteria threshold from 70 percent to 75 percent for the CY 2024 and 2025 performance periods/2026 and 2027 MIPS payment years; and establish a set of 195 quality measures. In section IV.A.10.c.(1)(d) of this proposed rule, we are seeking public comment regarding each of the following topics: the addition of questions related to health disparities and price transparency to the CAHPS for MIPS Survey; the development and implementation of health equity quality measures; and the development and implementation of quality measures that address amputation avoidance in diabetic patients. (b) Cost Performance CategoryIn section IV.A.3.b. of this proposed rule, we are proposing to update the operational list of care episode and patient condition groups and codes by adding the Medicare Spending Per Beneficiary (MSPB) Clinician cost measure as a care episode group. (c) Improvement Activities Performance CategoryWe are proposing to add four new, modify five existing, and remove five existing improvement activities from the Inventory. The new and modified activities help fill gaps we have identified in the Inventory as well as seek to ensure that activities reflect current clinical practice across the category. All four of the new activities being proposed relate to CMS Six Health Equity Priorities for Reducing Disparities in Health. We are also recommending the removal of five activities, both to align with current clinical guidelines and practice as well as to eliminate duplication, so that the Inventory offers flexibility and choice without a potentially burdensome number of activities available. (d) Promoting Interoperability Performance CategoryWe are proposing several changes to the Promoting Interoperability performance category. Specifically, we are proposing: (1) to require and modify the Electronic Prescribing Objective's Query of Prescription Drug Monitoring Program (PDMP) measure while maintaining the associated points at 10 points; (2) to expand the Query of PDMP measure to include not only Schedule II opioids, but also Schedule III, and IV drugs; (3) to add a new Health Information Exchange (HIE) Objective option, the Enabling Exchange under the Trusted Exchange Framework and Common Agreement (TEFCA) measure (requiring a yes/no response), as an optional alternative to fulfill the objective; (4) to consolidate the current options from three to two levels of active engagement for the Public Health and Clinical Data Exchange Objective and to require the reporting of active engagement for the measures under the objective; (5) to modify the scoring methodology for the Promoting Interoperability performance category; and (6) to continue to reweight the Promoting Interoperability performance category for certain types of non-physician practitioner MIPS eligible clinicians. (e) Payment AdjustmentWe are proposing to use the CY 2019 MIPS payment year as the prior period and the rounded mean final score of 75 points from that prior period as the performance threshold for the CY 2025 MIPS payment year. (f) ScoringFor scoring of the quality performance category, we are proposing to score administrative claims measures using benchmarks calculate from data collected during the performance period and clarifying the topped-out measure lifecycle in instances where a measure is suppressed or otherwise has a benchmark removed. We also include a request for information on which additional risk indicators and data sources we should consider for the complex patient bonus to better assess the social and medical complexity for the patients of MIPS eligible clinicians. Lastly, we are proposing to establish a maximum cost improvement score of 1 percentage point out of 100 percentage points available for the cost performance category starting with the CY 2022 performance period/2024 MIPS payment year. (g) Third Party IntermediariesWe are proposing to update the definition of third party intermediary consistent with existing policies and to make other minor technical edits to the regulation text governing third party intermediaries accordingly. We are also proposing to revise QCDR measure self-nomination and measure approval requirements, including proposing to delay the QCDR measure testing requirement for traditional MIPS by an additional year, until the CY 2024 performance period/2026 MIPS payment year. We are proposing to continue delaying this requirement based on our recognition of the continuing impact of the COVID-19 public health emergency on the ability of QCDRs to test measures. We are also proposing to revise remedial action and termination policies. Finally, we have included two requests for information on third party intermediary support of MVPs and national Continuing Medical Education (CME) organizations becoming a new type of third-party intermediary. (h) Public Reporting/Physician CompareIn an effort to expand the information available to patients and caregivers when choosing a doctor or clinician, we propose publicly reporting on individual clinician and group profile pages: • A telehealth indicator, as applicable, and technically feasible, for those clinicians furnishing covered telehealth services. Start Printed Page 46259
Additionally, we would like interested party feedback, through a request for information, on ways to incorporate health equity into public reporting on Care Compare. c. Continuing To Advance to Digital Quality Measurement and the Use of Fast Healthcare Interoperability Resources (FHIR) in Physician Quality Programs—Request for InformationIn the CY 2022 PFS final rule, we stated our aim to move fully to digital quality measurement in CMS quality reporting and value-based purchasing programs (86 FR 65377 through 65382). As part of this modernization of our quality measurement enterprise, we are issuing this request for information to gather additional public input on the 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 notice-and-comment rulemaking. This request for information contains five parts: • Background. This part provides an overview of our goals and strategies to achieve digital quality measurement, and notes input and learnings relevant to these goals and strategies. • Potential Refined definition of Digital Quality Measures (dQMs). This part outlines potential revisions for a future definition for dQMs. • Data Standardization Activities to Leverage and Advance Standards for Digital Data. This part discusses data standardization strategies and potential venues for advancing data standardization. • Approaches to Achieve FHIR® eCQM Reporting. This part describes activities we are undertaking and considering to achieve FHIR-based electronic clinical quality measure (eCQM) reporting (for example, via FHIR Application Programming Interfaces or APIs) as our initial implementation of dQMs. • Solicitation of Comments. This part lists all requests for input included in the sections of this request for information. (1) BackgroundIn the CY 2022 PFS final rule, we noted the continued focus on use of digital data and advancements in technology and technical standards to improve interoperability of healthcare data which creates opportunity to significantly improve our quality measurement systems (86 FR 65377 through 65382). In a learning health system, standardized and interoperable digital data from a single point of collection can support multiple use cases, including quality measurement, quality improvement efforts, clinical decision support, research, and public health. We believe data used for quality measurement, as well as these other use cases, should be a seamless outgrowth of data generation from routine workflows. Data sharing should be standards-based to maximize interoperability, minimize burden, and facilitate the development and use of common tooling across use cases. This approach supports data analysis, rapid-cycle feedback, and quality measurement that are aligned for continuous improvement in patient-centered care. We are continuing to define how we can leverage existing policy to transform all CMS quality measurement to digital reporting, such as policy finalized in the Office of the National Coordinator for Health Information Technology's (ONC) 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program final rule, hereinafter referred to as the ONC 21st Century Cures Act final rule (85 FR 25642). In that rule, ONC finalized a “Standardized API for patient and population services” certification criterion (45 CFR 170.315(g)(10)) for certified health information technology (IT) requiring the use of FHIR Release 4.0.1 and several other implementation specifications, for health IT modules certified to that criterion. 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 (85 FR 25670) also required health IT developers to update their certified health IT to support the United States Core Data for Interoperability (USCDI) standard, Version 1 for all certification criteria that reference it.[362] By aligning technology requirements for payers, healthcare 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 CY 2022 PFS final rule, we outlined actions in four areas to transition to digital quality measures: (1) leverage and advance standards for digital data and obtain all electronic health record (EHR) data required for quality measures via provider FHIR-based application programming interfaces (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 (86 FR 65377 through 65382). The actions are further described in CMS' Digital Quality Measurement Strategic Roadmap available at https://ecqi.healthit.gov/dQM. In this request for information, we focus on data standardization activities related to leveraging and advancing standards for digital data and approaches to transition to FHIR eCQM reporting in the future, as initial steps in our transition to digital quality measurement. In the CY 2022 PFS final rule, we also stated our goal of moving to digital quality measurement for all CMS quality reporting and value-based purchasing programs (86 FR 65377 through 65382). We further clarify that we plan to transition incrementally, beginning with the adoption of FHIR API technology and shifting to eCQM reporting using FHIR standards as described in section IV.A.4.d. of this proposed rule. We aim to achieve a quality measurement system fully based on digital measures. The goals of a fully digital measurement system include: reduced burden of reporting; provision of multi-dimensional data in a timely fashion, rapid feedback, and transparent reporting of quality measures; digital measures leveraged for advanced analytics to define, measure, and predict key quality issues; and quality measures that support development of a learning health system, which uses key data that are also used for care, quality improvement, public health, research, etc. (2) Potential Future Definition of Digital Quality Measures (dQMs)In the CY 2022 PFS final rule (86 FR 65379), we suggested a potential future definition of dQM for advanced feedback. Based on comments received on the RFI that the term “software” is confusing, we are now further revising our potential future definition such that a dQM is a quality measure, organized as self-contained measure specification and code package, that uses one or more sources of health information that is captured and can be transmitted electronically via interoperable systems. We continue to note potential data sources for dQMs may include administrative systems, electronically submitted clinical assessment data, case Start Printed Page 46260 management systems, EHRs, laboratory systems, prescription drug monitoring programs (PDMPs), instruments (for example, medical devices and wearable devices), patient portals or applications (for example, for collection of patient-generated data such as a home blood pressure monitor, or patient-reported health data), health information exchanges (HIEs) or registries, and other sources. We are currently considering how eCQMs, which use EHR data, can be refined or repackaged to fit within the potential future dQM definition. While eCQMs meet the definition for dQMs in many respects, limitations in data standards, requirements, and technology have limited their interoperability. In the current state, there are multiple standards that must be supported (for example, Health Quality Measurement Format (HQMF) [363] and Quality Reporting Document Architecture (QRDA) [364] ) for eCQM data collection and reporting. Mapping EHR data can be challenging and burdensome for providers as there is often novel data collection occurring to support quality measurement. For example, eCQMs require steps to map data elements from the EHR to the appropriate format. Future dQMs would leverage interoperability standards to decrease mapping burden and align standards for quality measurement with interoperability standards used in other healthcare exchange methods. We seek comment on this potential future refined definition of dQM and feedback on potential considerations or challenges related to non-EHR data sources. (3) Data Standardization Activities To Leverage and Advance Standards for Digital DataAs noted in the CY 2022 PFS final rule (86 FR 65379), we are considering implementing eCQM quality reporting via FHIR-based APIs based on standardized, interoperable data. Advancing data standardization is a critical step for this implementation, and for long-term digital measurement strategies. Utilizing standardized data for EHR-based measurement (based on the FHIR standard) and aligning where possible with other interoperability requirements can reduce the data collection burden incurred by providers for the purpose of reporting quality measures. Utilizing standardized data also supports achieving the goals of transitioning to a fully digital quality measurement system identified in section IV.A.4.a. of this proposed rule, including provision of timely feedback, leveraging the same data for multiple use cases, and contributing to a learning health system. We intend to utilize standardized data for quality measurement as one use case of digital data in a learning health system. In a learning health system, standardized digital data can support multiple use cases, including quality measurement, quality improvement efforts, clinical decision support, research, and public health. We believe that standardization across data elements and data models is necessary to ensure data are accessible across use cases and enable the transmission of data through each stage of the health system's learning process. Standardized data and FHIR APIs are important for advancing interoperability; the goal is for data to be sent and received via trusted exchanges, and for patients to have access to their data. Operations activities (for example, prior authorization) are also dependent on standardized, interoperable data. Additionally, standardization is necessary across implementation guides, or rules for how a particular interoperability standard should be used,[365] and across value sets that organize the specific terminologies and codes that define clinical concepts.[366] Commenters on the request for information in the CY 2022 PFS proposed rule encouraged the use of data elements for quality measurement that are consistent with ONC's USCDI standard (45 CFR 170.213),[367] where possible. We agree with this approach. To advance the use of standardized data, models, implementation guides, and value sets in quality measurement, we continue to focus on leveraging the interoperability data requirements for standardized APIs in certified health IT certified to certain certification criteria, set by the ONC 21st Century Cures Act final rule and any future updates made in rulemaking, as a vehicle to support modernization of CMS quality measure reporting. These API requirements are being implemented as part of a series of updates to certified health IT (85 FR 84825), and include availability of data included in the USCDI via standards-based APIs. In the CY 2021 PFS final rule, we finalized that eligible clinicians and eligible hospitals and CAHs participating in MIPS and the Medicare Promoting Interoperability Program, respectively, must transition to use of certified technology updated consistent with the 2015 Edition Cures Update by 2023 (85 FR 84825). We aim to align with these standardized data requirements as the basis for data used in quality measurement. We are collaborating with Federal agencies to define and prioritize additional data standardization needs and develop consensus with federal partners on recommendations for future versions of the USCDI. We are also directly collaborating with ONC to build requirements to support data standardization and alignment with requirements for quality measurement. ONC recently launched the USCDI+ initiative focused on supporting identification and establishment of domain specific datasets that build on the core USCDI foundation.[368] A USCDI+ quality measurement domain currently being explored would support defining additional data specifications for quality measurement that harmonize, where possible, with other Federal agency data needs and inform supplemental standards necessary to support quality measurement. We also received feedback on the request for information in the CY 2022 PFS proposed rule that the use of Health Level Seven (HL7®) Implementation Guides should be foundational to FHIR measure reporting. To advance implementation of standardized data, we continue to collaborate with consensus standards-setting bodies such as HL7. We are considering how best to leverage existing implementation guides that are routinely updated and maintained by HL7 to define data standards and exchange mechanisms for FHIR-based dQMs, in a fashion that supports the learning health system and alignment across use cases, including the following existing HL7 Implementation Guides: • U.S. Core Implementation Guide; [369] • Quality Improvement Core (QI Core) Implementation Guide; [370] • Data Exchange for Quality Measures (DEQM) Implementation Guide; [371] and • Quality Measure (QM) Implementation Guide.[372] Start Printed Page 46261 We are also considering what, if any, additional CMS-specific implementation guides may be necessary to support future digital quality measurement such as guidance on aggregation mechanisms for reporting. We recognize the importance of considering how implementation guides used across quality measurement and other use cases (for example, public health reporting, clinical decision support) work together to support a learning health system. For example, the Clinical Guidelines (CPG) Implementation Guide [373] connects computable guidelines, clinical decision support, quality reporting, and case reporting. The mechanisms for reporting across use cases are also critical to consider, as each time a different mechanism for reporting is needed across different use cases, it creates more burden. We are collaborating closely with federal partners, such as the Centers for Disease Control and Prevention (CDC), to align where possible. We believe developing appropriately defined implementation guides will be a key component of supporting standardized FHIR APIs that enable access to standardized data elements for particular use cases, such as quality measurement. We seek comment on the specific Implementation Guides noted previously, additional Implementation Guides we should consider, and other data and reporting components (for example, data vocabulary/terminology, alignment with other types of reporting) where standardization should be considered to advance data standardization for a learning health system. (4) Approaches To Achieve FHIR eCQM ReportingWe previously noted in the CY 2022 PFS final rule (86 FR 65379) the activities we are conducting to begin structuring and reporting eCQMs using FHIR. eCQMs are a subset of dQMs. We consider the transition to FHIR-based eCQM reporting the first step to dQM reporting, and a potential model for how future digital reporting can occur. To support the transition, we continue to undertake and consider activities necessary for reporting of FHIR-based eCQMs and future dQMs:
We also continue to consider how best to leverage the ONC interoperability certification criteria related to implementing FHIR API technology to access and electronically transmit interoperable data for quality measurement. Based on feedback on the CY 2022 PFS proposed rule request for information, many supported the use of FHIR APIs, while others expressed concern around infrastructure readiness. We continue to explore how to leverage FHIR APIs to decrease reporting burden and support implementor readiness. We seek comment on approaches to optimize data flows for quality measurement to retrieve data from EHRs via FHIR APIs, and to combine data needed for measure score calculation for measures that require aggregating data across multiple providers (for example, risk-adjusted outcome measures) and multiple data sources (for example, hybrid claims-EHR measures). We are interested in data flows that support using the same data for measurement and to provide feedback to providers at multiple levels of accountability, such as at the individual clinician, group, accountable care organization and health plan levels, as are used for patient care and other use cases (for example, public health reporting). We seek comment on additional venues to engage with implementors during the transition to digital quality measurement, and other critical considerations during the transition. We also seek comment on data flow options to support FHIR-based eCQM reporting. (5) Solicitation of CommentsAs noted previously, we seek input on the following:
++ Do you have feedback on the potential refined definition of digital quality measures (dQMs)? ++ Do you have feedback on potential considerations or challenges related to non-EHR data sources?
++ Do you have feedback on the specific implementation guides we are considering, additional FHIR implementation guides we should consider, or other data and reporting components where standardization should be considered to advance data standardization for a learning health system?
++ Are there additional venues to engage with implementors during the transition to digital quality measurement? ++ What data flow options should we consider for FHIR-based eCQM reporting, including retrieving data from EHRs via FHIR APIs and other mechanisms? Start Printed Page 46262 ++ Are there other critical considerations during the transition? B. Advancing the Trusted Exchange Framework and Common Agreement (TEFCA)—Request for InformationSection 4003(b) of the 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted on December 13, 2016), amended section 3001(c) of the Public Health Service Act (42 U.S.C. 300jj-11(c)), and required HHS to take steps to advance interoperability for the purposes of ensuring full network-to-network exchange of health information. Specifically, Congress directed the National Coordinator to “develop or support a trusted exchange framework, including a common agreement among health information networks nationally.” Since the enactment of the Cures Act, HHS has pursued development of a Trusted Exchange Framework and Common Agreement (TEFCA). ONC's goals for TEFCA are as follows: Goal 1: Establish a universal policy and technical floor for nationwide interoperability. Goal 2: Simplify connectivity for organizations to securely exchange information to improve patient care, enhance the welfare of populations, and generate health care value. Goal 3: Enable individuals to gather their health care information.[374] On January 18, 2022, ONC announced a significant TEFCA milestone by releasing the Trusted Exchange Framework [375] and Common Agreement Version 1.[376] The Trusted Exchange Framework is a set of non-binding principles for health information exchange, and the Common Agreement for Nationwide Health Information Interoperability Version 1 (also referred to as Common Agreement) is a contract that advances those principles. The Common Agreement and the incorporated by reference Qualified Health Information Network (QHIN) Technical Framework Version 1 (QTF) [377] establish the technical infrastructure model and governing approach for different health information networks and their users to securely share clinical information with each other, all under commonly agreed to terms. The Common Agreement is a legal contract that QHINs [378] sign with the ONC Recognized Coordinating Entity (RCE),[379] a private-sector entity that implements the Common Agreement and ensures QHINs comply with its terms. The technical and policy architecture of how exchange occurs under TEFCA follows a network-of-networks structure, which allows for connections at different levels and is inclusive of many different types of entities at those different levels, such as health information networks, care practices, hospitals, public health agencies, and Individual Access Services (IAS) [380] Providers.[381] QHINs connect directly to each other to facilitate nationwide interoperability, and each QHIN can connect Participants, which can connect Subparticipants.[382] Compared to most nationwide exchange today, the Common Agreement includes an expanded set of Exchange Purposes beyond Treatment to include Individual Access Services, Payment, Health Care Operations, Public Health, and Government Benefits Determination [383] —all built upon common technical and policy requirements to meet key needs of the U.S. health care system. This flexible structure allows interested parties to participate in the way that makes most sense for them, while supporting simplified, seamless exchange. The QTF,[384] which was developed and released by the RCE, describes the functional and technical requirements that a Health Information Network (HIN) [385] must fulfill to serve as a QHIN under the Common Agreement. The QTF specifies the technical underpinnings for QHIN-to-QHIN exchange and certain other responsibilities described in the Common Agreement. The technical and functional requirements described in the QTF enable different types of information exchange, including querying and message delivery across participating entities. In 2022, prospective QHINs are anticipated to begin signing the Common Agreement and applying for designation. The RCE will then begin onboarding and designating QHINs to share information. In 2023, HHS expects interested parties across the care continuum to have increasing opportunities to enable exchange under TEFCA. Specifically, this would mean such interested parties would be: (1) signatories to either the Common Agreement or an agreement that meets the flow-down requirements of the Common Agreement (called a Framework Agreement [386] under the Start Printed Page 46263 Common Agreement), (2) in good standing (that is, not suspended) under that agreement, and (3) enabling secure, bi-directional exchange of information to occur, in production. TEFCA is expected to give individuals and entities easier, more efficient, access to more health information while requiring strong privacy and security protections. We believe that exchange of health information enabled by the Common Agreement can advance CMS policy and program objectives related to care coordination, cost efficiency, and patient-centeredness in a variety of ways. We also believe that CMS policy and programs can help to accelerate nationwide connectivity through TEFCA by health care providers as well as other interested parties. As discussed in section IV.A.10.c.(4)(e) of this proposed rule, we are proposing to add a new Enabling Exchange Under TEFCA measure in the Promoting Interoperability performance category. This proposed measure would provide eligible clinicians with the opportunity to earn credit for the Health Information Exchange objective if they: are a signatory to a “Framework Agreement” as that term is defined in the Common Agreement; enable secure, bi-directional exchange of information to occur for all unique patients of eligible clinicians, and all unique patient records stored or maintained in the EHR; and use the functions of CEHRT to support bi-directional exchange. In addition to this proposal, we are considering other ways that available CMS policy and program levers can advance information exchange under TEFCA. For instance, similar to the proposal in the current rule, there may be opportunities for CMS to incentivize exchange under TEFCA through other programs that incentivize high quality care, or through program features in value-based payment models that encourage certain activities that can improve care delivery. In addition to programs focused on health care providers, we are interested in opportunities to encourage exchange under TEFCA through CMS regulations for certain health care payers, including Medicare Advantage, Medicaid Managed Care, and CHIP issuers. For instance, we believe there may be opportunities to encourage information exchange under TEFCA to support recently finalized requirements for these payers to make information available to patients and to make patient information available to other payers as beneficiaries transition between plans in the “Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Interoperability and Patient Access for Medicare Advantage Organization and Medicaid Managed Care Plans, State Medicaid Agencies, CHIP Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans on the Federally-Facilitated Exchanges, and Health Care Providers” final rule (85 FR 25510). Finally, we are considering future opportunities to encourage information exchange under TEFCA for payment and operations activities such as submission of clinical documentation to support claims adjudication and prior authorization processes. We are requesting input from the public on the ideas described previously and related concepts for future exploration, as well as the following questions:
C. DefinitionsAt § 414.1305, we are proposing revisions to the definitions of the following terms:
These terms and definitions are discussed in detail in the relevant sections of this proposed rule. 7. Transforming MIPS: MVP Strategya. MVP Vision OverviewWe are moving to MIPS Value Pathways (MVPs) to improve value, reduce burden, inform patient choice in selecting clinicians, and reduce barriers to participation in Alternative Payment Models (APMs). We intend to promote high value care by connecting performance on cost, quality, and patient experience of care to payment. We believe the MVP framework will move MIPS forward on the path to value by connecting the MIPS performance categories, better informing and empowering patients to make decisions about their healthcare, and by helping clinicians to achieve better outcomes using robust and accessible healthcare data and interoperability. The MVP framework aims to reduce complexity and burden, move towards more meaningful measurement, capture the patient voice, and move to higher value care. We intend for MVPs to drive value and help clinicians and practices prepare to take on and manage financial risk, for example, through Advanced APMs, as they build out their quality infrastructure components and gain experience with cost measurement. We envision that MVPs, in which there is aligned measurement of quality of care and cost, continuous improvement and innovation within the practice, and efficient management and transfers of information, will help clinicians deliver higher value care and remove barriers to APM participation. Combining linked performance measures and activities with more standardization and focused reporting of meaningful measures in MVPs will, we believe, produce data that can better assist patients in comparing clinician performance and in selecting clinicians. Such data can also assist clinicians in making care improvements and making appropriate specialist referrals. As more clinicians have applicable MVPs available, the performance data available to patients will expand, and in the future, information on specialists in Start Printed Page 46264 multispecialty groups will increase on our Compare Tools, enabling patients to make more informed choices for their care. MVPs will be available for voluntary reporting beginning with the CY 2023 MIPS performance period, and we intend for MVPs to become the only method to participate in MIPS in future years, although we have not yet finalized the timing for the sunset of traditional MIPS.[387] We are continuing to explore opportunities to advance health equity across all CMS programs and policies. The CMS Office of Minority Health released Paving the Way to Equity: A Progress Report in 2021, which describes the CMS Equity Plan for Medicare and progress from 2015 to 2021.[388] The progress report considers emerging opportunities to build on progress with a focus on CMS current strategic initiatives, HHS priorities, and areas in which CMS quality improvement efforts will move forward.[389] MIPS improvement activities that support and recognize impactful disparities reduction efforts are acknowledged in the CMS Equity Progress Report.[390] More recently, on April 22, 2022, the CMS Office of Minority Health released the CMS Framework for Health Equity,[391] which updates the CMS Equity Plan with an enhanced and more comprehensive 10-year approach to further embed health equity across CMS programs including Medicare, Medicaid, CHIP, and the Health Insurance Marketplaces. This CMS Framework for Health Equity outlines five priorities: (1) Expand the collection, reporting and analysis of standardized data; (2) Assess causes of disparities within CMS programs, and address inequities in policies and operations to close gaps; (3) Build capacity of health care organizations and the workforce to reduce health and health care disparities; (4) Advance language access, health literacy, and the provision of culturally tailored services; and (5) Increase all forms of accessibility to health care services and coverage.[392] We intend to use this health equity framework across CMS to design, implement, and operationalize policies to support health for all people served by our programs, eliminating avoidable differences in health outcomes experienced by people who are disadvantaged or underserved, and providing the care and support that our beneficiaries need to thrive. We are considering ways that we can advance health equity via the Quality Payment Program. As we implement MVPs, we are considering how best to further the five priorities of the CMS Framework for Health Equity. We intend for both MVPs and APMs to advance health equity and increase the value of health care for all as we leverage improvement activities, quality measure performance data, and public reporting. We anticipate that MVPs and APMs will have greater impact on health equity as participation grows. The CMS Center for Medicare & Medicaid Innovation's (CMMI) strategy refresh white paper [393] includes advancing health equity as one of five objectives that guide CMMI's models, priorities, and assessment of impact.[394] In this CY 2023 PFS proposed rule we consider approaches for advancing health equity in MIPS in section IV.A.10.c.(1)(b) through IV.A.10.c.(1)(d) of this proposed rule. See section IV.A.10.c.(1)(c)(i) of this proposed rule regarding potential next steps related to a proposed social determinants of health quality measure. See sections IV.A.10.c.(1)(d) and IV.A.10.h.(3) for our request for comment on the inclusion of a health equity measure in MIPS and MIPS Compare Tool public reporting in the future. We presented our MVP vision and guiding principles in the CY 2021 PFS final rule (85 FR 84844 through 84845). We intend for MVP implementation to drive value, obtain comparative performance data, and elevate the patient voice while reducing clinician burden. We strive to achieve meaningful performance measurement, burden reduction, scoring equity, and increased value. The MVP framework was discussed in the CY 2020 and the CY 2021 PFS proposed rules (84 FR 40732 through 40734, and 85 FR 50279, respectively) and CY 2021 PFS final rule (85 FR 84844 through 84845). Our MVP framework calls for linking the quality, cost, and improvement activities performance categories, as well as a foundation of required reporting for the Promoting Interoperability performance category and population health claims-based quality performance category measures. We continue to consider how to best implement an MVP portfolio that balances our MVP goals for transformative change and our five MVP guiding principles as discussed in the CY 2021 PFS final rule (85 FR 84845 through 84546) within current CMS and clinician practice capabilities. We previously described in the CY 2022 PFS proposed rule (86 FR 39354) how we are beginning to implement the MVP guiding principles, and in the CY 2019 PFS proposed rule (83 FR 40732 through 40733) we discussed how MVPs can help ready clinicians for APM participation. We finalized policies around MVP reporting by subgroups (CY 2022 PFS final rule, 86 FR 654398 through 65401) that allow specialty clinicians to report meaningful performance information to MIPS and that better represents the non-primary care, specialty services provided. We also continue to develop MVP subgroup reporting policies and propose a modification of the definition of single specialty and multispecialty group to include claims as the data source used in the specialty determination (see section IV.A.8.e.(2) of this proposed rule). We continue to contemplate how to support specialty clinician reporting for APM participants who report to MIPS through the APM Performance Pathway (APP) and potentially MVPs. See CY 2021 PFS final rule (85 FR 84860) and section IV.A.9.b. of this proposed rule for details on the APP. We are also considering how MVPs should evolve to better promote higher value care and APM participation by both primary care and specialist clinicians. b. MVPs and APM Participant Reporting Request for Information(1) OverviewMVPs and APMs share a goal of meaningful performance measurement and burden reduction, along with objectives of scoring equity and advancing value. Interested parties have requested more options for meaningful specialty clinician participation within both the MVP framework and APMs (85 FR 84845 and 86 FR 65391). We have developed MVP and subgroup reporting policies to provide meaningful MIPS performance measurement for both primary care and specialist clinicians (86 FR 65414). We received requests from interested parties to further define the relationship between MVPs and Start Printed Page 46265 APMs and previously requested public feedback on this topic (86 FR 39354 and 39355). We sought public feedback via a request for comment in the CY 2022 PFS proposed rule on innovative approaches to achieving our desired MVP goals to improve value, reduce burden, help patients compare clinician performance, and reduce barriers to joining APMs (86 FR 39353 and 39354). We discussed how to best coordinate and align MVPs and APMs and noted we would continue to explore the ideal MVP relationship with APMs to drive value (86 FR 39354). While we did not summarize the responses to this request for comment in the CY 2022 PFS final rule, several commenters requested to see close alignment between MVPs and APMs. Some commenters specifically suggested using APM measures in MVPs and others suggested we adopt a flexible MVP framework similar to APMs in that it centers on quality improvement, efficient resource use, patient reported outcomes and satisfaction, and enhanced technology to care for patients with specific medical conditions. A few commenters referred to challenges for specialists in reporting quality performance data under MIPS and their respective APM separately, resulting in additional reporting burden. We are considering what close alignment between MVPs and APMs would mean and welcome additional feedback as more MVPs are developed. We seek public comments on addressing the challenges commenters noted regarding specialist reporting of quality performance data and outline concepts in this section of this proposed rule. We recognize a gap in the availability of specialty clinician performance data for APM participants to inform patient selection of clinicians based on clinician quality and value improvement data. Of the 933,547 MIPS eligible clinicians receiving a MIPS payment adjustment for the 2020 performance year, 398,719 participated in MIPS as APM participants, a significant 42.7 percent ( qpp.cms.gov ).[395] We acknowledge the 2022-2024 APM Performance Pathway (APP) measure set (86 FR 65431) may not fully represent the services provided and the patients treated by all clinician types in a group, for example, when a group includes multiple specialties, such as emergency medicine, orthopedic surgery, and neurology in the Medicare program. We expect many clinicians who are part of APMs and do not attain QP status will report for MIPS using the APP. We seek ideas for how we could obtain more robust reporting of both primary care and specialty care performance measurement information from APM participants. We would like to consider policy ideas that would encourage the reporting of specialty services performance information in addition to the APP, for example and to the extent feasible, by extending APP scoring policies for the cost and improvement activities performance categories outside the APP, finding a way to roll MVP quality measure performance data into the APP, or by some other method. These policy options should be considered in conjunction with the proposals in sections IV.A.8.e.(3) and IV.A.9.b. of this proposed rule where we request input on policies to formalize subgroup registration and reporting of the APP. As we move forward with MVP implementation, we continue to seek feedback on ways to better align clinician experience between MVPs and APMs, and to ensure that MVP reporting serves as a bridge to APM participation. While we believe that MVPs will serve an important role in furthering specialty measurement, we also believe that primary care measurement will be integral to MIPS. We envision MVP reporting to complement APP reporting such that it will enhance performance measurement and available information while minimizing additional burden. We look for feedback on the benefits and disadvantages of various approaches, keeping in mind our goals of enhancing specialty specific performance measurement and available information for patients while also minimizing complexity where possible. We continue to solicit input as we consider solutions, the direction of our MVP framework, and its intersection with APMs. (2) Solicitation of CommentsWe are seeking feedback on the following as described in section IV.A.7.b.(1) of this proposed rule:
8. MVP Development and Reporting Requirementsa. MVP Development(1) Development of New MVPsWe intend to develop MVPs, to the extent feasible and appropriate, by including interested parties in the process (85 FR 84849 and 84850). For a description of the current process for developing new MVPs, we refer readers to the CY 2021 PFS final rule (85 FR 84849 through 84856). Commenters suggested that we work in tandem with clinicians and specialty societies to develop MVPs (84 FR 62948) and have supported the development of MVPs with robust input from interested parties and feedback opportunities. While this process has provided value in the development of meaningful MVPs for the program, we agree and believe that we should also consider feedback during the MVP development process from a wide range of interested parties and the general public before the notice and comment rulemaking process. By creating the opportunity for feedback earlier in the MVP development process, we hope to receive a broader set of perspectives on a draft MVP, including the perspectives of: patients, patient advocates, practices that serve underserved and rural areas, specialty organizations, health systems, and the general public. We believe it is important to receive feedback from interested parties and the general public early in the MVP development process to ensure the MVPs that are developed are meaningful and resonate with clinicians- including those who serve patients in small practices, or in rural or underserved areas where patient populations may face health equity barriers. Clinicians may use the results of MVP reporting results to determine areas of practice improvement, and identify gaps in clinical outcomes. In addition, patients may leverage the granular data ascertained through MVP reporting to make informed decisions Start Printed Page 46266 when selecting a clinician or specialist to participate in their care. Therefore, we propose to modify the MVP development process such that we would evaluate a submitted candidate MVP through the MVP development process, and if we determine it is “ready” for feedback, we would post a draft version of the submitted candidate MVP on the Quality Payment Program website ( https://qpp.cms.gov/) and solicit feedback for a 30-day period. Interested parties and the general public would have the opportunity to submit feedback on the candidate MVP for CMS's consideration through an email inbox. We would review the feedback received, and determine if any changes should be made to the candidate MVP prior to potentially including the MVP in a notice of proposed rulemaking. If we determine changes should be made to the candidate MVP, we would not notify the interested parties who originally submitted the candidate MVP for CMS consideration in advance of the rulemaking process. We request comments on this proposal. (2) MVP Maintenance Process and Engagement With Interested PartiesIn the CY 2022 PFS final rule (86 FR 65410), we finalized an annual maintenance process for MVPs that were previously finalized through notice and comment rulemaking. We established a process for soliciting recommendations from interested parties for potential updates to finalized MVPs. As part of this process, beginning in January of the year prior to the performance period, interested parties may submit recommendations to revise an MVP that was previously finalized through rulemaking. Recommendations from interested parties will be accepted on a rolling basis throughout the year. We stated that we would be unable to communicate with interested parties as to whether their recommendations were accepted ahead of rulemaking, and that we would ultimately determine whether updates to the established MVPs should be made (86 FR 65410). We stated that we would consult with the interested parties who originally nominated the MVP about any publicly recommended changes to the MVP (86 FR 65410). Similar to the proposed updates to the process for developing new MVPs, discussed in section IV.A.8.a.(1) of this proposed rule, and for the same reasons, we believe that we should also consider feedback during the MVP maintenance process, from a wide range of interested parties and the general public, prior to proposing changes to an existing MVP through the notice and comment rulemaking process. Therefore, we propose to modify the MVP maintenance process such that interested parties and the general public would be able to submit their recommendations for potential revisions to established MVPs on a rolling basis throughout the year. We would then review the submitted recommendations and determine whether any are potentially feasible and appropriate. If we identify any submitted recommendations that are potentially feasible and appropriate, we would host a public facing webinar, open to interested parties and the general public through which they may offer their feedback on the potential revisions we have identified. We would publish details related to the timing and registration process for the webinar through our Quality Payment Program Listserv. These proposed changes to the MVP maintenance process would enable us to receive a wide range of perspectives on potential revisions to MVPs earlier in the maintenance process, which we believe is important in developing MVPs that are meaningful to clinicians, patients, and the general public. If we decide to make any revisions to an established MVP based on the recommendations submitted, we would adopt such revisions through notice and comment rulemaking. We request comments on this proposal. (3) Proposed Revisions to Previously Finalized MVPsIn the CY 2022 PFS final rule (86 FR 65998 through 66031), we finalized seven MVPs that will be available for reporting beginning with the CY 2023 performance period/CY 2025 MIPS payment year. The seven MVPs are as follows: Advancing Rheumatology Patient Care; Coordinating Stroke Care to Promote Prevention and Cultivate Positive Outcomes; Advancing Care for Heart Disease; Optimizing Chronic Disease Management; Adopting Best Practices and Promoting Patient Safety within Emergency Medicine; Improving Care for Lower Extremity Joint Repair; and Patient Safety and Support of Positive Experiences with Anesthesia. We are proposing revisions to these seven MVPs based on the proposed removals of certain activities from the improvement activities inventory and the addition of other relevant existing quality measures for MVP participants to select from. We refer readers to Appendix 3: MVP Inventory of this proposed rule for these proposed revisions and our explanation of why we believe these changes are appropriate. (4) Proposed New MVPsThrough our established development processes for new MVPs (85 FR 84849 through 84856) we aim to gradually develop MVPs that are relevant and meaningful for all clinicians who participate in MIPs. We are proposing five new MVPs:
We continue to develop MVPs based on needs and priorities, as described in the MVP Needs and Priorities document at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1803/MIPS%20Value%20Pathways%20(MVPs)%20Development%20Resources.zip. The identification of priorities includes consideration of the various specialties and subspecialties that currently participate in MIPS, and identification of priorities of the Biden-Harris Administration, Department, and Agency. For example, in support of the Biden-Harris Administration's Cancer Moonshot Mission [396] and the importance of cancer screening and care, we are proposing a new MVP related to cancer care. We refer readers to Appendix 3: MVP Inventory of this proposed rule where we discuss each proposed new MVP, including which specific measures and activities would be included, and the clinician types for which a proposed new MVP may be relevant. b. MVP Reporting Requirements(1) Promoting InteroperabilityIn the CY 2021 PFS final rule (85 FR 84849 through 84854), we finalized that MVPs must include the full set of Promoting Interoperability performance category measures. In the CY 2022 PFS final rule (86 FR 65413), we stated that we do not intend to establish different reporting requirements for Promoting Interoperability measures in MVPs from what is established under traditional MIPS. As described at § 414.1365(c)(4)(i), an MVP Participant is required to meet the Promoting Interoperability performance category reporting requirements described at § 414.1375(b). We refer readers to Start Printed Page 46267 section IV.A.10.c.(4) of this proposed rule for proposed modifications to the Query of Prescription Drug Monitoring Program (PDMP) measure, the Public Health and Clinical Data Exchange Objective, and the Health Information Exchange Objective. In addition, section IV.A.10.c.(4) of this proposed rule includes proposals related to reweighting the Promoting Interoperability performance category for non-physician clinician types, and modifying the Promoting Interoperability scoring methodology beginning with the CY 2023 performance period/CY 2025 MIPS payment year. We intend for any changes that are finalized for the Promoting Interoperability performance category under traditional MIPS to apply to MVPs. c. Reporting MVPs and Team-Based CareIn the CY 2022 PFS final rule (86 FR 65406), we discussed that MVPs may be constructed to reflect the team-based healthcare model. This approach considers the patient's care from a holistic perspective, involving several clinician types in a manner that captures the patient's experience and outcomes. We have received questions from interested parties asking how a large multispecialty group that practices team-based care can report MVPs, and if subgroup reporting would mean that each individual specialty within the practice would have to report its own MVP. In this proposed rule, we are providing some clarification on a few options of how multispecialty groups who practice in a team-based care manner can report MVPs. In the CY 2022 PFS final rule (86 FR 65392 through 65394), we finalized that for the CY 2023, 2024, and 2025 performance periods, individual MIPS eligible clinicians, single specialty groups, multispecialty groups, subgroups and APM entities may report MVPs. We also finalized that beginning with the CY 2026 performance period, multispecialty groups must form subgroups to report MVPs (86 FR 65394). We encourage multispecialty groups to review the inventory of available MVPs that we have implemented to identify whether a relevant MVP is available to them. If a multispecialty group identifies an MVP that is relevant to its practice, the group may register through the MVP registration process to report that single MVP (86 FR 65415 through 65418). We encourage a multispecialty group to choose an MVP that includes measures that are attributable to all clinician types that participate in its group, if it intends to report as a multispecialty group within the first few years of its MVP reporting. We believe that reporting data that is directly attributed to all clinicians in the group will better drive quality improvement and lead to improved patient outcomes. We encourage multispecialty groups to consider adopting subgroup reporting before it becomes mandatory in the CY 2026 performance period. Early adoption will allow clinicians within the subgroups to gain familiarity with reporting at the subgroup level before it becomes mandatory. We refer readers to the CY 2022 PFS final rule (86 FR 65398 through 65405) and section IV.A.8.e. of this proposed rule where we discuss our proposals regarding subgroup policies and subgroup composition. In support of team-based care, we have not proposed any criteria which would limit the number of specialties within a subgroup. A multispecialty group should use its discretion in determining the most operationally feasible and appropriate way to report MVPs via subgroup reporting before mandatory subgroup reporting begins in CY 2026. For example, choosing a few clinically relevant specialties from the group to form a subgroup (that is, orthopedic surgeons, physical therapists, nurse practitioners or physician assistants who are specialized in the area of orthopedics) to report on a single MVP related to orthopedic surgery. While we understand there may be an increase to the burden associated with requiring multispecialty groups to report through subgroups beginning with the CY 2026 performance period, we believe MVP reporting will have more value because the data will be directly attributed to the clinicians leading to actionable changes in the care provided to patients. d. Scoring MVP PerformanceIn the CY 2022 PFS final rule, we finalized policies for MVP scoring beginning with the CY 2023 performance period/CY 2025 MIPS payment year. We refer readers to 86 FR 65419 through 65427 for the details of those finalized policies. We previously finalized at § 414.1365(d)(2) that, unless otherwise indicated in § 414.1365(d)(2), the performance standards described at § 414.1380(a)(1)(i) through (iv) apply to the measures and activities included in the MVP (86 FR 65419 through 65421). We noted that in general, we intend to adopt scoring policies from traditional MIPS for MVP participants unless there is a compelling reason to adopt a different policy to further the goals of the MVP framework (86 FR 65419). We refer readers to section IV.A.10.d.(1)(b)(i) of this proposed rule for our proposal on the determination of benchmarks for administrative claims quality measures, section IV.A.10.d.(1)(b)(ii) for our proposal on assigning measure achievement points for topped out quality measures, section IV.A.10.d.(1)(c)(i) for our proposal regarding improvement scoring for cost measures, and section IV.A.10.c.(4)(g) for our proposals regarding changes to the scoring methodology for the Promoting Interoperability performance category for the performance period in CY 2023. In the event these proposals and any other scoring policies for traditional MIPS are adopted as final policy, they would apply to the measures and activities included in the MVP, unless otherwise indicated. In the CY 2022 PFS final rule, we finalized the subgroup reporting option for clinicians choosing to report MVPs or the APP (86 FR 65392 through 65394). We refer readers to section V.B.9.e.(7)(a)(ii) of this proposed rule for the discussion on estimated burden associated with subgroup reporting. The relevant burden will be submitted to OMB under control number 0938-1314 (CMS-10621). Subgroup reporting is a new option for clinicians, and, for clarity, we discuss all proposals regarding subgroups, including scoring, in a single section of this proposed rule at section IV.A.8.e. We refer readers to section IV.A.8.e.(4)(b) of this proposed rule for our proposals related to subgroup scoring for administrative claims and cost measures and section IV.A.8.e.(4)(c) of this proposed rule for our proposal related to scoring for subgroups that register but do not report. e. Subgroup Reporting(1) BackgroundIn the CY 2022 PFS final rule, we finalized an option for clinicians choosing to report MVPs to report through subgroups beginning with the CY 2023 performance period/CY 2025 MIPS payment year (86 FR 65392 through 65394). Additionally, we finalized: (1) A timeline for implementing subgroup reporting (86 FR 65396 and 65397); (2) registration requirements, reporting requirements, and scoring policies for clinicians desiring to report MVPs through subgroups (§ 414.1365; 86 FR 65415 through 65426); (3) definitions of subgroup, single specialty group, multispecialty group, and special status (§ 414.1305; 86 FR 65398 through 65401); (4) subgroup eligibility requirements (§ 414.1318; 86 FR 65401); (5) application of low-volume threshold and special status designations for Start Printed Page 46268 subgroups (§ 414.1318(a)(2); 86 FR 65401 and 65402); and (6) subgroup inclusions and exclusions (§ 414.1318; 86 FR 65402 and 65403). In this section, we propose to: (1) modify the definitions of single specialty group and multispecialty group; (2) add subgroup description requirements to the registration process; (3) limit the number of subgroups a clinician may participate in to one subgroup per TIN; (4) establish the subgroup determination period; (5) apply new policies for scoring administrative claims measures and cost measures for subgroups; and (6) not assign a subgroup final score to registered subgroups that do not submit data. (2) Definitions of a Single Specialty Group and a Multispecialty GroupWe previously finalized at § 414.1305 the definitions of a single specialty group as a group that consists of one specialty type, and a multispecialty group as a group that consists of two or more specialty types. We also finalized at § 414.1305 the definition of an MVP participant for the purpose of MVP reporting. The definition of MVP Participant established in the CY 2022 PFS final rule (86 FR 65392 through 65394) would only allow multispecialty groups to participate as a group for MVP reporting beginning with the CY 2023 performance period/CY 2025 MIPS payment year through the CY 2025 performance period/2027 MIPS payment year. Beginning with the CY 2026 performance period/CY 2028 MIPS payment year, only single specialty groups would be able to participate as a group for MVP reporting, and multispecialty groups will be required to form subgroups for reporting an MVP. We believe that the definitions of single specialty group and multispecialty group would allow groups to distinguish their specialty type or types and assess the requirement to participate as a subgroup in MVP reporting beginning with the CY 2026 performance period/CY 2028 MIPS payment year. In the CY 2022 PFS proposed rule (86 FR 39360), we proposed to identify a group's specialty type or types using data from the Medicare Provider Enrollment, Chain, and Ownership System (PECOS). We received comments expressing concerns that the use of PECOS specialty designations would result in the exclusion of certain clinician types, such as NPs and PAs (86 FR 65398). We adopted definitions of a single specialty group and a multispecialty group in the CY 2022 PFS final rule but did not finalize PECOS as the data source or specify another data source that we would use to determine a group's specialty type. We noted that we needed additional time to better understand our options to utilize different data sources when making this determination (86 FR 65399). Having reviewed the available data sources, we believe that Medicare Part B claims data is the appropriate data source for determining a group's specialty type or types for purposes of MVP reporting. Currently, we use PECOS and Medicare Part B claims data to identify clinician specialty for certain purposes. For purposes of public reporting, we rely on PECOS as the primary data source, and for purposes of MIPS eligibility determination, we use both PECOS and claims data. Additionally, we use the information on claims to identify clinician specialty when attributing some of the measures in the cost and quality performance categories. A clinician's primary specialty designation in PECOS is identified by the clinician in the Medicare enrollment application for physicians and non-physician practitioners. Additionally, there may be instances when a clinician would be allowed to select more than one primary specialty in PECOS.[397] For example, a primary specialty designation of cardiothoracic surgery is not available in PECOS, and therefore, a cardiothoracic surgeon would have two primary specialty designations, one for cardiac surgery and another for thoracic surgery. In such instances, it would be difficult for CMS to identify a clinician's primary specialty using their PECOS designation. The specialty codes used on Medicare Part B claims [398] are not reported by clinicians but are assigned by the Medicare Administrative Contractors (MACs) and derived from the clinician-reported specialty information in PECOS. In instances where more than one specialty code appears on a claim, we determine primary specialty based on the specialty code used for the plurality of the services billed by the clinician. We analyzed the identification of specialty for clinicians using claims data and PECOS data and found a variance rate of less than 1 percent between the two data sources. Given the strong alignment between the data sources and our historical use of claims data to identify a clinician's specialty, we believe that Medicare Part B claims data would be the best data source to use to determine a group's specialty type or types for purposes of participation in MVPs. We note that in response to our proposal to use PECOS data in determining specialty, some commenters recommended that, instead of PECOS, CMS should utilize specialty taxonomy codes which they stated were more detailed than PECOS specialty codes (86 FR 65398). While these commenters were not specific in their request, we understood them to be referring to the provider taxonomy codes used on the application to receive a National Provider Identifier (NPI). We agree with the commenters that in some instances, the health care provider taxonomy code set may include more specificity than the information found in the specialty codes used on Medicare Part B claims. However, currently we do not use this data for other QPP purposes, and we are uncertain of the extent to which it is maintained by clinicians if their circumstances change. While we considered the use of this data as an alternative, we do not believe it is necessary to introduce a new data source at this point, given that subgroup reporting is voluntary at this time. For these reasons, we propose to modify the definition of a single specialty group at § 414.1305 to state that single specialty group means a group that consists of one specialty type as determined by CMS using Medicare Part B claims. We also propose to modify the definition of a multispecialty group at § 414.1305 to state that multispecialty group means a group that consists of two or more specialty types as determined by CMS using Medicare Part B claims. We seek public comment on these proposals and request comment on additional data sources CMS could use to determine a group's specialty type or types. (3) Subgroup Registration Requirements(a) BackgroundWe established at § 414.1365(b) a registration process for clinicians who choose to report MVPs through a subgroup. Under this policy, a subgroup must register between April 1 and November 30 of the applicable calendar year performance period or a later date specified by CMS. A subgroup that elects to report the CAHPS for MIPS Survey [399] associated with an MVP must complete their registration by June 30 of the applicable performance period (86 FR 65416). At the time of registration, a subgroup must select an MVP on which it intends to report, and a population Start Printed Page 46269 health measure included in the foundational layer of the MVP (86 FR 65416 and 65417). Additionally, a subgroup may select an outcomes-based administrative claims measure if available in an MVP (86 FR 65417). We finalized that a subgroup must submit a list of TIN/NPIs associated with the subgroup and a plain language name for the subgroup (§ 414.1365(b)(2)(ii)). We note that we are not currently proposing any changes to the subgroup registration timeline. We refer readers to the CY 2022 PFS final rule (86 FR 65415 through 65418) for additional details on subgroup registration requirements. (b) Subgroup Description RequirementIn the CY 2022 PFS final rule (86 FR 65399), we defined a subgroup as a subset of a group which contains at least one MIPS eligible clinician and is identified by a combination of the group TIN, the subgroup identifier, and each eligible clinician's NPI. We did not propose any criteria for limiting the composition of a subgroup but did solicit comment on criteria that we could consider in the future (86 FR 39362), such as establishing a threshold requiring 75 percent of the eligible clinicians in a group or subgroup to be of the same or a related specialty to form a subgroup. In response to that request, many commenters expressed concern that single specialty subgroups may discourage team-based care and that the primary specialty designation for certain clinicians may not adequately reflect their clinical role (86 FR 65399 and 65400). Several commenters particularly pointed to the challenges associated with NPs and PAs, who are designated as an NP or a PA based on their education credentials as opposed to a clinical specialty relevant to the scope of care provided (86 FR 65399). A few commenters requested further engagement with members of the public before limiting the composition of subgroups so that CMS could better understand how clinicians work together. We believe the comments we received reflect the reality that clinicians practice in many ways within a group TIN. While we anticipate we may need to establish requirements and/or restrictions on the composition of subgroups through rulemaking in future years, we are not proposing to establish such policies for the CY 2023 performance period/CY 2025 MIPS payment year. We believe that we may need to establish limits on subgroups in order to further our goals of measuring as many clinicians as possible using the measures that are most relevant to their practice. We are concerned that if we do not establish restrictions or requirements in the future we may not move meaningfully towards that goal. However, given that subgroups will be newly available for the CY 2023 performance period/CY 2025 MIPS payment year and will be voluntary, we do not believe we should yet establish those policies. To inform our future subgroup policies, we desire to better understand how group TINs form subgroups and how group TINs choose to organize their subgroups. For this reason, we propose that as part of the subgroup registration process, in addition to the previously established registration requirements, group TINs must provide a description of each subgroup that is registered. We would identify some key scenarios for subgroups to select from that we expect might reflect a typical subgroup, but also wish to offer an opportunity for group TINs to describe how they constructed their subgroups by providing a narrative in a text-only field, if the options we provide do not correctly describe the subgroup. We would not evaluate or approve the narrative description, if submitted. Rather, we intend to collect and review the information to better inform our understanding of subgroups and the different ways groups would choose to form subgroups. We believe that receiving the information about the subgroup directly from the group TIN itself would fill a gap in our understanding of the nature of subgroup formation during the transition to MVPs that cannot be filled merely by reviewing PECOS or claims-based group specialty information. We understand requiring such reporting would create some additional burden, but we believe such burden is modest and worth the effort to inform future development of subgroup policies. Furthermore, we are attempting to mitigate this burden by permitting subgroups to select from certain common scenarios for groups to form subgroups, when appropriate, instead of drafting a narrative description. We refer readers to section V.B.9.e.(7)(a) (ii) of this rule for the discussion of estimated burden related to this proposal. We note that we are not intending for these narratives to be lengthy but expect the narratives to be short descriptions of the nature of practice and appropriately reflect the composition of a subgroup. We offer some illustrative examples for the narrative description: • Example 1: This subgroup represents our cardiovascular service line, which includes cardiologists, cardiothoracic surgeons, and other associated professionals. • Example 2: This subgroup represents our west side practice, which uses one electronic health record (EHR) platform and collaborates on patient care across orthopedic surgeons, physical therapists, NPs, and other associated clinicians. We also believe that the availability of subgroups will facilitate our efforts to increase health equity. In part, we believe that by creating a smaller group of clinicians to analyze, we can better understand care at the patient and community level. This is important for measuring and improving health equity because subgroup data could be utilized to identify gaps in clinical outcomes, patient characteristics, and specialist care availability on a more targeted level than shown by examining TIN-level data. We also believe that group practices may share this same interest in improving health equity. For example, a group may have clinicians practicing in different locations and may choose to organize their subgroups to focus on certain underserved populations based on geography or income. We hope to better inform our understanding of clinicians supporting this goal through narrative descriptions of subgroup organization. (c) Limitation of One Subgroup per TIN-NPI CombinationIn the CY 2022 PFS final rule (86 FR 65414 and 65415), we finalized at § 414.1318(c)(2) that subgroups will have their performance assessed at the subgroup level across all the MIPS performance categories. Additionally, we did not propose any criteria for the composition of subgroups (86 FR 39362). We must nonetheless place some restrictions on the allocation of a group TIN's clinicians among subgroups to properly score each subgroup. Clinicians in small groups are eligible to register as subgroups and report using Medicare Part B claims. While we establish a subgroup identifier as part of the registration process, this subgroup identifier would not be present on any claims data. If we were to allow a clinician to register under more than one subgroup in a single group TIN, we would be unable to determine to which subgroup a particular claim should be connected. Therefore, we propose at § 414.1318(a)(3) that an individual eligible clinician, as represented by a TIN-NPI combination may register for no more than one subgroup within a group's TIN. We are not proposing any other restrictions or requirements on the composition of subgroups at this time. We are also proposing to limit a clinician to a single subgroup per group TIN to overcome current limitations in Start Printed Page 46270 scoring certain cost and quality measures. In section IV.A.8.e.(4)(b) of this rule, we are proposing to evaluate clinicians in subgroups using measures in the cost performance category, and the population health measures and outcomes-based administrative claims measures in the quality performance category, based on their affiliated group's performance. We are making that proposal due to current technical limitations related to attribution and risk adjustment of such measures but are working to potentially overcome those challenges in the future. CMS calculates administrative claims measures using Medicare claims data. This does not require any additional reporting by clinicians. If we were to allow a clinician to be a part of more than one subgroup within a single group TIN, however, we would be unable to identify which subgroup the clinician was part of for the purposes of attributing cost measures, population health measures, and outcomes-based administrative claims measures. We recognize that our proposal to limit each TIN-NPI combination to a single subgroup per group TIN would limit how a group may establish its subgroups. We believe there may be clinicians who work in different capacities within a single group TIN (for example, a clinician who works in a cardiology clinic on Mondays and the primary care clinic Tuesday-Friday) which could be considered to work in multiple subgroups in a single group TIN. For this reason, we are interested in hearing perspectives from groups on how common this is, and if there are ways that we could match a clinician to a subgroup for measures reported through Medicare Part B claims or calculated using administrative claims. (d) Subgroup Determination PeriodIn the CY 2022 PFS final rule, we established the definition of a subgroup at § 414.1305 as a subset of a group which contains at least one MIPS eligible clinician and is identified by a combination of the group TIN, the subgroup identifier, and each eligible clinician's NPI (86 FR 65399). We also codified at § 414.1318(a) that, for a MIPS payment year, low-volume threshold criteria and special status for subgroups are determined at the group level in accordance with §§ 414.1305 and 414.1310. We also established at § 414.1365(b) a process for clinicians to register as a subgroup for the purpose of reporting the measures and activities in an MVP (86 FR 65415 through 65418). Previously, we defined a MIPS determination period—the period of activity we review to identify clinicians who are eligible to participate in MIPS—to mean, in relevant part, a 24-month assessment period consisting of: (1) An initial 12-month segment beginning on October 1 of the calendar year 2 years prior to the applicable performance period and ending on September 30 of the calendar year preceding the applicable performance period, and that includes a 30-day claims run out; and (2) A second 12-month segment beginning on October 1 of the calendar year preceding the applicable performance period and ending on September 30 of the calendar year in which the applicable performance period occurs (§ 414.1305; 83 FR 59727 through 59730). In order to determine their eligibility to participate in MIPS for the applicable performance year, an individual clinician or a group must meet or exceed the low-volume threshold criteria specified under § 414.1305 during the MIPS determination period. An individual eligible clinician or group that is identified as not exceeding the low-volume threshold during the initial 12-month segment will continue to be excluded under § 414.1310(b)(1)(iii) for the applicable year regardless of the results of the second 12-month segment analysis. Additionally, an individual eligible clinician or group for which the unique billing TIN and NPI combination is established during the second 12-month segment of the MIPS determination period will be assessed based solely on the results of such segment. In the CY 2022 PFS final rule, we did not discuss how CMS would assess the low-volume threshold for individual clinicians and groups for the purpose of subgroup participation. Specifically, we did not discuss whether any special considerations were necessary when applying the MIPS determination period for clinicians participating as subgroups. Currently, we review claims and PECOS data from a MIPS determination period to determine MIPS eligibility for an individual clinician and a group. The initial 12-month segment of the MIPS determination period spans from October 1 of the calendar year 2 years prior to the applicable performance period to September 30 of the calendar year preceding the applicable performance period and includes a 30-day claims run out. Individual clinicians and groups receive their initial eligibility information prior to the applicable performance period but do not know their final eligibility determination until November or December of the applicable performance period. Using a 2-year MIPS determination period is incompatible with the framework we have established for subgroup participation in MVPs. For example, for the CY 2023 performance period/CY 2025 MIPS payment year, individual clinicians and groups that choose to participate as subgroups would only know their preliminary eligibility at the time of subgroup registration. We believe that by using the preliminary eligibility information, clinicians and groups could assess their ability to participate as subgroups early in the performance period and we do not wish to limit subgroup participation for groups that are otherwise eligible based on an eligibility assessment that is not made until after registration is completed. Therefore, we are proposing to add at § 414.1318(a)(4) that CMS will apply the low-volume threshold criteria for a subgroup as described under § 414.1318(a)(1) using information from the initial 12-month segment of the applicable MIPS determination period. Under this proposal, an individual eligible clinician or group determined to be MIPS eligible based on the low-volume threshold determination under § 414.1305 during the initial 12-month segment of the MIPS determination period would continue to be eligible for an applicable performance period regardless of the results of the second segment of the low-volume threshold determination. Additionally, we propose to make conforming changes at § 414.1318(a)(1) to state that, except as provided under paragraph (a)(2) of this section and subject to (a)(4) of this section, for a MIPS payment year, determinations of meeting the low-volume threshold criteria and special status for a subgroup is determined at the group level in accordance with §§ 414.1305 and 414.1310. We note that we are not making any further changes to the application of low-volume threshold and special status as described under § 414.1318(a)(1). In summary, to form a subgroup, a group would need to be eligible to participate in MIPS as a group and have at least one MIPS eligible clinician in the subgroup who was also a MIPS eligible clinician during the initial 12-month segment of the determination period. Such an individual eligible clinician or group would continue to be identified as such for the applicable MIPS payment year regardless of the results of the second segment of the MIPS determination period. A subgroup may thus include an individual clinician who does not exceed the low-volume threshold during the first segment of the MIPS determination Start Printed Page 46271 period only if the subgroup has at least one MIPS eligible clinician during the first 12-month segment of the MIPS determination period and the affiliated group also meets the low-volume threshold during the first 12-month segment of the MIPS determination period. We believe this would also allow practices to identify and place clinicians in appropriate subgroups, choose the measures and activities relevant to subgroups, make administrative changes to their workflows and EHR systems, and comprehensively capture clinician performance through subgroups. Using the first segment of the determination period would also be consistent with the use of the first segment of the MIPS determination period for Virtual Groups (§ 414.1315(c)(1)( ii); 83 FR 59743 and 59744). We seek public comment on this proposal. (4) Subgroup Reporting and Scoring(a) Subgroups Reporting the APPWe refer readers to section IV.A.9.b of this proposed rule for our proposals with regard to subgroups reporting the APP. (b) Subgroup Scores for Administrative Claims Measures and Cost MeasuresIn the CY 2022 PFS final rule, we established at § 414.1318(c)(2) that subgroups will have their performance assessed at the subgroup level across all the MIPS performance categories (86 FR 65414 through 65415). We also established in the quality performance category that subgroups are scored on each selected population health measure that does not have a benchmark or meet the case minimum requirement based on their affiliated group score, if available (86 FR 65421 through 65422). In establishing this policy, we noted our concern about the ability of subgroups to meet the case minimum for an administrative claims measure and our interest in including population health measures in the subgroup's score for the MVP. In establishing our policies for scoring the cost performance category in MVPs, we received a comment that expressed concern that multi-specialty groups may take advantage of the option to report at the subgroup level to avoid being assessed on cost measures (86 FR 65422). While we intend to monitor subgroup implementation and assess the potential for gaming, we acknowledge the risk of a multi-specialty group forming subgroups in order to avoid being measured in the cost performance category. Measures in the cost performance category, as well as population health measures (which are part of the foundational layer of MVPs) and outcomes-based administrative claims measures in the quality performance category, are not reported directly by clinicians. Instead, CMS calculates these measures based on Medicare administrative claims data. Each measure includes an attribution and risk adjustment methodology within the specifications, which are available for review at https://qpp.cms.gov/. These measures are created and tested for validity and reliability using Medicare administrative claims data, which includes the identification of the TIN and the clinician's NPI. However, because subgroups are established exclusively for the purpose of participation in the Quality Payment Program, we are unable to identify a subgroup using existing or future claims data, and therefore, it may not be possible to test these measures for validity and reliability for subgroups using claims data. While we believe in general that subgroups can be measured in the same manner as we measure groups, there are complications related to the establishment of subgroups. Subgroups differ from groups in a couple of key ways: First, the creation of a subgroup does not change the nature of the group, so a patient could be attributed to both a group and a subgroup. In addition, a group TIN is not required to allocate all clinicians into subgroups. This affects measures in different ways depending on the attribution methodology of a measure. For example, in the total per capita cost measure, months are attributed to a particular group TIN or TIN-NPI based on specific primary care services. In this measure, costs are assigned to a single group TIN for the purpose of measuring the group TIN and a single TIN-NPI for the purpose of measuring the TIN-NPI. We believe we could assign a patient to a single subgroup, as we have also proposed to limit NPIs to a single subgroup per TIN. However, since we do not have an existing data source for subgroup composition, we are unable to examine the data to determine if performance on the measure is reliable and valid at the subgroup level. For these reasons, we propose to assess subgroups on measures in the cost performance category, and population health measures and outcomes-based administrative claims measures in the quality performance category, based on their affiliated group. We propose to modify § 414.1365(d)(3)(i)(A)( 1) to read that a subgroup is scored on each selected population health measure based on their affiliated group score, if available, and that if the subgroup's affiliated group score is not available, each such measure is excluded from the subgroup's total measure achievement points and total available measure achievement points. We also propose to add § 414.1365(d)(3)(i)(B)( 1) so that a subgroup is scored on each selected outcomes-based administrative claims measure based on its affiliated group score, if available, and that if the subgroup's affiliated group score is not available, each such measure will receive zero measure achievement points. We also propose to add § 414.1365(d)(3)(ii)(A) to state that a subgroup is scored on each cost measure included in the MVP that they select and report based on its affiliated group score for each such measure, if available. If the subgroup's affiliated group score is not available for a measure, the measure is excluded from the subgroup's total measure achievement points and total available measure achievement points, as described under § 414.1380(b)(2)(i) through (v). We are concerned that measuring subgroups based on their affiliated group score for these measures may detract from our efforts to generate more clinically relevant and granular information about clinician performance. For this reason, we intend to pursue potential technical solutions to these issues in the future, to enable us to measure clinicians in subgroups on these measures at the subgroup level. Even if we address these technical issues, we are still concerned that clinicians may use the opportunity to form subgroups to avoid being measured on cost as discussed in the public comment we received (86 FR 65422). If we are able to address the technical limitations in the future and evaluate performance at the subgroup level, we would anticipate developing policies similar to our existing policy for population health measures to use the affiliated group score if we are unable to calculate the measures for the subgroup. This would allow us to focus our measurement at the subgroup level but limit the opportunity of groups to use the formation of subgroups to avoid being measured in the cost performance category. Since we are uncertain if we will be able to address these technical issues, we are not proposing a policy at this time. We also believe the registration information we receive from subgroups for CY 2023 performance period/CY 2025 MIPS payment year will help us to Start Printed Page 46272 learn more about the nature of subgroups and better test our measures. We seek public comment on these proposals. (c) Scoring for Subgroups That Register But Do Not ReportAs described in the CY 2022 PFS rule (86 FR 65415 through 65418), groups interested in participating as subgroups for reporting the measures and activities in an MVP must adhere to the registration process established at § 414.1365(b). To be assessed on their performance at a subgroup level, clinicians participating as subgroups would need to meet the reporting requirements outlined at § 414.1365(c). We expect subgroups to register with the intent to submit data for the measures and activities in an MVP because they wish to be assessed based on their performance at the subgroup level. We also believe there will be instances where a subgroup would register but not submit data for the applicable performance period or clinicians in a registered subgroup would choose to participate in MIPS via a different reporting option instead of reporting as a subgroup. We considered whether we should assign a score for a subgroup regardless of their submission status. At this point in time, we want to encourage groups to explore the subgroup reporting option and not penalize subgroups that do not submit data. During the voluntary years of subgroup reporting, we do not intend to assign a subgroup score in instances when we do not receive any MVP data for clinicians in registered subgroups. However, we expect that MIPS eligible clinicians in registered subgroups would participate in MIPS via another available reporting option as they would be subject to the MIPS payment adjustment under the TIN. Under the existing scoring hierarchy established in the CY 2022 PFS final rule (86 FR 65536 and 65537), a clinician is assigned the highest of the available final scores associated with the clinician's TIN/NPI. For these reasons, we propose at § 414.1318(b)(1) that we will not assign a final score for a subgroup that registers and does not submit data as a subgroup for the applicable performance period. Additionally, we propose to make conforming changes at § 414.1318(b) to state that, except as provided under § 414.1317(b) and paragraph (b)(1) of this section, each MIPS eligible clinician in the subgroup receives a final score based on the subgroup's combined performance. We intend to continue monitoring the participation trends for subgroup reporting and reevaluate scoring for registered subgroups that do not submit data as we move towards mandatory subgroup reporting in the future. (d) Subgroup ExamplesIn the CY 2022 PFS final rule (86 FR 65400), we stated that during the initial years of subgroup reporting, the affiliated group will continue to include subgroup reporters in their traditional MIPS submission across all four performance categories. Additionally, we updated the scoring hierarchy to include subgroups and to specify that the scoring hierarchy will apply with respect to any available final score that is associated with a TIN/NPI from MVPs, traditional MIPS, and/or the APP (86 FR 65537). We have provided examples below to illustrate how the final score is applied for a clinician who is part of a TIN where only some of the clinicians in that TIN choose to participate in MIPS through subgroups. The MVPs used in the below examples are for illustrative purposes only and are not intended to be exhaustive of the different ways clinicians could participate in MIPS. Scenario 1: In this example, we illustrate a TIN that is eligible as a group and includes individual MIPS eligible clinicians. For the purposes of this example, we illustrate scoring for three clinicians who are individually eligible represented by letters for simplicity. A portion of the clinicians under the TIN form one subgroup to report the measures and activities in the Coordinating Stroke Care to Promote Prevention and Cultivate Positive Outcomes MVP. The TIN also forms another subgroup to report the measures and activities in the Advancing Care for Heart Disease MVP. The group TIN submits data for the Optimizing Chronic Disease Management MVP. The group submission will include the performance of the clinicians in the subgroup. The three individual MIPS eligible clinicians, clinicians A, D, and G, submit data as individuals in traditional MIPS in addition to their submissions as part of a subgroup or the group as a whole. In Table 76, we illustrate the calculated final score for their submissions at the full group, subgroup, and individual level. In Table 77, we illustrate the final scores for the individual TIN/NPI based on the existing scoring hierarchy finalized in the CY 2022 PFS final rule (86 FR 65537). Start Printed Page 46273 Scenario 2: In contrast to scenario 1, in this example, we illustrate final scoring for a TIN when a portion of the clinicians under the TIN form one subgroup for reporting an MVP and the whole TIN participates as a group only for reporting traditional MIPS. Similar to scenario 1, the TIN is eligible as a group and includes individual eligible clinicians. We note that the TIN does not participate as a group for MVP reporting. For the purposes of this example, we illustrate scoring for three clinicians who are individually eligible represented by letters for simplicity. A portion of the clinicians under the TIN form only one subgroup to report the measures and activities in the Advancing Care for Heart Disease MVP. The group TIN submits data for traditional MIPS. The group submission will include the performance of the clinicians in the subgroup. The three individual MIPS eligible clinicians, clinicians A, D, and G, submit data as individuals in traditional MIPS in addition to their submissions as part of the subgroup or the whole group. In Table 78, we illustrate the calculated final score for their submissions at the full group, subgroup, and individual level. In Table 79, we illustrate the final scores for the individual TIN/NPI based on the existing scoring hierarchy finalized in the CY 2022 PFS final rule (86 FR 65537). Start Printed Page 46274 Scenario 3: In contrast to scenarios 1 and 2, in this scenario, we illustrate final scoring for a TIN that does not participate as group. Similar to scenarios 1 and 2, we have a TIN that is eligible as a group and includes individual eligible clinicians. In this scenario, a portion of the clinicians under the TIN form two subgroups for reporting an MVP and the TIN does not submit data at the group level. For the purposes of this example, we illustrate scoring for three clinicians who are individually eligible represented by letters for simplicity. A portion of the clinicians under the TIN form one subgroup to report the measures and activities in the Coordinating Stroke Care to Promote Prevention and Cultivate Positive Outcomes MVP. The TIN also forms another subgroup to report the measures and activities in the Optimizing Chronic Disease Management MVP. Three individual MIPS eligible clinicians, clinicians A, D, and G, submit data as individuals in traditional MIPS in addition to their submissions as part of a subgroup. In Table 81, we illustrate the calculated final score for their submissions at the full group, subgroup, and individual level. In Table 81, we illustrate the final scores for the individual TIN/NPI based on the existing scoring hierarchy finalized in the CY 2022 PFS final rule (86 FR 65537). Start Printed Page 46275 9. APM Performance Pathwaya. OverviewIn the CY 2021 PFS final rule (85 FR 84859 through 84866), we finalized the APM Performance Pathway (APP) at § 414.1367 beginning in performance year 2021, which was designed to provide a predictable and consistent MIPS reporting option to reduce reporting burden and encourage continued APM participation. b. APP Reporting OptionsUnder the APP, MIPS eligible clinicians in an APM Entity that participates in a MIPS APM may report to MIPS and be scored (subject to certain limitations) at the individual clinician, group, or APM Entity level (85 FR 84859 through 84866).[400] [401] In that rule, we excluded Virtual Groups from reporting the APP. At that time, the concept of MIPS Value Pathway (MVP) subgroup reporting, through which a subset of MIPS eligible clinicians within a group TIN may report and be scored as a standalone MVP Participant, had not yet been introduced; however, we note that our subsequent use of the term “subgroup” may have caused confusion in light of its use in MVPs. In the CY 2022 PFS final rule, we codified policies related to subgroups at § 414.1318 (86 FR 65671), by which we meant the reporting of the APP by a subset of MIPS eligible clinicians within an APM Entity. In that rule, we stated that because we already identify the MIPS eligible clinicians who are MIPS APM participants based on Participation Lists for each APM, it is unnecessary to require MIPS APM participants to register as subgroups for purposes of reporting the APP (86 FR 65397 and 65398). We stated that beginning with performance year 2023, we will use Participation Lists to identify the MIPS eligible clinicians within a group TIN that should be included in the subgroup of APM participants for purposes of reporting the APP (86 FR 65398). We also codified at § 414.1318(c)(2) that subgroups would be scored according to the applicable MVP or APP scoring rules. However, under § 414.1367, which governs APP reporting and scoring, no changes were made to reflect the introduction of subgroup-level reporting of the APP. Recognizing that there is ambiguity in our current rules, we are proposing to modify the text at § 414.1318(c)(2) to remove the reference to subgroup scoring of the APP, and therefore, disallow reporting of the APP by a subset of a group. This proposed change is not intended as a change in policy; as described previously in this section of the proposed rule, it was not our intent to permit MIPS eligible clinicians within an APM entity to be scored at a level in between a group and the individual clinician. Notwithstanding the foregoing, we recognize that MIPS eligible clinicians may have an interest in reporting as subgroups in the APP, and as we describe further later in this section of the propose rule, we are considering as an alternative to our above proposed conforming change whether to permit subgroups as a level of reporting the APP, and to modify § 414.1367 accordingly. We believe there could be scenarios where a group may have an interest in reporting the APP through subgroups. For example, if a large multi-specialty TIN had specialists of different types participating in MIPS APMs, and, therefore, who are eligible for APP scoring, it would be possible that a subgroup within that TIN—perhaps primary care providers working out of a single EHR or practice site—would be interested in reporting the APP using only the data generated by MIPS eligible clinicians in that subgroup. Additionally, particularly after MVP reporting is more widely performed, we recognize that clinicians using subgroup reporting for MVPs may have an easier time joining APMs and reporting the APP if they are able to maintain their reporting at the same level, thereby strengthening MVPs as a glide path to APM participation. To permit subgroup reporting of the APP, we would need to enable a subgroup registration option for APP reporters, which would inevitably introduce additional administrative burden for the subgroups that would report. Aside from needing to register in order to be recognized as a subgroup, all other aspects of APP reporting for subgroups under this alternative proposal would be the same as for other reporting levels as established at § 414.1367. We request comments on the proposed conforming change and the alternative we considered. In particular, we are interested in commenters' input from the public on which option would best balance the reporting flexibilities with administrative burdens, with the understanding that it may be necessary to revisit these policies in future rulemaking as MVP and APP policies continue to develop, we seek comment on this proposal. 10. MIPS Performance Category Scoringa. Quality Performance CategoryAs discussed in section III.J.4 and elsewhere in this proposed rule, we are Start Printed Page 46276 seeking comment on the potential addition of new Consumer Assessment of Healthcare Providers and Systems (CAHPS) for the Merit-based Incentive Payment System (MIPS) Survey Questions. In this proposed rule, we are seeking feedback on the potential future inclusion of two new measures in the APP measure set: MUC21-136: Screening for Social Drivers of Health and MUC21-134: Screen Positive Rate for Social Drivers of Health. The National Quality Forum (NQF) provided conditional support for these two social determinants of health measures during the 2021-2022 cycle and indicated the measures would be appropriate for consideration in the Shared Savings Program.[402] The measure MUC21-136: Screening for Social Drivers of Health assesses the percentage at which providers screen their adult patients for health-related social needs, which is consistent with the priorities of the agency and program including Meaningful Measures 2.0 priority areas.[403] The measure MUC21-134: Screen Positive Rate for Social Drivers of Health assesses the percentage of patients who screened positive for health-related social needs. We encourage readers to review the Social Determinants of Health Measure and Future Measure Development—Request for Information (RFI) discussed at section III.J.4. of this proposed rule. b. Improvement Activities Performance CategorySection 414.1367(c)(3) provides that the improvement activities performance category score for MIPS eligible clinicians, groups, and APM Entities reporting via the APP is calculated in accordance with § 414.1380(b)(3) based on the activities required by the MIPS APM that are included in the MIPS final inventory of improvement activities. We assign scores to each MIPS eligible clinician in the improvement activity performance category for participating in MIPS APMs, and MIPS eligible clinicians must earn 40 points in order to receive full credit in this performance category. On an annual basis, we conduct a review of the governing documentation of all MIPS APMs to determine the Improvement Activities that are required by each such APM, and have in all cases found that each MIPS APM requires participants to engage in such Improvement Activities as would earn participants a performance category score of no less than 40 points, which as discussed previously in this section of the propose rule is the maximum score for this performance category (§ 414.1380(a)(1)(iii)). The list of required activities for each MIPS APM is compared to the MIPS list of improvement activities and the MIPS APM's participants that report the APP are scored in accordance with MIPS to determine if the APM meets the requirements for awarding full credit (40 points) for Improvement Activities to the participants in the MIPS APM. We would like to clarify that, even though § 414.1367(c)(3) permits the reporting of additional improvement activities, such reporting would not supersede the automatic award of the maximum score described previously in this section of the proposed rule. Because the reporting of additional improvement activities does not serve any Improvement Activity scoring purpose, we would not use any Improvement Activity performance category submissions for scoring under the APP where the participants were already entitled to full credit for this performance category. This clarification is particularly relevant in instances where an APM Entity is eligible for reweighting of the two remaining performance categories of quality and promoting interoperability. We understand it is possible that, for example, a data submission from the Application Programming Interface (API) of a TIN or individual within an APM Entity could contain incidental Improvement Activity performance information that was collected automatically, though not for the purpose of a MIPS submission or scoring. We clarify that the submission of Improvement Activity performance information in this type of circumstance would not constitute a submission of data for the purpose of scoring the improvement activities performance category under the APP. Therefore, incidental submissions such as the type in this example would never be the sole basis for an APM Entity to be scored under the APP. c. MIPS Performance Category Measures and Activities(1) Quality Performance Category(a) BackgroundSection 1848(q)(1)(A)(i) and (ii) of the Act requires the Secretary to develop a methodology for assessing the total performance of each MIPS eligible clinician according to certain specified performance standards and, using such methodology, to provide for a final score for each MIPS eligible clinician. Section 1848(q)(2)(A)(i) of the Act provides that the Secretary must use the quality performance category in determining each MIPS eligible clinician's final score, and section 1848(q)(2)(B)(i) of the Act describes the measures that must be specified under the quality performance category. We refer readers to §§ 414.1330 through 414.1340 and the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77097 through 77162 and 82 FR 53626 through 53641, respectively), and the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (83 FR 59754 through 59765, 84 FR 63949 through 62959, 85 FR 84866 through 84877, and 86 FR 65431 through 65445, respectively) for a description of previously established policies and statutory basis for policies regarding the quality performance category. In this proposed rule, we are proposing to:
(b) Quality Data Submission Criteria(i) Submission Criteria for Quality Measures, Excluding the CAHPS for MIPS Survey MeasureThe Meaningful Measures Initiative provides for the identification of high priority areas for quality measurement and quality improvement, which identifies the core quality of care issues that advances our work to improve patient outcomes (83 FR 59719). In order to further identify priority areas for MIPS quality measurement, we defined the term high priority measure at § 414.1305, for years beginning with the CY 2019 performance period/2021 MIPS payment year, as an outcome (including intermediate-outcome and Start Printed Page 46277 patient-reported outcome), appropriate use, patient safety, efficiency, patient experience, care coordination, or opioid-related quality measure (83 FR 59761). Generally, if an applicable outcome measure is not available, a MIPS eligible clinician must report a high priority measure (§ 414.1335(a)(1)). To incentivize the voluntary adoption of high priority measures, a MIPS eligible clinician may earn bonus points for reporting such a measure (§ 414.1380(b)(1)(v)(A)). As significant and persistent inequities in healthcare outcomes exist in the United States, we are committed to developing innovative solutions that support access to high quality care and promote health equity, including the exploration of solutions to measure health equity within MIPS. Health equity is a priority area across CMS programs, including MIPS. Thus, we are proposing to amend the definition of the term high priority measure to include health equity measures. Specifically, starting with the CY 2023 performance period, we are amending the definition of the term high priority measure at § 414.1305 to mean an outcome (including intermediate-outcome and patient-reported outcome), appropriate use, patient safety, efficiency, patient experience, care coordination, opioid, or health equity-related quality measure. We believe that it is imperative to include quality measures pertaining to health equity as high priority measures in order to incentivize the adoption of health equity measures by MIPS eligible clinicians. We seek public comment on our proposal to amend the definition of the term high priority measure. (ii) Submission Criteria for the CAHPS for MIPS Survey MeasureThe CAHPS for MIPS Survey measures patients' experience of care within a group, virtual group, and APM Entity, including Shared Savings Program ACOs. The survey measures ten dimensions of patient experience of care, known as summary survey measures, for which patients may be the best, if not only source of information. The CAHPS for MIPS Survey is optional for all groups, virtual groups, and APM Entities of 2 or more eligible clinicians reporting via traditional MIPS, and is required for Shared Savings Program ACOs reporting via the APM Performance Pathway (APP). (A) CAHPS for MIPS Survey Measure Case-Mix Adjustment ModelUnder the CAHPS for MIPS Survey measure, we adjust summary survey measure scores for case-mix to promote meaningful comparison of the performance of MIPS groups despite differences in their patient populations (81 FR 77120). The case-mix adjustment model for CAHPS for MIPS Survey measure includes the following case-mix adjustors as of the CY 2022 performance period: age; education; self-reported general health status; self-reported mental health status; proxy response; Medicaid dual eligibility; eligibility for Medicare's low-income subsidy; and Asian language survey completion (86 FR 65444 and 65445). Only a small percentage of CAHPS for MIPS Survey participants who report speaking a language other than English at home actually complete the survey in that language. We believe that collecting information on the language spoken by the participant at home as a case-mix adjustor rather than the language used by the respondent to complete the survey is likely to capture language preference more accurately, as well as response patterns of participants with similar experiences, for a more meaningful comparison of performance between MIPS groups. Furthermore, more accurately capturing preferred language aligns with CMS's effort to provide culturally and linguistically appropriate services (CLAS), which are intended to advance health equity, improve quality, and help eliminate health care disparities.[404] Other CMS-administered CAHPS Surveys, such as the CAHPS for Hospice Survey and the Hospital CAHPS Survey, include preferred language variables rather than survey language variables for case-mix adjustment. Furthermore, analysis of CY 2019 performance period for CAHPS for MIPS Survey measure data found that adding case-mix adjustors for Spanish language spoken at home, Asian language(s) spoken at home, and other language spoken at home has minimal impacts on scoring for most groups, and slightly positively impacts the scores of groups with substantial patient populations who speak a language other than English at home. Therefore, we are proposing to revise the CAHPS for MIPS Survey measure case-mix adjustment model to remove the existing adjustor for Asian language survey completion and to add adjustors for Spanish language spoken at home, Asian language spoken at home, and other language spoken at home. We seek public comment on our proposal to revise the CAHPS for MIPS Survey measure case-mix adjustment model. (aa) Adding Items Related to Health Disparity and Price Transparency to the CAHPS for MIPS Survey MeasureWe are interested in gathering information directly from patients related to health disparities and price transparency. In section III.G.4.g. of this proposed rule, we discuss the request for information regarding the future consideration of additional and modified questions related to health disparities and price transparency to the CAHPS for MIPS Survey measure. Specifically, we are seeking public comment on the following items in the request for information as outlined in section III.G.4.g. of this proposed rule: (1) the potential future inclusion of health disparities and price transparency questions and whether there are other questions that should be considered for potential future inclusion in the CAHPS for MIPS Survey measure; and (2) the potential for creating a shortened version of the CAHPS for MIPS Survey measure such that it would be more applicable to specialty groups. Therefore, we refer readers to section III.G.4.g. of this proposed rule for further information regarding this request for information. (iii) Data Completeness CriteriaIn the CY 2017 and CY 2018 Quality Payment Program final rules and the CY 2020 PFS final rule, we noted that we would increase the data completeness criteria threshold over time (81 FR 77121, 82 FR 53632, and 84 FR 62951). For the CY 2017 performance period/2019 MIPS payment year (first year of the implementation of MIPS), the data completeness criteria threshold was established to reflect a threshold of at least 50 percent (81 FR 77125). The data completeness criteria threshold increased from at least 50 percent to at least 60 percent for the CY 2018 performance period/2020 MIPS payment year (81 FR 77125 and 82 FR 53633) and was maintained at a threshold of at least 60 percent for the CY 2019 performance period/2021 MIPS payment year (82 FR 53633 and 53634). For the CY 2020 performance period/2022 MIPS payment year, the data completeness criteria threshold was increased from at least 60 percent to at least 70 percent (84 FR 62952). The data completeness criteria threshold of at least 70 percent was maintained for the CY 2021, CY 2022, and CY 2023 performance periods/2023, 2024, and 2025 MIPS payment years (86 FR 65435 through 65438). We continue to believe that it is important to incrementally Start Printed Page 46278 increase the data completeness criteria as MIPS eligible clinicians, groups, and virtual groups gain experience with MIPS. We believe that the incorporation of higher data completeness thresholds in future years ensures a more accurate assessment of a MIPS eligible clinician's performance on quality measures and prevent selection bias to the extent possible (81 FR 77120, 82 FR 53632, 83 FR 59758, and 86 FR 65436). We have encouraged all MIPS eligible clinicians to perform the quality actions associated with the quality measures on their patients (82 FR 53632 and 86 FR 65436). The data submitted for each measure is expected to be representative of the individual MIPS eligible clinician, group, or virtual group's overall performance for that measure. The data completeness threshold of less than 100 percent is intended to reduce burden and accommodate operational issues that may arise during data collection during the initial years of the program (82 FR 53632 and 86 FR 65436). We previously noted concerns raised regarding the unintended consequences of accelerating the data completeness thresholds too quickly, which may jeopardize a MIPS eligible clinicians' ability to participate and perform well under MIPS (81 FR 77121, 82 FR 53632, and 84 FR 62951). We want to ensure that an appropriate, yet achievable, data completeness threshold is applied to all eligible clinicians participating in MIPS. Based on our analysis of data completeness rates from data submission for the CY 2017 performance period (as outlined in the CY 2020 PFS final rule (84 FR 62951), the average data completeness rates were as follows: for individual eligible clinicians, it was 76.14; for groups, it was 85.27; and for small practices, it was 74.76), we believe that it is feasible for eligible clinicians and groups to achieve a higher data completeness threshold without jeopardizing their ability to participate and perform well under MIPS. We are now proposing to raise the data completeness criteria from 70 percent to 75 percent for the CY 2024 and CY 2025 performance periods/2026 and 2027 MIPS payment years. Specifically, we propose in § 414.1340(a)(4) that, for the CY 2024 and CY 2025 performance periods/2026 and 2027 MIPS payment years, a MIPS eligible clinician or a group submitting quality measures data on QCDR measures, MIPS CQMs, eCQMs must submit data on at least 75 percent of the MIPS eligible clinician or group's patients that meet the measure's denominator criteria, regardless of payer. Similarly, we are proposing in § 414.1340(b)(4), for the CY 2024 and CY 2025 performance periods/2026 and 2027 MIPS payment years, that a MIPS eligible clinician or a group submitting quality measures data on Medicare Part B claims measures would need to submit data on at least 75 percent of the MIPS eligible clinician or group's patients seen during the corresponding performance period to which the measure applies. We believe that increasing the data completeness criteria threshold to 75 percent for the CY 2024 performance period/2026 MIPS payment year and the CY 2025 performance period/2027 MIPS payment year provides MIPS eligible clinicians with ample time prepare for a higher standard as most clinicians already meet or exceed this standard. We seek public comment on our proposal to increase the data completeness criteria threshold from at least 70 percent to at least 75 percent for the CY 2024 and CY 2025 performance periods/2026 and 2027 MIPS payment years. (c) Selection of MIPS Quality MeasuresSection 1848(q)(2)(D)(i) of the Act requires the Secretary, through notice and comment rulemaking, to establish an annual final list of quality measures from which MIPS eligible clinicians may choose for the purpose of assessment under MIPS. Section 1848(q)(2)(D)(i)(II) of the Act requires that the Secretary annually update the list by removing measures from the list, as appropriate; adding to the list, as appropriate, new measures; and determining whether measures that have undergone substantive changes should be included on the updated list. Previously finalized MIPS quality measures can be found in the CY 2022 PFS final rule (86 FR 65687 through 65968); CY 2021 PFS final rule (85 FR 85045 through 85377); CY 2020 PFS final rule (84 FR 63205 through 63513); CY 2019 PFS final rule (83 FR 60097 through 60285); CY 2018 Quality Payment Program final rule (82 FR 53966 through 54174); and CY 2017 Quality Payment Program final rule (81 FR 77558 through 77816). Proposed changes to the MIPS quality measure set, as described in Appendix 1 of this proposed rule, include the following: the addition of new measures; updates to specialty sets; removal of existing measures, and substantive changes to existing measures. For the CY 2023 performance period, we are proposing a measure set of 194 MIPS quality measures in the inventory. The new MIPS quality measures that we are proposing to include in MIPS for the CY 2023 performance period and future years can be found in Table Group A of Appendix 1 to this proposed rule. For the CY 2023 performance period, we are proposing 9 new MIPS quality measures, which includes 1 administrative claims measure; 1 composite measure; 5 high priority measures, and 2 patient-reported outcome measures). In addition to the establishment of new individual MIPS quality measures, we also develop and maintain specialty measure sets to assist MIPS eligible clinicians with selecting quality measures that are most relevant to their scope of practice. We are proposing modifications to existing specialty sets and new specialty sets as described in Table Group B of Appendix 1 to this proposed rule. Specialty sets may include: new measures, previously finalized measures with modifications, previously finalized measures with no modifications, the removal of certain previously finalized quality measures, or the addition of existing MIPS quality measures. Specialty and subspecialty sets are not inclusive of every specialty or subspecialty. On January 3, 2022, we announced that we would be accepting recommendations for potential new specialty measure sets or revisions to existing specialty measure sets for year 7 of MIPS under the Quality Payment Program.[405] These recommendations were based on the MIPS quality measures finalized in the CY 2021 PFS final rule and the 2021 Measures Under Consideration List; the recommendations include the addition or removal of current MIPS quality measures from existing specialty sets, or the creation of new specialty sets. All specialty set recommendations submitted for consideration were assessed and vetted, and as a result, the recommendations that we agree with are being proposed in this proposed rule. In addition to establishing new individual MIPS quality measures and modifying existing specialty sets and new specialty sets as outlined in Tables Group A and Group B of Appendix 1 of this proposed rule, we refer readers to Table Group C of Appendix 1 of this proposed rule for a list of quality measures and rationales for measure removal. We have previously specified certain criteria that will be used when Start Printed Page 46279 we are considering the removal of a measure (81 FR 77136 and 77137; 83 FR 59763 through 59765; 84 FR 62957 through 62959). For the CY 2023 performance period, we are proposing to remove 15 MIPS quality measures and partially remove 2 MIPS quality measures that are proposed for removal from traditional MIPS and proposed for retention for use in MVPs. We refer readers to Table Group DD of Appendix 1 of this proposed rule for further information regarding the proposals to retain such measures for retention for use in relevant MVPs. Of the 15 MIPS quality measures proposed for removal, the following pertains to such measures: 1 MIPS quality measure is duplicative to a proposed new MIPS quality measure; 4 quality measures are duplicative of current measures; 7 MIPS quality measures that do not align with the Meaningful Measure Initiative (that is, measures that are unable to produce a benchmark or have limited adoption, or are a standard of care); 2 MIPS quality measures that are under the topped out lifecycle; and 1 measure is extremely topped out. We have continuously communicated to interested parties our desire to reduce the number of process measures within the MIPS quality measure set (83 FR 59763 through 59765). We noted our belief that our proposal to remove the quality measures outlined in Table Group C of this proposed rule would lead to a more parsimonious inventory of meaningful, robust measures in the program, and that our approach to removing measures should occur through an iterative process that includes an annual review of the quality measures to determine whether they meet our removal criteria. Also, we are proposing substantive changes to several MIPS quality measures, which can be found in Table Group D of Appendix 1 of this proposed rule. We have previously established criteria that would apply when we are considering making substantive changes to a quality measure (81 FR 77137, and 86 FR 65441 and 65442). We are proposing substantive changes to 75 MIPS quality measures, which includes 2 quality measures proposed to be retained for utilization under MVPs (we refer readers to Table Group DD of Appendix 1 of this proposed rule for such measures that are proposed for retention for use in relevant MVPs). On an annual basis, we review the established MIPS quality measure inventory to consider updates to the measures. Possible updates to measures may be minor or substantive. Lastly, we are proposing substantive changes to CMS Web Interface measures that are available as a collection and submission type for Medicare Shared Savings Program ACOs meeting reporting requirements under the APP. The substantive changes to the CMS Web Interface measures can be found in Table Group E of Appendix 1 of this proposed rule. Also, in section III.G.4.c.(2) of this proposed rule, the establishment of CMS Web Interface benchmark policies for the APP under Medicare Shared Savings Program are being proposed, in which the establishment of such benchmark policies for the APP (at § 425.512) would be applied retroactively starting with the CY 2022 performance year. The CMS Web Interface benchmark policies previously established at § 425.502(b) under the Medicare Shared Savings Program were revised in the CY 2021 PFS final rule, in which the provisions under § 425.502(b) were sunset with the CY 2020 performance year and not applied to the APP under the Medicare Shared Savings Program. For performance year CY 2021, it was noted in the CY 2021 PFS final rule that the CMS Web Interface measure benchmarks developed for the Medicare Shared Savings Program for performance year CY 2020 would be utilized (85 FR 84724). However, as a result of the inadvertent failure to consider the policies that would apply for purposes of establishing benchmarks for the CMS Web Interface measures applicable to the APP starting with performance year CY 2022, benchmarks policies for the CMS Web Interface measures were not established for the APP under the Medicare Shared Savings Program. We note that the absence of benchmark policies for the APP under the Medicare Shared Savings Program impacts MIPS. The CMS Web Interface measure benchmarks established for the Medicare Shared Savings Program are utilized for purposes of MIPS (§ 414.1380(b)(1)(ii)(B)). Due to the absence of benchmark policies for the APP under the Medicare Shared Savings Program, CMS Web Interface measure benchmarks are not able to be established starting with performance year 2022. As outlined in section III.G.4.c.(2) of this proposed rule, the establishment of CMS Web Interface benchmark policies for the APP under Medicare Shared Savings Program are being proposed, in which the retroactive adoption of benchmark policies previously established at § 425.502(b) would be applied for performance year CY 2022 (and future performance years as applicable under the Medicare Shared Savings Program). Thus, for the CY 2022 performance period/2024 MIPS payment year (last year in which the CMS Web Interface is available as a collection and submission type under traditional MIPS for groups, virtual groups, and APM Entities), the CMS Web Interface benchmarks created for the APP under the Medicare Shared Savings Program would be utilized under MIPS. We are requesting public comment on our proposals to modify the quality performance category measure set. (i) Screening for Social Drivers of Health Proposed MeasureEstablished evidence demonstrates that factors beyond the clinical realm are directly associated with patient health outcomes as well as healthcare utilization, costs, and performance in quality-based payment programs.[406 407] Specifically, social risk factors account for 50 to 70 percent of health outcomes.[408 409 410] Indeed, the Physicians Foundation surveyed 8,500 physicians in 2018 and found that almost 90 percent of respondents reported their patients had a serious health problem linked to poverty or other social conditions.[411] Health-related social needs (HRSNs), which we have previously defined as individual-level, adverse social conditions that negatively impact a person's health or healthcare, are significant risk factors associated with worse health outcomes as well as increased healthcare utilization.[412] In Start Printed Page 46280 2017, the CMS Innovation Center launched the Accountable Health Communities (AHC) Model to test the impact of addressing the HRSNs of Medicare and Medicaid beneficiaries.[413 414 415 416] Although there are other models of care that address HRSNs, the AHC Model is one of the first Federal pilots to test whether systematically identifying and addressing core HRSNs—through screening, referral, and community navigation—improves healthcare costs, utilization, and outcomes.[417] Moreover, as described in the CMS Equity Plan for Improving Quality in Medicare, complex interactions among individual need, clinician practice/behavior, and availability of community resources significantly impact healthcare access, quality, and ultimately costs.[418 419] Conceptually, HRSNs exist along a continuum with other equity-related terms—such as “social determinants of health” and “social risk factors”—used to describe upstream factors that can adversely affect the health of individuals and communities. Often conflated and even used interchangeably, the variety of terms has created both confusion as well as concern, prompting leaders in the field to adopt “drivers of health” (DOH) instead.[420] Hereafter, we utilize DOH terminology to more holistically capture aforementioned and related concepts, while minimizing potential misinterpretation and/or negative connotation. We believe that consistently addressing DOH will have two significant benefit for MIPS. First, because DOH disproportionately impact individuals and communities that are disadvantaged and/or underserved by the healthcare system, the promotion of screening for these factors would support clinician practices and health systems in actualizing an expressed commitment to address disparities in care, implementing associated equity measures to track progress, and improving overall health equity.[421] Second, patient-level DOH data through screening is essential in the long-term to encourage meaningful collaboration among clinicians and community-based organizations, and implement and evaluate related innovations in healthcare and social service delivery. As a first step towards addressing DOH to close health equity gaps among patients served by MIPS-eligible clinicians, we propose the adoption of an evidence-based DOH measure (we refer readers to Table Group A.3 of Appendix 1 to this proposed rule for the proposed measure information) that would support identification of specific DOH associated with inadequate healthcare access and adverse health outcomes among patients. We note that the measure would enable systematic collection of DOH data. This standardized measure would enable clinicians to systematically address DOH affecting individual patients; thereby, improving not only early identification of risk and/or need, but also prompt referral to relevant resources as well as stronger clinical-community linkages. Further, collecting DOH data could promote more focused collaboration between clinicians/health systems and appropriate community-based organizations to guide cross-sector resource allocation and ultimately improved patient outcomes. The “Screening for Social Drivers of Health” measure assesses the percent of patients who are 18 years or older screened for food insecurity, housing instability, transportation problems, utility difficulties, and interpersonal safety. Under our Meaningful Measures Framework,[422] the measure addresses the quality priority of “Work with Communities to Promote Best Practices of Healthy Living” through the Meaningful Measures Area of “Equity of Care.” Additionally, pursuant to Meaningful Measures 2.0, this measure addresses the “healthcare equity” priority area and aligns with our commitment to introduce plans to close equity gaps and promote health equity through quality measures, including to “develop and implement measures that reflect social and economic determinants.” [423] The development and proposal of this measure also aligns with the CMS strategic pillar to advance health equity by addressing the health disparities that underlie our health system [424] and the 5 CMS health equity priorities for reducing disparities in health: [425] • Priority 1: Expand the Collection, Reporting, and Analysis of Standardized Data. • Priority 2: Assess Causes of Disparities Within CMS Programs, and Address Inequities in Policies and Operations to Close Gaps. • Priority 3: Build Capacity of Health Care Organizations and the Workforce to Reduce Health and Health Care Disparities. • Priority 4: Advance Language Access, Health Literacy, and the Provision of Culturally Tailored Services. • Priority 5: Increase All Forms of Accessibility to Health Care Services and Coverage. (d) MIPS Quality Performance Category Health Equity Request for InformationSignificant and persistent inequities in healthcare outcomes exist in the United States. Belonging to a racial or Start Printed Page 46281 ethnic minoritized group; being a member of a religious minority; living with a disability; being a member of 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.[426 427 428 429 430 431 432 433 434] One approach being employed to reduce health inequity across CMS programs is the expansion of efforts to report quality measure results stratified by patient social risk factors and demographic variables. In the CY 2023 IPPS/LTCH PPS proposed rule (87 FR 28570 through 28576), there is a Request for Information regarding the Overarching Principles for Measuring Healthcare Quality Disparities Across CMS Quality Programs, which describes key considerations that we believe should be accounted for across all CMS quality programs, including MIPS, when advancing the use of measure stratification to address healthcare disparities and advance health equity across our programs. We refer readers to the CY 2023 IPPS/LTCH PPS proposed rule for further information regarding this Request for Information). To facilitate efforts to reduce health inequities, we are considering the development of broadly applicable health equity measures for potential use within traditional MIPS and MVPs. As noted in section IV.A.10.c.(1)(d) of this proposed rule, we are proposing one health equity measure for purposes of MIPS, “Screening for Social Drivers of Health,” while other CMS programs are proposing two health equity measures, “Screening for Social Drivers of Health” and “Screen Positive Rate for Social Drivers of Health,” as proposed in the CY 2023 IPPS/LTCH PPS proposed rule (87 FR 28498 through 28506). As we consider the possible future inclusion of additional health equity measures in MIPS in future years (may include, but not limited to, a measure similar to the MUC2021-134 Screen Positive Rate for Social Drivers of Health measure included on the 2021 Measures Under Consideration (MUC) List),[435] we seek public comment on the following questions in order to better understand the type and structure of health equity measures that would be appropriate for the implementation in MIPS.
Also, we seek public comment on the following two potential approaches for measuring health equity in MIPS and MVPs: assessing the collection and use of self-reported patient characteristics; and assessing patient-clinician communication. (i) Assessing the Collection and Use of Self-Reported Patient CharacteristicsA prerequisite for measuring and reporting quality for patients with social risk factors (that is, stratifying quality measures by patient characteristics) is collecting standardized, complete, and accurate patient data. These data include patient demographics and social drivers of health (referred to as “patient characteristics”), which are not routinely or systematically collected across the health care system.[436 437] We are considering ways to encourage clinicians to collect social risk information, including through the development of a measure that tracks the completeness of self-reported patient characteristics such as race, ethnicity, preferred language, gender identity, sexual orientation, disability status, income, education, employment, food insecurity, housing instability, transportation problems, utility help needs, and interpersonal safety. Patient-reported data are considered to be the gold standard for evaluating quality of care for patients with social risk factors.[438] We seek public comment on the following questions in order to understand the feasibility and usefulness of a measure that promotes the collection of self-reported patient characteristics data to provide potential opportunities for the use of patient characteristics data to understand the status of health and health care equity.
• Are there certain characteristics that are important to collect together to more meaningfully categorize patient populations (for example, examining the Start Printed Page 46282 intersection of race and gender identity)?
We are interested in understanding differences in clinician's performance on MIPS measures for different patient populations. We understand that patient outcomes, especially for those patients who belong to underserved communities, may be influenced by factors outside of the clinician's control. We seek public comment on the following question. Would it be beneficial to: stratify either outcome or process measures by patient demographics; and/or stratify either outcome or process measures by identified social needs, such as food insecurity, housing instability, transportation problems, utility help needs, or interpersonal safety? (ii) Assessing Patient-Clinician CommunicationEffective communication is critical to ensuring mutual clinician-patient understanding, empowering patients, and providing high-quality care across all patient care settings and clinician types. Reliance on unqualified individuals to interpret medical information can lead to misunderstandings, devastating outcomes, or even death.[439 440] To promote access to care for patients in need of foreign language services, we developed the Guide to Developing a Language Access Plan [441] in February of 2018. The Guide to Developing a Language Access Plan outlines steps organizations can take to provide high-quality and appropriate language assistance services to all individuals they serve. While resources are available, currently, there are not clinician-level measures in MIPS that assess the receipt of language services.[442] We are considering the development of a patient-reported outcome measure that assesses the receipt of appropriate language services and/or the extent of clinician-patient communication. We are seeking feedback on the feasibility and usefulness of such a measure(s). If we developed such measure(s), it may be considered for the foundational layer of MVPs, meaning this measure would be required of most, if not all, eligible clinicians. Given the variance in patient needs and organizational resources, we are seeking feedback on the appropriateness of requiring all clinicians to report on such measure(s). (e) Developing Quality Measures That Address Amputation Avoidance in Diabetic Patients Request for InformationDiabetes affects 34 million, or 13 percent, of adults in the United States. A serious potential complication of diabetes is lower extremity amputation (LEA), resulting from peripheral neuropathy (nerve damage), peripheral arterial disease (PAD, reduced blood flow to the extremities), or both. Patients with neuropathy or PAD are vulnerable to developing ulcers on the feet, which, if they become infected and do not heal, can lead to amputation. LEAs occur at a rate of 5.6 per 1000 persons with diabetes, affecting approximately 130,000 patients in 2016,[443] and evidence indicates that amputations are on the rise. The COVID-19 pandemic has likely accelerated rates of amputation, due in part to delayed wound care and preventive care.[444 445] LEA has devastating consequences for a patient's health and quality of life; [446] the 5-year mortality rate following LEA is estimated at 50 percent.[447] There are known disparities in LEA, with rates of amputation substantially higher among Black, Native American, and Hispanic patients as compared to White non-Hispanic patients.[448 449] Evidence indicates that there may be gaps in care for certain populations, which contribute to these disparities.[450] For Start Printed Page 46283 example, evidence has demonstrated that Black patients are less likely to undergo potentially limb-saving interventions, such as revascularization or wound debridement, prior to having an amputation, as compared to White patients.[451] Disparities are also observed by socioeconomic status and region (with rural regions experiencing higher amputation rates).[452 453] High-quality care can reduce the risk of amputation, through activities such as regular foot exams to identify ulcers, screening for risk factors such as neuropathy and PAD, patient engagement in foot self-care, therapeutic footwear for patients at high risk of developing ulcers, offloading treatment for patients who develop ulcers, and revascularization to restore blood flow to the limbs.[454] We are exploring the development of a process quality measure, as well as a composite measure, for inclusion in MIPS, designed to reduce the risk of LEA among patients with diabetes. Based on review of the literature, technical expert panel (TEP) feedback, and prioritization of health equity, we are prioritizing the following process quality measure concept for potential future development: Ulcer Risk Assessment and Follow-Up. The measure would assess the percent of patients with diabetes who receive neurologic and vascular assessments of their lower extremities to determine ulcer risk, have a documented ulcer risk level, and who receive a follow-up plan of care if identified as high risk for ulcer. We intend to consider either adoption and modification of an existing measure or development of a new measure to achieve this measure concept. We are seeking feedback on the following questions in order to understand, account for, and address challenges that may be experienced during development, testing, and implementation of the process measure.
We may also consider the development of a composite quality measure. A composite measure is a measure that combines two or more individual measures and yields a single score. Composite measures are intended to capture information about complex, multidimensional care processes. Within the context of diabetes and LEA, a composite measure may include individual measures focused on A1C control, cardiovascular risk factors (such as blood pressure control, tobacco non-use), peripheral neuropathy screening, PAD screening, evaluation of footwear, and offloading when ulcers occur. We are seeking feedback on the following questions in order to understand, account for, and address challenges that may be experienced during development, testing, and implementation of a composite quality measure.
(2) Cost Performance Category(a) BackgroundWe refer readers to the CY 2017 and CY 2018 Quality Payment Program final rules, and the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (81 FR 77162 through 77177, 82 FR 53641 through 53648, 83 FR 59765 through 59776, 84 FR 62959 through 62979, 85 FR 84877 through 84881, and 86 FR 65445 through 65461, respectively) for a description of the statutory basis for and existing policies pertaining to the cost performance category. In this rule, we are proposing to update the operational list of care episode and patient condition groups and codes by adding the Medicare Spending Per Beneficiary (MSPB) Clinician cost measure as a care episode group. (b) Proposed Revisions to the Operational List of Care Episode and Patient Condition Groups and CodesSection 1848(r) of the Act specifies a series of steps and activities for the Secretary to undertake to involve physicians, practitioners, and other interested parties in enhancing the infrastructure for cost measurement, including for purposes of MIPS and APMs. Section 1848(r)(2) of the Act requires the development of care episode and patient condition groups, and classification codes for such groups, and provides for care episode and patient condition groups to account for a target of an estimated one-half of expenditures under Parts A and B (with this target increasing over time as appropriate). Sections 1848(r)(2)(E) through (G) of the Act require the Secretary to post on the CMS website a draft list of care episode and patient condition groups and codes for solicitation of input from interested parties, and subsequently, post an operational list of such groups and Start Printed Page 46284 codes. Section 1848(r)(2)(H) of the Act requires that not later than November 1 of each year (beginning with 2018), the Secretary shall, through rulemaking, revise the operational list as the Secretary determines may be appropriate, and that these revisions may be based on experience, new information developed under section 1848(n)(9)(A) of the Act, and input from physician specialty societies and other interested parties. For more information about past revisions to the operational list, we refer readers to 84 FR 62968 through 62969 and 86 FR 65452 through 65453. The current operational list is available at the MACRA Feedback page at https://www.cms.gov/Medicare/Quality-Payment-Program/Quality-Payment-Program/Give-Feedback. Additionally, as required by section 1848(r)(2)(I) of the Act, information on resource use (or cost) measures currently in use in MIPS, cost measures under development and the time-frame for such development, potential future cost measure topics, a description of engagement with interested parties, and the percent of expenditures under Medicare Parts A and B that are covered by cost measures must be provided on the website of CMS not later than December 31 of each year. In prior rulemaking, we have included episode-based measures that focus on specific procedures and conditions in the operational list of care episode and patient condition groups and codes (84 FR 62968 through 62969 and 86 FR 65452 through 65453). Section 1848(r)(2)(D)(ii) of the Act specifies that in establishing the care episode groups, we must take into account the patient's clinical problems at the time items and services are furnished during an episode of care, such as the clinical conditions or diagnoses, whether or not inpatient hospitalization occurs, and the principal procedures or services furnished, as well as other factors we determine appropriate. Section 1848(r)(2)(D)(iii) of the Act specifies that in establishing the patient condition groups, we must take into account the patient's clinical history at the time of a medical visit, such as the patient's combination of chronic conditions, current health status, and recent significant history (such as hospitalization and major surgery during a previous period, such as 3 months), as well as other factors we determine appropriate. Currently, in the operational list there are 21 care episode groups, which served as the basis for the 15 procedural episode-based measures and the 6 acute inpatient medical episode-based measures that have been established for the cost performance category (83 FR 59767 through 59773, 84 FR 62962 through 62968, and 86 FR 65446 through 65453), and 2 patient condition groups, which served as the basis for the 2 chronic condition episode-based measures that have been established for the cost performance category (86 FR 65446 through 65453). Given that population-based measures, such as the MSPB Clinician and total per capita cost measures, focus on a broader range of patient care, CMS and interested parties have considered them to be distinct from episode-based measures. Therefore, we did not include these two population-based measures in the operational list after they were comprehensively re-evaluated in 2019 and revised for use in MIPS beginning with the CY 2020 performance period/2022 MIPS payment year (84 FR 62974 through 62977). This distinction between episode-based measures and population-based measures also reflects development status as episode-based measures were developed specifically for use in MIPS, while the original versions of the MSPB Clinician and total per capita cost measures were first used in the Value Modifier (VM) program before being adapted for MIPS for the CY 2017 performance period/2019 MIPS payment year (81 FR 77166 through 77168). For additional background on the population-based measures currently in use in MIPS please refer to 84 FR 62969 through 62977. We propose to add the MSPB Clinician measure to the operational list as a care episode group. Consistent with section 1848(r)(2)(D)(ii) of the Act, the MSPB Clinician measure takes into account the patient's clinical diagnoses at the time of an inpatient hospitalization and includes the costs of various items and services furnished during an episode of care. The MSPB Clinician measure is constructed using many aspects of the same logic as episode-based measures based on the care episode groups currently on the operational list. Both the MSPB Clinician and the episode-based measures are based on clearly-defined episodes and include the services that are clinically related to the clinician's role in the care being assessed. Further, the MSPB Clinician measure attributes episodes under medical Medicare Severity—Diagnosis Related Groups (MS-DRGs) to clinician groups billing at least 30 percent of evaluation and management (E/M) services during an inpatient stay, which is the same attribution logic as the one used for acute inpatient medical episode-based measures. Therefore, designating the MSPB Clinician measure as a care episode group alongside the episode-based measures would ensure that these similarities are reflected in the operational list. For more information on the MSPB Clinician measure, we refer readers to the CY 2020 PFS final rule (84 FR 62974 through 62977) and to the measure specification documents that are available on the QPP Resource Library at https://qpp.cms.gov/about/resource-library. We note that at this time we are not proposing to add the total per capita cost measure to the operational list as a care episode group or patient condition group. The measure is not constructed based on episodes of care; rather, it includes all costs after a primary care-type relationship has been identified. It also does not focus on specific patient conditions as it aims to include all patients where this clinician-patient relationship has been identified. More detailed information on the total per capita cost measure is included in the measure specifications documents available at the Quality Payment Program Resource Library website at https://qpp.cms.gov/resources/resource-library. We do not intend for our proposal to detract from the importance of episode-based measures or affect our plans to continue developing episode-based measures for potential use in MIPS. There are 7 episode-based measures under development and 4 anticipated episode-based measures to begin development this year. The operational list as revised to reflect the proposal is available on the MACRA Feedback Page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-Feedback.html. We seek public comment on our proposal. (3) Improvement Activities Performance Category(a) BackgroundFor previous discussions on the general background of the improvement activities performance category, we refer readers to the CY 2017 Quality Payment Program final rule (81 FR 77177 and 77178), the CY 2018 Quality Payment Program final rule (82 FR 53648 through 53661), the CY 2019 PFS final rule (83 FR 59776 and 59777), the CY 2020 PFS final rule (84 FR 62980 through 62990), CY 2021 PFS final rule (85 FR 84881 through 84886) and the CY 2022 PFS final rule (86 FR 65462 through 65466). We also refer readers to 42 CFR 414.1305 for the definitions of improvement activities and attestation, Start Printed Page 46285 § 414.1320 for standards establishing the performance period, § 414.1325 for the data submission requirements, § 414.1355 for standards related to the improvement activity performance category generally, § 414.1360 for data submission criteria for the improvement activity performance category, and § 414.1380(b)(3) for improvement activities performance category scoring. We are not proposing any changes to the traditional MIPS improvement activities policies for the CY 2023 performance period/2025 MIPS payment year. However, we are proposing changes to the improvement activities Inventory for the CY 2023 performance period/2025 MIPS payment year and future years as follows: adding four new improvement activities; modifying five existing improvement activities; and removing six previously adopted improvement activities. (b) Improvement Activities Inventory(i) Annual Call for Activities BackgroundIn the CY 2017 Quality Payment Program final rule (81 FR 77190), for the transition year of MIPS, we implemented the initial improvement activities Inventory consisting of approximately 95 activities (81 FR 77817 through 77831). We took several steps to ensure the Inventory was inclusive of activities in line with statutory and program requirements. We discussed that we had conducted numerous interviews with highly performing organizations of all sizes and had conducted an environmental scan to identify existing models, activities, or measures that met all or part of the improvement activities performance category, including the patient-centered medical homes, the Transforming Clinical Practice Initiative (TCPI), CAHPS surveys, and AHRQ's Patient Safety Organizations. In addition, we reviewed the CY 2016 PFS final rule with comment period (80 FR 71259) and the comments received in response to the MIPS and APMs RFI in relation to the improvement activities performance category, which sought input on what activities could be classified as clinical practice improvement activities according to the definition under section 1848(q)(2)(C)(v)(III) of the Act. For the CY 2018 performance period/2020 MIPS payment year, we provided an informal process for submitting new improvement activities or modifications for potential inclusion in the comprehensive improvement activities Inventory for the Quality Payment Program CY 2018 performance period/2020 MIPS payment year and future years through subregulatory guidance.[455] In the CY 2018 Quality Payment Program final rule (82 FR 53656 through 53659), for the CY 2019 performance period/2021 MIPS payment year and for future years, we finalized a formal Annual Call for Activities process for the addition of possible new activities and for possible modifications to current activities in the improvement activities Inventory. This process included the requirement to submit a nomination form similar to the one we utilized for CY 2018 performance period/2020 MIPS payment year (82 FR 53656 through 53659). In order to submit a request for a new activity or a modification to an existing improvement activity, the stakeholder must submit a nomination form (OMB control #0938-1314) available at www.qpp.cms.gov during the Annual Call for Activities. (ii) Proposed Changes to the Improvement Activities InventoryIn the CY 2018 Quality Payment Program final rule (82 FR 53660), we finalized that we would establish improvement activities through notice-and-comment rulemaking. We refer readers to Table H in the Appendix to the CY 2017 Quality Payment Program final rule (81 FR 77177 through 77199), Tables F and G in the Appendix to the CY 2018 Quality Payment Program final rule (82 FR 54175 through 54229), Tables A and B in the Appendix 2 to the CY 2019 PFS final rule (83 FR 60286 through 60303), Tables A, B, and C in the Appendix 2 to the CY 2020 PFS final rule (84 FR 63514 through 63538), Tables A, B, and C in the Appendix 2 to the CY 2021 PFS final rule (85 FR 85370 through 85377), and Tables A, B, and C in the Appendix 2 to the CY 2022 PFS final rule (86 FR 65969 through 65997) for our previously finalized improvement activities Inventories. We also refer readers to the Quality Payment Program website under Explore Measures and Activities at https://qpp.cms.gov/mips/explore-measures?tab=improvementActivities&py=2020 for a complete list of the current improvement activities. In the CY 2017 Quality Payment Program final rule (81 FR 77539), we codified the definition of improvement activities at § 414.1305 to mean an activity that relevant MIPS eligible clinicians, organizations, and other relevant stakeholders identify as improving clinical practice or care delivery and that the Secretary determines, when effectively executed, is likely to result in improved outcomes. In this proposed rule, we are proposing to add four new improvement activities, modify five existing improvement activities, and remove six previously adopted improvement activities for the CY 2023 performance period/2025 MIPS payment year and future years. We refer readers to Appendix 2 to this proposed rule for more details. All of our proposed new improvement activities are responsive to the Administration's goal of advancing health equity for all, as outlined in the President's January 20, 2021, Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government” ( https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/). Additionally, all of the proposed new improvement activities address Priorities for Reducing Disparities in Health, as described in the CMS Framework for Health Equity ( https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/framework-for-health-equity). The first proposed new improvement activity, IA_AHE_XX titled “Use Security Labeling Services Available in Certified Health Information Technology (IT) for Electronic Health Record (EHR) Data to Facilitate Data Segmentation” would promote the adoption of technology certified to the Security tags—summary of care—send and Security tags—summary of care—receive criteria at 45 CFR 170.315(b)(7) and (b)(8) in the ONC Health IT Certification Program.[456 457] ONC finalized updated versions of these criteria as part of the ONC 21st Century Cures Act Final Rule (85 FR 25702), which are available for certification by health IT developers. Security tagging allows sharing of certain portions of an EHR while not sharing others, such as sensitive information related to drivers of health. We refer readers to the 2015 Edition final rule (80 FR 62647) for further details. This proposed improvement activity would involve Start Printed Page 46286 clinicians working with their EHR vendors to implement technology meeting the security tags criteria in practice systems and clinic workflows. We believe that implementing this technology would improve interoperability while protecting patient privacy, thus improving care delivery and patients' care experience.[458] We believe this activity is likely to improve patient outcomes because protection of patient privacy and increased interoperability helps improve patient care delivery. This proposed improvement activity would address the CMS Framework for Health Equity Priority 1, Expand the Collection, Reporting, and Analysis of Standardized Data.[459] The proposed new improvement activity IA_AHE_XX titled “Create and Implement a Plan to Improve Care for Lesbian, Gay, Bisexual, Transgender, and Queer Patients” supports both CMS Framework for Health Equity Priority 1 and Priority 3, Build Capacity of Health Care Organizations and the Workforce to Reduce Health and Health Care Disparities. Eligible clinicians would receive improvement activity credit for creating and implementing a plan to improve care for lesbian, gay, bisexual, transgender, and queer (LGBTQ+) patients by understanding and addressing health disparities for this population, which may include analysis of sexual orientation and gender identity (SO/GI) data to identify and address disparities in care. Actions to implement this activity may include identifying target goals for addressing disparities in care, collecting and using patients' pronouns and chosen names, training clinicians and staff on SO/GI terminology (including as supported by certified health IT and ONC's United States Core Data for Interoperability [USCDI] as finalized as 45 CFR 170.213), identifying risk factors or behaviors specific to LGBTQ+ individuals, communicating SO/GI data security and privacy practices with patients, and/or utilizing anatomical inventories when documenting patient health histories. LGBTQ+ individuals face health disparities and challenges navigating and accessing healthcare.[460 461] We refer readers to the ONC USCDI website at https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi for further information. Due to lack of clinician training about providing culturally competent and sensitive care for LGBTQ+ individuals, several studies indicate that LGBTQ+ patients, especially gender minority patients, have high rates of negative healthcare experiences.[462 463 464] This improvement activity would fill a gap in the Inventory, which does not currently include an activity focused on improving care for LGBTQ+ patients. We believe this activity has the potential to improve clinical practice and care delivery because training clinicians about working with LGBTQ+ patients may lead to more positive care experiences and health outcomes.[465] Another proposed new improvement activity, IA_EPA_XX titled “Create and Implement a Language Access Plan” directly responds to the CMS Framework for Health Equity Priority 4, Advance Language Access, Health Literacy, and the Provision of Culturally Tailored Services. This activity involves eligible clinicians' creating and implementing a language access plan to address communication barriers for individuals with limited English proficiency. These language access plans should align with standards for communication and language assistance defined in the National Standards for Culturally and Linguistically Appropriate Services (CLAS) in Health and Health Care. We believe that accurate patient-clinician communication, delivered and received in a culturally competent manner, is an essential aspect of improving equity in healthcare and patient outcomes.466 467 This proposed improvement activity would fill a gap in the Inventory, which does not currently include an activity focused on language access. We believe this proposed improvement activity has the potential to improve clinical practice and care delivery and is likely to result in improved patient outcomes, because research indicates the importance of accurate clinical communication in achieving positive patient outcomes.[468] The fourth proposed new improvement activity, IA_ERP_XX titled “COVID-19 Vaccine Promotion for Practice Staff” supports CMS Framework for Health Equity Priority 3. COVID-19 vaccination rates in the U.S. can be improved significantly, particularly in underserved communities.[469] Disparities in COVID-19 vaccination rates have been observed specifically among healthcare workers, with physicians and advanced practiced staff being more likely to be vaccinated than nurses and support staff. Also, it has been reported that Black and younger health care workers have lower vaccination rates than other groups of healthcare workers.[470] This proposed improvement activity would fill a gap in Start Printed Page 46287 the Inventory, which does not currently include an activity focused on COVID-19 vaccination. We believe this activity has the potential to improve clinical practice and is likely to result in improved outcomes and public health, as research indicates the importance of vaccination in reducing the severity and spread of COVID-19.[471] We are also proposing a number of modifications focused on combining activities where possible and other administrative changes. A particularly important proposed modification to an existing activity is focused on Priority 1 of the CMS Framework for Health Equity, Expand the Collection, Reporting, and Analysis of Standardized Data. We are proposing to: (1) recategorize the IA_CC_14 improvement activity, currently titled “Practice improvements that engage community resources to support patient health goals,” from the Care Coordination subcategory to the Achieving Health Equity subcategory, and (2) re-name and re-focus the improvement activity on obtaining and acting on drivers of health data. More specifically, the proposed updated improvement activity with a new ID, IA_AHE_XX, would be titled “Practice Improvements that Engage Community Resources to Address Drivers of Health.” We are proposing to modify this improvement activity description to include `drivers of health' terminology, which better encompasses both `social determinants of health (SDOH)' and `health-related social needs (HSRN)' concepts. We are also proposing to update the list of these factors in the description to reflect a more comprehensive array of drivers of health. These proposed modifications build on ongoing efforts to advance health equity in accordance with the Advance Equity Pillar of the CMS Strategic Plan ( https://www.cms.gov/cms-strategic-plan ). We believe the proposed modifications will better enable eligible clinicians to not only improve clinical practice by screening for and addressing drivers of health, but to also receive credit for their efforts. Furthermore, we anticipate such efforts will be associated with improved clinical outcomes because of the potential impact of social drivers of health and other upstream factors on both healthcare and health status.[472 473] Finally, these proposed modifications would also more clearly align this activity with available evidence and other CMS work in this area, including the CMS Innovation Center's Accountable Health Communities (AHC) Model, designed to test how “addressing health-related social needs through enhanced clinical-community linkages can improve health outcomes and reduce costs.” [474] (4) Promoting Interoperability Performance Category(a) BackgroundSection 1848(q)(2)(A) of the Act includes the meaningful use of certified electronic health record technology (CEHRT) as a performance category under the MIPS. We refer to this performance category as the Promoting Interoperability performance category (and in past rulemaking, we referred to it as the advancing care information performance category). For our previously established policies regarding the Promoting Interoperability performance category, we refer readers to § 414.1375 and the CY 2017 Quality Payment Program final rule (81 FR 77199-77245), CY 2018 Quality Payment Program final rule (82 FR 53663 through 53688), CY 2019 PFS final rule (83 FR 59785 through 59820), CY 2020 PFS final rule (84 FR 62991 through 63006), CY 2021 PFS final rule (85 FR 84886 through 84895), and CY 2022 PFS final rule (86 FR 65466-65490). (b) Promoting Interoperability Performance Category Performance PeriodAs finalized in the CY 2021 PFS final rule at § 414.1320(g)(1) (85 FR 84886) (subsequently re-designated as § 414.1320(h)(1) (86 FR 65671)), for the 2024 MIPS payment year, and each subsequent MIPS payment year, the performance period for the Promoting Interoperability performance category is a minimum of any continuous 90-day period within the calendar year that occurs 2 years prior to the applicable MIPS payment year, up to and including the full calendar year. Thus, for the CY 2025 MIPS payment year, the performance period for the Promoting Interoperability performance category is a minimum of any continuous 90-day period within CY 2023, up to and including the full CY 2023 (January 1, 2023 through December 31, 2023). We are not proposing any changes to the Promoting Interoperability performance category performance period that we established under § 414.1320(h)(1). (c) CEHRT RequirementsThe Promoting Interoperability Program and the QPP require the use of CEHRT as defined at 42 CFR 495.4 and 414.1305, respectively. Since 2019, in general, this has consisted of EHR technology (which could include multiple technologies) certified under the Office of the National Coordinator for Health Information Technology (ONC) Health IT Certification Program that meets the 2015 Edition Base EHR definition (as defined at 45 CFR 170.102) and has been certified to certain other 2015 Edition health IT certification criteria as specified in the definition. The “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” final rule (also referred to as the “ONC 21st Century Cures Act final rule”), published in the May 1, 2020 Federal Register (85 FR 25642 through 25961), finalized a number of updates to the 2015 Edition of health IT certification criteria (also referred to as the 2015 Edition Cures Update) and introduced new 2015 Edition certification criteria. In connection with these updates, ONC also finalized that health IT developers have 24 months from the publication date of the final rule (until May 2, 2022) to make technology available that is certified to the updated, or new criteria. In response to additional calls for flexibility in response to the public health emergency (PHE) for COVID-19, ONC published an interim final rule with comment period on November 4, 2020 entitled, “Information Blocking and the ONC Health IT Certification Program: Extension of Compliance Dates and Timeframes in Response to the COVID-19 Public Health Emergency” (hereinafter the “ONC interim final rule”) (85 FR 70064). In this interim final rule, ONC finalized extended compliance dates for certain 2015 Edition certification criteria. Specifically, where the ONC 21st Century Cures Act final rule provided that developers of certified health IT have 24 months from the publication Start Printed Page 46288 date of the final rule to make technology certified to new or updated criteria available, ONC extended the timeline until December 31, 2022 (and until December 31, 2023 for 45 CFR 170.315(b)(10), “electronic health information ((EHI) export”). In the CY 2021 PFS final rule (85 FR 84815 through 84825), we finalized that the technology used by health care providers to satisfy the definitions of CEHRT at §§ 495.4 and 414.1305 must be certified under the ONC Health IT Certification Program, in accordance with the updated 2015 Edition certification criteria as finalized in the ONC 21st Century Cures Act final rule (85 FR 25642). We further finalized aligning the transition period during which health care providers participating in the Promoting Interoperability Program or QPP may use technology certified to either the existing or updated 2015 Edition certification criteria, with the December 31, 2022 date established in the ONC interim final rule for health IT developers to make updated certified health IT available. After this date, health care providers will be required to use only certified technology updated to the 2015 Edition Cures Update for an EHR reporting period or performance period in CY 2023. We are not proposing any changes to this final policy within this proposed rule. We remind readers that health care providers would not be required to demonstrate that they are using updated technology to meet the CEHRT definitions immediately upon the transition date of December 31, 2022. In accordance with the EHR reporting period and performance period established for the Promoting Interoperability Program and the MIPS Promoting Interoperability performance category, participants are only required to use technology meeting the CEHRT definitions during a self-selected EHR reporting period or performance period of a minimum of any consecutive 90 days in CY 2023, including the final 90 days of 2023 (86 FR 45460 through 45462 and 86 FR 65466, respectively). The eligible hospital, CAH, or MIPS eligible clinician is not required to demonstrate meaningful use of technology meeting the 2015 Edition Cures Update until the EHR reporting period or performance period they have selected. (d) Promoting Interoperability Performance Category Measures for MIPS Eligible Cliniciansi. Changes to the Query of Prescription Drug Monitoring Program Measure Under the Electronic Prescribing Objective(A) Measure BackgroundWe have adopted a Query of Prescription Drug Monitoring Program (PDMP) measure under the Electronic Prescribing objective. For background on this measure, we refer readers to the CY 2019 PFS final rule (83 FR 59800 through 59803) and the CY 2020 PFS final rule (84 FR 62992 through 62994). In the CY 2021 PFS final rule (85 FR 84887 through 84888), we finalized that the Query of PDMP measure will remain optional and eligible for 10 bonus points for the CY 2021 performance period/CY 2023 MIPS payment year. In the CY 2022 PFS final rule (86 FR 65466 through 65467), we finalized that the Query of PDMP measure will remain optional and eligible for 10 bonus points for the CY 2022 performance period/CY 2024 MIPS payment year. (B) State PDMPs' Progress and Previous Interested Parties' FeedbackIn the CY 2020, CY 2021, and CY 2022 PFS final rules (84 FR 62992 through 62994, 85 FR 84887 through 84888 and 86 FR 65467), we described the concerns expressed by interested parties that they believed it was premature for the Promoting Interoperability performance category to require the Query of PDMP measure and score it based on performance. In the CY 2022 PFS proposed rule (86 FR 39410) we discussed our support of efforts to expand the use of PDMPs, describing Federally supported activities aimed at developing a more robust and standardized approach to EHR-PDMP integration, and additional discussions on the feedback we have received from health IT vendors and MIPS eligible clinicians thus far. For more detailed information, we refer readers to the CY 2022 PFS proposed rule (86 FR 39410). We heard extensive feedback from EHR developers that effectively incorporating the ability to count the number of PDMP queries in the EHR would require more robust measurement specifications. These interested parties stated that EHR developers may face significant cost burdens if they fully develop numerator and denominator calculations and are then required to change the specification at a later date. Interested parties have stated that the costs of additional development would likely be passed on to health care providers without additional benefit, as this development would be solely for the purpose of calculating the measure, rather than furthering the clinical goal of the measure. While we recognize that a numerator/denominator-based measure remains challenging, we also note (as discussed in more detail later in this section) that the widespread availability of PDMPs across the country, and recent progress toward solutions for connecting PDMPs with health care provider EHR systems, has made use of PDMPs feasible through a wide variety of approaches. (C) Current Status of PDMP AdoptionToday, all 50 States and several localities host PDMPs.[475] The final State to establish a PDMP, the State of Missouri, passed legislation to address this issue in 2021, and is currently working to make its PDMP operational. A 2021 American Medical Association report found that physicians and others used State PDMPs more than 910 million times in 2020.[476] An assessment of PDMPs conducted by the PDMP Training and Technical Assistance Center (TTAC) at the Institute for Intergovernmental Research (IIR) found an increase in the number of PDMPs that are integrated with Health Information Exchanges (HIEs), EHRs, and/or Pharmacy Dispensing Systems (PDSs), with 44 PDMPs integrated in 2021 reflecting an increase from 28 PDMPs with at least one type of integration in 2017. We refer readers to Table 82 for the report's findings on the type of integration and the number of PDMPs that have implemented that type of integration in 2021. Start Printed Page 46289 Moreover, a number of enhancements to PDMPs are occurring across the country, including enhancements to RxCheck, which is a free, Federally supported interstate exchange hub for PDMP data. RxCheck is connected to 50 out of 54 PDMPs in states and territories and does not require providers to pay to have the PDMP data integrated into the EHR. The goal of the project is to allow any health care provider who is live on the eHealth Exchange to use that existing connection to query a patient's record on the RxCheck Hub, which routes the query to individual State PDMPs that are also live on RxCheck. This solution enables health care providers to query PDMPs via existing connections to health information exchange networks. Most States use either RxCheck or Prescription Monitoring Program (PMP) InterConnect or both to facilitate the sharing of PDMP information between States, allowing health care providers to query other States' PDMP information from within their own State PDMP.[477] We also note that the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (Pub. L. 115-271), enacted in 2018, has focused on ways to address the nation's opioid epidemic. The SUPPORT for Patients and Communities Act included new requirements for PDMP enhancement and integration, to help reduce opioid misuse and overprescribing and promote the effective prevention and treatment of opioid use disorder beginning in October of 2021. Enhanced Federal matching funds were available to States to support related PDMP design, development, and implementation activities during FYs 2019 and 2020. (D) Proposed Changes to the Query of PDMP Measure and Related Policies (aa) Proposal To Change the Query of PDMP Measure DescriptionThe description of the Query of PDMP measure provides that for at least one Schedule II opioid electronically prescribed using CEHRT during the performance period, the MIPS eligible clinician uses data from CEHRT to conduct a query of a PDMP for prescription drug history, except where prohibited and in accordance with applicable law. In section IV.A.10.c.(4)(d)(i)(D) of this proposed rule, beginning with the performance period in CY 2023, we are proposing to require the Query of PDMP measure for MIPS eligible clinicians participating in the Promoting Interoperability performance category. In section IV.A.10.c.(4)(d)(iii) of this proposed rule, we note that should we finalize our proposal to require the Query of PDMP measure beginning with CY 2023, we are proposing two exclusions beginning with the performance period in CY 2023: (1) Any MIPS eligible clinician who is unable to electronically prescribe Schedule II opioids and Schedule III and IV drugs in accordance with applicable law during the performance period, and (2) Any MIPS eligible clinician who writes fewer than 100 permissible prescriptions during the performance period. Should we finalize the proposals to require the Query of PDMP measure and the associated exclusions, we believe the inclusion of the phrase “except where prohibited and in accordance with applicable law” in the description of the Query of PDMP measure and in the language of the exclusion would be duplicative and potentially cause confusion. Therefore, we are proposing to remove the phrase “except where prohibited in accordance with applicable law” from the measure description should our proposals to require the Query of PDMP measure and the associated exclusions be finalized. We refer readers to section IV.A.10.c.(4)(d)(i)(D) of this proposed rule for our proposed measure description that would reflect this proposed change and additional proposed policy changes for the Query of PDMP measure. (ab) Proposal to Require the Query of PDMP MeasureIn the CY 2022 PFS final rule (86 FR 65466 through 65467), we noted that the decision to maintain the Query of PDMP as an optional measure for CY 2022 considered the current efforts to improve the technical foundation for EHR-PDMP integration, the continued implementation of the SUPPORT for Patients and Communities Act, our ongoing review of alternative measure approaches, and concerns from interested parties about the current readiness across States for implementation of the existing measure. We also noted that this measure can play an important role in helping health care providers to improve clinical decision making by utilizing this information to identify potential opioid use disorders, inform the development of care plans, and develop effective interventions (86 FR 65467); maintaining it as an optional measure with bonus points signals to the clinician and vendor community that this is an important measure which can help spur development and innovation to reduce barriers and challenges (86 FR 65467). We continue to believe that PDMPs play an important role in patient safety by assisting in the identification of patients who have multiple prescriptions for controlled substances or may be misusing or overusing them. Querying the PDMP is important for tracking dispensed controlled substances and improving prescribing practices. Efforts to expand the use of PDMPs and integrate PDMPs with health information technology systems are supported by Federal interested parties including ONC, the Centers for Disease Control and Prevention (CDC), Start Printed Page 46290 the Department of Justice (DOJ), and the Substance Abuse and Mental Health Services Administration (SAMHSA). The Query of PDMP measure offers a way to reward health care providers who participate in current PDMP initiatives, including those supported by Federal partners. While work continues to improve standardized approaches to PDMP and EHR interoperability, we believe that it is feasible at this time to require MIPS eligible clinicians to report the current Query of PDMP measure, which requires reporting a “yes/no” response. Given our policies for the Query of PDMP measure that included increasing the eligible bonus points to reward MIPS eligible clinicians that could report the measure, as well as the recent progress in the availability of PDMPs in all 50 States, and solutions which support accessibility of PDMPs to health care providers, we believe MIPS eligible clinicians have had time to grow familiar with what this measure requires of them, even as technical approaches to the use of PDMPs continue to advance. By requiring a “yes/no” response the measure allows MIPS eligible clinicians to use a variety of technical solutions to conduct a query of the PDMP and receive credit for the measure. Therefore, beginning with the performance period in CY 2023, we are proposing to require MIPS eligible clinicians to report the Query of PDMP measure (which requires reporting a “yes/no” response) for the Promoting Interoperability performance category. We would maintain the associated points at 10 points and refer readers to section IV.A.10.c.(4)(l) of this proposed rule for a discussion of our scoring methodology and proposed concurrent changes. As a result of this proposal, the maximum total points available for the Electronic Prescribing Objective would remain at 20 points for CY 2023.We are inviting public comment on these proposals. We are also seeking feedback on ways CMS can ensure coordination and alignment with varying State requirements for PDMPs. Additionally, we invite public comment on what information returned from the PDMP query would be clinically significant. (ii) Proposed Changes to the Query of PDMP Measure To Include Schedules II, III and IVThe Query of PDMP measure was adopted in the CY 2019 PFS final rule (83 FR 59800 through 59803) as one of two measures under the Electronic Prescribing Objective intended to support HHS initiatives related to the treatment of opioid and substance use disorders by helping health care providers avoid inappropriate prescriptions, improving coordination of prescribing amongst health care providers, and focusing on the advanced use of CEHRT. The measure description for the Query of PDMP measure is as follows: for at least one Schedule II opioid electronically prescribed using CEHRT during the performance period, the MIPS eligible clinician uses data from CEHRT to conduct a query of a PDMP for prescription drug history, except where prohibited and in accordance with applicable law (83 FR 59800 through 59803). Under the Controlled Substances Act (CSA),[478] the Drug Enforcement Administration classifies drugs, substances, and certain chemicals used to make drugs into five distinct categories or schedules depending upon the drug's acceptable medical use and the drug's abuse or dependency potential. A drug's abuse rate is a factor used to determine its classification; for example, Schedule I medications have the highest abuse potential while medications in Schedule V have a low abuse potential. We refer readers to Table 83 for information on each Schedule, including abuse potential, medicinal use, if any, and drug examples. For additional information, we refer readers to the listing of drugs and their schedule located at CSA Scheduling at https://www.deadiversion.usdoj.gov/schedules/orangebook/c_cs_alpha.pdf.[479] Start Printed Page 46291 PDMPs are operated at the State level and individual State requirements for reporting and use differ from State to State.[480] Currently, every State collects data on schedules II, III, and IV.[481] Some States collect information about certain non-controlled substances that are potentially subject to abuse or on all prescription drugs.[482] While State laws vary, we note that most State PDMPs require physicians and dispensing pharmacists to review a patient's prescribing information for the past 12 months prior to prescribing or dispensing any Schedule II, III, and IV controlled substances.[483] PDMPs play an important role in patient safety by assisting in the identification of patients who have multiple prescriptions for controlled substances or may be misusing or overusing them. We believe that expanding the requirements of the Query of PDMP measure to include Schedule III and IV drugs in addition to Schedule II opioids would further support HHS initiatives related to the treatment of opioid and substance use disorders by expanding the types of drugs included in the Query of PDMP measure while aligning with the PDMP requirements in a majority of States. We also believe this expansion to include additional Scheduled drugs would facilitate more informed prescribing practices and improve patient outcomes. Therefore, beginning with the performance period in CY 2023, we are proposing to expand the Query of PDMP measure to include Schedule III and IV drugs in addition to Schedule II opioids. Proposed Measure Description: For at least one Schedule II opioid or Schedule III or IV drug electronically prescribed using CEHRT during the performance period, the MIPS eligible clinician uses data from CEHRT to conduct a query of a PDMP for prescription drug history. To align with policy for the Query of PDMP measure with regard to Schedule II opioids, we are proposing the query of the PDMP for prescription drug history must occur prior to the electronic transmission of an electronic prescription for a Schedule II opioid or Schedule III or Schedule IV drug. We also note that this measure would include all permissible prescriptions and dispensing of Schedule II, III, or IV drugs no matter how small the amount prescribed during an encounter in order for MIPS eligible clinicians to identify multiple health care provider episodes (physician shopping), prescriptions of dangerous combinations of drugs, and controlled substances prescribed in high quantities. We also note that multiple prescriptions for Schedule II opioids or Schedule III and IV drugs prescribed on the same date by the same MIPS eligible clinician would not require multiple queries of the PDMP and only one query would have to be performed for this measure. MIPS eligible clinicians would have flexibility to query the PDMP using data from CEHRT in any manner allowed under State law. We are inviting public comment on these proposals. We are also inviting public comment on whether to expand this measure to include Schedule V or other drugs with potential for abuse. (iii) ExclusionsIn CY 2019 PFS proposed rule, we proposed an exclusion for MIPS eligible clinicians from reporting the Query of PDMP measure beginning with CY 2020 when the measure would have been required by the Promoting Interoperability performance category (83 FR 35922 through 35923). The proposed exclusion was: Any MIPS eligible clinician who is unable to electronically prescribe Schedule II opioids in accordance with applicable law during the performance period. In the CY 2019 PFS final rule, we finalized the Query of PDMP measure as optional for CY 2019, and thus we did not finalize the proposed exclusion (83 FR 59803). We also stated that we would propose policy for CY 2020 in future rulemaking. To date, we have not adopted any exclusions for this measure because it has remained optional for CY 2020 (84 FR 62992 through 62994), CY Start Printed Page 46292 2021 (85 FR 84887 through 84888) and CY 2022 (86 FR 65466 through 65467). In section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, beginning with the performance period in CY 2023, we are proposing to require MIPS eligible clinicians to report the Query of PDMP measure for the Promoting Interoperability performance category. Should we finalize our proposal to require the Query of PDMP measure beginning with CY 2023, we believe that an exclusion for the measure would be needed for MIPS eligible clinicians. Therefore, we have revisited the exclusion we proposed in the CY 2019 PFS proposed rule (83 FR 35922 through 35923) and are proposing a modified version here. Specifically, if we finalize our proposal to require the Query of PDMP measure in section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, we are proposing the following exclusion beginning with the performance period in CY 2023: Any MIPS eligible clinician who is unable to electronically prescribe Schedule II opioids and Schedule III and IV drugs in accordance with applicable law during the performance period. In addition, if we finalize our proposal to require the Query of PDMP measure in section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, we are proposing a second exclusion beginning with the performance period in CY 2023: Any MIPS eligible clinician who writes fewer than 100 permissible prescriptions during the performance period. We adopted this same exclusion previously for the e-Prescribing measure (82 FR 53679). We believe this exclusion is also applicable to the Query of PDMP measure based on similar feedback we received from prior rulemaking, where fewer than 100 encounters were supported as an appropriate cutoff number (82 FR 53680). We are also proposing that if a MIPS eligible clinician claims an exclusion for the Query of PDMP measure, we would redistribute the points associated with the Query of PDMP measure to the e-Prescribing measure under the Electronic Prescribing Objective. We are inviting public comment on these proposals. We are also asking commenters to provide feedback on barriers to reporting on this measure, barriers related to technology solutions, cost, and workflow, that should be considered for MIPS eligible clinicians. We also request comment on any additional exclusions that we should consider proposing for this measure in future rulemaking. (iv) Future DirectionWhile we believe that proposing to require the Query of PDMP measure is feasible and appropriate at this time, we are continuing to work with industry and other Federal partners to advance common standards for exchange of information between PDMPs, EHRs, pharmacy information systems, and exchange networks. We believe this work will ultimately allow us to achieve our ideal State, under which we would modify the Query of PDMP measure to be numerator/denominator-based and require use of standardized functionality within certified health IT systems to support the actions associated with the measure and reporting of a numerator and denominator. We will continue to collaborate with ONC to monitor developments across the industry and efforts to advance relevant standards, and plan to revisit this measure in the future to explore further specifying health IT requirements if they become available and are incorporated into the ONC Health IT Certification Program. Federally supported activities continue to focus on developing and refining standards-based approaches to enable effective integration into clinical workflows; exploring emerging technical solutions to enhance access to and use of PDMP data; and providing technical resources to a variety of interested parties to advance and scale the interoperability of health IT systems and PDMPs. Moreover, updates to certified health IT systems incorporating application programming interfaces (APIs) based on HL7® FHIR® standard version Release 4 (85 FR 25642) can help support future technical approaches that enable more seamless exchange of data between CEHRT and PDMP systems. For more information about current and emerging standards related to PDMP data capture and exchange, we refer readers to the ONC Interoperability Standards Advisory.[484] (e) Health Information Exchange (HIE) Objective: Proposed Addition of an Alternative Measure for Enabling Exchange Under the Trusted Exchange Framework and Common Agreement (TEFCA)(i) Background on the Health Information Exchange ObjectiveThe Health Information Exchange (HIE) Objective and its associated measures for MIPS eligible clinicians hold particular importance because of the role they play within the care continuum. In addition, these measures encourage and leverage interoperability on a broader scale and promote health IT-based care coordination. The Health Information Exchange Objective currently includes three measures: Support Electronic Referral Loops by Sending Health Information; Support Electronic Referral Loops by Receiving and Reconciling Health Information; and Health Information Exchange Bi-Directional Exchange. For background on this objective and its associated measures, we refer readers to the CY 2019 PFS final rule (83 FR 59807 through 59812) and the CY 2021 PFS final rule (85 FR 84888 through 84893). In the CY 2021 PFS final rule (85 FR 84888 through 84893), we finalized the HIE Bi-Directional Exchange measure, under the Health Information Exchange Objective. The HIE Bi-Directional Exchange measure is worth 40 points, the maximum number of points of the Health Information Exchange Objective, and was finalized as an alternative to reporting on the two existing Health Information Exchange Objective measures: The Support Electronic Referral Loops by Sending Health Information measure and the Support Electronic Referral Loops by Receiving and Reconciling Health Information measure. To meet the measure, MIPS eligible clinicians must attest to the following statements:
We stated that, by enabling bi-directional exchange of information between health care providers and aggregating data across health care providers with disparate systems, HIEs (including a wide range of organizations facilitating health information exchange) can bring together the information needed to create a true longitudinal care record and support improved care coordination by facilitating timely access to robust health information across care settings (CY 2021 PFS proposed rule, 85 FR Start Printed Page 46293 50300). We further described how participation in HIEs can amplify health care providers' capacity to share information beyond what a health care provider can achieve through the sending and receiving actions described in the existing measures under the Health Information Exchange Objective, for instance, by facilitating information exchange when a health care provider is unaware of another health care provider's need to receive information about a patient (CY 2021 PFS proposed rule, 85 FR 50300). By finalizing this measure for MIPS eligible clinicians, we sought to ensure that health care providers participating in the Promoting Interoperability performance category would be rewarded for connecting to exchange arrangements that can enable this type of robust information sharing. (ii) Background on TEFCASection 4003(b) of the 21st Century Cures Act (Pub. L. 114-255), enacted in 2016, amended section 3001(c) of the Public Health Service Act (42 U.S.C. 300jj-11(c)), and required HHS to take steps to advance interoperability for the purpose of ensuring full network-to-network exchange of health information. Specifically, Congress directed the National Coordinator to “develop or support a trusted exchange framework, including a common agreement among health information networks nationally.” Since the enactment of the 21st Century Cures Act, HHS has pursued development of a Trusted Exchange Framework and Common Agreement, or TEFCA. ONC's goals for TEFCA are [485] :
Since we adopted the HIE Bi-Directional Exchange measure, important additional developments have occurred with respect to TEFCA.[486] On January 18, 2022. ONC announced a significant TEFCA milestone by releasing the Trusted Exchange Framework [487] and Common Agreement Version 1.[488] The Trusted Exchange Framework is a set of non-binding principles for health information exchange, and the Common Agreement for Nationwide Health Information Interoperability Version 1 (also referred to as Common Agreement) is a contract that advances those principles. The Common Agreement and the incorporated by reference Qualified Health Information Network (QHIN) Technical Framework Version 1 (QTF)[489] establish the technical infrastructure model and governing approach for different health information networks and their users to securely share clinical information with each other—all under commonly agreed-to terms. The Common Agreement is a legal contract that QHINs[490] can sign with the ONC Recognized Coordinating Entity (RCE),[491] a private-sector entity that implements the Common Agreement and ensures QHINs comply with its terms. The technical and policy architecture of how exchange occurs under TEFCA follows a network-of-networks structure, which allows for connections at different levels and is inclusive of many different types of entities at different levels, such as health information networks, care practices, hospitals, public health agencies, and Individual Access Services (IAS) [492] Providers.[493] QHINs connect directly to each other to facilitate nationwide interoperability, and each QHIN can connect Participants, which can connect Subparticipants.[494] Compared to most nationwide exchange today, the Common Agreement also includes an expanded set of Exchange Purposes [495] beyond Treatment to include Individual Access Services, Payment, Health Care Operations, Public Health, and Government Benefits Determination—all built upon common technical and policy requirements and to meet key needs of the U.S. health care system. This flexible structure allows interested parties to participate in the way that makes the most sense for them, while also supporting simplified, seamless exchange. The QTF,[496] which was developed and released by the RCE, describes the Start Printed Page 46294 functional and technical requirements that a Health Information Network (HIN)[497] must fulfill to serve as a QHIN under the Common Agreement. The QTF specifies the technical underpinnings for QHIN-to-QHIN exchange and certain other responsibilities described in the Common Agreement. The technical and functional requirements described in the QTF enable information exchange modalities, including querying and message delivery across participating entities. In general, the information to be exchanged within the TEFCA ecosystem allows for the use of Health Level Seven (HL7®) Implementation Guide for Clinical Document Architecture (CDA®) Release 2: Consolidated CDA Templates for Clinical Notes (US Realm) Draft Standard for Trial Use Release 2.1 (C-CDA 2.1) document format, including data defined as part of U.S. Core Data for Interoperability (USCDI), with allowance for flexibility to further expand the content to support a multitude of use cases.[498] The Common Agreement and the QTF do not require HL7® Fast Healthcare Interoperability Resource (FHIR®) based exchange. TEFCA allows for the optional exchange of FHIR content using more traditional, established standards to enable the transport of that content. However, TEFCA can nonetheless be a strong catalyst for network enablement of FHIR maturation. To that end, the RCE released a 3-year FHIR Roadmap for TEFCA Exchange, which lays out a deliberate strategy to add FHIR-based exchange under TEFCA in the near future.[499] (iii) Proposed Enabling Exchange Under TEFCA MeasureIn 2022, prospective QHINs are anticipated to begin signing the Common Agreement and applying for designation. The RCE will then begin onboarding and designating QHINs to share information. In 2023, HHS expects interested parties across the care continuum to have increasing opportunities to enable exchange under TEFCA. Specifically, this would mean such interested parties would be: (1) signatories to either the Common Agreement or an agreement that meets the flow-down requirements of the Common Agreement (called a Framework Agreement [500] under the Common Agreement); (2) in good standing (that is, not suspended) under that agreement; and (3) enabling secure, bi-directional exchange of information to occur, in production. TEFCA is expected to give individuals and entities easier, more efficient access to more health information. The Common Agreement requires strong privacy and security protections for all entities who elect to participate, including entities not covered by the Health Insurance Portability and Accountability Act (HIPAA).[501] By connecting to a network that connects to a QHIN or directly to a QHIN, a MIPS eligible clinician can share health information in the same manner as described in the attestation statements previously finalized for the HIE Bi-Directional Exchange measure (CY 2021 PFS final rule (85 FR 84888 through 84893). By connecting to an entity that connects to a QHIN, or connecting directly to a QHIN, that supports sharing information on patients as part of a Framework Agreement,[502] a MIPS eligible clinician would be thereby enabling bi-directional exchange with other health care providers as described in Statement 1 of the HIE Bi-Directional Exchange measure. Since participation in a Framework Agreement as a QHIN, Participant, or Sub-participant will be open to all qualifying entities and will not be restricted by use of a single vendor, a connection via a Framework Agreement would also satisfy the requirements of Statement 2 of the HIE Bi-Directional Exchange measure. Finally, as discussed above, the technical requirements for exchanging information by entities through the Common Agreement and Framework Agreements utilize standards included in certified technology referenced under the CEHRT definition (see 42 CFR 414.1305), including the ability to exchange and receive data using the C-CDA standard (see certification criteria at 45 CFR 170.315(b)(1) and (b)(2)), thus health care providers participating in a Framework Agreement can use the functions of CEHRT to support bi-directional exchange with an HIE. To offer health care providers more opportunities to earn credit for the Health Information Exchange Objective, and given the alignment between enabling exchange under TEFCA and the existing HIE Bi-Directional Exchange measure, we are proposing to add an additional measure through which a MIPS eligible clinician could earn credit for the Health Information Exchange Objective by connecting to an entity that connects to a QHIN or connecting directly to a QHIN. Specifically, we are proposing to add the following new measure to the Health Information Exchange Objective beginning with the performance period in CY 2023: Enabling Exchange Under TEFCA measure. We propose MIPS eligible clinicians would have three reporting options for the Health Information Exchange Objective: (1) report on both the Support Electronic Referral Loops by Sending Health Information measure (or the exclusion, if applicable) and the Support Electronic Referral Loops by Receiving and Reconciling Health Information measure (or the exclusion, if applicable); (2) report on the HIE Bi-Directional Exchange measure; or (3) report on the proposed Enabling Exchange Under TEFCA measure. We propose the Enabling Exchange Under TEFCA measure would be worth the total amount of points available for the Health Information Exchange Objective. Under the current scoring methodology finalized in the CY 2021 PFS final rule, the Health Information Exchange Objective is worth a total of 40 points (85 FR 84894). We note in section IV.A.10.c.(4) of this proposed rule, we are proposing changes to the scoring methodology beginning with the performance period in CY 2023 such that the Health Information Exchange Objective would be worth no more than 30 points. Therefore, under our proposal, the proposed Enabling Exchange Under TEFCA measure would be worth 30 points. We are proposing Start Printed Page 46295 this change to the scoring methodology as a result of our proposal in section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule to make the Query of PDMP measure required and worth 10 points. However, should we not finalize the Query of PDMP measure proposal, we propose the Enabling Exchange Under TEFCA measure would be worth 40 points (the current total point value of the Health Information Exchange Objective). In no case could more than 40 points total be earned for the Health Information Exchange Objective. We believe the new measure for Enabling Exchange Under TEFCA that we are proposing would incentivize MIPS eligible clinicians to exchange information by connecting directly or indirectly to a QHIN and support health information exchange at a national level. We believe that fulfillment of this measure is an extremely high value action. The overall TEFCA goal of establishing a universal floor of interoperability across the country aligns with our commitment to promoting and prioritizing interoperability and exchange of healthcare data. Incentivizing health care providers to enable exchange under TEFCA is a critical component to advancing healthcare data exchange nationwide. We are proposing a MIPS eligible clinician would report the Enabling Exchange Under TEFCA measure by attestation, and the measure would require a “yes/no” response. A “yes” response would enable a MIPS eligible clinician to earn the proposed 30 points allotted to the Health Information Exchange Objective. We propose that a MIPS eligible clinician would attest to the following: • Participating as a signatory to a Framework Agreement (as that term is defined by the Common Agreement for Nationwide Health Information Interoperability as published in the Federal Register and on ONC's website) in good standing (that is, not suspended) and enabling secure, bi-directional exchange of information to occur, in production, for every patient encounter, transition or referral, and record stored or maintained in the EHR during the performance period, in accordance with applicable law and policy.
Similar to the HIE Bi-Directional Exchange measure, to successfully attest to this measure, we propose that a MIPS eligible clinician must use the capabilities of CEHRT to support bi-directional exchange under a Framework Agreement, which includes capabilities that support exchanging the clinical data within the Common Clinical Data Set (CCDS) or the United States Core Data for Interoperability (USCDI). This is consistent with the other measures under the Health Information Exchange Objective, which point to the use of CEHRT to support the exchange of the clinical data within the CCDS or the USCDI. We believe there are numerous certified health IT capabilities that can support bi-directional exchange under a Framework Agreement. For instance, participants may exchange information under a Framework Agreement by using technology certified to the criterion at 45 CFR 170.315(b)(1), “Care coordination—Transitions of care,” to transmit C-CDAs across a network. Where supported, participants could also utilize API technology certified to either the criterion at 45 CFR 170.315(g)(8), “Design and performance—Application access—data category request,” or (g)(10), “Design and performance—Standardized API for patient and population services,” as finalized in the ONC 21st Century Cures Act final rule (85 FR 25742), to enable exchange of data in the CCDS or USCDI from a participant's EHR. Additional certified health IT modules may also support exchange of information under a Framework Agreement for transitions of care, including modules certified to certification criteria at 45 CFR 170.315(g)(7), “Design and performance—Application access—patient selection,” and (g)(9), “Design and performance—Application access—all data request,” which support information exchange via API; the certification criterion at 45 CFR 170.315(e)(1), “Patient engagement—View, download, and transmit to 3rd party,” which supports patient access to their information; and the certification criterion at 45 CFR 170.315(g)(6), “Design and performance—Consolidated CDA creation performance,” which supports creation of a summary of care record. We recognize that entities that will connect directly or indirectly to a QHIN are currently interacting with health care providers using certified health IT in a variety of ways, and, as with the Bi-Directional HIE Exchange measure, believe that we should allow for substantial flexibility in how health care providers use certified health IT to exchange data under a Framework Agreement. The Enabling Exchange Under TEFCA measure could offer health care providers an alternative to earn credit for the Health Information Exchange Objective. The Enabling Exchange Under TEFCA measure would not require a MIPS eligible clinician to assess whether they participate in a health information exchange that meets the attributes of attestation Statement 2 under the HIE Bi-Directional Exchange measure regarding exchange across a broad network of unaffiliated exchange partners including those using disparate EHRs. These attributes are key to the goals of TEFCA, which aims to offer health care providers a uniform set of expectations around information sharing regardless of which network for information exchange they participate in. We are inviting public comment on these proposals. As noted in section IV.A.5. of this proposed rule, we are also requesting comment on other ways that TEFCA can advance CMS policy and program objectives, including how TEFCA can support exchange of information required under other measures in the Promoting Interoperability performance category. For instance, how can TEFCA support exchange of information specified under the Public Health and Clinical Data Exchange and the Patient Access to their Health Information objectives? (f) Modifications to the Public Health and Clinical Data Exchange Objective(i) BackgroundThe Promoting Interoperability performance category for MIPS eligible clinicians has been an important mechanism for encouraging healthcare data exchange for public health purposes through the Public Health and Clinical Data Exchange Objective. Effective responses to public health events, such as the COVID-19 PHE, require fast, accurate exchange of data between health care providers and Federal, State, and local public health agencies (PHAs). Health care providers collect these data for patient care, and PHAs need them to protect the public, whether to track an outbreak, initiate contact tracing, find gaps in vaccine coverage, or pinpoint the source of a foodborne outbreak. There are five measures under the Public Health and Clinical Data Exchange Objective: Immunization Registry Reporting; Syndromic Surveillance Reporting; Electronic Case Reporting; Public Health Registry Reporting; and Clinical Data Registry Reporting. For background on this objective and its associated measures, we refer readers to the CY 2019 PFS final rule (83 FR 59795, 59815 through 59817). In the CY 2022 PFS final rule (86 FR 65469 through 65475), we Start Printed Page 46296 finalized the requirement for MIPS eligible clinicians to report two of the five measures associated with the Public Health and Clinical Data Exchange Objective, beginning with the performance period in CY 2022: Immunization Registry Reporting; and Electronic Case Reporting. These two measures will put PHAs on better footing for future health threats and a long-term COVID-19 pandemic recovery by strengthening two important public health functions: (1) case surveillance; and (2) vaccine uptake. Requiring these measures will enable nationwide automated case reporting for fast public health response; and local and national visibility on immunization uptake so PHAs can tailor vaccine distribution strategies. (See https://www.cdc.gov/coronavirus/2019-ncov/hcp/electronic-case-reporting.html https://www.healthit.gov/topic/safety/safer-guides.) (ii) Proposed Revisions to Active Engagement(A) BackgroundThe Promoting Interoperability performance category has been an important mechanism for encouraging data exchange between health care providers and public health agencies through the Public Health and Clinical Data Exchange Objective. We believe requiring MIPS eligible clinicians to report on the Immunization Registry Reporting measure and Electronic Case Reporting measure will motivate EHR vendors to implement the necessary capabilities in their products and encourage MIPS eligible clinicians to engage in the reporting activities described in the measures. Despite these gains, ensuring the nation's thousands of clinicians implement and initiate data production for these vital public health capabilities remains an ongoing and important effort. The Promoting Interoperability performance category provides an opportunity to continue strengthening the incentives for MIPS eligible clinicians to engage in these essential reporting activities. Without adequate incentives, it will be difficult to attain the comprehensive data exchange needed to ensure fast, complete, actionable data in response to future public health threats. In the EHR Incentive Program Stage 3 final rule (80 FR 62862 through 62864), beginning with the EHR reporting period in 2016, we established a definition for active engagement under the Public Health and Clinical Data Registry Reporting Objective (subsequently renamed for MIPS the Public Health and Clinical Data Exchange Objective, see 83 FR 59815 through 59817). Active engagement is defined as when an eligible professional (now a MIPS eligible clinician) is in the process of moving towards sending “production data” to a public health agency or clinical data registry, or is sending production data to a public health agency or clinical data registry. We noted that the term “production data” refers to data generated through clinical processes involving patient care and it is used to distinguish between this data and “test data” which may be submitted for the purposes of enrolling in and testing electronic data transfers. We established the following three options for eligible professionals to demonstrate active engagement: • Option 1—Completed registration to submit data: The eligible professional registered to submit data with the PHA or, where applicable, the clinical data registry (CDR) to which the information is being submitted; registration was completed within 60 days after the start of the EHR reporting period; and the eligible professional is awaiting an invitation from the PHA or CDR to begin testing and validation. Eligible professionals that have registered in previous years do not need to submit an additional registration to meet this requirement for each EHR reporting period. • Option 2—Testing and validation: The eligible professional is in the process of testing and validation of the electronic submission of data. The eligible professional must respond to requests from the PHA or, where applicable, the CDR within 30 days; failure to respond twice within an EHR reporting period would result in the eligible professional not meeting the measure. • Option 3—Production: The eligible professional has completed testing and validation of the electronic submission and is electronically submitting production data to the PHA or CDR. For more information about the current options for active engagement, we refer readers to the EHR Incentive Program Stage 3 final rule (80 FR 62862 through 62864). (B) Proposed Revision to Options for Active EngagementThe three active engagement options provided flexibility for eligible professionals and MIPS eligible clinicians to meet the measures under the Public Health and Clinical Data Registry Reporting Objective/Public Health and Clinical Data Exchange Objective in a variety of ways, but they did not provide an incentive to move through the options and get to option 3, production, where there is the ongoing electronic submission of data. Option 1, completed registration to submit data, was an important option in 2016 as many PHAs and CDRs were starting to come online, and thus the provision of this option recognized that many eligible professionals were just beginning to engage in electronic data exchange with PHAs and CDRs. Now many years have passed, and we believe that MIPS eligible clinicians have had ample time to complete option 1. Thus, we propose to consolidate current options 1 and 2 into one option beginning with the performance period in CY 2023, as follows:
Eligible clinicians could select this option if they have previously completed the initial registration (existing Option 1). They could also select this option if they are currently in the process of testing and validation (existing Option 2).
Start Printed Page 46297 Under this proposal, a MIPS eligible clinician must demonstrate their level of active engagement at either proposed Option 1 (pre-production and validation) or proposed Option 2 (validated data production) to fulfill each measure. We are inviting public comment on these proposed changes to the options for active engagement. (C) Proposed Reporting Requirement for Level of EngagementMIPS eligible clinicians currently are not required to report their level of active engagement for any of the measures associated with the Public Health and Clinical Data Exchange Objective. We believe that this information would be helpful as it would enable HHS to identify registries and PHAs which may be having difficulty onboarding MIPS eligible clinicians and moving them to the Validated Data Production phase. During the recent COVID-19 PHE, we recognized the importance of public health reporting (as discussed further in section IV.A.10.c.(4)(f)(i) of this proposed rule), and we believe that knowing the level of active engagement that a MIPS eligible clinician selects would provide information on the types of registries and geographic areas with health care providers in the Pre-production and Validation stage. Our goal is for all health care providers nationwide to be at the Validated Data Production stage so that data will be actively flowing and public health threats can be monitored. Therefore, for the Public Health and Clinical Data Exchange Objective, in addition to submitting responses for the required measures and any optional measures a MIPS eligible clinician chooses to report, we propose to require MIPS eligible clinicians to submit their level of active engagement, either Pre-production and Validation or Validated Data Production (as proposed in section IV.A.10.c.(4)(B)), for each measure they report beginning with the performance period in CY 2023. If our proposal to reduce the three current options of active engagement to two options is not finalized, we propose to require MIPS eligible clinicians to submit one of the three current options of active engagement for each measure they report. We are inviting public comment on this proposed change to require submission of the level of active engagement. (D) Proposed Changes to the Duration of Active Engagement OptionsMIPS eligible clinicians currently are not required to advance from one option of active engagement to the next within a certain period of time. Beginning with the performance period in CY 2023, we are proposing that MIPS eligible clinicians may spend only one performance period at the Pre-production and Validation level of active engagement per measure, and that they must progress to the Validated Data Production level in the next performance period for which they report a particular measure. For example, under this proposal, if a MIPS eligible clinician submits the Immunization Registry Reporting measure for the performance period in CY 2023 at the level of active engagement for proposed option 1 (Pre-production and Validation), the clinician must submit the Immunization Registry Reporting measure at the level of active engagement for proposed option 2 (Validated Data Production phase) for the next performance period in CY 2024, or they would fail to satisfy the Public Health and Clinical Data Exchange Objective. To use an optional measure as an example to illustrate this proposal, if a MIPS eligible clinician chooses to submit the Syndromic Surveillance Reporting measure for the performance period in CY 2023 at the level of active engagement for proposed option 1 (Pre-production and Validation) and then chooses to submit the Syndromic Surveillance Reporting measure for a later performance period, the clinician would have to submit the measure at the level of active engagement for proposed option 2 (Validated Data Production phase) for the next performance period for which they choose to submit the measure. The options for active engagement assume the same PHA or CDR is used by the MIPS eligible clinician. In the event a MIPS eligible clinician chooses to switch between one or more CDRs or PHAs, we are proposing they would be permitted to spend one additional performance period at the Pre-production and Validation phase to assist with onboarding to the new CDR or PHA. As electronic transmission of high-quality data is achieved at the Validated Data Production phase, we want all MIPS eligible clinicians to reach this level. We are inviting public comments on this proposed change to the duration of the active engagement options. (E) Public Health Reporting and Information BlockingThe ONC 21st Century Cures Act final rule (85 FR 25642) implemented policies related to information blocking as authorized under section 4004 of the 21st Century Cures Act. The 21st Century Cures Act final rule established a regulatory definition of information blocking, under which information blocking is, in general, a practice by a health IT developer of certified health IT, health information network, health information exchange, or health care provider (actors [503] ) that, except as required by law or covered by an exception in 45 CFR part 171, subparts B or C, is likely to interfere with (as defined in 45 CFR 171.102) access, exchange, or use of EHI.[504 505] For a health care provider (as defined in 45 CFR 171.102), information blocking (see 45 CFR 171.103) means a practice (except as required by law or covered by an exception defined in 45 CFR part 171) that is likely to interfere with access, exchange, or use of EHI that the health care provider knows is unreasonable and is likely to interfere with access, exchange, or use of electronic health information.[506 507] ONC recently released an information blocking frequently asked question (FAQ) (IB.FAQ43.1.2022FEB) that highlights important points about public health reporting and information blocking.[508] Specifically, if an actor is required to comply with another law that relates to the access, exchange, or use of EHI, failure to comply with that law may implicate the information blocking regulations. As an example, where a law requires actors to submit EHI to public health authorities, an actor's failure to submit EHI to public health authorities could be considered an interference under the information blocking regulations. For example, many States legally require reporting of certain diseases and conditions to detect Start Printed Page 46298 outbreaks and reduce the spread of disease. Should an actor that is required to comply with such a law fail to report,the failure could be an interference with access, exchange, or use of EHI under the information blocking regulations. Practices would be evaluated to determine whether the unique facts and circumstances constitute information blocking, consistent with additional ONC frequently asked questions.[509] (g) Proposed Changes to the Scoring Methodology for the Performance Period in CY 2023For ease of reference, Table 84 lists the objectives and measures for the Promoting Interoperability performance category for the CY 2023 performance period/CY 2025 MIPS payment year as revised to reflect the proposals made in this proposed rule. Start Printed Page 46299 Start Printed Page 46300 Start Printed Page 46301 Start Printed Page 46302 Start Printed Page 46303 Start Printed Page 46304 In this proposed rule, we are making various proposals that would affect the scoring of the objectives and measures for the performance period in CY 2023. For reference, Table 85 reflects the scoring methodology for the Promoting Interoperability performance category for the performance period in CY 2022. Start Printed Page 46305 In proposing to make the Query of PDMP measure required, we would retain the 10 points associated with it, which are allocated as bonus points for the performance period in CY 2022. To accommodate this change if our proposal is finalized, we are proposing to reduce the points associated with the Health Information Exchange Objective measures from the current 40 points to 30 points beginning with the CY 2023 performance period. The Public Health and Clinical Data Exchange Objective, with its two required measures, is currently worth only 10 points. Despite requiring certain measures to make the objective more effective in promoting public health data electronic exchange, the total number of points did not change between CY 2021 and CY 2022. We believe that increasing the point value of the Public Health and Clinical Data Exchange Objective would create a more meaningful incentive for MIPS eligible clinicians to engage in the electronic reporting of public health information and recognize the importance of public health systems affirmed by the COVID-19 pandemic. Increasing the point value would make the Public Health and Clinical Data Exchange Objective a more central piece of the Promoting Interoperability performance category and better incentivize MIPS eligible clinicians to implement these essential public health data exchange capabilities. Without adequate incentives, there remains a risk that MIPS eligible clinicians will simply not prioritize implementing these capabilities, which are essential to ongoing efforts to address COVID-19 and will be indispensable for responding to future public health threats and emergencies. Increasing the point value would more appropriately incentivize MIPS eligible clinicians to engage in the electronic reporting of public health information and would align the value of the objective with the objective's importance and the effort necessary to meet the required measures. Thus, we are proposing to increase the points allocated to the Public Health and Clinical Data Exchange Objective from 10 to 25 points to better align with the true value of this objective beginning with the CY 2023 performance period. We believe assigning 25 points to the objective reflects the importance of comprehensive, nationwide health care data exchange between MIPS eligible clinicians and public health agencies. Nationwide health care data exchange would provide immense value to the public by improving the speed and effectiveness of public health responses, as well as to MIPS eligible clinicians, since better public health response reduces pressure on clinicians, which can be overwhelmed in a public health crisis. To balance the increase in the points associated with the Public Health and Clinical Data Exchange Objective, we are proposing to reduce the points associated with the Provide Patients Electronic Access to Their Health Information measure from the current 40 points to 25 points beginning with the CY 2023 performance period. We are proposing to revise the regulatory text for scoring the Promoting Interoperability performance category at § 414.1380(b)(4)(ii)(B) and (C) to reflect these proposals for scoring the objectives and measures. We are inviting public comment on these proposed changes to our scoring methodology. Table 86 reflects the scoring methodology for the Promoting Interoperability performance category for the performance period in CY 2023 if the proposals discussed are finalized. Start Printed Page 46306 The maximum points available in Table 86 do not include the points that would be redistributed in the event an exclusion is claimed. For ease of reference, Table 87 shows how points would be redistributed among the objectives and measures for the performance period in CY 2023 in the event a MIPS eligible clinician claims an exclusion, if the proposals discussed in this section are finalized. Start Printed Page 46307 For ease of reference, Table 88 lists the objectives and measures for the Promoting Interoperability performance category for the performance period in CY 2023 and the 2015 Edition certification criteria. Start Printed Page 46308 Start Printed Page 46309 (h) Additional Considerations(i) Nurse Practitioners, Physician Assistants, Clinical Nurse Specialists, and Certified Registered Nurse AnesthetistsWe established a policy at § 414.1380(c)(2)(i)(A)( 4)( ii) for the performance periods in CY 2017 through 2022 (CY 2019 through CY 2024 MIPS payment years) under section 1848(q)(5)(F) of the Act to assign a weight of zero to the Promoting Interoperability performance category in the MIPS final score if there are not sufficient measures applicable and available to NPs, PAs, CRNAs, and CNSs. We will assign a weight of zero only in the event that an NP, PA, CRNA, or CNS does not submit any data for any of the measures specified for the Promoting Interoperability performance category, but if they choose to report, they will be scored on the Promoting Interoperability performance category like all other MIPS eligible clinicians and the performance category will be given the weighting prescribed by section 1848(q)(5)(E) of the Act. As in past years, we intend to use data from prior performance periods to further evaluate the participation of NPs, PAs, CRNAs, and CNSs in the Promoting Interoperability performance category and consider for subsequent years whether the measures specified for this category are applicable and available to these MIPS eligible clinicians. We analyzed the data submitted for the 2017 performance period for the Promoting Interoperability performance category and discovered that the vast majority of MIPS eligible clinicians submitted data as part of a group. Although we are pleased that MIPS eligible clinicians utilized the option to submit data as a group, it does limit our ability to analyze data at the individual NPI level. For the 2017 performance period, approximately 4 percent of MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs submitted data individually for MIPS, and more than two-thirds of them did not submit data for the Promoting Interoperability performance category. For the 2018 performance period, of the MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted data individually for MIPS, we initially found approximately 34 percent submitted data individually for the Promoting Interoperability performance category. However, after further review and the refinement of our analytics, we found that this percentage was 24 percent, not 34 percent. For the 2019 performance period, of the MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted data individually for MIPS, approximately 30 percent submitted data individually for the Promoting Interoperability performance category, a modest increase from 2018. For the 2020 performance period, of the MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted data individually for MIPS, approximately 27.5 percent submitted data individually for the Promoting Interoperability performance category, a modest decrease from 2019. For the 2021 performance period, of the MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted data individually for MIPS, approximately 21.3 percent submitted data individually for the Promoting Interoperability performance category, a decrease from 2020. Due to the continued relatively low numbers of NPs, PAs, CRNAs, or CNSs that submitted data individually for the Promoting Interoperability performance category for prior performance periods, we did consider proposing to extend the reweighting policy at § 414.1380(c)(2)(i)(A)( 4)( ii) for another year (for the CY 2023 performance period/2025 MIPS payment year). However, we believe that incentivizing more of these types of MIPS eligible clinicians to adopt and use CEHRT and submit data for the Promoting Interoperability performance category is important for increased interoperability and data exchange nationwide. We adopted the reweighting policy beginning with the first year of MIPS (the CY 2017 performance period/2019 MIPS payment year), and we believe that there has been sufficient time for NPs, PAs, CRNAs, and CNSs to adopt and implement CEHRT. At this point in the program's maturity, we are concerned that the reweighting policy itself might be serving as a disincentive to these types of MIPS eligible clinicians adopting and using CEHRT, which would be an unintended consequence. We believe it is possible that these clinician types are now able to submit data individually on the measures for the Promoting Interoperability performance category, but they are Start Printed Page 46310 choosing not to because they would prefer for the performance category to be reweighted and not to contribute to their final score. Further, we believe that there are sufficient measures applicable and available in the Promoting Interoperability performance category for NPs, PAs, CRNAs, and CNSs. The measures that may not apply to these clinician types, such as the e-Prescribing measure, have exclusions that can be claimed if applicable. We considered the impact that not extending the policy may have on MIPS eligible clinicians in small practices, but we believe that the policy we established in the CY 2022 PFS final rule at § 414.1380(c)(2)(i)(A)( 4)( ii)) to automatically assign a weight of zero to the Promoting Interoperability performance category for MIPS eligible clinicians in a small practice will result in very few NPs, PAs, CRNAs, and CNSs being affected. Further, we remind readers that a MIPS eligible clinician who meets the criteria for a significant hardship may submit an application to reweight the Promoting Interoperability performance category based on a significant hardship, such as lack of control over the availability CEHRT and insufficient internet access (81 FR 77240 through 77243, 82 FR 53680 through 53686, 82 FR 53783 through 53785, and 85 FR 84984). For these reasons, we are not proposing to continue the reweighting policy at § 414.1380(c)(2)(i)(A)( 4)( ii) to assign a weight of zero to the Promoting Interoperability performance category in the MIPS final score for NPs, PAs, CRNAs, or CNSs for the CY 2023 performance period/2025 MIPS payment year. We are, however, requesting public comment on whether we should continue this policy for the CY 2023 performance period/CY 2025 MIPS payment year, and we may decide to take a different approach in the final rule depending on the comments we receive. We are particularly interested in comments on potential barriers to CEHRT adoption and implementation that may impact one or more of these clinician types, as well as comments on the applicability of the Promoting Interoperability performance category measures to NPs, PAs, CRNAs, or CNSs. (ii) Physical Therapists, Occupational Therapists, Qualified Speech-Language Pathologists, Qualified Audiologists, Clinical Psychologists, and Registered Dieticians or Nutrition ProfessionalsIn the CY 2019 PFS final rule (83 FR 59819 through 59820), we established that we will apply the same reweighting policy for the Promoting Interoperability performance category that we adopted previously for NPs, PAs, CNSs, and CRNAs to other types of MIPS eligible clinicians who are non-physician practitioners (physical therapists, occupational therapists, qualified speech-language pathologist, qualified audiologists, clinical psychologists, and registered dieticians or nutrition professionals) for the CY 2019 performance period. The reweighting policy for physical therapists, occupational therapists, qualified speech-language pathologist, qualified audiologists, clinical psychologists, and registered dieticians or nutrition professionals is codified at § 414.1380(c)(2)(i)(A)( 4)( i).We stated that because many of these clinician types were or are not eligible to participate in the Medicare or Medicaid Promoting Interoperability Program, we have little evidence as to whether there are sufficient measures applicable and available to them under the Promoting Interoperability performance category. We extended this policy for the performance periods in CY 2020 (84 FR 63003 through 63004), CY 2021 (85 FR 84895), and CY 2022 (86 FR 65488 through 65489). We analyzed the data from the CY 2019 performance period/CY 2021 MIPS payment year, and approximately 18.4 percent of occupational therapists, 2 percent of physical therapists, and 1 percent of clinical psychologists who submitted data individually for MIPS, submitted data individually for the Promoting Interoperability performance category. For qualified speech-language pathologists, qualified audiologists, and registered dieticians/nutrition professionals, approximately 18.8 percent of those who submitted data individually for MIPS also submitted data individually for the Promoting Interoperability performance category. We analyzed the data from the CY 2020 performance period/CY 2022 MIPS payment year, and approximately 3.3 percent of occupational therapists, 1.4 percent of physical therapists, and 0.6 percent of clinical psychologists who submitted data individually for MIPS, submitted data individually for the Promoting Interoperability performance category. For qualified speech-language pathologists, qualified audiologists, and registered dieticians/nutrition professionals, 0 percent (rounded from 16 total clinicians) of those who submitted data individually for MIPS also submitted data individually for the Promoting Interoperability performance category. We analyzed the data from the CY 2021 performance period/CY 2023 MIPS payment year, and 0 percent of occupational therapists, 0.3 percent of physical therapists, 0.5 percent of clinical psychologists who submitted data individually for MIPS, submitted data individually for the Promoting Interoperability performance category. For qualified speech-language pathologists, qualified audiologists, and registered dieticians/nutrition professionals, 6.7 (6.66) percent of those who submitted data individually for MIPS also submitted data individually for the Promoting Interoperability performance category. Based on low participation, it is possible that these clinician types may be finding that there are not sufficient measures that are applicable to them. As with NPs, PAs, CRNAs, and CNSs, however, it is also possible that the reweighting policy itself might be serving as a disincentive to these types of MIPS eligible clinicians adopting and using CEHRT, and that they are choosing not to submit data individually on the measures because they would prefer for the performance category to be reweighted and not to contribute to their final score. Because these clinician types were added to the definition of a MIPS eligible clinician under § 414.1305 more recently than NPs, PAs, CRNAs, and CNSs, we believe it would be appropriate to continue the existing reweighting policy for them for one more year. Therefore, we are proposing to continue the existing policy of reweighting the Promoting Interoperability performance category for physical therapists, occupational therapists, qualified speech-language pathologist, qualified audiologists, clinical psychologists, and registered dieticians or nutrition professionals only for the CY 2023 performance period/2025 MIPS payment year and to revise § 414.1380(c)(2)(i)(A)( 4)(i) to reflect the proposal. We want to continue to encourage these types of MIPS eligible clinicians to adopt and use CEHRT, which would contribute to increased interoperability and data exchange nationwide; therefore, we do not anticipate proposing in future rulemaking to extend the policy for additional years. We invite comments on this proposal. (iii) Clinical Social WorkersIn the CY 2022 PFS final rule (86 FR 65387 through 65389), we added clinical social workers to the definition of a MIPS eligible clinician under § 414.1305, beginning with the CY 2022 performance period/CY 2024 MIPS payment year. This clinician type was not eligible to participate in the Medicare Promoting Interoperability Program to earn incentive payments for meaningful use of CEHRT or receive Start Printed Page 46311 reduced Medicare payments for failing to meaningfully use CEHRT. Clinical social workers also were not eligible for Medicaid EHR incentive payments. We stated that clinical social workers may lack experience with the adoption or use of CEHRT, and that we believed there may not be sufficient Promoting Interoperability performance category measures that are applicable and available to them (86 FR 65489). For the CY 2022 performance period/CY 2024 MIPS payment year, we established that we will apply to clinical social workers the same reweighting policy for the Promoting Interoperability performance category that we adopted previously for NPs, PAs, CNSs, CRNAs, and other types of MIPS eligible clinicians who are non-physician practitioners (86 FR 65489). The reweighting policy for clinical social workers is codified at § 414.1380(c)(2)(i)(A)( 4)(iii). CY 2022 is the first year that clinical social workers are considered MIPS eligible clinicians, and thus we do not yet have any performance period data that we could use to evaluate whether the Promoting Interoperability performance category measures are applicable and available to this type of MIPS eligible clinician. We are proposing to continue the existing policy of reweighting the Promoting Interoperability performance category for clinical social workers for the CY 2023 performance period/CY 2025 MIPS payment year and to revise § 414.1380(c)(2)(i)(A)( 4)(iii) to reflect the proposal. We will evaluate whether the policy should be continued for future years when we have performance period data available. (i) Patient Access to Health Information Measure—Request for Information (RFI)Patient use of portals to access their health information has been tied to benefits such as improvements in access, quality of care, and health outcomes, and reductions in healthcare expenditures.[510] In particular, access to health information has been shown to enable the discovery of medical errors, to improve medication adherence, and to promote communication between the patient and health care provider.[511] Health care provider encouragement (and other facilitating conditions), perceived usefulness, ease of use, control of health information, and enhanced communication are demonstrated as facilitators, while concerns of privacy, security, and lack of awareness have been tied to barriers of use.[512 513] The Health Information National Trends Survey (HINTS), a large, nationally representative survey operated by the National Cancer Institute (with support from ONC), is conducted routinely and contains key utilization data on consumer access and use of their online medical record through patient portals. The HINTS results showed the rates of individuals being offered and subsequently using their health information through a patient portal, as well as use of mobile health applications (apps) and the role health care providers play in encouraging use.[514] Results showed that health care providers and staff have a substantial role in influencing patient use of the portal. In the past for the Promoting Interoperability performance category, we attempted to promote patient access to their health information through measuring the number of patients who actively engaged with the electronic health record through the View, Download, Transmit (VDT) measure in the CY 2017 Quality Payment Program final rule (81 FR 77228 through 77237). In the CY 2019 PFS final rule (83 FR 59812 through 59814), we renamed the Patient Electronic Access Objective to the Provider to Patient Exchange Objective and updated the measures within the Provider to Patient Exchange Objective. Specifically, we removed the standalone VDT measure from the Promoting Interoperability performance category in response to feedback from interested parties, including physician specialty societies ongoing concern with measures that require patient action for successful submission (83 FR 59814). We have also noted that data analysis of VDT measure supports concerns from interested parties that barriers exist which impact a clinician's ability to meet them. Interested parties have indicated that success of the measure is reliant upon the patient, who may face barriers to access which are outside a clinician's control. Additionally, in the CY 2019 PFS final rule (83 FR 59812 through 59813), we changed the name of the Provide Patient Access measure to Provide Patients Electronic Access to Their Health Information and finalized changes to the measure description. These measure changes included a requirement for MIPS eligible clinicians to provide timely access for viewing, downloading or transmitting their health information for at least one unique patient discharged using any application of the patient's choice (83 FR 59812 through 59813). This change emphasized timely electronic access of patient health information rather than requiring health care providers to be accountable for patient actions. Through the current Provide Patients Electronic Access to Their Health Information measure in the Provider to Patient Exchange Objective, we are ensuring that patients have access to their health information through any application of their choice that is configured to meet the technical specifications of the Application Programing Interface (API) in the CEHRT of the MIPS eligible clinician. Promoting the use of API-enabled applications that provide timely access to updated information whenever the patient needs that information is an integral step in enhancing patient access and use of their health information. These API-enabled applications should be configured using standardized technology and contain the information the patient needs to make informed decisions about their care in a way the patient understands, and that recognizes the community's level of access to devices and internet connectivity. While we removed the VDT measure holding MIPS eligible clinicians responsible for patient action (83 FR 59814), we still require that the technical capabilities be in place within a MIPS eligible clinician's CEHRT through the Provide Patients Electronic Access to Their Health Information measure should patients choose to access and use their health information (83 FR 59812 through 59813). We continue to believe in the importance of taking a patient-centered approach to health information access and moving to a system in which patients have immediate access to their electronic health information and can be assured that their health information will follow them as they move throughout the health care system. Recognizing the concerns and barriers Start Printed Page 46312 with the previous VDT measure discussed previously, but acknowledging the advancements made within the health IT industry over the past few years, this request for information is seeking a broad array of public comments regarding how to further promote equitable patient access and use of their health information without adding unnecessary burden on the MIPS eligible clinician or group. Specifically, we are seeking public comment on the following questions:
++ Would allowing patients to add information to their records be useful in promoting patient access and utilization? Are there other incentives that would promote patient access? ++ Are there potential unintended consequences in allowing patients to add information to their records? What could be done to mitigate any potential unintended consequences? ++ Are there certain tools found to be useful in promoting patient access and use of their health information? • Recent studies have raised concerns about the presence of racial bias and stigmatizing language within EHRs that could lead to unintended consequences if patients were to obtain disparaging notes regarding their medical care.[515 516] ++ What policy, implementation strategies, or other considerations are necessary to address existing racial bias or other biases and prevent use of stigmatizing language? • Additional analysis of HINTS data provides insights into common barriers to patient portal access and use as well as characteristics that can help predict which individuals are more likely to experience certain barriers (for example, preference for in-person communication with their health care provider is one of the most prevalent barriers experienced more often by older adults and women).[517] ++ What are the most common barriers to patient access and use of their health information that have been observed? Are there differences by populations or individual characteristics? For example, are there barriers caused by lack of accessibility to patients due to disability or limited English proficiency?
++ If patient portals connected to a network participating in the recently launched TEFCA,[518 519] would this enable more seamless access to individual health information across various patient portals? • With the advancement of HIT, EHRs and other health-related communication technologies, there are concerns that implementation of these technologies can lead to unintended consequences that exacerbate existing health disparities within populations who could receive greater benefits but are less likely to adopt them.[520 521 522 523] What policy, governance and implementation strategies or other considerations are necessary to ensure equal access to consumer-facing health technologies including patient portals and mobile health applications, as well as equitable implementation and appropriate design and encouragement of use across all populations?
We welcome input on how we can encourage and enable patient access to and use of their health information to manage and improve their care across the care continuum. (5) APM Entity Level Participation for MIPS Eligible Clinicians Participating in MIPS APMs(a) OverviewIn the CY 2021 PFS final rule (85 FR 84896), we finalized our policy to terminate the APM scoring standard effective January 1, 2021, and to retain certain APM Entity group reporting policies that were established and finalized for reporting and scoring under MIPS beginning with the CY 2021 MIPS performance period. Therefore, we redesignated, in part, the regulation that describes APM Entity group determinations, from § 414.1370(e) to § 414.1317, and titled that section “APM Entity Groups.” (b) APM Entity Level Reporting of Promoting Interoperability Performance CategoryIn the CY 2021 PFS final rule (85 FR 84896), we finalized a policy to allow APM Entities to report to traditional MIPS using any available MIPS reporting pathway, including the APM Performance Pathway (APP), traditional MIPS and, in the future, MIPS Value Pathways (MVPs). We finalized that APM Entities that do not report through the APP will continue to have the cost performance category reweighted to zero percent of their MIPS final score, but will be required to report and be scored on the three remaining MIPS performance categories, including quality, IA, and promoting interoperability. We explained in that rule that the PI performance category would continue to be scored for multi-TIN APM Entities using the promoting interoperability roll-up calculation described at § 414.1317(b)(1) (85 FR 84897). Start Printed Page 46313 It has come to our attention through feedback from interested parties that many of the workstream modifications, as well as data aggregation and integration tools that are likely to be used by multi-TIN APM Entities, such as use of the FHIR API or hiring vendors to complete the more complex reporting activities required for reporting APM Entity level eCQMs could also be used to collect data and submit for the promoting interoperability performance category at the APM Entity level. It is also our understanding that it is possible that an APM Entity may represent only a single practice site or specialty within a larger multi-specialty TIN. We believe that in these circumstances the APM Entity may have both the ability and desire to report on the promoting interoperability performance category at the APM Entity level, thereby excluding data generated by the rest of the larger TIN, in cases where the APM Entity itself performed above average relative to the rest of that TIN. Therefore, we are proposing to introduce a voluntary reporting option for APM Entities to report the promoting interoperability performance category at the APM Entity level beginning with the 2023 performance period. Multi-TIN APM Entities that do not choose this proposed new reporting option would continue to be scored using the roll -up calculation described at § 414.1317(b)(1). We seek comment on this proposal. e. MIPS Final Score Methodology(1) Performance Category Scores(a) BackgroundSection 1848(q)(1)(A)(i) and (ii) of the Act provides, in relevant part, that the Secretary shall develop a methodology for assessing the total performance of each MIPS eligible clinician according to certain specified performance standards for a performance period and use such methodology to provide for a composite performance score for each such clinician for each performance period. For the CY 2023 performance period/2025 MIPS payment year, we intend to continue to build on the scoring methodology we finalized for prior years. We believe that this scoring methodology allows for accountability and alignment across the performance categories and minimizes burden on MIPS eligible clinicians. We are proposing to update our scoring policies consistent with this framework. Specifically, we are proposing to—
We refer readers to section IV.A.10.c.(4)(l) of this proposed rule for our proposed changes to the scoring methodology for the Promoting Interoperability performance category. We are not proposing changes to scoring policies for the improvement activities performance category. We refer readers to § 414.1380 for our current policies on scoring. (b) Scoring the Quality Performance Category for the Following Collection Types: Medicare Part B Claims Measures, eCQMs, MIPS CQMs, QCDR Measures, the CAHPS for MIPS Survey Measure and Administrative Claims MeasuresWe refer readers to § 414.1380(b)(1) for our current policies regarding quality measure benchmarks, calculating total measure achievement and measure bonus points, calculating the quality performance category percent score, including achievement and improvement points, and the small practice bonus (81 FR 77276 through 77308, 82 FR 53716 through 53748, 83 FR 59841 through 59855, 84 FR 63011 through 63018, 85 FR 84898 through 84913). In the CY 2022 PFS final rule we finalized policies to simplify scoring in MIPS as we transition to MVPs and to incentivize the selection of new, potentially high-value measures (86 FR 65496 through 65507). (i) Scoring Administrative Claims Measures in the Quality Performance Category Using Performance Period BenchmarksWe refer readers to the CY 2017, CY 2018, CY 2019, CY 2020, and CY 2021 Quality Payment Program final rules and PFS final rules (81 FR 77277 through 77282, 82 FR 53699 through 53718, 83 FR 59841 through 59842, 84 FR 63014 through 63016, and 85 FR 84901 through 84904, respectively) for our previously established benchmarking policies. In the CY 2017 Quality Payment Program final rule (81 FR 77276 through 77282), we finalized a rule providing that we will use MIPS eligible clinicians' performance in the baseline period to set benchmarks for the quality performance category, with the exception of new quality measures, quality measures that lack historical data, or where we do not have comparable data from the baseline period. In these cases, we will calculate benchmarks using data submitted during the applicable performance period. We defined the baseline period to be the 12-month CY that is 2 years prior to the performance period for the MIPS payment year. For example, for the CY 2023 performance period/2025 MIPS payment year, the baseline period two performance periods prior would be the CY 2021 performance period (81 FR 77276 and 77277). Additionally, in the CY 2019 PFS final rule (83 FR 59842), we amended § 414.1380(b)(1)(ii) to align our benchmark policy with concurrently made changes to our date submission terminology. These changes removed references to each individual benchmark and instead stated that benchmarks will be based on measure collection type, from all available sources, including MIPS eligible clinicians and APMs, to the extent feasible, during the applicable baseline or performance period. Additionally, we refer readers to the CY 2017 Quality Payment Program final rule and the CY 2021 PFS final rule (81 FR 77130 through 77136 and 85 FR 84871 through 84873 respectively) and § 414.1325(a)(2)(i) for our previously established policies regarding administrative claims measures in the quality performance category. The policy at § 414.1325 provides that there is no data submission requirement for cost measures or administrative claims measures in the quality performance category as these measures are calculated on behalf of participants by CMS using administrative claims data. In the CY 2017 Quality Payment Program final rule, we finalized a policy that clinicians would be scored on applicable administrative claims-based global or population health (henceforth referred to only as population health measures) in addition to the six required submitted measures. Additionally, we established exclusions to the case minimum policy of 20 cases. It was found that the all-cause hospital readmission (ACR) measure was not reliable for cases under 200 and for groups of fewer than ten clinicians. As a result, we established exceptions to the case minimum policy for this measures and others as specified in the MIPS final list of quality measures through rule making (§ 414.1380(b)(1)(iii)). In the CY 2021 Start Printed Page 46314 PFS final rule (85 FR 84989 through 84901), we finalized a policy starting in the CY 2021 performance period/2023 MIPS payment year that would allow for performance periods longer than the standard 12-month performance period for administrative claims measures in the cost and quality performance categories as specified through rulemaking. Beginning with the CY 2023 performance period/2025 MIPS payment year, we are proposing that we will score administrative claims measures using benchmarks calculated using performance period benchmarks. We believe that using a performance period benchmark to score these measures would allow for scores that are more reflective of current performance, while adding no additional burden to clinicians. For the reasons described below, we believe it is more appropriate in certain circumstances to evaluate clinicians against current performance benchmarks. As previously noted, they do not require the submission of data by or on behalf of clinicians and may have a measure-specific performance period to ensure appropriate sample sizes. Additionally, in instances where these measures do not meet the case minimum or benchmark requirements, they are excluded from a MIPS-eligible clinician's quality performance category score. The use of performance period benchmarks for such measures would help us to improve quality measurement. For example, the Risk-standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) has a 3-year performance period (consecutive 36-month timeframe) [524] that would start on October 1 of the calendar year 3 years prior to the applicable performance year and conclude on September 30 of the calendar year of the applicable performance year, proceeding with a 3-month numerator assessment period (capturing complication outcomes) followed by a 2-month claims run-out period. For the CY 2023 performance period/2025 MIPS payment year, the 3-year (36 consecutive months) performance period for this measure would span from October 1, 2020 to September 30, 2023 with a 90-day numerator assessment period followed by a 60-day claims run-out period. This means that according to standard scoring policy, the corresponding baseline would include data from October 1, 2018 to September 30 2021. We believe that comparison to data that precedes that standard 2-year baseline period may limit the usefulness of this measure. By comparing performance to data that was collected 5 years prior, this measure does not account for changes to the healthcare landscape and improvements in care that might have been made in the timeframe. We do not believe using performance period benchmarks would increase burden to clinicians. We believe that clinicians prefer to have historical benchmarks to aid in measure selection and have performance targets. Additionally, population health administrative claims measures in MIPS are not subject to case minimum policies reducing the risk in being scored on these measures. Accordingly, we are proposing to add a paragraph at § 414.1380(b)(1)(ii)(D) to state that, beginning with the CY 2023 performance period/2025 MIPS payment year, CMS will calculate a benchmark for an administrative claims quality measure using the performance on the measure during the current performance period. We note that we do not intend this proposal to modify our existing policies regarding case minimums and measures for which no benchmark may be calculated. Specifically, measures would remain subject to case minimum requirements described in paragraph (b)(1)(iii) and benchmark requirements in paragraph (b)(1)(ii)(A) of this section. Measures that cannot have a benchmark calculated or meet case minimum requirements would still be deducted from the eligible clinician's total measure achievement points consistent with (b)(1)(i)(A)( 2)( ii). We are seeking public comment on our proposals to score administrative claims measures in the quality performance category using performance period benchmarks. (ii) Assigning Measure Achievement Points for Topped Out MeasuresSection 1848(q)(3)(B) of the Act requires that, in establishing performance standards with respect to measures and activities, the Secretary consider, among other things, the opportunity for continued improvement. As part of our implementation of section 1848(q)(3)(B) of the Act, we established our topped out measure policy, which is intended to encourage clinicians to focus on areas where clinical improvement is necessary possible by capping the points received for reporting on MIPS measures where meaningful distinctions in clinical performance are no longer measurable. We refer readers to § 414.1380(b)(1)(iv)(B) for our policies regarding the scoring of topped out measures. Under § 414.1380(b)(1)(iv), we identify topped out measures in the benchmarks published for each performance year. Under § 414.1380(b)(1)(iv)(B), beginning with the CY 2019 performance period/2021 MIPS payment year, measure benchmarks (except for measures in the CMS Web Interface) that are identified as topped out for 2 or more consecutive years will receive a maximum of 7 measure achievement points beginning in the second year the measure is identified as topped out (82 FR 53726 and 53727). We finalized in the CY 2017 Quality Payment Program final rule (81 FR 77286) that we would define topped out process measures as those with a median performance rate of 95 percent or higher (§ 414.1305). We defined topped out non-process measures using a definition similar to the definition used in the Hospital Value-Based Purchasing (VBP) Program: a measure where the truncated coefficient of variation is less than 0.10 and the 75th and 90th percentiles are within 2 standard errors (81 FR 77286). When a measure is topped out, a large majority of clinicians submitting the measure perform at or very near the top of the distribution; therefore, there is little or no room for the majority of MIPS eligible clinicians who submit the measure to improve. We understand that each measure we have identified as topped out may offer room for improvement for some MIPS eligible clinicians; however, we believe asking clinicians to submit measures that we have identified as topped out and measures for which the vast majority of MIPS eligible clinicians already excel is an unnecessary burden that does not add value or improve beneficiary outcomes. In the CY 2018 Quality Payment Program final rule, we finalized that, beginning in the CY 2019 performance period/2021 MIPS payment year, each measure (excluding measures in the CMS Web Interface) that is identified as topped out for two or more consecutive years can receive no more than 7 points in the second year that it is identified as topped out and beyond (82 FR 53726 through 53727). A measure is identified as topped out for a given performance period by assessing its historical benchmark. Two consecutive historical Start Printed Page 46315 benchmarks must be labeled as topped out for the 7-point cap to be applied for a given performance period. For example, for the CY 2023 performance period/2025 MIPS payment year, a measure is considered topped out if the historical benchmark calculated from data submitted in the CY 2021 performance period has a median performance of 95 percent or higher in the case of process measures or the truncated coefficient of variation is less than 0.10 and the 75th and 90th percentiles are within two standard errors in the case of non-process measures. If this same measure is identified as topped out again for the CY 2024 performance period/2026 MIPS payment year from data from the historical baseline period from CY 2022, this measure would be labeled as topped out and have the 7-point cap applied until the historical baseline period shows that the measure is no longer topped out or the measure is removed from the program. We believe this methodology incentivizes MIPS eligible clinicians to begin submitting non-topped out measures without performing below the median score. The methodology also does not impact scoring for those MIPS eligible clinicians that do not perform near the top of the measure, and therefore, have significant room to improve on the measure. In the CY 2021 PFS final rule (85 FR 84989 through 84901), we finalized a policy at § 414.1380(b)(1)(vii)(A) that consolidated previously established scoring flexibilities regarding the truncation of a quality measure's performance period to 9-months of data from the CY 2018 Quality Payment Program final rule (82 FR 52714 through 53716) and the measure suppression policy established in the CY 2019 PFS final rule (FR 59845 through 59847). The updated scoring flexibilities policy stated that, beginning with the CY 2021 performance period/2023 MIPS payment year, CMS would truncate the performance period or suppress a quality measure if CMS determined that revised clinical guidelines, measure specifications, or codes impacted a clinician's ability to submit information on the measure or may lead to potentially misleading results (85 FR 84899 through 84901). We stated that, based on the timing of the changes to clinical guidelines, measure specifications or codes, we will assess the measure on 9 months of data, and if 9 consecutive months of data are not available, we will suppress the measure by reducing the total available measure achievement points from the quality performance category by 10 points for each measure submitted that is impacted (85 FR 84899). In the CY 2022 PFS final rule (86 FR 65491 and 65492), the scope of the truncation and suppression policy was expanded to include errors that are outside the control of the clinician, such as an incorrect coding status. We now clarify the interaction of our topped-out measure policy and our measure truncation and measure suppression policies. First, we must note that not all instances in which a measure lacks a benchmark affect the scoring of the measure equally. For example, when a measure is suppressed in the baseline period for the incorrect inclusion of an inactive status code in the measure specifications, the measure could resume to be scored comparably once the measure specifications are accurate in both the baseline and applicable performance period. Conversely, a measure that was suppressed or had its performance period truncated because it underwent a substantive change could not be comparably scored. In a case like the former, it is not until the suppressed or otherwise affected data is in the baseline period that the topped-out measure lifecycle is affected. A measure that lacks a benchmark for a performance period due to the suppression of date in the measure's baseline period will not have the 7-point cap applied for that performance period. This is because the measure lacks the two topped out historical performance periods necessary for the application of the cap. This does not preclude, however, CMS determining that the measure is topped out for the performance period. In the case of a measure that lacks a baseline period, CMS may base the benchmark on performance during the applicable performance period ( See § 414.1380(b)(1)(ii)). Determining the measure was topped out during the performance period would thus require only that MIPS eligible clinician data for the performance period met the topped-out measure standard. In such a case, the 7-point cap could next be applied as soon as the following year. Where a measure was suppressed or had its performance period truncated because of a substantive change or a change in clinical guidelines, the topped-out measure resets entirely the year following the change as there is no longer a historical benchmark with which to compare the measure for the purpose of determining whether it is topped out. (c) Cost Performance Category Score(i) Improvement Scoring MethodologyIn the CY 2018 Quality Payment Program final rule, we established policies related to measuring improvement in the cost performance category at the measure level, an improvement scoring methodology for the cost performance category, and a formula for calculating the cost performance category percent score to include achievement and improvement (82 FR 53748 through 53752). These policies were to apply beginning with the CY 2018 performance period/2020 MIPS payment year. We codified these policies under § 414.1380(b)(2)(iii) and (iv) (82 FR 53748 through 53752, 53957). Subsequent to the publication of that final rule, the Bipartisan Budget Act of 2018 (BBA 18) (Pub. L. 115-123, enacted February 9, 2018) was enacted. Section 51003(a)(1)(B) of the BBA 18 modified section 1848(q)(5)(D) of the Act such that the cost performance category score shall not take in to account the improvement of the MIPS eligible clinician for each of the second, third, fourth, and fifth years for which the MIPS applies to payments. In the CY 2019 PFS proposed rule, we stated that we do not believe this statutory change requires us to remove our existing methodology for scoring improvement in the cost performance category (see 82 FR 53749 through 53752), but it does prohibit us from including an improvement component in the cost performance category percent score for each of the CY 2020 through 2023 MIPS payment years (83 FR 35956). Therefore, we proposed to revise § 414.1380(b)(2)(iv)(E) to provide that the maximum cost improvement score for the CY 2020, 2021, 2022, and 2023 MIPS payment years is zero percentage points (83 FR 35956). We stated that under our existing policy (82 FR 53751 through 53752), the maximum cost improvement score for the CY 2020 MIPS payment year is 1 percentage point, but due to the statutory changes and under our proposal, the maximum cost improvement score for the CY 2020 MIPS payment year would be zero percentage points (83 FR 35956). We also proposed at § 414.1380(a)(1)(ii) to modify the performance standards to reflect that the cost performance category percent score will not take in to account improvement until the CY 2024 MIPS payment year (83 FR 35956). In the CY 2019 PFS final rule, we finalized these proposals as proposed (83 FR 59856). In prior rulemaking, we inadvertently failed to address what the maximum cost improvement score would be under Start Printed Page 46316 § 414.1380(b)(2)(iv)(E) beginning with the CY 2022 performance period/2024 MIPS payment year. As we stated previously in the CY 2019 PFS proposed and final rules (83 FR 35956 and 83 FR 59856, respectively), we do not believe the changes made to section 1848(q)(5)(D) of the Act by section 51003(a)(1)(B) of the BBA 18 required us to remove our existing methodology for scoring improvement in the cost performance category. Thus, in the CY 2019 PFS final rule, we maintained the methodology we had previously established under § 414.1380(b)(2)(iii) and (iv), while modifying § 414.1380(b)(2)(iv)(E) to reflect the statutory change made by section 51003(a)(1)(B) of the BBA 18. Section 1848(q)(5)(D) of the Act requires us to take in to account the improvement of the MIPS eligible clinician when scoring the cost performance category for the sixth year of MIPS (the CY 2022 performance period/2024 MIPS payment year) and for subsequent years. We are proposing to establish a maximum cost improvement score of 1 percentage point for the cost performance category beginning with the CY 2022 performance period/2024 MIPS payment year. A maximum cost improvement score of 1 percentage point was the policy we established previously, before the amendments made by section 51003(a)(1)(B) of the BBA 18 with respect to the second, third, fourth, and fifth years of MIPS. We believe this policy is still appropriate at this time because although there are many opportunities for clinicians to actively work on improving their performance on cost measures, such as through more active care management or reductions in certain services, we recognize that many clinicians are still learning about cost measurement under MIPS. We aim to continue to educate clinicians about cost measurement and develop opportunities for robust feedback and measures that better recognize the role of clinicians. Clinicians are navigating and overcoming the obstacles of the COVID-19 public health emergency while having to familiarize themselves with new policies we have adopted for MIPS, such as the establishment of MVPs as a voluntary means for participation starting with the CY 2023 performance period that could become a mandatory means of participation, the opportunity for subgroup participation and reporting, the sunset of the CMS Web Interface as a collection/submission type and transition to other collection and submission types for CMS Web Interface users starting with the CY 2023 performance period, and the implementation of new cost measures. As the CY 2022 performance period/2024 MIPS payment year is the first program year we will be measuring improvement for the cost performance category, we believe it would be appropriate to begin gradually with a maximum cost improvement score of 1 percentage point—a policy clinicians already would be familiar with from prior rulemaking. In a future year, we may consider and assess the possibility of increasing the maximum cost improvement score. To the extent that this proposed change constitutes a change to the MIPS scoring or payment methodology for the CY 2024 MIPS payment adjustment after the start of the CY 2022 performance period, we believe that, consistent with section 1871(e)(1)(A)(i) of the Act, it is necessary to comply with the requirement of section 1848(q)(5)(D) of the Act that we take in to account the improvement of the MIPS eligible clinician when scoring the cost performance category for the sixth year of MIPS (the CY 2022 performance period/2024 MIPS payment year). We also believe that, consistent with section 1871(e)(1)(A)(ii) of the Act, it would be contrary to the public interest not to fill the gap in our existing methodology for scoring improvement in the cost performance category for the CY 2022 performance period/2024 MIPS payment year. Currently, our improvement scoring methodology for the cost performance category under § 414.1380(b)(2)(iv)(E) does not include a maximum cost improvement score for the CY 2022 performance period/2024 MIPS payment year. Our proposal would correct this deficiency by establishing a maximum cost improvement score of 1 percentage point beginning with the CY 2022 performance period/2024 MIPS payment year. In addition, it would be contrary to the public interest not to comply the statutory requirement of section 1848(q)(5)(D) of the Act to take in to account improvement when scoring the cost performance category for the sixth year of MIPS (the CY 2022 performance period/2024 MIPS payment year). We are proposing corresponding changes to § 414.1380(b)(2)(iv)(E) to reflect the proposal. We solicit public comment on the proposal. (2) Calculating the Final ScoreFor a description of the statutory basis and our policies for calculating the final score for each MIPS eligible clinician, we refer readers to § 414.1380(c) and the discussion in the CY 2017 and CY 2018 Quality Payment Program final rules, and the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (81 FR 77319 through 77329, 82 FR 53769 through 53785, 83 FR 59868 through 59878, 84 FR 63020 through 63031, 85 FR 84908 through 84917, 86 FR 65509 through 65527, respectively) on final score calculations, performance category weights, reweighting the performance categories, and the complex patient bonus. As described in more detail in the following sections, we:
(a) Complex Patient Bonus(i) BackgroundSection 1848(q)(1)(G) of the Act requires us to consider risk factors in our MIPS scoring methodology. Specifically, it provides that the Secretary, on an ongoing basis, shall, as the Secretary determines appropriate and based on an individual's health status and other risk factors, assess appropriate adjustments to quality measures, cost measures, and other measures used under MIPS; and assess and implement appropriate adjustments to payment adjustments, final scores, scores for performance categories, or scores for measures or activities under MIPS. In doing so, the Secretary is required to take into account the relevant studies conducted under section 2(d) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185, October 6, 2014) and, as appropriate, other information, including information collected before completion of such studies and recommendations. In the CY 2018 Quality Payment Program final rule, under the authority in section 1848(q)(1)(G) of the Act, we established at § 414.1380(c)(3) a complex patient bonus of up to 5 points to be added to the final score for the 2020 MIPS payment year (82 FR 53771 through 53776). In subsequent rulemaking, we continued the complex patient bonus at § 414.1380(c)(3) for the 2021, 2022, and 2023 MIPS payment Start Printed Page 46317 years (83 FR 59870, 84 FR 63023, and 85 FR 84910, respectively). Additionally, we finalized for the 2022 and 2023 MIPS payment years at § 414.1380(c)(3)(iv) that the complex patient bonus will be calculated under the existing formulas in paragraphs (c)(3)(i) and (ii), and the resulting numerical value will then be multiplied by 2, but cannot exceed 10.0 (85 FR 84911 through 84913 and 86 FR 65510 and 65511, respectively). Finally, beginning with the CY 2022 performance period/2024 MIPS payment year, we revised the complex patient bonus by: (1) limiting the bonus to clinicians who have a median or higher value for at least one of the two risk indicators (Hierarchical Condition Category (HCC) and dual proportion); (2) standardizing the distribution of the two risk indicators so that the policy can target clinicians who have a higher share of socially and/or medically complex patients; and (3) providing one overall complex patient bonus cap at 10 bonus points (86 FR 65511 through 65519). We refer readers to the final rules cited above for additional details on the background, statutory authority, policy rationale, and calculation of the complex patient bonus. (ii) Eligibility for the Complex Patient BonusIn the CY 2018 Quality Payment Program final rule, we finalized at § 414.1380(c)(3) a complex patient bonus for MIPS eligible clinicians, groups, APM Entities, and virtual groups that submit data for at least one MIPS performance category during the applicable performance period, which will be added to the final score (82 FR 53771 through 53776). In the CY 2018 Quality Payment Program proposed rule, we proposed that a MIPS eligible clinician, group, virtual group or APM Entity must submit data on at least one measure or activity in a performance category during the performance period to receive the complex patient bonus (82 FR 30138). We stated that under this proposal, MIPS eligible clinicians would not need to meet submission requirements for the quality performance category to receive the bonus (they could instead submit improvement activities or Promoting Interoperability performance category measures only or submit fewer than the required number of measures for the quality performance category). In the CY 2018 Quality Payment Program final rule, we also established facility-based measurement for certain MIPS eligible clinicians under the authority in section 1848(q)(2)(C)(ii) of the Act, which provides that the Secretary may use measures used for a payment system other than for physicians, such as measures for inpatient hospitals, for purposes of the quality and cost performance categories (82 FR 53752 through 53767). We did not address whether facility-based MIPS eligible clinicians would be eligible to receive the complex patient bonus. Under the scoring methodology for facility-based measurement under § 414.1380(e), there are no data submission requirements for individual clinicians to be scored under facility-based measurement (§ 414.1380(e)(4)). Although individual facility-based MIPS eligible clinicians are not required to submit data for at least one MIPS performance category, and it is possible they may choose not to submit data voluntarily, we believe they should be eligible to receive the complex patient bonus. As with other MIPS eligible clinicians who submit data for the quality performance category, we are able to score this performance category for facility-based MIPS eligible clinicians based on quality measure data available to us pursuant to the methodology described under § 414.1380(e). Thus, we are proposing that beginning with the 2023 performance period/2025 MIPS payment year, a facility-based MIPS eligible clinician would be eligible to receive the complex patient bonus, even if they do not submit data for at least one MIPS performance category. We are proposing corresponding revisions to § 414.1380(c)(3). We seek comments on this proposal. (iii) Request for Information on Risk Indicators for the Complex Patient Bonus Formula(A) Background on Risk Indicators Within the Complex Patient Bonus FormulaIn the CY 2022 PFS final rule, we finalized to continue using the existing risk indicators for the complex patient bonus formula (86 FR 65511 through 65517). We received comments regarding our policy to continue to use the existing risk indicators. A few commenters requested that CMS look at additional risk indicators to account for additional complexities within the complex patient bonus formula. Specifically, a few commenters suggested CMS consider clinical data to capture comorbidities and alternatives to dual eligibility to capture social risk. Other commenters suggested CMS consider using other data such as Z-codes and indices (for example, Social Vulnerability Index, Community Needs Index, etc.). In response to these comments, we stated that we would take the comments into consideration as we continue updating the complex patient bonus in future years (86 FR 65517). We also stated that, although the HHS Assistant Secretary for Planning and Evaluation (ASPE) report found dual eligibility to be a reliable indicator of social risk, we understand there may be some limitations.[525] However, at that time, we were unaware of data sources and/or methodologies to account for other social indicators such as income and education which are readily available for all Medicare beneficiaries and would be more complete indices of a patient's complexity. We stated that we continue to believe that average HCC risk scores are a valid proxy for medical complexity which are also used by other CMS programs. Therefore, we stated that we will continue to pair the HCC risk score with the proportion of dually eligible patients to create a more complete complex patient indicator than can be captured using HCC risk scores alone. We stated that we will evaluate additional, more comprehensive options, such as Z-codes and indices, based on any updated data or additional information, including to better account for social risk factors while minimizing unintended consequences. When we considered the approaches for a complex patient bonus in the CY 2018 Quality Payment Program proposed rule (82 FR 30135 through 30139), we reviewed evidence to identify how indicators of patient complexity have an impact on performance under MIPS as well as availability of data to implement the bonus, described in more detail in the regulatory impact analysis of the CY 2018 Quality Payment Program proposed rule (82 FR 30235 through 30238). At that time, we identified two potential indicators for complexity: medical complexity as measured through HCC risk scores and social risk as measured through the proportion of patients with dual eligible status. We identified these indicators because they are common indicators of patient complexity in the Medicare program and the data is readily available. Please refer to the CY 2018 Quality Payment Program proposed rule for a detailed discussion of our analysis of both indicators that informed our proposal (82 FR 30135 through 30138). Specifically, we proposed (82 FR 30138) and finalized (82 FR 53776) at § 414.1380(c)(3)(i) to calculate an Start Printed Page 46318 average HCC risk score, using the model adopted under section 1853 of the Act for Medicare Advantage risk adjustment purposes, for each MIPS eligible clinician or group, and to use that average HCC risk score as the complex patient bonus. Additionally, in the CY 2019 PFS final rule (83 FR 59870), we finalized to calculate the average HCC risk score for a MIPS eligible clinician or group by averaging HCC risk scores for beneficiaries cared for by the MIPS eligible clinician or clinicians in the group during the second 12-month segment of the eligibility period, which begins on October 1 of the calendar year preceding the applicable performance period and ends on September 30 of the calendar year in which the applicable performance period occurs. Beginning with the 2021 MIPS payment year, the second 12-month segment of the MIPS determination period (beginning on October 1 of the calendar year preceding the applicable performance period and ending on September 30 of the calendar year in which the applicable performance period occurs) is used when calculating average HCC risk scores and proportion of full benefit or partial benefit dual eligible beneficiaries for MIPS eligible clinicians. (B) Request for Information on Risk Indicators Within Complex Patient Bonus Formula to Continue to Align With CMS Approach to Operationalizing Health EquityCMS defines “health equity” as the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, social economic status, geography, preferred language, or other factors that affect access to care and health outcomes. We are working to advance health equity by designing, implementing, and operationalizing policies and programs that support health for all the people served by our programs, eliminating avoidable differences in health outcomes experienced by people who are disadvantaged or underserved, and providing the care and support that our enrollees need to thrive. We focus our health equity actions in five high-impact areas based on input from interested parties and communities, which incorporate both community- and system-level approaches to achieving health equity.[526]
We believe the complex patient bonus aligns with all five focus areas, addressing the need for standardized data collection, supporting CMS in addressing inequities to close gaps, and helping build capacity among health care professionals to provide tailored, culturally and linguistically appropriate, accessible care that meets their patients' needs and addresses social risk factors that individuals experience which can affect health care quality, access, and outcomes. To ensure our focus remains on the communities, individuals, and health care professionals we serve, we continue to explore ways and efforts to improve our current policies to advance health equity in ways that are responsive to the needs of our interested parties. In section III.G.4.b.(7)(d) of this rule, we are proposing a positive adjustment to the quality performance score for an Accountable Care Organizations (ACO) that achieves a specified level of quality performance and serves beneficiaries in areas with a high Area Deprivation Index (ADI) or serves a large proportion of dual eligible beneficiaries. At this time, we are evaluating and inquiring whether the ADI measure is a good indicator of beneficiaries with high needs for use within the MIPS program as it is intended to capture local socioeconomic factors correlated with medical disparities and underservice. ADI is now reported publicly through the Neighborhood Atlas from the University of Wisconsin. It is a relative measure that is reported at the individual level, typically reported by percentile (1-100) or decile (1-10), with a higher percentile indicating greater disadvantage. While we are not currently proposing to use the ADI measure within the complex patient bonus, we ask for public comments on the potential future incorporation of the measure. We are particularly interested in information from, or related to perspectives of, individuals living in or serving underserved communities, including health care professionals disproportionately serving underserved communities and medically and socially complex patients:
++ How should CMS incorporate those additional risk indicators into the complex patient bonus formula? ++ What additional data sources should CMS consider that would allow for CMS to calculate the complex patient bonus in both a feasible and timely manner? ++ What additional measures or indicators are already developed which may capture the social determinants of health?
++ Whether the definition of “essential community providers” adequately functions as a potential definition for safety net providers and could include all MIPS eligible clinicians who may receive the complex patient bonus? What (if any) concerns would health care providers or health care professionals have regarding the use of this definition? ++ What recommendations for alternate definitions should CMS consider as a definition of “safety net provider” that would be inclusive of all MIPS eligible clinicians who may receive the complex patient bonus? ++ When considering the “safety net provider” definition, how would commenters suggest CMS consider differences related to location or facilities that might qualify as “safety net providers” versus individual health care professionals who might also qualify as “safety net providers”? What would commenters identify as key determinations when considering a location, site-based, or facility-based definition or an individual health care Start Printed Page 46319 professional based definition of “safety net provider” in the context of MIPS eligible clinicians who may receive the complex patient bonus? (b) Facility-Based Measurement(i) BackgroundSection 1848(q)(2)(C)(ii) of the Act provides that the Secretary may use measures used for a payment system other than for physicians, such as measures for inpatient hospitals, for purposes of the quality and cost performance categories. In the CY 2018 Quality Payment Program final rule (82 FR 53752 through 53767), we established facility-based measurement under the authority in section 1848(q)(2)(C)(ii) of the Act for certain MIPS eligible clinicians. We established facility-based measurement to better align incentives between facilities and the MIPS eligible clinicians who provide services there (82 FR 53753). Scoring under facility-based measurement was available for clinicians beginning with the CY 2019 performance period/2021 MIPS payment year. In the CY 2022 PFS final rule, we finalized at § 414.1380(e)(6)(vi)(B) that for clinicians and groups eligible for facility-based measurement, beginning with the CY 2022 performance period/2024 MIPS payment year, the MIPS quality and cost performance category scores for such clinicians and groups will be based on the facility-based measurement scoring methodology unless a clinician or group receives a higher MIPS final score through another MIPS submission (86 FR 65526 and 65527). For more background on facility-based measurement, we refer readers to the CY 2018 Quality Payment Program final rule (82 FR 53752 through 53767), the CY 2019 PFS final rule (83 FR 59856 and 59867), the CY 2020 PFS final rule (84 FR 63018 through 63020), and the CY 2022 PFS final rule (86 FR 65526 and 65527). (A) Eligibility for Facility-Based MeasurementIn the CY 2018 Quality Payment Program final rule (82 FR 53756 and 53757), we finalized individual eligibility criteria for facility-based measurement at § 414.1380(e)(2)(i). We established that a MIPS eligible clinician who furnishes 75 percent or more of his or her covered professional services in sites of service identified by the place of service (POS) codes used in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) standard transaction as an inpatient hospital or emergency room based on claims for a period prior to the performance period as specified by CMS is eligible as an individual for facility-based measurement. We specified that we would use the definition of professional services provided in section 1848(k)(3)(A) of the Act in applying this standard (82 FR 53756). In the CY 2019 PFS final rule, we added the on-campus outpatient hospital (POS code 22) to the list of sites of service we consider when determining eligibility for facility-based measurement (83 FR 59857 through 59860). Additionally, we required that clinicians bill at least one covered professional service in a site of service identified by the POS codes for inpatient hospital or the emergency room in order to be eligible for facility-based measurement. We codified these standards in § 414.1380(e)(2)(i)(A) and (B). We also finalized that we must be able to attribute a clinician to a particular facility that has a value-based purchasing score under the methodology specified in § 414.1380(e)(5) in order for the clinician to be eligible for facility-based measurement (§ 414.1380(e)(2)(i)(C)). Separately, in the CY 2018 Quality Payment Program final rule (82 FR 53759), we defined a facility-based group as a group in which 75 percent or more of its eligible clinician NPIs billing under the group's TIN meet the requirements described above. As we clarified and expanded our definition of a facility-based MIPS eligible clinician, we intended to allow MIPS eligible clinicians participating in virtual groups to be eligible for facility-based measurement using the same standards applicable to individual MIPS eligible clinicians and groups. We intended this because, just like individual clinicians and groups, some virtual groups may predominantly practice within a hospital setting and their MIPS eligible clinicians may otherwise be eligible for facility-based measurement based on the eligibility standards established at § 414.1380(e)(2)(i)(A) through (C) were they to participate in MIPS individually or as a group. However, we did not specify at § 414.1380(e)(2) that virtual groups may be eligible for facility-based measurement. Therefore, we are proposing to revise § 414.1380(e)(2) to permit facility-based measurement of a virtual group so long as it meets the specified eligibility standards beginning with the 2023 performance period/2025 MIPS payment year. Additionally, we are also proposing to revise § 414.1380(e)(2) to specify, consistent with our prior discussion of the matter, that a MIPS eligible clinician is eligible for facility-based measurement only if CMS determines it eligible to be facility-based (82 FR 53757). We seek comments on this proposal. (B) Definition of Facility-Based MIPS Eligible ClinicianIn the CY 2018 Quality Payment Program final rule, we finalized the definition of a facility-based MIPS eligible clinician at § 414.1305 (82 FR 53578). In the CY 2019 PFS final rule, we finalized additions to the determination of eligibility for facility-based measurement as reflected in the regulation text at § 414.1380(e)(2)(i)(A), (B), and (C) (83 FR 59856 through 59860); however, we inadvertently did not update the definition of a facility-based MIPS eligible clinician at § 414.1305 to reflect these additions. Therefore, we are proposing to revise the facility-based MIPS eligible clinician definition at § 414.1305 to align with the current policies at § 414.1380(e)(2)(i)(A), (B), and (C), which are described in detail in section IV.A.10.d.(2)(b)(i)(A) of this proposed rule. We are also proposing to revise the terminology within § 414.1380(e) to align with the terminology used in the definition of a facility-based MIPS eligible clinician at § 414.1305. We are seeking comments on these proposals. e. MIPS Payment Adjustments(1) BackgroundFor our previously established policies regarding the final score used to determine MIPS payment adjustments, we refer readers to the CY 2022 PFS final rule (86 FR 65527 through 65537), CY 2021 PFS final rule (85 FR 84917 through 84926), CY 2020 PFS final rule (84 FR 63031 through 63045), CY 2019 PFS final rule (83 FR 59878 through 59894), CY 2018 Quality Payment Program final rule (82 FR 53785 through 53799), and CY 2017 Quality Payment Program final rule (81 FR 77329 through 77343). In this CY 2023 PFS proposed rule, we are proposing to establish the performance threshold for the CY 2025 MIPS payment year using 2019 MIPS payment year data. In addition, we are including information about our timing for providing MIPS performance feedback to clinicians for the performance period in 2021. (2) Establishing the Performance ThresholdUnder section 1848(q)(6)(D)(i) of the Act, for each year of MIPS, the Secretary shall compute a performance threshold with respect to which the final scores of MIPS eligible clinicians are compared for purposes of determining the MIPS payment adjustment factors under section 1848(q)(6)(A) of the Act for a Start Printed Page 46320 year. The performance threshold for a year must be either the mean or median (as selected by the Secretary, and which may be reassessed every 3 years) of the final scores for all MIPS eligible clinicians for a prior period specified by the Secretary. Section 1848(q)(6)(D)(iii) of the Act included a special rule for the initial 2 years of MIPS, which required the Secretary, prior to the performance period for such years, to establish a performance threshold for purposes of determining the MIPS payment adjustment factors under section 1848(q)(6)(A) of the Act and an additional performance threshold for purposes of determining the additional MIPS payment adjustment factors under section 1848(q)(6)(C) of the Act, each of which shall be based on a period prior to the performance period and take into account data available for performance on measures and activities that may be used under the performance categories and other factors determined appropriate by the Secretary. Section 51003(a)(1)(D) of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9, 2018) amended section 1848(q)(6)(D)(iii) of the Act to extend the special rule to apply for the initial 5 years of MIPS instead of only the initial 2 years of MIPS. In addition, section 51003(a)(1)(D) of the Bipartisan Budget Act of 2018 added a new clause (iv) to section 1848(q)(6)(D) of the Act, which includes an additional special rule for the third, fourth, and fifth years of MIPS (the 2021 through 2023 MIPS payment years). This additional special rule provides, for purposes of determining the MIPS payment adjustment factors under section 1848(q)(6)(A) of the Act, in addition to the requirements specified in section 1848(q)(6)(D)(iii) of the Act, the Secretary shall increase the performance threshold for each of the third, fourth, and fifth years to ensure a gradual and incremental transition to the performance threshold described in section 1848(q)(6)(D)(i) of the Act (as estimated by the Secretary) with respect to the sixth year (the 2024 MIPS payment year) to which the MIPS applies. We applied these special rules for the first 5 years of MIPS to provide for a gradual and incremental transition to the performance we estimated for the sixth year of MIPS (the CY 2024 MIPS payment year). In the CY 2022 PFS final rule, we set the performance threshold at 75 points for the CY 2024 MIPS payment year (86 FR 65532). For further information on the performance threshold policies, we refer readers to the CY 2017 Quality Payment Program final rule (81 FR 77333 through 77338), CY 2018 Quality Payment Program final rule (82 FR 53787 through 53794), CY 2019 PFS final rule (83 FR 59880 through 59883), CY 2020 PFS final rule (84 FR 63031 through 63037), CY 2021 PFS final rule (85 FR 84919 through 84923), and CY 2022 PFS final rule (86 FR 65527 through 65532). We codified the performance thresholds for each of the first 6 years of MIPS at § 414.1405(b)(4) through (9), as shown in Table 89. Beginning with the CY 2024 MIPS payment year, section 1848(q)(6)(D)(i) of the Act requires the performance threshold to be the mean or median (as selected by the Secretary) of the final scores for all MIPS eligible clinicians with respect to a prior period specified by the Secretary. That section also provides that the Secretary may reassess the selection of the mean or median every 3 years. In the CY 2022 PFS final rule (86 FR 65527 through 65532), we selected the mean as the methodology for determining the performance threshold for each of the 2024, 2025, and 2026 MIPS payment years. We intend to reassess and establish the methodology (mean or median) that we will use to determine the performance threshold for each of the next 3 years (2027 MIPS payment year, 2028 MIPS payment year, and 2029 MIPS payment year) in future rulemaking. While we identified the mean as our methodology for determining the performance threshold for MIPS payment years CY 2024 through 2026, we have not specified which prior period's mean final score we would use for the 2025 MIPS payment year's performance threshold. From our review of the data available to us, we have identified the mean final scores for each of the 2019 through 2022 MIPS payment years, as shown in Table 90. These four values represent the mean final scores for all MIPS eligible clinicians from prior periods that are available for consideration for the CY 2025 MIPS payment year performance threshold. The final scores for the CY 2021 MIPS performance period/2023 MIPS payment year were not finalized in time for this proposed rule; thus, the mean final score for the CY 2023 MIPS payment year is not listed as a potential performance threshold value for the CY 2025 MIPS payment year. Start Printed Page 46321 As shown in Table 90, the mean final scores available for consideration for the CY 2025 MIPS payment year performance threshold cover a range of values from 74.65 points to 89.47 points (rounded to 75 points and 89 points, respectively). We are proposing to use the CY 2019 MIPS payment year as the prior period for the purpose of determining the performance threshold for the CY 2025 MIPS payment year for several reasons. We expect the mean final score for the CY 2023 performance period/2025 MIPS payment year to be lower than the mean final scores from the CY 2018 through 2020 performance periods/2020 through 2022 MIPS payment years. In the CY 2022 PFS final rule (86 FR 65491 through 65507), we removed transition policies such as quality bonus points that had been established for scoring the quality performance category for the CY 2018 through 2020 performance periods/2020 through 2022 MIPS payment years. Additionally, for the CY 2019 through 2021 performance periods/2021 through 2023 MIPS payment years, we applied certain extreme and uncontrollable circumstances policies described under § 414.1380(c)(2)(i) to MIPS eligible clinicians nationwide due to the COVID-19 PHE, which resulted in the reweighting of some performance categories if data were not submitted for a MIPS eligible clinician. In setting the performance threshold for the CY 2025 MIPS payment year, we believe we should take into account the elimination of those transition policies, as well as the possibility that the performance categories will not be reweighted for as many MIPS eligible clinicians for the CY 2023 performance period/2025 MIPS payment year. Furthermore, continuing to use the mean final score from the CY 2019 MIPS payment year to determine the performance threshold for the CY 2025 MIPS payment year would maintain stability in the program. We believe continuing to use the mean final score from the CY 2019 MIPS payment year would provide predictability to MIPS eligible clinicians during a program year in which they might be affected by those prior policy changes as well as potentially scored on performance categories that were previously reweighted due to the COVID-19 PHE. We estimate in the Regulatory Impact Analysis (RIA) in section VII.E.16.d.(4) of this proposed rule that approximately a third of MIPS eligible clinicians would receive a negative payment adjustment for the CY 2023 performance period/2025 MIPS payment year if the policies proposed in this proposed rule are finalized and the performance threshold is equal to 75 points. However, we have estimated that final scores for many clinicians for the CY 2023 performance period/2025 MIPS payment year would be close to the proposed performance threshold of 75 points; therefore, the actual observed percentage of clinicians receiving negative payment adjustments may slightly differ from the RIA estimates. We refer readers to the alternatives considered in the RIA in section VII.F.7 of this proposed rule where we present the impact of using data from alternative years to determine the performance threshold for the 2025 MIPS payment year. We intend to revisit in future rulemaking whether we should use a different prior period to establish the performance threshold for future MIPS payment years. Under this proposal, and pursuant to the methodology we established previously at § 414.1405(g), the performance threshold for the CY 2025 MIPS payment year would be the mean of the final scores for all MIPS eligible clinicians for the CY 2019 MIPS payment year, which is 75 points (rounded from 74.65 points). We propose corresponding changes to § 414.1405(b)(9) to reflect this proposal. We request comments on this proposal, as well as whether we should use data from alternative years to set the performance threshold for the CY 2025 MIPS payment year, which we considered and discussed in the RIA in section VII.F.7 of this proposed rule. (3) Example of Adjustment FactorsFigure 4 provides an illustrative example of how various final scores would be converted to a MIPS payment adjustment factor using the statutory formula and based on our proposed policies for the CY 2025 MIPS payment year. In Figure 4, the performance threshold is set at 75 points. The applicable percentage is 9 percent for the CY 2025 MIPS payment year. The MIPS payment adjustment factor is determined on a linear sliding scale from zero to 100, with zero being the lowest possible score which receives the negative applicable percentage (negative 9 percent for the CY 2025 MIPS payment year) and resulting in the lowest payment adjustment, and 100 being the highest possible score which receives the highest positive applicable percentage and resulting in the highest payment adjustment. However, there are two modifications to this linear sliding scale. First, there is an exception for a final score between zero and one-fourth of the performance threshold (zero and 18.75 points based on the performance threshold of 75 points for the CY 2025 MIPS payment year). All MIPS eligible clinicians with a final score in this range will receive the lowest negative applicable percentage (negative 9 percent for the CY 2025 MIPS payment year). Second, the linear sliding scale line for the positive MIPS payment adjustment factor is adjusted by the scaling factor, which cannot be higher than 3.0. If the scaling factor is greater than zero and less than or equal to 1.0, then the MIPS payment adjustment factor for a final score of 100 will be less than or equal to 9 percent. If the scaling factor is above 1.0 but is less than or equal to 3.0, then the MIPS payment adjustment factor for a final score of 100 will be greater than 9 percent. Only those MIPS eligible clinicians with a final score equal to 75 points (which is the proposed performance threshold for the CY 2025 MIPS payment year) would receive a neutral MIPS payment adjustment. Beginning with the CY 2025 MIPS payment year, the additional MIPS payment adjustment for exceptional performance described in section 1848(q)(6)(C) of the Act will no longer be available. For this reason, Figure 4 no longer illustrates an additional adjustment factor for MIPS eligible clinicians with final scores at or above the additional performance threshold described in section 1848(q)(6)(D)(ii) of the Act. Start Printed Page 46322 Table 91 illustrates the changes in payment adjustment based on the final policies from the CY 2022 PFS final rule (86 FR 65527 through 65536) for the 2024 MIPS payment year and the proposed policies for the 2025 MIPS payment year, as well as the applicable percent required by section 1848(q)(6)(B) of the Act. Start Printed Page 46323 f. Review and Correction of MIPS Final Score(1) Feedback and Information To Improve PerformanceUnder section 1848(q)(12)(A)(i) of the Act, we are at a minimum required to provide MIPS eligible clinicians with timely (such as quarterly) confidential feedback on their performance under the quality and cost performance categories beginning July 1, 2017, and we have discretion to provide such feedback regarding the improvement activities and Promoting Interoperability performance categories. In the CY 2018 Quality Payment Program final rule (82 FR 53799 through 53801), we finalized that on an annual basis, beginning July 1, 2018, performance feedback will be provided to MIPS eligible clinicians and groups for the quality and cost performance categories, and if technically feasible, for the improvement activities and advancing care information (now called the Promoting Interoperability) performance categories. As we explained previously, we aim to provide performance feedback on or around July 1 of each year, but due to the PHE and COVID-19, it is possible that we might provide performance feedback at a later date (85 FR 50321). We made performance feedback available for the CY 2019 performance period on August 5, 2020, and for the CY 2020 performance period on August 2 and September 27, 2021. Although we aim to provide performance feedback for the CY 2021 performance period on or around July 1, 2022, it is possible that the release date could be later depending on the circumstances. We direct readers to qpp.cms.gov for more information. g. Third Party Intermediaries General Requirements(1) General Requirements(a) BackgroundFlexible reporting options will provide eligible clinicians with options Start Printed Page 46324 to accommodate different practices and make measurement meaningful. We believe that allowing eligible clinicians to participate in MIPS through the use of third party intermediaries that will collect or submit data on their behalf, will help us accomplish our goal of implementing a flexible program (82 FR 53806). We refer readers to §§ 414.1305 and 414.1400, the CY 2017 Quality Payment Program final rule (81 FR 77362 through 77390), the CY 2018 Quality Payment Program final rule (82 FR 53806 through 53819), the CY 2019 PFS final rule (83 FR 59894 through 59910), the CY 2020 PFS final rule (84 FR 63049 through 63080), the May 8th COVID-19 IFC (85 FR 27594 through 27595), the CY 2021 PFS final rule (85 FR 84926 through 84947), and the CY 2022 PFS final rule (86 FR 65538 through 65550) for our previously established policies regarding third party intermediaries. In this proposed rule, we are proposing to update the definition of a third party intermediary at § 1400.1305 and to make other minor conforming technical edits to the regulation text governing third party intermediaries set forth in § 414.1400. We are also proposing to revise Qualified Clinical Data Registry (QCDR) measure self-nomination and measure approval requirements, including proposing to delay the QCDR measure testing requirement for traditional MIPS by an additional year, until the CY 2024 performance period/2026 MIPS payment year. We are also proposing to revise remedial action and termination of third party intermediaries' policies. Finally, we have also included two requests for information on third party intermediary support of MIPS value pathways (MVPs) and national Continuing Medical Education (CME) organizations becoming a new type of third party intermediary. (b) Definition of a Third Party IntermediaryIn the CY 2022 PFS final rule (86 FR 65542 through 65545), we finalized at § 414.1400(a)(1) that MIPS data may be submitted on behalf of a MIPS eligible clinician, group, virtual group, subgroup, or Alternative Payment Model (APM) Entity by any of the following third party intermediaries: QCDR; qualified registry; health IT vendor; or CMS approved survey vendor. In that rule, we added APM Entities to § 414.1400(a)(1), expanding the general participation requirements of third party intermediaries reporting MIPS on behalf of APM Entities (86 FR 65542). We also revised § 414.1400(a)(1) to allow for QCDRs, qualified registries, health IT vendors, and CAHPS for MIPS survey vendors to support subgroup reporting, a recently adopted option for MIPS eligible clinicians reporting MIPS Value Pathways (86 FR 65544 through 65545). One of our strategic goals in developing MIPS included developing a program that is meaningful, understandable, and flexible for participating MIPS eligible clinicians. One way we believe this could be accomplished is through flexible reporting options, including allowing MIPS eligible clinicians the flexibility of using third party intermediaries to collect or submit data on their behalf. In the CY 2019 PFS final rule (83 FR 59894) we finalized at § 414.1305 to define a third party intermediary as an entity that has been approved under § 414.1400 to submit data on behalf of a MIPS eligible clinician, group, or virtual group for one or more of the quality, improvement activities, and Promoting Interoperability performance categories. We now propose to update the definition of a third party intermediary at § 414.1305 to include subgroups and APM Entities and to make minor edits for technical clarity. We propose the revised definition would state that a third party intermediary means an entity that CMS has approved under § 414.1400 to submit data on behalf of a MIPS eligible clinician, group, virtual group, subgroup, or APM Entity for one or more of the quality, improvement activities, and Promoting Interoperability performance categories. We request comments on this proposal. (2) Requirements Specific to QCDRs(a) BackgroundAs described at § 414.1305, a QCDR is an entity that demonstrates clinical expertise in medicine and quality measurement development experience and collects medical or clinical data on behalf of a MIPS eligible clinician for the purpose of patient and disease tracking to foster improvement in the quality of care provided to patients. Section 1848(q)(5)(B)(ii) of the Act provides, that the Secretary shall encourage MIPS eligible professionals to report on applicable measures through the use of certified EHR technology and qualified clinical data registries. We believe QCDRs and QCDR measures further health equity through the expansion of data collection, reporting, and analysis. QCDR measures data can be used not only to identify gaps in the standard of care, but also to determine solutions to disparate impacts on different populations. We anticipate growth in the number of QCDR measures that address health equity in upcoming performance years. We refer readers to § 414.1400(b)(4), the CY 2017 Quality Payment Program final rule (81 FR 77374 through 77375), the CY 2018 Quality Payment Program final rule (82 FR 53813 through 53814), the CY 2019 PFS final rule (83 FR 59900 through 59906), the CY 2020 PFS final rule (84 FR 63058 through 63074), the May 8th COVID-19 IFC (85 FR 27594 through 27595), the CY 2021 PFS final rule (85 FR 84937 through 84944) and the CY 2022 PFS final rule (86 FR 65540 through 65550) for previously finalized standards and criteria for QCDRs and QCDR measure requirements. (b) QCDR Measure Self-Nomination RequirementsAs part of QCDR measure self-nomination, § 414.1400(b)(4)(i) and (b)(4)(i)(B) require the nominating QCDR to publicly post the QCDR measure specifications (including the CMS-assigned QCDR measure ID) and provide CMS with a link to where this information is posted no later than 15 calendar days following CMS approval. We typically notify a QCDR of its measure's approval prior to our posting of the approved measure specifications. While we require QCDRs to post their approved measure specifications, as their websites are an important source for clinicians, we want to limit the chance of discrepancies between CMS's posting and QCDRs' postings. To avoid confusion, we are proposing to revise § 414.1400(b)(4)(i)(B) to clarify requirements for publicly posting the approved measure specifications. Specifically, we propose to revise the language such that entities must publicly post measure specifications no later than 15 calendar days following CMS's posting of approved QCDR measure specifications on a CMS website and that QCDRs need to confirm that the measure specifications they post align with the measure specifications posted by CMS. We propose to revise § 414.1400(b)(4)(i)(B) to state that, for a QCDR measure, the entity must submit for CMS approval measure specifications including the Name/title of measure, National Quality Forum (NQF) number (if NQF-endorsed), descriptions of the denominator, numerator, and when applicable, denominator exceptions, denominator exclusions, risk adjustment variables, and risk adjustment algorithms. In addition, no later than 15 calendar days following CMS posting of all approved specifications for a QCDR measure, the entity must publicly post the CMS-approved measure specifications for the Start Printed Page 46325 QCDR measure (including the CMS-assigned QCDR measure ID) and provide CMS with a link to where this information is posted. We request comments on this proposal. The burden estimates for the self-nomination process are currently associated with OMB Control No. 0938-1314 (CMS-10621). We refer readers to section V.B.9.c. of this rule for the associated burden estimates relevant to this proposal. (c) QCDR Measure Approval CriteriaWe refer readers to § 414.1400(b)(4)(iii), the CY 2017 Quality Payment Program final rule (81 FR 77374 through 77375), the CY 2018 Quality Payment Program final rule (82 FR 53813 through 53814), the CY 2019 PFS final rule (83 FR 59900 through 59906), the CY 2020 PFS final rule (84 FR 63058 through 63074), the May 8th COVID-19 IFC (85 FR 27594 through 27595), the CY 2021 PFS final rule (85 FR 84937 through 84942), and the CY 2022 PFS final rule (86 FR 65540 through 65542) for previously finalized standards and criteria for QCDRs, specifically QCDR measure requirements. We refer readers to the CY 2020 PFS final rule where we finalized requirements for QCDR measure testing (84 FR 63065 through 63067). Based on our goal that all measures available in MIPS are reliable and valid, we finalized in the CY 2020 PFS final rule a requirement for all QCDR measures to be fully developed and tested with complete testing results at the clinician level beginning with the CY 2021 performance period/2023 MIPS payment year (84 FR 63065 through 63067).[527] In consideration of the burden of collecting data as part of QCDR measure testing on clinicians and hospitals on the front lines of the COVID-19 pandemic, in the May 8th COVID-19 IFC and CY 2021 PFS final rule, we delayed the requirement for fully developed and tested QCDR measures by a year, to begin with the CY 2022 performance year (85 FR 27594 and 85 FR 84938 through 84939). Separately, to incorporate feedback from interested parties into the CY 2021 PFS final rule, we finalized an incremental approach to the QCDR measure testing requirements beginning with the CY 2022 performance year. Specifically, we finalized a policy that a QCDR measure must be face valid prior to being self-nominated for the CY 2022 performance year (85 FR 84939). For new QCDR measures to be approved, we must verify they are face valid for the initial performance year and fully tested for any subsequent performance year (85 FR 84939). Thus, a QCDR measure that we approve for the CY 2022 performance year; does not have to be fully tested until the CY 2023 performance year (85 FR 84939). We recognize concerns expressed by interested parties regarding the burden of full measure testing and the continuing impact of the COVID-19 PHE (86 FR 65540 and 65541). Data collection efforts pose a challenge given the myriad disruptions to the health care system caused by the PHE, including clinicians' need to prioritize care for COVID-19 patients (and deprioritize data collection), and lost data due to the delay and cancelation of elective procedures. In particular, the COVID-19 extreme and uncontrollable circumstances exception decreased the number of groups reporting to MIPS through QCDRs. Without data from clinicians, QCDRs cannot complete their measure assessments, and delaying for one year will reduce the burden placed on QCDRs and clinicians. Despite these challenges, we believe QCDRs will soon be able to work with clinicians on full measure testing. Fully developed and tested measures improve measure reliability and validity thereby increasing clinician usability. Full measure testing also prevents instances where QCDRs may discover that a measure is not feasible part way through data collection (84 FR 63066). Therefore, we propose to revise our QCDR measure approval requirements again by delaying the requirement for a QCDR measure to be fully developed and tested with complete testing results at the clinician level until the CY 2024 performance year. Under this proposal, a QCDR measure approved for the CY 2023 performance year or earlier would not need to be fully developed and tested until the CY 2024 performance year. A new QCDR measure proposed for the CY 2024 performance year would be required to meet face validity. We would require full testing at the clinician level before the QCDR measure can continue in the program beyond the first year. We propose to amend § 414.1400(b)(4)(iii)(A)( 3) to state that beginning with the CY 2022 performance period/2024 MIPS payment year, CMS may approve a QCDR measure only if the QCDR measure meets face validity. Beginning with the CY 2024 performance period/2026 MIPS payment year, a QCDR measure approved for a previous performance year must be fully developed and tested, with complete testing results at the clinician level, prior to self-nomination. We request comments on this proposal. (3) Remedial Action and Termination of Third Party IntermediariesWe refer readers to § 414.1400(e), the CY 2017 Quality Payment Program final rule (81 FR 77386 through 77389), the CY 2019 PFS final rule (83 FR 59908 through 59910), the CY 2020 PFS final rule (84 FR 63077 through 63080), the CY 2021 PFS final rule (85 FR 84947), and the CY 2022 PFS final rule (86 FR 65542 and 65550) for previously finalized policies for remedial action and termination of third party intermediaries. We are proposing a few changes to the regulations relating to remedial actions and terminations set forth in § 414.1400(e). These include one revised and one new requirement for Corrective Action Plans (CAPs), and proposed termination of certain approved QCDRs and Qualified Registries that continue to fail to submit performance data. Section 414.1400(e)(1) provides that, after providing written notice, CMS may take remedial action if CMS determines that a third party intermediary has ceased to meet one or more of the applicable criteria for approval, has submitted a false certification under paragraph (a)(3) of this section, or has submitted data that are inaccurate, unusable, or otherwise compromised. As described in § 414.1400(e)(1)(i) and (ii), the remedial actions CMS may take against a third party intermediary include requiring the third party intermediary to submit to CMS by a date specified by the agency a corrective action plan (CAP) and publicly disclosing an entity's data error rate on the CMS website until the data error rate falls below 3 percent. As described in § 414.1400(e)(2), CMS may immediately or with advance notice terminate the ability of a third party intermediary to submit MIPS data on behalf of a MIPS eligible clinician, group, or virtual group for one or more of the following reasons: CMS has grounds to impose remedial action; CMS has not received a CAP within the specified time-period or the CAP is not accepted by CMS; or the third party intermediary fails to correct the deficiencies or data errors by the date specified by CMS. We are taking this opportunity to propose a technical correction in § 414.1400(e)(3), to include the missing introductory text of, “A data submission that,” which we inadvertently failed to Start Printed Page 46326 include when finalizing our proposal to revise and redesignate existing language from former § 414.1400(f)(3)(ii) to paragraph (e)(3) in the CY 2022 PFS final rule (86 FR 65550). With this proposed technical correction, the provision at § 414.1400(e)(3) would read, “A data submission that contains data inaccuracies affecting the third party intermediary's total clinicians may lead to remedial action/termination of the third party intermediary for future program year(s) based on CMS discretion.” (a) Revised Corrective Action Plan (CAP) RequirementsAs described in § 414.1400(e)(1)(i), the remedial actions CMS may take against a third party intermediary include requiring the third party intermediary to submit to CMS by a date specified by the agency a corrective action plan (CAP). As finalized in the CY 2021 PFS final rule and specified at §§ 414.1400(e)(1)(i)(A) through (D), unless different or additional information is specified by CMS, the CAP must address the following issues: (A) the issues that contributed to the non-compliance; (B) the impact to individual clinicians, groups, or virtual groups, regardless of whether they are participating in the program because they are MIPS eligible, voluntary participating, or opting in to participating in the MIPS program; (C) the corrective actions to be implemented by the third party intermediary to ensure that the non-compliance has been resolved and will not recur in the future; and (D) a detailed timeline for achieving compliance with the applicable requirements. In this proposed rule, we are proposing to revise the scope of affected parties impacted by the second CAP requirement at § 414.1400(e)(1)(i)(B). As finalized in the CY 2021 PFS final rule at § 414.1400(e)(1)(i)(B), we explained that, depending on the circumstances, non-compliance by a third party intermediary may affect an uncertain number of clinicians and groups and has the potential to implicate substantial program dollars. We noted our belief that the information regarding the scope of harms was necessary for the agency to assess the full program impact of the non-compliance, as well as our belief that it was important for the CAP to include this impact information regardless of the clinician's participation status, because non-compliance may have programmatic implications even if it does not affect payment, such as for data posted on the Physician Compare website (85 FR 84947). We have become aware that in some cases, QCDRs granted licenses to the measures of another QCDR upon which a CAP has been imposed may be directly impacted by the issues that led to the CAP. We are proposing to broaden the scope of affected parties under the CAP requirement at § 414.1400(e)(1)(i)(B) to also identify impacts to any QCDRs that were granted licenses to the measures of the affected QCDR, rather than limit the identification of impacts to clinicians only. We are also proposing a technical correction in § 414.1400(e)(1)(i)(B) to correct the word “voluntary” to “voluntarily.” Accordingly, we propose to revise the CAP requirement at § 414.1400(e)(1)(i)(B) to require the third party intermediary to address in its CAP the impact to individual clinicians, groups, virtual groups, subgroups, or APM Entities, regardless of whether they are participating in the program because they are MIPS eligible, voluntarily participating, or opting in to participating in the MIPS program, and any QCDRs that were granted licenses to the measures of a QCDR upon which a CAP has been imposed. We also propose to add a new CAP requirement to require the third party intermediary to notify the parties identified in proposed § 414.1400(e)(1)(i)(B) of the impact to these parties by submitting a communication plan. The intent of this proposal is to enable affected parties to better understand and prepare for any operational and other challenges as needed. We believe having third party intermediaries submit a communication plan as part of their CAP would ensure third party intermediaries directly communicate the situation and its impact to these parties in a timely and consistent manner. Accordingly, we propose to add § 414.1400(e)(1)(i)(E) to require the third party intermediary to develop a communication plan for communicating the impact to the parties identified in proposed § 414.1400(e)(1)(i)(B). Specifically, as proposed above, this would include individual clinicians, groups, virtual groups, subgroups, or APM Entities, regardless of whether they are participating in the program because they are MIPS eligible, voluntarily participating, or opting in to participating in the MIPS program, and any QCDRs that were granted licenses to the measures of a QCDR upon which a CAP has been imposed. We refer readers to section V.B.9.c. of this rule for the associated burden estimates relevant to these proposals. We request comments on these proposals. (b) Termination of Approved QCDRs and Qualified Registries That Have Not Submitted Performance DataIn the CY 2022 PFS final rule, we noted that we had identified a number of QCDRs and qualified registries that had continued to self-nominate to become a third party intermediary for the MIPS program but had not submitted clinician, group, or virtual group data to CMS (86 FR 65545). We further noted as the MIPS program continues to mature, we wished to reduce the number of vendors that self-nominate to become a qualified vendor but do not actively participate in the MIPS program ( Id.). We also noted that our goal was to decrease the operational burden on CMS and those vendors that do not submit MIPS data to CMS (86 FR 65546). Accordingly, we finalized requirements for approved QCDRs and qualified registries that have not submitted performance data to submit a participation plan as part of their self-nomination process ( Id.). We finalized an incremental approach to addressing this issue. First, we established a participation plan requirement, which requires a QCDR or qualified registry that was approved but did not submit data for any of the CY 2019 through 2023 MIPS payment years to submit a participation plan in order to be approved for the CY 2023 performance period/2025 MIPS payment year (§ 414.1400(b)(3)(vii)). Second, a QCDR or qualified registry that was approved but did not submit any MIPS data for either of the 2 years preceding the applicable self-nomination period must submit a participation plan in order for it to be approved for the CY 2024 performance period/2026 MIPS payment year or for a future performance period/payment year (§ 414.1400(b)(3)(viii)). Even with the participation requirements in place, we remain concerned about the administrative burden created by QCDRs and qualified registries that submit the required participation plans during the self-nomination process and continue as an approved QCDR or qualified registry, yet continue not to submit MIPS data to CMS. Maintaining these vendors that do not actively participate does not provide a benefit to the MIPS program, rather it creates confusion for interested parties by including these vendors in our qualified postings (86 FR 65545). Our goal is also to decrease the operational burden on CMS and interested parties. CMS would decrease its operational burden by eliminating Start Printed Page 46327 the need to screen these entities. Removing QCDRs and qualified registries who do not actively participate from our qualified postings would also decrease the administrative burden for clinicians trying to identify an active participating QCDR or qualified registry. Accordingly, beginning with the CY 2024 performance period, we propose to terminate those QCDRs and qualified registries that are required to submit participation plans during the applicable self-nomination period under § 414.1400(b)(3)(viii) because they did not submit any MIPS data for either of the 2 years preceding the applicable self-nomination period, and continue to not submit MIPS data to CMS for the applicable performance period. For example, if a QCDR or qualified registry is required to submit a participation plan during the self-nomination process for the CY 2024 performance period under § 414.1400(b)(3)(viii) because they did not submit any MIPS data for the CY 2022 and 2023 performance periods, and CMS approves their participation plan, but the QCDR or qualified registry continues to not submit MIPS data for the CY 2024 performance period (CY 2024 performance data is submitted by March 2025), then under our proposed policy, that QCDR or qualified registry would be terminated. Specifically, we propose to add a new ground for termination at § 414.1400(e)(5) stating that, beginning with the CY 2024 performance period/2026 MIPS payment year, a QCDR or qualified registry that submits a participation plan as required under § 414.1400(b)(3)(viii), but does not submit MIPS data for the applicable performance period for which they self-nominated under § 414.1400(b)(3)(viii), will be terminated. We refer readers to section V.B.9.c. of this rule for the associated burden estimates relevant to this proposal. We request comments on this proposal. Finally, in conjunction with our proposal in section IV.A.10.g.(1)(b) above to amend the definition of “third party intermediary” to refer to subgroups and APM Entities, we are proposing a conforming change to § 414.1400(e)(2), which currently states that CMS may immediately or with advance notice terminate “the ability of a third party intermediary to submit MIPS data on behalf of MIPS eligible clinician, group or virtual group” under certain circumstances. Rather than amend this provision to add references to subgroups and APM Entities, we propose to revise § 414.1400(e)(2) by removing the previously quoted phrase. If this proposal is finalized, the revised regulation would simply provide that CMS may immediately or with advance notice “terminate a third party intermediary” under the specified circumstances. We request comments on this proposal. (4) Auditing of Entities Submitting MIPS Data(a) BackgroundIn the CY 2017 Quality Payment Program final rule (81 FR 77389 through 77390), we finalized that third party intermediaries submitting MIPS data must comply with auditing procedures as a condition of qualification and approval to participate in MIPS, including the requirement to make available to CMS the contact information of each MIPS eligible clinician or group on behalf of whom it submits data (§ 414.1400(f)(1)). (b) Proposed Revisions to the Requirement to Make Contact Information AvailableIn conjunction with our proposal in section IV.A.10.g.(1)(b) above updating the definition of a third party intermediary, we are similarly proposing to revise the requirements codified at § 414.1400(f)(1) to account for third party intermediaries reporting on behalf of subgroups and APM Entities. Additionally, we are also proposing to update the requirement to apply to third party intermediaries submitting data on behalf of virtual groups. We therefore propose to update § 414.1400(f)(1) to require that the entity must make available to CMS the contact information of each MIPS eligible clinician, group, virtual group, subgroup, or APM Entity on behalf of whom it submits data. The contact information must include, at a minimum, the MIPS eligible clinician, group, virtual group, subgroup, or APM Entity phone number, address, and, if available, email. We invite public comment on this proposal. (5) Requests for Information(a) Request for Information on Third Party Intermediary Support of MVPsIn the 2022 PFS rule (86 FR 65394 through 65395) we discussed our proposals related to furthering our transition to MVPs. We believe it is important to allow third party intermediaries to support MVPs. Furthermore, we noted that we expect QCDRs, qualified registries, and Health IT vendors who support MVPs to support all measures and activities across the quality, Promoting Interoperability, and improvement activities performance categories that are included in the MVP (86 FR 65543). Thus, we believe it is important for third party intermediaries to have the capabilities to support MVPs (86 FR 65415 and 65542 through 65544). Although our MVP proposals have generally been supported, some third party intermediaries have had questions and expressed concerns with the requirement for third party intermediaries to support all measures within an MVP due to operational limitations (86 FR 65543). While we recognize these limitations, we believe allowing third party intermediaries to only support specific measures in an MVP creates undue burden on the MVP Participant and limits the clinicians' choice of measures available. Given public comments on the challenges of the current requirement to support all quality measures within an MVP (86 FR 65543), we are requesting input on the following:
We request comments on these questions. (b) Request for Information on National Continuing Medical Education (CME) Accreditation Organizations Submitting Improvement ActivitiesWe have signaled an interest in aligning MIPS with efforts clinicians undertake to maintain their state licensure and, as appropriate, board certification status, which often requires completion of Continuing Medical Education (CME) requirements and/or Maintenance of Certification (MOC) requirements. We are considering whether national continuing medical education (CME) accreditation organizations that provide certification of CME could serve as a new type of third party intermediary to submit data for clinicians seeking improvement activities performance category credit for IA_PSPA_28, “Completion of an Accredited Safety or Quality Improvement Program,” and IA_PSPA_2, “Participation in MOC Part IV,” which are both medium-weighted improvement activities, so that clinicians would not need to attest to completion of the improvement Start Printed Page 46328 activities through the QPP web portal. We are considering how to include information from national CME accreditation organizations in MIPS. Currently, the only entities that are permitted to submit attestations on behalf of clinicians are third party intermediaries which includes QCDRs, qualified registries, health IT vendors, and CMS-approved survey vendors. We are considering approaches to including CME accreditation organizations as third party intermediaries, however our current third party intermediary policies do not allow third party intermediaries to submit data solely for the improvement activities performance category. We have established that QCDRs and quality registries must support the reporting of three performance categories: quality; Promoting Interoperability; and improvement activities (§ 414.1400(b)(1)(i). We have finalized requirements that Health IT vendors supporting MVPs must be able to submit data for the quality, Promoting Interoperability, and improvement activities performance categories (§ 414.1400(c)(1)(i)). In the quality performance category, QCDRs, quality registries and Health IT vendors are not required to support the Consumer Assessment of Healthcare Provider and Systems (CAHPS) for MIPS surveys and qualified registries and Health IT vendors are not required to support QCDR measures (85 FR 84926). CMS-approved survey vendors are allowed to report the CAHPS for MIPS survey only for the quality performance category (§ 414.1400(d)). We are considering establishing a different type of third party intermediary, that allows national CME accreditation organizations to submit improvement activities based on completion of CME or MOC for the improvement activities performance category. We are seeking comment on whether a new type of third party intermediary would be valuable to clinicians. We believe that if we add a new type of third party intermediary, we should consider only national CME accreditation organizations to reduce potential clinician confusion and program complexity. We realize there are numerous issues on which we need feedback to determine the usefulness of CME accreditation organizations reporting for clinicians and to fully implement policies. We are interested in the value to clinicians, including burden reduction, to allow CME accreditation organizations to submit one or two improvement activities. We are interested in the types of organizations that should be considered if we establish a different type of third party intermediary and seek feedback on criteria for selection. We also are interested in benefits and barriers to the CME accreditation organizations if we established a different type of third party intermediary. It is important to note that all requirements that apply to third party intermediaries would need to be applied to CME Accreditation Organizations. We would need to establish criteria for the types of CME accreditation organizations that would be included, a review process to evaluate vendor application forms, requirements for yearly vendor training and additional training as required, submission of a Quality Assurance Plan (QAP) regarding the data submitted, and policies about the public posting of information submitted. We are seeking feedback on the value to clinicians of adding CME accreditation organizations as third party intermediaries including burden reduction, criteria for selecting CME accreditation organizations including the types of entities that should be considered and implementation policies. (i) Request for Information on Value of Adding CME Accreditation Organizations as Third Party Intermediaries We are requesting feedback on the value to clinicians of the program including CME accreditation organizations as a new type of third party intermediary that submits data on improvement activities that align with efforts clinicians undertake to complete CME, rather than attest to completing the activity at the time of submission.
(ii) Request for Information on Criteria for Selecting the CME Accreditation OrganizationsWe request feedback on the types of organizations that should be considered for this potential new type of third party intermediary.
• If we develop a new type of third party intermediary that allows only reporting for specific improvement activities for the improvement activities performance category, what type of selection criteria should be established? What type of entity would be eligible to be this new third party intermediary type? For example, would only national certifying accrediting organizations for CME with the ability to report for all Start Printed Page 46329 MIPS clinicians meet the requirement when we initially implement the policy because the relevant improvement activity is specific to physicians: IA_PSPA_28, “Completion of an Accredited Safety or Quality Improvement Program” and IA_PSPA_2, “Participation in MOC Part IV”? Should we consider only organizations that can support submission of all improvement activities in the improvement activities performance category to reduce clinician confusion and burden?
(iii) Request for Information on Third Party Intermediary Implementation PoliciesWe request feedback on how third party intermediary policies should be maintained or modified if we add a new type of third party intermediary.
We request feedback on these topics. h. Public Reporting on the Compare Tools Hosted by HHSSection 10331(a)(1) of the Affordable Care Act authorized the development of a Physician Compare internet website with information on physicians and other eligible professionals enrolled in Medicare who participate in the Physician Quality Reporting Initiative (PQRI). Section 1848(q)(9) of the Act, as added by section 101(b) of MACRA, aligned Physician Compare with the newly-established Merit-Based Incentive Program by requiring the public reporting of MIPS performance information for MIPS eligible professionals through Physician Compare. For previous discussions on public reporting, we refer readers to the CY 2016 PFS final rule (80 FR 71116 through 71123), the CY 2017 Quality Payment Program final rule (81 FR 77390 through 77399), the CY 2018 Quality Payment Program final rule (82 FR 53819 through 53832), the CY 2019 PFS final rule (83 FR 59910 through 59915), the CY 2020 PFS final rule (84 FR 63080 through 63083), the CY 2022 PFS final rule (86 FR 65550 through 65554) and the Care Compare: Doctors and Clinicians Initiative Page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Compare-DAC. We also note that as finalized at § 414.1305 “Physician Compare” is defined as the Physician Compare internet website of CMS (or a successor website). As discussed in prior rulemaking, we note the current website is the Compare Tools hosted by the U.S. Department of Health and Human Services (HHS), referred to as “compare tool” throughout this proposed rule (86 FR 39466). (1) Telehealth IndicatorPrior to the start of the COVID-19 public health emergency (PHE) in March 2020, Medicare paid for telehealth under limited circumstances, with telemedicine services restricted to rural or health professional shortage areas, established patients, or certain types of health care providers. In response to the ongoing PHE, we expanded Medicare payment for telemedicine services to increase access to care. In the CY 2021 PFS final rule, we finalized a number of more permanent Category 1 CPT codes and authorized a number of time-limited Category 3 codes due to the PHE (85 FR 84502 through 84540). Additionally, in the CY 2022 PFS final rule, we expanded upon definitions of different telehealth services to increase coverage, and extended the time period for certain Category 3 codes (86 FR 65047 through 65065). According to the September 2021 Medicare Telemedicine Snapshot,[528] telehealth services have increased more than 30-fold since the start of the PHE and have been utilized by more than half of the Medicare population. With the increase in patients seeking telehealth due to the ongoing PHE and CMS finalizing and expanding coverage of certain Category 1 and Category 3 telehealth services codes, adding an indicator to clinician and group profile pages would clarify for website users which clinicians offer telehealth services. The Compare tool includes information on how beneficiaries may access care. We believe knowing whether a clinician offers services via telehealth would be useful to patients and caregivers generally, beyond the PHE, particularly for those who have access to care barriers such as living in rural areas or have transportation constraints. The ability to search for clinicians and groups who offer telehealth would also eliminate the burden of patients and caregivers having to call offices to obtain this information. Our research suggests that the addition of a telehealth indicator would meet a gap in the current information we provide on access to care and that such an indicator would be well understood by users. Keyword searches from the legacy Physician Compare website showed that, historically, website users search for telehealth information. Additionally, user testing we conducted with Medicare beneficiaries and caregivers showed that users accurately understood the meaning of a telehealth indicator and some even expressed an interest in knowing which services, specifically, might be offered via telehealth. Most users found the telehealth indicator to be important and useful when selecting a clinician. Users also mentioned convenience or personal preference as Start Printed Page 46330 reasons a telehealth indicator would be important to include on the website. We also believe that publicly reporting a telehealth indicator on clinician and group profile pages would further CMS's health equity goals. According to the aforementioned Medicare Telemedicine Snapshot, more than half of the Medicare population in almost every racial/ethnic group regardless of sex or Medicare and Medicaid status are utilizing telehealth services. Given the exponential increase in Medicare telehealth usage by Medicare users over the past 2 years, particularly by those in areas with limited healthcare access, and those who cannot physically access a clinician's office, publicly reporting information on which clinicians furnish services via telehealth would aid in more widely applicable health care provider selection across the Medicare and dually eligible Medicare and Medicaid populations, since some beneficiaries have preferences for, or limitations preventing them from- seeing a clinician in-person. For these reasons, we propose adding a telehealth indicator to clinician and group profile pages, as technically feasible. Along with the indicator, we would include a statement on the profile page caveating, in a user-friendly way based on consumer testing, that the clinician or group only provides some, not all, services via telehealth. To develop the indicator that would display on the Compare tool clinician and group profile pages, we propose to identify clinicians who perform telehealth services using Place of Service Code 02 (indicating telehealth) on paid physician & ancillary service (that is, carrier) claims, or modifier 95 appended on paid claims. To keep the indicator current and address concerns that some telehealth codes are time-limited, we would use a 6-month lookback period and refresh the telehealth indicator on clinician profile pages bi-monthly, which is the same cadence in which we update other clinician directory information. Frequently updating the telehealth indicator information would ensure that when a time-limited Category 3 codes expires, a clinician who only bills telehealth services under that code would no longer have a telehealth indicator on their profile page. We seek comment on all aspects of our proposals to add a telehealth indicator to clinician and group profile pages, as technically feasible; our proposed approach to identifying clinicians and groups furnishing telehealth services; and our proposed 6-month lookback period and bi-monthly data refresh frequency, which account for potential changes to telehealth coverage. (2) Publicly Reporting Utilization Data on Profile PagesSection 104(a) of MACRA provides that, beginning with 2015, the Secretary shall make publicly available on an annual basis, in an easily understandable format, information with respect to physicians and, as appropriate, other eligible professionals, on items and services furnished to Medicare beneficiaries. The information made available must be similar to the physician and other supplier utilization data we have historically made available and shall include information on the number of services furnished by the physician or other eligible professional under Medicare, which may include information on the most frequent services furnished or groupings of services. Section 104(e) of MACRA requires that we integrate this data into the Compare tool. To satisfy section 104(e), we implemented a policy of including utilization data in a downloadable format from late 2017 using the most currently available data and that the specific codes to be included were determined using data analysis and reported at the eligible clinician level (80 FR 71130). We also finalized a policy of continuing to include utilization data in the downloadable database (81 FR 77398). This information continues to be available today in the Medicare Provider Data Catalog (PDC) available at https://data.cms.gov/provider-data/topics/doctors-clinicians. Separately, we have reported on the Compare tool clinician training information as well as a clinician's primary and secondary specialties.[529] We believe it would be useful to patients and their caregivers, when making healthcare decisions, if a subset of procedures performed were publicly reported on clinician profile pages in an understandable and meaningful way. To date, we have gathered utilization data for procedures from physician/supplier Medicare Part B non-institutional claims on certain services and procedures and published it in the public use file (PUF) file entitled “Physician and Other Supplier Data.” These data are useful to the healthcare industry, healthcare researchers, and other interested parties who have the expertise to accurately interpret these data and use them in meaningful analyses. However, this information is presented in a technical manner that is not easily accessible or usable by patients, who do not frequently visit data.cms.gov or understand medical procedure coding. Additionally, the amount of information available in the PUF may overwhelm patients and caregivers. We envision that reporting utilization data on patient-facing clinician profile pages would provide two main areas of benefit. The first would be to allow for more granular clinician searches. Patients would not only be able to find specific types of clinicians but also those clinicians who have performed specific types of procedures. The second would be to provide categories of utilization data in a plain language display that is more usable to patients and their caregivers than what is available in the PDC. For example, someone with severe arthritis of the knee may want to search for an orthopedic surgeon who specifically performs knee replacements. Currently, the clinician search returns only results for “orthopedic surgeons” generally. That is, the patient does not see which clinicians have performed knee replacements in the past, and the patient likely would need to spend time calling clinicians to ascertain such information. We believe that indicating which clinicians have performed certain procedures would relieve some of this patient burden as it would yield more specific and useful search results. In order to publicly report procedural utilization data in a meaningful way to patients and caregivers, rather than showing thousands of rows of individual Healthcare Common Procedure Coding System (HCPCS) data, as we do for the research community in the PDC, we propose to collapse HCPCS codes using the Restructured Berenson-Eggers Type of Service (BETOS) Codes Classification System into procedural categories. BETOS is a taxonomy that allows for the grouping of health care services codes for Medicare Part B into clinically meaningful categories and subcategories. Additional BETOS information is available at https://data.cms.gov/provider-summary-by-type-of-service/provider-service-classifications/restructured-betos-classification-system. For example, applying categories would enable us to list that a clinician performs knee arthroplasties, which we could further simplify to knee replacements for understandability instead listing each of nine unique procedure codes indicating Start Printed Page 46331 the specifics of exactly which bones and implants were utilized. We would exclude non-specific procedure codes, such as evaluation and management (E&M) codes for office visits which do not provide context about the care provided, and low complexity procedures such as basic wound care or administering a vaccine because these codes encompass many types of care and are not specific enough about the services covered. For procedures in which no Restructured BETOS categories are available, we would utilize procedure code sources used in MIPS, such as the procedure categories already defined for MIPS cost or quality measures. Prior to publishing this data, we would conduct user testing with patients and caregivers to determine which procedures are of most importance, as well as how to best display and plain language utilization data on profile pages. User testing would also inform the appropriate context necessary to display utilization data in a meaningful way that ensures it is interpreted accurately. We note that the utilization data shown on profile pages would only reflect Medicare claims data. Though this would provide information to patients and caregivers about which procedures are covered by Medicare, the utilization data would not include procedures performed for patients who have other types of insurance. For this reason, we would include a disclaimer on profile pages that the utilization data only represents the care that has been provided to Medicare beneficiaries and does not include those of patients with other forms of insurance. In summary, we believe that publicly reporting summary utilization data on profile pages in a way that is easily accessible and understandable by patients and caregivers will assist in more informed healthcare decision-making and further the implementation of the MACRA requirement to publicly report utilization data beyond what we publish today in the PDC. It would allow patients and their caregivers to more easily find and compare clinicians who perform specific procedures without having to contact each individual clinician directly. Therefore, we propose publicly reporting Medicare procedural utilization data on the Compare tool clinician and group profile pages in a way that is understandable to patients and caregivers, based on user testing, and helps them make healthcare decisions. We would begin publicly reporting procedural utilization data no earlier than CY 2023. We will use a 12-month lookback period and bi-monthly data refresh frequency, as technically feasible. We seek comment on all aspects of this proposal, including the proposed approaches to identifying the most relevant and understandable procedural categories. (3) Incorporating Health Equity Into Public Reporting Request for InformationIn an effort to gather information from interested parties to help guide efforts to advance health equity, we seek comment on ways to incorporate health equity into public reporting on doctor and clinician profile pages with the goal of ensuring that all patients and caregivers can easily access meaningful information to assist with their healthcare decisions. As defined by CMS, for the purpose of this request for information, health equity means “the attainment of the highest level of health of all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.”[530] In accordance with this definition and other CMS efforts to improve health equity, we believe that empowering all patients with information that enables them to select high quality, high value clinicians will be one facet that helps improve outcomes and close disparity gaps across social risk factors, race, and ethnicity. We note that, consistent with § 414.1395(b) and subject to the limitations of § 414.1395 (c), all new MIPS quality or cost measures, improvement activities, and Promoting Interoperability measures and attestations, including those that aim to improve health equity will be available for public reporting on the Compare tool. CMS's public reporting of such information would provide patients and caregivers with information regarding health equity efforts and culture within a particular practice. For example, should the proposed improvement activity “Create and Implement a Plan to Improve Care for Lesbian, Gay, Bisexual, Transgender, and Queer Patients” be added to the improvement activity inventory, visitors to the Compare tool could see, when selecting a clinician, which clinicians chose to complete this improvement activity. This may be especially meaningful for patients concerned about care for LGBTQ+ individuals when selecting a clinician. We have also considered including additional information to the Compare tool clinician and group profile pages, such as whether the clinician or group has language services available, speaks other languages besides English, and whether they accept insurance outside of traditional Medicare Fee-for-Service, such as Medicaid, Medigap, Medicare Advantage, and other commercial insurance. During prior user testing sessions, participants have indicated an interest in seeing more demographic information on profile pages including available language services, other languages spoken, and additional insurances accepted. Beneficiary inquiries from the 1-800-MEDICARE have also shown that patients are interested in information about available language services provided by a clinician's office. However, we lack data sources from which to obtain language services, languages spoken, and other payer information. That said, we request information on what additional information, such as the information described previously in this section of the proposed rule, should be publicly reported on the Compare tool, as well as what readily available, centralized data sources could be used for gathering them. Additionally, we request information on other ways to incorporate health equity into public reporting. Specifically, we request information on the following questions:
11. Overview of the APM Incentivea. OverviewUnder the Quality Payment Program, an eligible clinician who is a Qualifying Start Printed Page 46332 APM Participant (QP) for a performance year earns an APM Incentive Payment, which is made in the corresponding payment year for payment years 2019 through 2024. As provided in our regulation at § 414.1450(d), this payment is made based on the clinician's QP status in the QP Performance Period that is 2 years prior (for example, the 2022 APM Incentive Payment will correspond to the 2020 performance year), and at § 414.1450(b)(1) the APM Incentive Payment is equal to 5 percent of the eligible clinician's estimated aggregate payments for covered professional services in the base period (the year between the QP performance and payment years). b. APM Incentive Payment RecipientIn the CY 2017 Quality Payment Program final rule (81 FR 77008, 77487), we initially finalized a policy that the APM Incentive Payment is made to the TIN associated with the APM Entity through which an eligible clinician becomes a QP during the QP Performance Period. In the CY 2021 PFS final rule (85 FR 84472, 84949 through 84950), we revised our approach to identifying the TIN or TINs to which we make the APM Incentive Payment at § 414.1450(c) to use a stepwise hierarchy to identify an appropriate payee TIN or TINs. c. Public NoticeAs specified in § 414.1450(c)(8), we notify QPs for whom we are unable to identify an appropriate TIN to which to make the APM Incentive Payment through a notice published annually in the Federal Register . In that notice, we include information on how the QP can update their information to enable CMS to make the APM Incentive Payment. Under our current policy, the deadline for providing CMS with updated information is the later of November 1 of each payment year or 60 days from the date on which we make the initial round of APM Incentive Payments for such year. Section 414.1450(d) specifies that we make APM Incentive Payments as soon as practicable following calculation and validation of the APM Incentive Payment amount, but in no event later than 1 year after the incentive payment base period, defined in § 414.1305 as the calendar year prior to the year in which CMS disburses the APM Incentive Payment. Based on our experience and lessons learned in disbursing APM Incentive Payments, we have determined that the November 1 cutoff date for QPs to provide us with updated information does not leave sufficient time for us to process the information provided and make payments within the timeframe established in § 414.1450(d). In addition, we made operational adjustments beginning in the 2021 payment year that allowed us to make the initial round of APM Incentive Payments earlier in the calendar year than was possible in the first 2 payment years. Because we are now able to notify QPs for whom we have not identified a TIN to which to make the APM Incentive Payment through the Federal Register notice earlier in the payment year, and because we have found that we need additional time to process the updated information we receive in response to the notice, we now are proposing to change the specified cutoff date from November 1 to September 1 of the payment year, or 60 days from the date on which we make the initial round of payments, whichever is later. As is the case under the current policy, after the specified cutoff date, we will no longer accept updated information from QPs or their representatives, and any claims to an APM Incentive Payment for such QPs for the payment year will be forfeited. We believe this change to the cutoff date for response to the public notice would allow us to disburse APM Incentive Payments more efficiently and effectively, reducing the time within which we make the remaining APM Incentive Payments for the payment year. This change would also improve our ability to make all APM Incentive Payments within the timeframe established under § 414.1450(d), and therefore, affected QPs would not have to wait as long to receive their payments. We seek comment on this proposal to amend § 414.1450(c)(8) to change the cutoff date for response to the public notice from November 1 to September 1 of each payment year, or 60 days from the date on which we make the initial round of APM Incentive Payments, whichever is later. d. Request for Information on Quality Payment Program Incentives Beginning in Performance Year 2023Section 1833(z)(1) of the Act provides for APM Incentive Payments in each year for eligible clinicians who are QPs with respect to a year from 2019 through 2024. Specifically, for each of the specified payment years, in addition to the amount of payment that would otherwise be made for covered professional services furnished by an eligible clinician who is a QP for such year, there is an additional lump sum APM Incentive Payment equal to 5 percent of the eligible clinician's estimated aggregate payment amounts for such covered professional services for the preceding year. Covered professional services is defined at § 414.1305, with reference to the statutory definition at section 1848(k)(3) of the Act, as services for which payment is made under, or based on, the PFS and which are furnished by an eligible clinician (physician; practitioner as defined in section 1842(b)(18)(C) of the Act; PT, OT, or speech-language pathologist; or qualified audiologist as defined under section 1861(ll)(4)(B) of the Act. In the CY 2017 Quality Payment Program final rule (81 FR 77445), we established a policy that, beginning with the 2017 QP Performance Period, the QP Performance Period would be the calendar year that is 2 calendar years before the payment year for the APM Incentive Payment. Thus, we established that the first QP Performance Period would begin on January 1, 2017, the first “base year” (established at 81 FR 77481 and 77482) for which we would use claims for professional services to calculate the 5 percent APM Incentive Payment amount would be in 2018, and the first payment year for the APM Incentive Payment would be in 2019 as required by the statute. The QP Performance Period, base year, and payment year continue in this fashion through payment year 2024, which is the final year for which the statute authorizes an APM Incentive Payment. After performance year 2022, which correlates with payment year 2024, there is no further statutory authority for a 5 percent APM Incentive Payment for eligible clinicians who become QPs for a year. In performance year 2023, which correlates with payment year 2025, the statute does not provide for any type of incentive for eligible clinicians who become QPs. Beginning with performance year 2024, which correlates with payment year 2026, section 1848(d)(1) of the Act provides for the application of two different PFS conversion factors depending on whether the services are furnished by an eligible clinician who is a QP for the year. The PFS conversion factor is the fixed-dollar constant, updated each year in accordance with statute, that is used to convert the RVUs (relative value units) for a service, after application of geographic practice cost indices to adjust for cost variations, into PFS payment amounts. Section 1848(d)(20) of the Act specifies that, beginning in CY 2026 (which is the payment year that correlates with the 2024 QP Performance Period under the Quality Payment Program), the update to the Start Printed Page 46333 “qualifying APM conversion factor” (hereafter, “QP conversion factor”) that applies for eligible clinicians who are QPs with respect to the payment year is 0.75 percent, and the update to the “non-qualifying APM conversion factor” (hereafter, “general conversion factor”) that applies for eligible clinicians who are not QPs with respect to the year (as well as other types of suppliers that are not eligible clinicians under the Quality Payment Program) is 0.25 percent. With the differentially higher 0.75 percent update to the QP conversion factor compounding each year beginning with CY 2026, compared to the 0.25 percent update to the general conversion factor in each year, the two PFS conversion factors will continue to diverge with each year, as illustrated in the chart below Beginning in payment year 2025, the statutory incentive structure under the Quality Payment Program for eligible clinicians who participate in Advanced APMs stands in contrast to the incentives for MIPS eligible clinicians. Specifically, as described in section VI.E.16.d.(4) of this proposed rule, we anticipate that the maximum potential positive payment adjustment that could be applied under MIPS for payment years beginning in 2025 will be at or above 6.9 percent, and the corresponding maximum negative payment adjustment will be 9 percent. While only some MIPS eligible clinicians could earn the maximum positive payment adjustment, there is nonetheless a significant range of potential positive payment adjustments under MIPS that would exceed the differentially higher QP conversion factor beginning in payment year 2026 and for many years to come. As illustrated in Figure 5, the QP conversion factor, with the compounded differentially higher 0.75 percent update in each year, is not expected to equate to the anticipated maximum available positive payment adjustment under MIPS until after CY 2038. We note again that the statute does not provide for any financial incentives for eligible clinicians who achieve QP status in QP Performance Period 2023/payment year 2025. Because section 1848(q)(1)(C)(ii)(I) of the Act explicitly excludes eligible clinicians who are QPs for a year from being considered as MIPS eligible clinicians, eligible clinicians who are QPs for a year are not subject to MIPS for that year, and thus, cannot receive MIPS payment adjustments. As such, eligible clinicians who are determined to be QPs in performance year 2023 will be paid under the PFS in payment year 2025 at the same rate as any other eligible clinicians who are not subject to MIPS and suppliers that are not subject to the Quality Payment Program at all. We recognize that the lack of any available financial incentive under the Quality Payment Program for QPs for the 2025 payment year could affect the willingness of some eligible clinicians to participate in Advanced APMs in performance year 2023. Moreover, we recognize that the substantial difference between the QP conversion factor that will apply for QPs beginning in CY 2026 and maximum positive payment adjustment available under MIPS might affect the willingness of eligible clinicians to participate in Advanced APMs for several years to come. We recognize that there are other factors that affect an eligible clinician's decision whether to participate in an Advanced APM, including the avoidance of MIPS reporting requirements and the availability of shared savings and other incentives within the various Advanced APMs. However, we are concerned that the statutory incentive structure under the Quality Payment Program beginning in the 2023 performance year and corresponding 2025 payment year could potentially lead to a drop in Advanced APM participation, and a corresponding increase in MIPS participation as eligible clinicians may believe their payments would be higher if they receive the MIPS payment adjustment. Start Printed Page 46334 While it has been CMS's goal to increase MIPS participation, we continue to believe MIPS should be a first step on a glide path towards Advanced APM participation. Furthermore, we are concerned that a significant reduction in Advanced APM participation stemming from changes in financial incentives under the Quality Payment Program could potentially bias the CMS Innovation Center's model tests of voluntary Advanced APMs by leading clinicians who have performed well in Advanced APMs on both cost and quality metrics, to leave participation in the Advanced APM in which they currently participate, or decide not to apply for and participate in Advanced APMs, thereby interfering with the evaluation of current model tests and interfering with potential participation in future models. We also are concerned that a shift of eligible clinicians into MIPS and out of Advanced APMs would be likely to affect the availability and distribution of funds in the budget-neutral MIPS payment pool. The average MIPS final score for MIPS eligible clinicians who were participants in MIPS APMs in 2020 was 96.24 points while the average MIPS final score for all other MIPS eligible clinicians was 84.42 points. Given these statistics, we can reasonably anticipate that eligible clinicians who would shift away from participation in Advanced APMs and into MIPS would increase the relative number of high-performing MIPS eligible clinicians likely to earn a positive MIPS payment adjustment. As a result of more MIPS eligible clinicians earning a positive MIPS payment adjustment, we would expect to see a corresponding reduction in the average and maximum positive MIPS payment adjustment due to the statutory requirement under section 1848(q)(6)(F)(ii) of the Act to maintain budget neutrality in MIPS. We have considered a range of potential administrative actions within our authority that might address these concerns. For example, we explored options for modifying the Advanced APM criteria or the requirements for current and future Advanced APMs to permit some degree of flexibility for eligible clinicians to choose whether to be considered under either the MIPS or the Advanced APM track of the Quality Payment Program. We have found it difficult to conceive of potential administrative options that would increase flexibility for eligible clinicians without drastically modifying characteristics of Advanced APMs, including CEHRT use, quality-based payment, and financial risk. After further consideration, we have concluded that it would be more prudent to forego administrative action for the 2023 performance period and 2025 payment year, and instead to seek robust public input that we will consider in identifying potential options for the 2024 performance period and 2026 payment year of the Quality Payment Program (and potentially beyond). Specifically, we seek public comment on whether administrative action is needed beginning in the 2024 performance period and 2026 payment year, and if so, what would be the best approach to address the multi-faceted issues that arise with the end of statutory authority for an APM Incentive Payment for QPs and the transition to the differential QP and general conversion factors beginning in payment year 2026, which correlates to the 2024 performance year. Taking into account that the current statute: (1) requires us to make QP determinations for eligible clinicians participating in Advanced APMs; (2) defines Advanced APMs as those APMs that require CEHRT use, sets payment based on MIPS-comparable quality measures, and assumption of more than nominal financial risk, as described at § 414.1415; and (3) specifically excludes QPs from being MIPS eligible clinicians, we are seeking input on what, if any, administrative actions eligible clinicians and APM Entities would potentially find helpful to better balance the payment incentives within the Quality Payment Program going forward, while continuing to encourage eligible clinicians and APM Entities to participate in APMs that align with the broader goals of CMS. We are particularly interested in receiving public comments in response to the questions stated below, which will help us to gauge options going forward. We are also considering holding a public listening session in the near future to gather additional feedback on these questions and ideas, though we encourage the public to submit written comments on this Request for Information.
e. Advanced APMs(1) Advanced APM Criteria(a) General OverviewIn the CY 2017 Quality Payment Program final rule (81 FR 77408), we finalized the criteria that define an Advanced APM based on the requirements set forth in sections 1833(z)(3)(C) and (D) of the Act. An Advanced APM is an APM that:
In this section of the proposed rule, we address policies regarding several aspects of the Advanced APM criteria. We provide a clarification around Start Printed Page 46335 payment based on quality measures and a proposal to modify the period of applicability for the generally applicable nominal amount standard. (b) Payment Based on Quality MeasuresIn the CY 2017 Quality Payment Program final rule, we finalized the requirement for Advanced APMs that payment be based on quality measures at § 414.1415(b). In the CY 2019 PFS final rule (83 FR 59915 through 59938), we revised § 414.1415(b)(2) to clarify, effective January 1, 2020, that at least one of the quality measures upon which an Advanced APM bases payment must either be finalized on the MIPS final list of measures, as described in § 414.1330; endorsed by a consensus-based entity; or determined by CMS to be evidenced-based, reliable, and valid. We also revised the requirement at § 414.1415(b)(3) that the quality measures upon which an Advanced APM bases payment must include at least one outcome measure (unless 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) to provide, effective January 1, 2020, that at least one such outcome measure must either be finalized on the MIPS final list of measures as described in § 414.1330; endorsed by a consensus-based entity; or determined by CMS to be evidence-based, reliable, and valid. It has come to our attention that it may not be clear whether the two criteria at § 414.1415(b) require different quality measures. That is, interested parties have questioned whether two separate measures are required with one to meet each criterion, or whether it is sufficient that a single quality measure meets both of the criteria. Therefore, in this proposed rule, we propose to revise the regulation at § 414.1415(b)(3) and adding a new paragraph (b)(4) to clarify that the requirement for Advanced APMs that payment must be based on quality measures as specified at § 414.1415(b)(1) can be met through the use of a single quality measure that meets the criteria under both § 414.1415(b)(2) and (b)(3). Likewise, consistent with our practice of aligning Advanced APM and Other Payer Advanced APM policies to the extent feasible and appropriate, we are also proposing to revise § 414.1420(c)(3)(ii) and add a new paragraph (c)(4) to clarify that the requirement for Other Payer Advanced APMs that payment must be based on quality measures as specified at § 414.1420(c)(1) can be met through the use of a single quality measure that meets the criteria at § 414.1420(c)(2) and (c)(3). We seek public comment on these proposals. (c) Generally Applicable Nominal Amount StandardIn the CY 2017 Quality Payment Program final rule, we finalized the amount of the generally applicable revenue-based nominal amount standard at 8 percent for the first two QP Performance Periods only, and we sought comment on what the revenue-based nominal amount standard should be for the third and subsequent QP Performance Periods. Specifically, we sought comment on setting the revenue-based standard: (1) for 2019 and later at up to 15 percent of revenue; or (2) at 10 percent so long as risk is equal to at least 1.5 percent of expected expenditures for which an APM Entity is responsible under an APM (81 FR 77427). In the CY 2018 Quality Payment Program final rule, we finalized at § 414.1415(c)(3)(i)(A) our proposal to maintain the generally applicable revenue-based nominal amount standard at 8 percent for the 2019 and 2020 QP Performance Periods. We also specified that the standard is based on the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities. We stated that we would address the nominal amount standard for QP Performance Periods after 2020 in future rulemaking (82 FR 53838). In the CY 2019 PFS final rule (83 FR 59922 through 59923), we revised § 414.1415(c)(3)(i)(A) to maintain the generally applicable revenue-based nominal amount standard at 8 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities for QP Performance Periods 2021 through 2024. At the same time, we established the generally applicable revenue-based nominal amount standard for Other Payer Advanced APMs at § 414.1420(d)(3)(i) to reflect the same 8 percent standard for QP Performance Periods for years 2021 through 2024, but based on the total combined revenues from the payer to providers and other entities under the payment arrangement. We are proposing to amend § 414.1415(c)(3)(i)(A) to permanently establish the generally applicable revenue-based nominal amount standard at 8 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities for the QP Performance Period. We are proposing this change because the nominal amount standard of 8 percent has worked well and we are making the change permanent at this time to provide continuity in policy into the future. We are also proposing to amend § 414.1420(d)(3)(i) to permanently establish the generally applicable revenue-based nominal amount standard at 8 percent of the total combined revenues from the payer to providers and other entities under the payment arrangement, consistent with our longstanding practice of aligning Advanced APM policies with Other Payer Advanced APM policies to the extent feasible and appropriate. We propose to amend these regulations to remove the specified end date of the 2024 QP Performance Period, such that the 8 percent standard would apply for all future performance years beginning with the 2023 QP Performance Period. This proposal would not change the current generally applicable revenue-based nominal amount standard. While we will continue to evaluate the generally applicable revenue-based nominal amount standard going forward and may determine at some point that it would be appropriate to propose to change the generally applicable revenue-based nominal amount standard, we believe that the current standard of 8 percent continues to be appropriate at this time for both the Advanced APM and Other Payer Advanced APM financial risk criteria. We seek public comment on the proposals to amend § 414.1415(c)(3)(i)(A) and 414.1420(d)(3)(i) to make permanent the 8 percent level of the generally applicable revenue-based nominal amount standard such that it would apply to all future QP Performance Periods beginning January 1, 2023. (d) Medical Home Model 50 Eligible Clinician LimitIn the 2017 Quality Payment Program final rule (81 FR 77428), we finalized a policy for the Medical Home Model nominal financial risk criterion to set a limit of 50 on the number of eligible clinicians in an organization that participates in an Advanced APM through a Medical Home Model. At that time, we described the way in which we would identify APM Entities that meet this standard as looking for “APM Entities that participate in Medical Home Models and that have 50 or fewer eligible clinicians in the organization through which the entity is owned and operated.” We defined organizational size as measured based on the size of the “parent organization” rather than the size of the APM Entity itself. We recognized that there would Start Printed Page 46336 be “additional but [. . .] achievable” burden to correctly identify parent organizations and their size (81 FR 77428). In the 2017 Quality Payment Program final rule, we responded to the many comments we had received in opposition to the proposal (81 FR 77429), where commenters expressed opinions that identifying eligible entities in this way was arbitrary, or that it would unfairly discriminate between similarly situated organizations. We finalized the proposal despite these concerns because we believed we could identify organizations that were or were not reasonably capable of taking on the generally applicable level of financial risk by identifying the ultimate size of the parent organization, and in so doing, identify organizations that should be excluded from the Medical Home Model financial risk standard. After several years of implementation and upon closer analysis of our results under the Medical Home Model standard, we have gained experience about the composition of parent organizations and that there is a wide variation in how practices are organized and are proposing a change in our policy. These changes are based on a re-evaluation of two assumptions we used in finalizing the 50 eligible clinician limit, codified at § 414.1415(c)(7), have not borne out in practice. Our belief that we could easily gather accurate data about the size and composition of “parent organizations” through disclosures from the APM Entities affiliated with them was misplaced. To accurately understand the numerous and varied ways in which a parent organization (itself a complex concept) may enter into contractual relationships with other subsidiary entities that have Taxpayer Identification Numbers (TINs), which otherwise might have no apparent relationship with one another, would require insight and access to private contracts do not have. The administration of QPP is not the same as the administration of an individual APM and we are not party to the contracts between those private entities. Based on the information about these relationships, we are unable to confidently say that, under the parent organization approach we had finalized, all similarly situated organizations are being treated in the same manner. On the other hand, we believe we have a good understanding of APM Entities and how they will manage financial risk from our time implementing the QPP and various APMs. Based on this insight and experience implementing the 50 eligible clinician limit for the Medical Home Model financial risk standard, we are proposing to amend our methodology for identifying which eligible clinicians are to be included under the 50 eligible clinician limit. Specifically, we propose to amend § 414.1415(c)(7) to apply the 50 eligible clinician limit directly to the APM Entity participating in the Medical Home Model, and to no longer look to the parent organization for the APM Entity. We would identify the eligible clinicians in the APM Entity by using the TIN/NPIs on the participation list of the APM Entity on each of the three QP determination dates (March 31, June 30, and August 31). This proposal, if finalized, would become effective beginning in Performance Year 2023. We believe this change will address the challenges we have faced in implementing this policy, as discussed above. We are also proposing to amend § 414.1420(d)(8) to apply the 50 eligible clinician limit directly to the APM Entity participating in Aligned Other Payer Medical Home Model and Medicaid Medical Home Model, and to no longer look to the parent organization for the APM Entity, consistent with our longstanding practice of aligning Advanced APM policies with Other Payer Advanced APM policies to the extent feasible and appropriate. In order to continue to achieve our aim of reducing the possibility for an APM Entity to potentially manipulate their numbers of eligible clinicians to inappropriately take advantage of participation in an Advanced APM that is a Medical Home Model, we propose that the Medical Home Model financial risk and nominal amount standards under § 414.1415(c)(2) and (c)(4) would apply only if the APM Entity remains below the 50 eligible clinician limit on all three QP determination dates during the QP Performance Period. If the number of eligible clinicians in the APM Entity is above 50 on any of the three QP determination dates, the Medical Home Model financial risk and nominal amount standards will not apply for that APM Entity for the QP Performance Period. Should an APM Entity exceed the 50 eligible clinician limit on any of the three snapshot dates, no eligible clinicians would achieve or retain QP status through that APM Entity for the QP Performance Period and corresponding payment year, regardless of the outcome of QP determinations made at another QP determination date. We propose to amend the regulation text to says that an APM Entity's Participation List will be used to determine if the 50 eligible clinician limit requirement has been met three times a year, for each of the three QP determination dates (March 31, June 30, and August 31). In addition, we propose to amend § 414.1440(e)(2) to require APM Entities or eligible clinician requesting a QP determination under the All-Payer Combination Option through participation in an Aligned Other Payer Medical Home Model or Medicaid Medical Home Model to supply information and certify that the 50 eligible clinician limit is being met for any Aligned Other Payer Medical Home Model or Medicaid Medical Home Model in which they participate and for the applicable time period in which the APM Entity or eligible clinician QP determination is made under the All-Payer Combination Option, as specified in the proposed revised § 414.1420(d)(8). Note, a practice exceeding the 50 eligible clinician limit under the Medicare Option would not preclude an eligible clinician or APM Entity from seeking a QP determination based on an Aligned Other Payer Medical Home Model or Medicaid Medical Home Model. We believe this modification to the methodology used to apply the 50 eligible clinician limit would better identify the eligible clinicians and APM Entities that should be included in QP determinations for participation in Advanced APMs under the Medical Home Model financial risk standard, and therefore continue to encourage movement into value based payment arrangements. This methodology would not attempt the complex task of gathering information on parent organizations, and we believe it would treat similarly situated entities similarly. We seek public comment on these proposals. (2) Qualifying APM Participant Determination(a) General OverviewIn the CY 2017 Quality Payment Program final rule (81 FR 77439 through 77448), we finalized our policy at § 414.1425(b) for Qualifying APM Participant (QP) determinations. For the purposes of making QP determinations, an eligible clinician must be present on the Participation List of an APM Entity in an Advanced APM on one of the “snapshot dates” (March 31, June 30, or August 31) for the QP Performance Period. An eligible clinician included on a Participation List on any one of such dates is included in the APM Entity group even if that eligible Start Printed Page 46337 clinician is not included on that Participation List at one of the prior- or later-listed dates. We perform QP determinations for the eligible clinicians in an APM entity group three times during the QP Performance Period using claims data for services furnished from January 1 through each of the respective QP snapshot dates of that year. An eligible clinician can be determined to be a QP only if they appear on the Participation List on a snapshot date that we use to identify the APM Entity group and to calculate Threshold Scores and make QP determinations at the APM Entity level based on participation in the Advanced APM. For eligible clinicians who appear on a Participation List with more than one APM Entity, but do not to achieve QP status based on any APM Entity group-level determinations, we make most QP determinations at the individual level as described in § 414.1425(c)(4). Likewise, for eligible clinicians who appear on an Affiliated Practitioner list for an Advanced APM we make QP determinations at the individual level three times during the QP Performance Period using claims data for services furnished from January 1 through each of the respective QP determination snapshot dates as described in § 414.1425(b)(2). (b) Request for Information: Potential Transition to Individual QP Determinations OnlyIn the CY 2017 Quality Payment Program final rule (81 FR 77439 through 77440), we discussed our reasons for establishing a policy to calculate Threshold Scores and make most QP determinations at the APM Entity group level, rather than at the individual eligible clinician level. At that time, we believed that this policy promoted administrative simplicity and collaboration among group members instead of imposing barriers or burden. We recognized that while many beneficiaries are attributed to an APM Entity based on the services rendered by one eligible clinician, many of the eligible clinicians participating in the APM Entity play a role in the actual diagnosis, treatment, and management of the many beneficiaries in the APM Entity's patient population. Each of these individual eligible clinicians can potentially be viewed as being instrumental to providing quality care to the beneficiary in alignment with the objectives of the APM, regardless of whether the specific services they furnish are used for purposes of APM-specific attribution methods. We noted that an APM Entity faces the risks and rewards of participation in an Advanced APM as a single unit and generally is responsible for performance metrics that are aggregated to the level of that APM Entity. The policy is based on the premise that entire organizations commit to participating in an Advanced APM and focusing on the attendant cost and quality goals as a whole. Under the current policy at § 414.1425(b), for most eligible clinicians participating in Advanced APMs, QP determinations are made at the APM Entity level. As described in § 414.1435, the Threshold Score for an APM Entity or eligible clinician is calculated in one of two ways, either the payment amount method or patient count method. The threshold score using the payment count method is calculated by dividing: (1) the aggregate of payments for Medicare Part B covered professional services furnished by the APM Entity group to attributed beneficiaries during the QP Performance Period; by (2) aggregate of payments for Medicare Part B covered professional services furnished by the APM Entity group to all attribution-eligible beneficiaries during the QP Performance Period. The Threshold Score using the patient count method is calculated by dividing: (1) the number of attributed beneficiaries to whom the APM Entity group furnishes Medicare Part B covered professional services; by (2) the number of attribution-eligible beneficiaries to whom the APM Entity group or eligible clinician furnish Medicare Part B covered professional services. Attributed beneficiaries are generally determined from each Advanced APM Entity's attributed beneficiary lists generated by each Advanced APM's specific attribution methodology. The current policy for QP determinations under the All-Payer Combination Option at § 414.1440(d) establishes a process that is similar to the QP determination participating in Advanced APMs, but accounts for participation in Other Payer Advanced APMs. Under the All-Payer Combination Option, an eligible clinician may request the QP determination be made at the individual or APM Entity level, and an APM Entity may request that the QP determination made at the individual, TIN or APM Entity level. Further, § 414.1440(d) specifies that CMS uses data at the same level for the Medicare and other payer portions of Threshold Score calculations under the All-Payer Combination Option. When QP determinations are made at the eligible clinician or, at the TIN level when all clinicians who have reassigned billing rights to the TIN are included in a single APM Entity; and if the Medicare Threshold Score for the APM Entity group is higher than when calculated for the eligible clinician or TIN, CMS makes QP determinations using a weighted Medicare Threshold Score that is factored into an All-Payer Combination Option Threshold Score. We are requesting public comment on the idea of transitioning away from an APM Entity level QP determination and instead calculating Threshold Scores and making QP determinations at the individual eligible clinician level for all eligible clinicians in Advanced APMs and Other Payer Advanced APMs. We believe making QP determinations at the individual eligible clinician level may have several benefits over the current policy. First, as explained later in this section of the proposed rule, we believe that making all QP determinations at the individual eligible clinician level would substantially reduce the practice of APM Entities removing specialists from their participation lists. Second, the change to make all QP determinations at the individual eligible clinician level would increase the number of eligible clinicians who are determined to be QPs for whom their individual participation would qualify them, but whose APM Entities did not qualify because other eligible clinicians in the APM Entity reduced its Threshold Score. Third, if we were to begin making all QP determinations at the individual eligible clinician level, that approach would eliminate the number of eligible clinicians who become QPs for a year, but whose individual participation in their Advanced APM(s) is well below the Threshold Score. Under our current policy to make most QP determinations at the APM Entity level, many eligible clinicians who would not meet the Threshold Score individually but whose APM Entities met the Threshold Score are able to gain QP status. For at least some of those eligible clinicians, a significant portion of the covered professional services they furnish may occur outside of the Advanced APM. When such eligible clinicians receive QP status, they may receive a financial windfall because their APM Incentive Payments are calculated based on all of the covered professional services they furnish during the base year, not just the services they furnish as part of the APM Entity in the Advanced APM. We note that this potential for receiving a financial windfall is possible through the 2022 QP Performance Period (which correlates to payment year 2024), but this will change beginning in the 2023 QP Performance Period (which correlates to payment year 2025) because the current statute does not provide for any APM Incentive Start Printed Page 46338 Payment for that year. As such, there will be no further potential windfall in the form of the APM Incentive Payment. However, there could be a similar windfall beginning in CY 2026 (which corresponds to the 2024 QP Performance Period) because eligible clinicians who achieve QP status beginning in that year will be paid under the PFS using the differentially higher QP conversion factor for the year, which will apply to all the covered professional services the eligible clinician furnishes in the year. In addition, beginning in payment year 2025 there are competing incentives under the QPP between the MIPS and APM track which are discussed in detail in section IV.(A).(11)(d) of this proposed rule. Because the APM Entity Threshold Scores (using the payment amount and patient count methods) that are used to make APM Entity-level QP determinations are based on an aggregate calculation across all eligible clinicians participating in the APM Entity group, eligible clinicians in the APM Entity group who furnish proportionally fewer services that lead to attribution of patients or payment amounts to the APM Entity are likely to lower the APM Entity's Threshold Score. For example, primary care physicians may furnish proportionally more evaluation and management (office visit) services which are frequently the basis for attribution of patients and payment amounts to the numerator of the APM Entity's Threshold Score; whereas specialist physicians may furnish proportionally more diagnostic tests and surgical procedures which are not usually part of the attribution basis to the APM Entity. We have received reports from Advanced APM participants that some APM Entities have taken steps to reduce the number of such eligible clinicians on their Participation Lists. Specifically, to achieve higher QP Threshold Scores, some APM Entities have taken steps to exclude from their APM Entity groups (and consequently from their Participation Lists) eligible clinicians who furnish proportionally fewer services that lead to the attribution of patients or payment amounts for purposes of calculating threshold scores for APM Entity-level QP determinations. There are important reasons that it is not beneficial for an APM Entity to exclude specialists and other eligible clinicians who furnish relatively fewer services that lead to attribution. In both the Medicare Shared Savings Program and in models tested by the Innovation Center that the meet the criteria to be Advanced APMs, CMS seeks to promote patient-centered care that is integrated across the continuum of care. The inclusion of specialists in APM Entities is essential for achieving this goal. For example, a comprehensive network that includes a range of specialists is central to the success of an ACO in the Medicare Shared Savings Program for its intended purpose in patient-centered care that coordinates items and services for Medicare FFS beneficiaries, a key aim of value-based care and practice transformation.[531] The methodology used in beneficiary assignment for the Shared Savings Program is deliberately constructed such that assignment is largely based on primary care, rather than specialty care, which results in specialists contributing proportionately less in terms of payment amounts and patient counts to the ACO's QP numerator. Similarly, it was not our intent to create a policy wherein eligible clinicians who are seeing most or all of their Medicare patients through an Advanced APM may remain unable to achieve QP status because the APM Entity with which they participate in the Advanced APM includes eligible clinicians who furnish very few services through the Advanced APM. It has always been one of the goals of the APM track of the Quality Payment Program for the availability of QP status to incentivize eligible clinicians to join Advanced APMs. But under our current policy to make most QP determinations at the APM Entity level, there is the potential that eligible clinicians who are fully engaged in an Advanced APM may still be unable to earn QP status. We carefully considered our policy to make most QP determinations at the APM Entity level, and believed it was the best approach at the time. However, we did not intend for the policy to create potentially conflicting incentives for APM Entities between the goal for their eligible clinicians to achieve QP status under the Quality Payment Program, and their full participation in an Advanced APM with a group of eligible clinicians that can deliver a full spectrum of care. Finally, we are concerned that, under our current policy to make most QP determinations at the APM Entity level, some eligible clinicians who furnish relatively fewer of their services through an APM Entity may receive a disproportionate financial benefit because they achieve QP status as a result of the care furnished by other eligible clinicians in the APM Entity, while their APM Incentive Payment is calculated based on all of the covered professional services they furnish during the base year—both as part of the APM Entity and elsewhere. Our policy to make most QP determinations at the APM Entity level allows these windfall financial rewards because we calculate the Threshold Scores using the aggregate of payment amounts or patient counts for attributed patients based on Medicare Part B covered professional services furnished by all the eligible clinicians in the APM Entity, whether they furnished a few or many of such services. Once an eligible clinician receives QP status for a year, the APM Incentive Payment is calculated based on paid claims for that individual QP's covered professional services across all their TINs in the base year. This can allow an eligible clinician with minimal Advanced APM participation to receive a large APM Incentive Payment, which we do not believe aligns with the intent of the Quality Payment Program. Though, as we note above, QPs for payment year 2025 (QP Performance Period 2023) will not, by statute, receive a financial incentive for achieving such status, beginning in payment 2026 (QP Performance Period 2024) financial incentives once again will apply in the form of the enhanced QP conversion factor, which in turn compounds each year after that and therefore increases over time. We are requesting input from interested parties on the possibility of discontinuing our policy to calculate Threshold Scores and make most QP determinations at the APM Entity level, and instead to make all QP determinations at the individual eligible clinician level. We believe this would avoid the potential incentive for APM Entities to limit or exclude specialists and other eligible clinicians who furnish services that are an important part of the health care spectrum, but less likely to be attributed to the APM Entity for purposes of calculating Threshold Scores for QP determinations. While the exclusion from an APM Entity of such specialists and other eligible clinicians can serve to improve the Threshold Scores for an APM Entity, it would not necessarily serve the central goals of many of our Advanced APMs, such as the statutory charge to Medicare Shared Savings Program ACOs to encourage groups of doctors, hospitals, and other health care providers to work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an ACO. In light of this potential conflict between Advanced APM goals and the existing QP Threshold Score calculation methodology, we are considering Start Printed Page 46339 whether it would be better to make all QP determinations at the individual eligible clinician level using the unique National Provider Identifier (NPI) associated with an eligible clinician participating in an Advanced APM. Under that approach, we would calculate a Threshold Score for each eligible clinician, identified by their NPI, based on all the covered professional services furnished by that individual eligible clinician, including services billed across all of the TINs to which the individual has reassigned their Medicare billing rights. This Threshold Score calculated at the individual eligible clinician level would provide a more specific measurement of each such eligible clinician's level of participation in one or more Advanced APMs. This methodology to calculate Threshold Scores and make QP determinations at the individual eligible clinician level would ensure that only those eligible clinicians (NPIs) who individually meet or exceed the applicable Threshold Score would receive QP status. At the same time, it would allow APM Entities to make decisions about which eligible clinicians to include on their Participation Lists based on the scope of eligible clinicians needed to furnish services to their patient populations under the Advanced APM, and to include those eligible clinicians who furnish proportionally fewer services that lead to patient attribution to the APM Entity under the current QP determination policy, without potentially affecting the QP status of other eligible clinicians in the APM Entity group. Because APM Entities no longer would have a need to consider how each eligible clinician may affect their aggregate Threshold Score for the APM Entity group, they would be able to include any eligible clinician who they believe can help them meet the patient-centered care goals of the Advanced APM(s) they are participating in. Therefore, we are considering whether a change to make QP determinations at the individual eligible clinician level would have a positive health equity impact by ensuring that incentives under the Quality Payment Program would hold ACOs “accountable for the quality, cost, and experience of care of an assigned Medicare fee-for-service (FFS) beneficiary population.” [532] Additionally, an analysis conducted by CMS found that many eligible clinicians do in fact frequently provide covered professional services to beneficiaries attributed to other APM Entities. These types of services and relationships are not necessarily accounted for or rewarded under the current methodology that makes QP determinations predominantly at the APM Entity level because they are outside the APM Entity participating in the Advanced APM, but would be if QP determinations were made at the individual eligible clinician level because all of the relevant covered professional services furnished by that eligible clinician would be counted in the QP determination. While our initial decision to calculate Threshold Scores and make most QP determinations at the APM Entity level was appropriate and, at the time, preferable to achieve the policy goals as stated in the CY 2017 proposed rule and reiterated above, for the reasons we identify here, we also believe that a change to calculate Threshold Scores and make QP determinations at the individual eligible clinician level may be preferable. In this Request for Information, we are requesting public feedback on whether an individual level QP determination approach is an avenue we should continue exploring in future years to better identify and reward individual eligible clinicians with substantial engagement in Advanced APMs. (c) QP Thresholds and Partial QP ThresholdsSection 1833(z)(2) of the Act specifies the thresholds for the level of participation in Advanced APMs required for an eligible clinician to become a QP for a year. The Medicare Option, based on Part B payments for covered professional services or counts of patients furnished covered professional services under Part B, has been applicable since payment year 2019. The All-Payer Combination Option, which uses the Medicare Option, as well as an eligible clinician's participation in Other Payer Advanced APMs, is applicable beginning in the payment year 2021. In the CY 2017 Quality Payment Program final rule (81 FR 77433 through 77439), we finalized our policy for QP and Partial QP Thresholds for the Medicare Option as codified at § 414.1430(a) and for the All-Payer Combination Option at § 414.1430(b). In the CY 2022 PFS final rule (86 FR 65557 through 65558), we finalized policies to implement section 114(a) of Subtitle B of Title I of Division CC of the CAA (referred to herein as section 114(a) of Division CC of the CAA), which amended section 1833(z)(2)(B) of the Act with regard to payment years 2023 and 2024 (which correspond respectively to performance years 2021 and 2022), by freezing for such years the applicable payment amount and patient count thresholds for an eligible clinician to achieve QP status. However, we neglected to fully amend our regulations at § 414.1430(a) and (b) to reflect these changes, and therefore, we are proposing conforming changes to § 414.1430(a) and (b) in this proposed rule. Specifically, section 114(a) of Division CC of the CAA amended section 1833(z)(2)(B) of the Act to continue the QP payment amount thresholds that apply in payment years 2021 and 2022 for payment years 2023 and 2024. Additionally, section 114(a) of Division CC of the CAA amended section 1833(z)(2)(D) of the Act to require that, for payment years 2023 and 2024, the Secretary must use the same percentage criteria for the QP patient count threshold that are applied in payment year 2022. As such, the Medicare Option QP thresholds for payment years 2023 and 2024 (performance years 2021 and 2022) will remain at 50 percent for the payment amount method and 35 percent for the patient count method. Section 114(b) of Division CC of the CAA amended section 1848(q)(1)(C)(iii) of the Act to extend through payment year 2024 the Partial QP thresholds that are established for payment years 2021 and 2022. Therefore, the Partial QP thresholds for payment years 2023 and 2024 (performance years 2021 and 2022) will remain at 40 percent for the payment amount method and 25 percent for the patient count method. For performance years beginning with 2023 (corresponding to payment years beginning with 2025) the statute prescribes the QP thresholds for the payment amount method, and the QP thresholds we established for the patient count method at § 414.1430 will take effect. Specifically, for performance years beginning with 2023, the Medicare Option QP Thresholds will be 75 percent for the payment amount method and 50 percent for the patient count method. The Partial QP Thresholds under the Medicare Option will be 50 percent for the payment amount method and 35 percent for the patient count method. Under the All-Payer Combination Option, the QP thresholds for performance years 2021 and 2022 (corresponding to payment years 2023 and 2024) will be 50 percent for the payment amount method and 35 percent for the patient count method. The Partial QP thresholds for performance years 2021 and 2022 (corresponding to payment years 2023 and 2024) will be 40 percent for the payment amount Start Printed Page 46340 method and 25 percent for the patient count method. The Partial QP thresholds for performance year 2023 and later (corresponding to payment years 2025 and later) will be 50 percent for the payment amount method and 35 percent for the patient count method. In order to become a QP through the All-Payer Combination Option, eligible clinicians must first meet certain threshold percentages under the Medicare Option. For performance years 2021 and later (corresponding to payment year 2023 and later), the minimum Medicare Option threshold an eligible clinician must meet for the All-Payer Combination Option is 25 percent for the payment amount method or 20 percent under the patient count method. V. Collection of Information RequirementsUnder the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.), we are required to publish a 60-day notice in the Federal Register and solicit public comment before a “collection of information” requirement is submitted to the Office of Management and Budget (OMB) for review and approval. For the purposes of the PRA and this section of the preamble, collection of information is defined under 5 CFR 1320.3(c) of OMB's implementing regulations. To fairly evaluate whether an information collection should be approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit comment on the following issues:
We solicited public comment on each of the required issues under section 3506(c)(2)(A) of the PRA for the following information collection requirements. A. Wage EstimatesTo derive average costs, we used data from the U.S. Bureau of Labor Statistics' May 2021 National Occupational Employment and Wage Estimates for all salary estimates ( http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 93 presents the mean hourly wage, the cost of fringe benefits and overhead (calculated at 100 percent of salary), and the adjusted hourly wage. Start Printed Page 46341 Start Printed Page 46342 As indicated, we adjusted BLS' hourly wage estimates by a factor of 100 percent to obtain the adjusted hourly wage estimate. This is necessarily a rough adjustment, both because fringe benefits and overhead costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Nonetheless, we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method. B. Information Collection Requirements (ICRs)1. ICRs Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs To Provide Refunds With Respect to Discarded Amounts (§ 414.940)As discussed in section III.A.7. of this proposed rule, as a part of implementing section 1847A(h) of the Act, as added by section 90004 of the Infrastructure Act, we recognize the need for establishing a dispute resolution process because of the nature of determining the estimated total allowed charges for a given calendar quarter and the methods by which the estimated refund amount is determined. We are proposing that each manufacturer have an opportunity to dispute the report, described in section III.A.4. of this proposed rule, by submitting an error report. We are proposing that to assert that there have been one or more errors in the report, a manufacturer must submit a dispute with each asserted error. The dispute must include the following information: (1) Manufacturer name and address; (2) The name, telephone number, and email address of one or more employees or representatives of the manufacturer with whom the Secretary may discuss the claimed errors; (3) For a mathematical calculation error, the specific calculation element(s) that the manufacturer disputes and its proposed corrected calculation; and (4) For any other asserted error, an explanation of the nature of the error, how the error affects the refund calculation, an explanation of how the manufacturer established that an error occurred, the proposed correction to the error, and an explanation of why the Secretary should use the proposed corrected data instead. As discussed in section VII.E.1. of this proposed rule, our estimates show a projected 26 billing and payment codes meeting the proposed definition of refundable single-dose container or single-use package drug would have 10 percent or more discarded units, which is the applicable percentage specified in section 1847A(h)(3) of the Act. Therefore, we anticipate a similar number of drugs would owe a refund pursuant section 90004 of the Infrastructure Act. Since each of these billing and payment codes is a single source drug code, each would represent 1 manufacturer and we would expect disputes from fewer than 10 manufacturers per year. Consistent with the estimated annual burden per respondent/recordkeeper for similar error reports utilized to implement the Branded Prescription Drug Fee (76 FR 51310), we estimate the annual burden per respondent/recordkeeper to be 40 hours. If we anticipate no more than 10 disputes per year, the total annual reporting and/or recordkeeping burden would be 400 hours (10 error reports per year × 40 hours per respondent). Based on the most recent Bureau of Labor and Statistics Occupational and Employment Data (May 2021) for Category 43-6014 (Secretaries and Administrative Assistants), the mean hourly wage for an administrative assistant is $19.75.[533] We have added 100% of the mean hourly wage to account for fringe and overhead benefits, which calculates to $39.50 ($19.75 + $19.75). Therefore, we estimate an annual cost of this burden to be $15,800 ($39.50/hour × 400 hours). These information collection requirements discussed in this section will be submitted to OMB for approval as part of a new information collection request. 2. ICRs Regarding the Clinical Laboratory Fee Schedule: Data Reporting by LaboratoriesAs described in section III.B of this proposed rule, under the Clinical Laboratory Fee Schedule, “reporting entities” must report to CMS during a “data reporting period” “applicable information” collected during a “data collection period” for their component “applicable laboratories.” As stated in section 1834A(h)(2) of the Act, Chapter 35 of title 44, United States Code, shall not apply to information collected under section 1834A of the Act. Consequently, the information collection requirements contained in this proposed rule need not be reviewed by the Office of Management and Budget. 3. ICRs Regarding the Medicare Shared Savings ProgramSection 1899(e) of the Act provides that chapter 35 of title 44 U.S.C., which includes such provisions as the PRA, shall not apply to the Shared Savings Program. Accordingly, we are not setting out burden under the authority of the PRA. Please refer to section VII.F.8. of this proposed rule for a discussion of the impacts associated with the proposed changes to the Shared Savings Program as described in section III.G. of this proposed rule. 4. ICRs for Medical Necessity and Documentation Requirements for Nonemergency, Scheduled, Repetitive Ambulance ServicesIn section III.I. of this proposed rule, we propose to clarify § 410.40(e)(2)(ii) by reorganizing existing language and stating that the PCS and additional documentation from the beneficiary's medical record may be used to support a claim that transportation by ground ambulance is required. We are also clarifying that the PCS and additional documentation must provide detailed explanations, that are consistent with the beneficiary's current medical condition, that explains the beneficiary's need for transport by an ambulance. Finally, we are clarifying that coverage includes observation or other services rendered by qualified ambulance personnel. We do not expect that our proposal will yield a change in the information collection burdens currently approved under OMB control number 0938-1380 and 0938-0969 as this policy does not require providers and suppliers to submit additional information. We are simply clarifying existing policy requirements. 5. ICRs for Medicare Provider and Supplier Enrollment ChangesWe propose the following three revisions to § 424.518:
• Moving SNFs from the “limited” level of categorical screening to the “high” screening level. Start Printed Page 46343 These proposed changes would result in an increase in the annual number of providers and suppliers that must submit the fingerprints for a national background check (via FBI Applicant Fingerprint Card FD-258) of all individuals who maintain a 5 percent or greater direct or indirect ownership interest in the provider or supplier. The burden is currently approved by OMB under control number 1110-0046. An analysis of the impact of this requirement can be found in the RIA section of this rule. None of our other proposed Medicare provider enrollment provisions implicate information collection requirements. 6. ICRs for State Options for Implementing Medicaid Provider Enrollment Affiliation ProvisionWe do not anticipate any information collection burden associated with our proposed revision to § 455.107(b), for the latter merely involves giving the states somewhat greater flexibility in executing the provisions of § 455.107. 7. ICRs 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)In section III.M. of this proposed rule, we are proposing to extend the existing compliance action of sending letters to non-compliant prescribers from the CY 2023 EPCS program implementation year (January 1, 2023 through December 31, 2023) to the CY 2024 year (January 1, 2024 through December 31, 2024). Additionally, effective January 1, 2023, we are proposing to change the year from which PDE data is used from the preceding year to the current evaluated year when CMS determines whether a prescriber qualified for an exception based on the number of Part D controlled substance prescriptions (§ 423.160(a)(5)(ii)). We are also proposing to determine whether a prescriber qualifies for the emergency or disaster exception (§ 423.160(a)(5)(iii)) based on the prescriber's valid address in PECOS (Medicare Provider Enrollment, Chain, and Ownership System), instead of the NCPDP Pharmacy Database address, and for prescribers who are not enrolled or do not have a valid PECOS address, we are proposing to use the address in the National Plan and Provider Enumeration System (NPPES) data. We do not expect that our proposal will yield a change in the information collection burdens currently being submitted for review under OMB control number 0938-1396 (CMS-10755) as these proposals do not require providers and suppliers to submit additional information. We refer readers to the 2022 PFS final rule (86 FR 65562 through 65564) for a detailed discussion of the EPCS collection of information burden that is being submitted under OMB control number 0938-1396. 8. ICRs Regarding the Medicare Ground Ambulance Data Collection System (§ 414.626)Section 1834(l)(17) of the Act requires that the Secretary develop a ground ambulance data collection system that collects cost, revenue, utilization, and other information determined appropriate by the Secretary with respect to providers of services and suppliers of ground ambulance services (ground ambulance organizations). Section 1834(l)(17)(I) of the Act states that the PRA does not apply to the collection of information required under section 1834(l)(17) of the Act. Accordingly, this collection of information section does not set out any burden for the proposed provisions. Please see section VII. of this preamble for a discussion of the estimated impacts. 9. The Quality Payment Program (QPP) (42 CFR Part 414 and Section IV. of This Proposed Rule)The following QPP-specific ICRs reflect this proposed rule's policy changes as well as adjustments to the policies that have been finalized in the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77008 and 82 FR 53568), CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (83 FR 59452, 84 FR 62568,85 FR 84472, and 86 FR 64996 respectively). a. Background(1) ICRs Associated With MIPS and Advanced APMsThere is a series of ICRs associated with the Quality Payment Program, including for MIPS and Advanced APMs. The following sections describe the proposed changes in the estimated burden for the information collections relevant to the revisions in the policies associated with the CY 2023 PFS proposed rule and the proposed revisions to our currently approved information requests for MIPS and Advanced APM ICRs. The proposed estimated burden will be submitted to OMB under control number OMB 0938-1314 (CMS-10621). The collection of information associated with the CAHPS for MIPS survey under OMB control number 0938-1222 (CMS-10450) is currently pending OMB review and approval. We note that CMS has already received approval for collection of information associated with the virtual group election process under OMB control number 0938-1343 (CMS-10652). (2) Summary of Quality Payment Program Changes: MIPSWe have included the change in estimated burden for the CY 2023 performance period/2025 MIPS payment year due to the proposed policies and information collections in this proposed rule. The proposed policies in this rule impact the burden estimates for the CY 2023 MIPS performance period/2025 MIPS payment year. The following six MIPS ICRs show changes in burden due to the proposed policies in this rule: (1) Quality performance category data submission by Medicare Part B claims collection type; (2) Quality performance category data submission by QCDR and MIPS CQM collection type; (3) Quality performance category data submission by eCQM collection type; (4) MVP quality performance category submission; (5) MVP registration, and (6) Promoting Interoperability performance category data submission. In aggregate, we estimate the proposed policies would result in a net decrease in burden of 11,039 hours and $1,213,933 for the CY 2023 performance period/2025 MIPS payment year. The remaining changes to our currently approved burden estimates are adjustments due to the revised burden assumptions based on the updated data available at the time of publication of this proposed rule. We have added one new ICR for third party intermediaries to distinctly capture the burden for collection of information related to: (1) QCDR and qualified registry targeted audits as established under the conditions for approval at § 414.1400(b)(3)(vi) through (viii); and (2) all the requirements for remedial action and termination at § 414.1400(e). For simplicity, we capture the estimated burden for third party intermediaries to submit additional requirements for compliance with both the conditions of approval and remedial action and termination criteria under one ICR. We note that the proposed addition of this ICR is not due to proposed policy changes in this rule, but rather it is a change in our approach to representing the estimated burden for third party intermediaries in the CY 2022 PFS final rule. (86 FR 65569 through 65576)]. We are not making any changes or adjustments to the following ICRs: Start Printed Page 46344 Registration for virtual groups; CAHPS survey vendor applications; group registration for CAHPS for MIPS survey; CAHPS for MIPS survey beneficiary participation; subgroups registration; call for quality measures; call for Promoting Interoperability measures; call for quality measures; nomination of improvement activities and opt-out of performance data display on Compare Tools for voluntary participants. See section V.B.9. of this proposed rule for a summary of the ICRs, the overall burden estimates, and a summary of the assumption and data changes affecting each ICR. The accuracy of our estimates of the total burden for data submission under the quality, Promoting Interoperability, and improvement activities performance categories may be impacted by two primary factors. First, we are unable to predict with absolute certainty who will be a QP for the CY 2023 performance period/2025 MIPS payment year. New eligible clinician participants in Advanced APMs who become QPs will be excluded from MIPS reporting requirements and payment adjustments, and as such, are unlikely to report under MIPS; while some current Advanced APM participants may end participation such that the APM Entity's eligible clinicians may not be QPs for a year based on § 414.1425(c)(5), and thus be required to report under MIPS. Second, it is difficult to predict what Partial QPs, who can elect whether to report to MIPS, will do in the CY 2023 performance period/2025 MIPS payment year compared to the CY 2019 performance period/2021 MIPS payment year, and therefore, the actual number of Advanced APM participants and how they elect to submit data may be different than our estimates. However, we believe our estimates are the most appropriate given the available data. Additionally, we will continue to update our estimates annually as data becomes available. (3) Summary of Quality Payment Program Changes: Advanced APMsFor these ICRs (identified above under, “ICRs Associated with MIPS and Advanced APMs”), the changes to currently approved burden estimates are adjustments based on updated projections for the CY 2023 performance period/2025 MIPS payment year. We did not implement any changes to the Other Payer Advanced APM identification: Payer Initiated and Eligible Clinician Initiated Processes; and submission of Data for QP determinations under the All-Payer Combination Option. (4) Framework for Understanding the Burden of MIPS Data SubmissionBecause of the wide range of information collection requirements under MIPS, Table 95 presents a framework for understanding how the organizations permitted or required to submit data on behalf of clinicians vary across the types of data, and whether the clinician is a MIPS eligible clinician or other eligible clinician voluntarily submitting data, MIPS APM participant, or an Advanced APM participant. As shown in the first row of Table 95, MIPS eligible clinicians and other clinicians voluntarily submitting data will submit data either as individuals, groups, or virtual groups for the quality, Promoting Interoperability, and improvement activities performance categories. Note that virtual groups are subject to the same data submission requirements as groups, and therefore, we will refer only to groups for the remainder of this section unless otherwise noted. Beginning with the CY 2023 performance period/2025 MIPS payment year, clinicians could also participate as subgroups for reporting measures and activities in a MIPS Value Pathway (MVP). We note that the subgroup reporting option is not available for clinicians participating in traditional MIPS. Because MIPS eligible clinicians are not required to submit any additional information for assessment under the cost performance category, the administrative claims data used for the cost performance category is not represented in Table 95. For MIPS eligible clinicians participating in MIPS APMs, the organizations submitting data on behalf of MIPS eligible clinicians will vary between performance categories and, in some instances, between MIPS APMs. We previously finalized in the CY 2021 PFS final rule that the APP is available for both ACO participants and non-ACO participants to submit quality data (85 FR 84859 through 84866). Due to data limitations and our inability to determine who will use the APM Performance Pathway versus the traditional MIPS submission mechanism for the CY 2023 performance period/2025 MIPS payment year, we assume ACO APM Entities will submit data through the APM Performance Pathway, using the CMS Web Interface option, and non-ACO APM Entities will participate through traditional MIPS, thereby submitting as an individual or group rather than as an entity. We also want to note that as finalized in the CY 2022 PFS final rule (86 FR 65259 through 65263), the CMS Web Interface collection type is available through the CY 2024 performance period/2026 MIPS payment year only for clinicians participating in the Shared Savings Program. Per section 1899 of the Act (42 U.S.C. 1395jjj), submissions received from eligible clinicians in ACOs are not included in burden estimates for this proposed rule because quality data submissions to fulfill requirements of the Shared Savings Program are not subject to the PRA. For the Promoting Interoperability performance category, group TINs may submit data on behalf of eligible clinicians in MIPS APMs, or eligible clinicians in MIPS APMs may submit data individually. As described in section IV.A.10.c.(5)(b) of this proposed rule, we are proposing to introduce a voluntary reporting option for APM Entities to report the Promoting Interoperability performance category at the APM Entity level beginning with the CY 2023 performance period/2025 MIPS payment year. For the improvement activities performance category, we will assume no reporting burden for MIPS APM participants. In the CY 2017 QPP final rule, we described that for MIPS APMs, we compare the requirements of the specific MIPS APM with the list of activities in the improvement activities Inventory and score those activities in the same manner that they are otherwise scored for MIPS eligible clinicians (81 FR 77185). Although the policy allows for the submission of additional improvement activities if a MIPS APM receives less than the maximum improvement activities performance category score, to date all MIPS APM have qualified for the maximum improvement activities score. Therefore, we assume that no additional submission will be needed. Eligible clinicians who attain Partial QP status may incur additional burden if they elect to participate in MIPS, which is discussed in more detail in the CY 2018 PFS final rule (82 FR 53841 through 53844). Start Printed Page 46345 Start Printed Page 46346 The policies finalized in the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77008 and 82 FR 53568), the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (83 FR 59452, 84 FR 62568, 85 FR 84472 and 86 FR 64996), and continued in this proposed rule create some additional data collection requirements not listed in Table 95. These additional data collections, some of which are currently approved by OMB under the control numbers 0938-1314 (Quality Payment Program, CMS-10621) and 0938-1222 (CAHPS for MIPS, CMS-10450), are as follows: Additional ICRs related to MIPS third-party intermediaries (see section V.B.9.c. of this proposed rule):
Additional ICRs related to the data submission and the quality performance category (see section V.B.9.e. of this proposed rule):
Additional ICRs related to the Promoting Interoperability performance category (see section V.B.9.g. of this proposed rule):
Additional ICRs related to call for new MIPS measures and activities (see sections V.B.9.f., V.B.9.h., and V.B.9.j. of this proposed rule):
Additional ICRs related to MIPS (see section V.B.9.o. of this proposed rule):
Additional ICRs related to APMs (see sections V.B.9.m. and V.B.9.n. of this proposed rule):
b. ICRs Regarding the Virtual Group Election (§ 414.1315)This rule is not proposing any new or revised collection of information requirements or burden related to the virtual group election. The virtual group election requirements and burden are currently approved by OMB under control number 0938-1343 (CMS-10652). Consequently, we are not proposing any changes to the virtual group election process under that control number. c. ICRs Regarding Third Party Intermediaries (§ 414.1400)In this rule, we propose changes in our existing approach to capture the estimated burden for third party intermediaries. In the CY 2022 PFS final rule, for the burden related to the third party intermediaries, we combined the burden associated with the submission of targeted audits, corrective action plans, participation plans and transition plans under the ICRs for QCDR and qualified registry self-nomination process (86 FR 65569 through 65573 and 86 FR 65573 through 65576). We propose to separate the burden for submission of the targeted audits and other plans listed above under the ICR for third party intermediary plan audits (see section V.B.9.c.(4) of this proposed rule). We believe that the proposed change would more accurately capture the associated burden for the QCDR and qualified registry self-nomination process because not every QCDR or qualified registry that submits a self-nomination application would also submit a targeted audit, corrective action plan (CAP), participation plan, or a transition plan. This change is not due to any proposed policies related to third party intermediaries in this rule, rather it is a change in representing the estimated burden from adopted policies. The proposed requirements and burden associated with this rule's self-nomination process related to qualified registries and QCDRs will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). In section IV.A.10.g.(1)(b) of this rule, we propose updates to the definition of a third party intermediary at § 414.1305, and to make other minor conforming technical edits to the regulation text governing third party intermediaries set forth in § 414.1400. We also propose to revise QCDR measure self-nomination and measure approval requirements to delay the QCDR measure testing requirement for traditional MIPS by an additional year, until the CY 2024 performance period/2026 MIPS payment year. (1) BackgroundUnder MIPS, the quality, Promoting Interoperability, and improvement activities performance category data may be submitted via relevant third party intermediaries, such as qualified registries, QCDRs, and health IT vendors. Data on the CAHPS for MIPS survey, which counts as either one quality performance category measure, or towards an improvement activity, can be submitted via CMS-approved survey vendors. Entities seeking approval to submit data on behalf of clinicians as a qualified registry, QCDR, or survey vendor must complete a self-nomination process annually.[534] The processes for self-nomination of entities seeking approval as qualified registries and QCDRs are similar with the exception that QCDRs have the option to nominate QCDR measures for approval for the reporting of quality performance category data. Therefore, differences between QCDRs and qualified registry self-nomination are associated with the preparation of QCDR measures for approval. (2) QCDR Self-Nomination ApplicationsAs described below, in this rule we propose to adjust the number of self-nomination applications used to Start Printed Page 46347 calculate our burden estimates based on current data (from 84 to 90). We are not proposing adjustments to the number of QCDR measures submitted for consideration by each QCDR at the time of self-nomination and the average time required to submit information for each QCDR measure. We refer readers to the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77507 through 77508, 82 FR 53906 through 53908), the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 59998 through 60000, 84 FR 63116 through 63121, 85 FR 84964 through 84969 and 86 FR 65569 through 65573) for our previously finalized requirements and estimated burden for self-nomination of QCDRs and nomination of QCDR measures. (a) Self-Nomination Process and Other RequirementsIn section IV.A.10.g.(1)(b) of this rule, we propose to update the definition of a third party intermediary at § 414.1305 to include subgroups and APM Entities and to make minor edits for technical clarity. We propose the revised definition would provide that a third party intermediary means an entity that has been approved under § 414.1400 to submit data on behalf of a MIPS eligible clinician, group, virtual group, subgroup, or APM Entity for one or more of the quality, improvement activities and Promoting Interoperability performance categories. This proposal is intended to update the regulation text to align with the existing policy and does not require additional information from QCDRs during the self-nomination process. Therefore, we are not proposing to revise our burden estimates related to this proposal. (b) QCDR Measure RequirementsWe previously finalized QCDR measure self-nomination requirements at § 414.1400(b)(4)(i), including the requirement at § 414.1400(b)(4)(i)(B) that entities must publicly post the measure specifications for QCDR measures no later than 15 calendar days following CMS approval of any QCDR measure specifications. In section IV.A.10.g.(2)(b) of this rule, we propose to revise § 414.1400(b)(4)(i)(B) to clarify requirements for publicly posting the QCDR measure specifications. We are not adjusting our burden estimates as a result of this proposal because this would not substantively change the estimated time required for a QCDR to submit information for a QCDR measure at the time of self-nomination. Additionally, in section IV.A.10.g.(2)(c) of this rule, we propose to amend § 414.1400(b)(4)(iii)(A)( 3) to delay the requirement for QCDR measure full testing until the CY 2024 performance period/2026 MIPS payment year. We are not adjusting our burden estimates as result of this proposal because we assume that this does not meaningfully change the existing requirements, or the time required for a QCDR to submit information for a QCDR measure at the time of self-nomination. For this rule, we propose to adjust the number of estimated QCDRs that would submit applications for self-nomination from 84 to 90 based on the number of applications that we expect to receive during the CY 2022 self-nomination period for the CY 2023 performance period/2025 MIPS payment year. This is an increase of 6 from the currently approved number of 84 respondents in the CY 2022 PFS final rule (86 FR 65571). We are not proposing any changes to the currently approved time of 0.5 hours required for the QCDR simplified self-nomination process and 2.5 hours for the full self-nomination process in the CY 2022 PFS final rule (86 FR 65571). Additionally, this rule is not proposing any new requirements for QCDRs that nominate QCDR measures as part of the self-nomination process. Therefore, we are not proposing changes to revise our currently approved estimated time for the QCDRs that submit measures as part of their self-nomination process (9.5 hours for the simplified self-nomination process and 11.5 hours for the full self-nomination process respectively) (86 FR 65571). Based on the assumptions discussed in this section, we provide an estimate of the total annual burden associated with a QCDR self-nominating to be considered “qualified” to submit quality measures results and numerator and denominator data on behalf of MIPS eligible clinicians. As shown in Table 96, we assume that the staff involved in the QCDR self-nomination process will continue to be computer systems analysts or their equivalent, who have an average labor rate of $98.28/hr. Using the change in the number of respondents, in aggregate, the proposed estimated annual burden for the simplified and full-self nomination process will range from 855 hours (90 QCDRs × 9.5 hr) to 1,035 hours (90 QCDRs × 11.5 hr) at a cost ranging from $84,029 (855 hr × $98.28/hr) and $101,720 (1,035 hr × $98.28/hr), respectively. As shown in Table 97, for the CY 2023 performance period/2025 MIPS payment year, the proposed change in the representation of burden for this ICR described above in this section and the estimated increase in 6 respondents Start Printed Page 46348 from the currently approved 84 respondents to 90 results in a change of −63 hours at a cost of −$6,192 for the simplified self-nomination process (or minimum burden) and −141 hours at a cost of −$13,857 for the full self-nomination process (or maximum burden). We note that the decrease in burden is due to separating the estimated burden for targeted audits, CAPs, and participation plans and including that burden under a new ICR for third party intermediary plan audits (see Table 101). We note that for the purposes of calculating proposed estimated change in burden in Tables 132, 133, and 135 of this rule, we use only the maximum burden estimate. (3) Qualified Registry Self-Nomination Process and Other RequirementsWe refer readers to § 414.1400 which states that qualified registries interested in submitting MIPS data to us on behalf of MIPS eligible clinicians, groups, or virtual groups need to complete a self-nomination process to be considered for approval to do so. In section IV.A.10.g.(1)(b) of this rule, we propose to update the definition of a third party intermediary at § 414.1305 to include subgroups and APM Entities and to make minor edits for technical clarity. This proposal would update the regulation text to align with existing policy and does not require additional information from qualified registries during the self-nomination process. Therefore, we are not proposing to revise our burden estimates related to this proposal. For this rule, we propose to adjust the number of estimated qualified registries that would submit applications for self-nomination from 147 to 160 based on the number of applications that we expect to receive during the CY 2022 self-nomination period for the CY 2023 performance period/2025 MIPS payment year. This is an increase of 13 applications from the currently approved estimate of 147 in the CY 2022 PFS final rule (86 FR 65574). Therefore, we are proposing to revise our estimates for this information collection related to the qualified registry self-nomination process. We are not proposing changes to revise our currently approved estimated time of 0.5 hours for the simplified qualified registry self-nomination process and 2 hours for the full qualified registry self-nomination process (86 FR 65574 through 65575). As shown in Table 98, we assume that the staff involved in the qualified registry self-nomination process will continue to be computer systems analysts or their equivalent, who have an average labor rate of $98.28/hr. Using the proposed change in estimated number of respondents, combined with the estimated time required for a self-nomination process ranging from a minimum of 0.5 hours to a maximum of 2 hours, we estimate that the annual burden would range from 80 hours (160 qualified registries × 0.5 hr) to 320 hours (160 qualified registries × 2 hr) at a cost ranging from $7,862 (80 hr × $98.28/hr) and $31,450 (320 hr × $98.28/hr), respectively. Both the proposed minimum and maximum burden shown in 99 reflect the adjustments to the number of respondents due to availability of more recent data. Based on the assumptions discussed in this section, we provide an estimate of the total annual burden associated with a qualified registry self-nominating to be considered “qualified” to submit quality measures results and numerator and denominator data on MIPS eligible clinicians. Start Printed Page 46349 As shown in Table 99, for the CY 2023 performance period/2025 MIPS payment year, the proposed change in the representation of burden for this ICR described above in this section and the estimated increase in 13 respondents from the currently approved 147 respondents to 160 results in a change of −311 hours at a cost of −$30,565 for the simplified self-nomination process (or minimum burden) and −521 hours at a cost of −$51,203 for the full self-nomination process (or maximum burden). We note that the decrease in burden is due to separating the estimated burden for targeted audits and participation plans and including that burden under a new ICR for third party intermediary plan audits (see Table 101). We note that for the purposes of calculating proposed estimated change in burden in Tables 132, 133, and 135 of this rule, we use only the maximum burden estimate. (4) ICR for Third Party Intermediary Plan AuditsAs discussed above in this section, we are proposing to add a new ICR to distinctly capture the burden for collection of information related to QCDR and qualified registry targeted audits at § 414.1400(b)(3)(vi) through (viii) and the requirements for remedial action and termination of third party intermediaries at § 414.1400(e) during the third party intermediary self-nomination process. We note that we capture the estimated burden for third party intermediaries to submit additional requirements for compliance with both the conditions of approval and remedial action and termination criteria under one ICR. The proposed requirements and burden associated with developing the plans and audits by QCDRs and qualified registries will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). In the CY 2022 PFS final rule, we combined the burden associated with the submission of the targeted audits, corrective action plans, participation plans and transition plans with the ICR for QCDR self-nomination process and other requirements (86 FR 65569 through 65573) and the ICR for qualified registry self-nomination process and other requirements (86 FR 65573 through 65576). For the purposes of this ICR, we refer to these audits and plans collectively as “plan audits.” For this proposed rule, we determined that it is necessary to separately estimate the burden for QCDR and qualified registry targetedaudits from self-nomination application burden because it would more accurately represent the burden. In section IV.A.10.g.(3) of this rule, we propose a few changes to the regulations remedial actions and terminations set forth in § 414.1400(e). These include one revised and one new requirement for Corrective Action Plans (CAPs), and proposed termination of certain approved QCDRs and qualified registries that continue to fail to submit performance data. The burden associated with these proposals is discussed below. (a) Targeted AuditsIn the CY 2022 PFS final rule (86 FR 65547 through 65548), we finalized that beginning with the CY 2021 performance period/2023 MIPS payment year, the QCDR or qualified Start Printed Page 46350 registry must conduct targeted audits in accordance with requirements at § 414.1400(b)(3)(vi). Consistent with our assumptions in the CY 2022 PFS final rule for the QCDRs (86 FR 65574) and qualified registries (86 FR 65571) that would submit targeted audits, we estimate that the time required for a QCDR or qualified registry to submit a targeted audit ranges between 5 and 10 hours for the simplified and full self-nomination process, respectively. We assume that the staff involved in submitting the targeted audits will continue to be computer systems analysts or their equivalent, who have an average labor rate of $98.28/hr. Using the proposed adjustments to the number of QCDRs and qualified registries expected to submit self-nomination applications in sections V.B.9.c.(2) and V.B.9.c.(3) of this rule, we estimate that 70 third party intermediaries (20 QCDRs and 50 qualified registries) would submit targeted audits for the CY 2023 performance period/2025 MIPS payment year (See Table 100). Using the unchanged currently approved time per respondent (86 FR 65572), we estimate the total impact associated with QCDRs and qualified registries completing targeted audits will range from 350 hours (70 respondents × 5 hours/audit) at a cost of $34,398 (70 respondents × $491.40/audit) to 700 hours (70 respondents × 10 hours/audit) at a cost of $68,796 (70 respondents × $982.80/audit) for the simplified and full self-nomination process, respectively (see Table 101 for the cost per audit). (b) Participation PlansIn the CY 2022 PFS final rule (86 FR 65546), we finalized requirements for approved QCDRs and qualified registries that have not submitted performance data to submit a participation plan as part of their self-nomination process. We refer readers to § 414.1400(e) for previously finalized policies for remedial action and termination of third-party intermediaries. In section IV.A.10.g.(3)(b) of this proposed rule, we propose a new termination policy for approved QCDRs and qualified registries which are required to submit participation plans during the applicable self-nomination period under § 414.1400(b)(3)(viii). We propose to terminate those QCDRs and qualified registries that are required to submit participation plans during the applicable self-nomination period under § 414.1400(b)(3)(viii) because they did not submit any MIPS data for either of the 2 years preceding the applicable self-nomination period, and continue to not submit MIPS data to CMS for the applicable performance period. Specifically, we propose to add a new ground for termination at § 414.1400(e)(5) stating that, beginning with the CY 2024 performance period/2026 MIPS payment year, a QCDR or qualified registry that submits a participation plan as required under paragraph (b)(3)(viii) of this section, but does not submit MIPS data for the applicable performance period for which they self-nominated under paragraph (b)(3)(viii) of this section, will be terminated. If this policy is finalized, CMS would terminate the qualified registry or QCDR as applicable under § 414.1400(e)(5) and we assume that it would not require additional requirements for interested parties to submit their information during the qualified registry and QCDR self-nomination process. (86 FR 65574). We refer readers to section IV.A.10.g.(3)(b) of this rule for additional details related to these proposals. Consistent with our assumptions in the CY 2022 PFS final rule for the QCDRs (86 FR 65574) and qualified registries (86 FR 65571) that would submit participation plans, we estimate that it would take 3 hours for a QCDR or qualified registry to submit a participation plan during the self-nomination process. We assume that the staff involved in submitting a participation plan will continue to be computer systems analysts or their equivalent, who have an average labor rate of $98.28/hr. As shown in Table 100, we estimate that 29 third party intermediaries (10 QCDRs and 19 qualified registries) would submit participation plans for the CY 2023 performance period/2025 MIPS payment year. Therefore, we estimate the total impact associated with QCDRs and qualified registries to submit participation plans would be 87 hours (29 respondents × 3 hours/plan) at a cost of $8,550 (29 respondents × $294.84/plan). (See Table 101 for the cost per audit). (c) Corrective Action Plans (CAPs)In section IV.A.10.g.(3)(a) of this rule, we propose to revise the CAP requirement at § 414.1400(e)(1)(i)(B) to require the third party intermediary to address in its CAP the impact to individual clinicians, groups, or virtual groups, subgroups, or APM Entities, regardless of whether they are participating in the program because they are MIPS eligible, voluntarily participating, or opting in to participating in the MIPS, and any QCDRs that were granted licenses to the measures of a QCDR upon which a CAP has been imposed. We also propose to add a new CAP requirement to require the third-party intermediary to notify the parties identified in proposed § 414.1400(e)(1)(i)(B) of the impact to these parties by submitting a communication plan. Additionally, we propose to add § 414.1400(e)(1)(i)(E) to require the third party intermediary to develop a communication plan for communicating the impact to the parties identified in proposed § 414.1400(e)(1)(i)(B). We assume that the intent of this proposal is to enable affected parties to better understand and prepare for any operational and other challenges as needed. We believe having third party intermediaries submit a communication plan as part of their CAP would ensure third party intermediaries directly communicate the situation and its impact to these parties in a timely and consistent manner. However, due to the relatively low number of CAPs (an average of 10 responses) that we expect to receive from QCDRs and qualified registries for the CY 2023 performance period/2025 MIPS payment year, we are unable to estimate the burden associated with the development of a communication plan. Consistent with our assumptions in the CY 2022 PFS final rule for the QCDRs and qualified registries (86 FR 65575) that would submit CAPs, we estimate that 10 third party intermediaries would submit CAPs for the CY 2023 performance period/2025 MIPS payment year. Additionally, we estimate that it would take 3 hours for a QCDR or qualified registry to submit a participation plan. We assume that the staff involved in submitting the targeted audits will continue to be computer systems analysts or their equivalent, who have an average labor rate of $98.28/hr. Therefore, we estimate the total impact associated with QCDRs and qualified registries to CAPs would be 30 hours (10 respondents × 3 hours/plan) at a cost of $2,948 (10 respondents × $294.84/plan). (See Table 101 for the cost per audit). (d) Transition PlansIn the CY 2020 PFS final rule (84 FR 63052 through 63053), we established a policy at § 414.1400(a)(4)(vi) that a condition of approval for the third party intermediary is to agree that prior to discontinuing services to any MIPS eligible clinician, group or virtual group during a performance period, the third party intermediary must support the transition of such MIPS eligible clinician, group, or virtual group to an alternate third party intermediary, submitter type, or, for any measure on Start Printed Page 46351 which data has been collected, collection type according to a CMS approved transition plan. In the CY 2020 PFS final rule (84 FR 63115), we did not estimate the total burden associated with the development of CMS approved transition plans because of the uncertain, but low frequency (less than 10 per year historically) with which third party intermediaries have elected to discontinue services during a performance period. Based on updated data received for the transition plans submitted by the registries and QCDRs beginning with the CY 2020 performance period/2022 MIPS payment year, we estimate to receive 15 transition plans from QCDRs and qualified registries for the CY 2023 performance period/2025 MIPS payment year. We estimate that it would take 1 hour for a computer system analyst or their equivalent at a labor rate of $98.28/hr to develop a transition plan on behalf of each QCDR or qualified registry during the self-nomination period. However, we are unable to estimate the burden for implementing the actions in the transition plan because the level of effort may vary for each QCDR or qualified registry. Therefore, we estimate the total impact associated with qualified registries completing transition plans is 15 hours (15 transition plans × 1 hour/plan) at a cost of $1,474 (15 hr × $98.28/hr). We refer readers to section VI.E.16.e.(2)(c) of this proposed rule where we discuss our impact analysis for the transition plans submitted by QCDRs and qualified registries. In section IV.A.10.g.(3) of this rule, we propose to revise conforming changes to § 414.1400(e)(2), which currently states that CMS may immediately or with advance notice terminate the ability of a third party intermediary to submit MIPS data on behalf of a MIPS eligible clinician, group, or virtual group under certain circumstances. Rather than amend this provision to add references to subgroups and APM Entities, we propose to revise § 414.1400(e)(2) by removing the previously quoted phrase. If this proposal is finalized, the revised regulation would simply provide that CMS may immediately or with advance notice “terminate a third party intermediary' under the specified circumstances. We assume that these proposals are intended to revise the regulation text in conjunction with the proposal in section IV.A.10.g.(1)(b) of this rule to amend the definition of a “third party intermediary” to refer to subgroups and APM Entities, and do not require additional information from qualified registries during the self-nomination process. In section IV.A.10.g.(4)(b) of this rule, we propose to update § 414.1400(f)(1) to require that the entity must make available to CMS the contact information of each MIPS eligible clinician, group, virtual group, subgroup, or APM Entity on behalf of whom it submits data. The contact information must include, at a minimum, the MIPS eligible clinician, group, virtual group, subgroup, or APM Entity phone number, address, and, if available, email. We assume that the intent of this proposal is to update the regulation text to align with the proposed updates to the definition of a “third party intermediary” at § 414.1305. We do not expect to receive additional information from qualified registries during the self-nomination process due to this proposal. Additionally, we refer readers to section VI.E.16.e.(2)(c) of this proposed rule where we discuss our impact analysis for these proposals. As shown in Table 100, we assume that 124 third party intermediaries would submit plan audits (targeted audits, participation plans, CAPs, and transition plans). As shown in Table 101, we assume that the staff involved in the submission of the plan audits during the third party intermediary self-nomination process will continue to be computer systems analysts or their equivalent, who have an average labor rate of $98.28/hr. For the CY 2023 performance period/2025 MIPS payment year, in aggregate, the proposed estimated annual burden for the simplified (or minimum) and full (or maximum) self-nomination process will range from 482 hours to 832 hours at a cost ranging from $50,370 (482 hr × $98.28/hr) and $81,769 (832 hr × $98.28/hr), respectively. Start Printed Page 46352 As shown in Table 102, for the CY 2023 performance period/2025 MIPS payment year, the addition of this ICR for third party intermediary plan audits results in a change of +482 hours at a cost of +$50,370 for the simplified self-nomination process (or minimum burden) and +832 hours at a cost of +$81,768 for the full self-nomination process (or maximum burden). We note that for the purposes of calculating proposed estimated change in burden in Tables 132, 133, and 135 of this rule, we use only the maximum burden estimate. (5) Survey Vendor RequirementsThis rule is not proposing new or revised collection of information requirements related to the requirements for CAHPS Survey vendors. The requirements and burden for CAHPS survey vendors to submit data for eligible clinicians are currently approved by OMB under control number 0938-1222 (CMS-10450). Consequently, we are not proposing any changes to the CAHPS for MIPS Survey vendor information collection request under that control number. d. ICR Regarding Open Authorization (OAuth) Credentialing and Token Request ProcessThe proposed requirements and burden associated with the OAuth Credentialing and token request process will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2021 and the CY 2022 PFS final rules (85 FR 84969 through 85 FR 84970 and 86 FR 65576) for our previously finalized requirements and burden estimates for the information collection related to the OAuth credentialing and token request process. This rule is not proposing new or revised collection of information requirements related to the OAuth credentialing and token request process. Beginning with the CY 2023 MIPS performance period/2025 MIPS payment year, we made administrative Start Printed Page 46353 changes in the process for interested parties to submit their application for OAuth credentialing and token process. Based on the changes to the workflows, the CMS Office of Information Technology (OIT) has centralized Okta Administrator privileges. In previous years, the Quality Payment Program maintained the privileges for Administrator roles. As a result of this change, interested parties that would submit their information for OAuth Credentialing and Token request process are now required to meet with both Quality Payment Program and OIT for final approvals to have their applications integrated with the CMS Okta production environment. Therefore, we propose to revise our estimates that it would take 2 hours for a computer systems analyst (or their equivalent) to provide documentation and any follow-up communication via email. This is an increase of 1 hour from the currently approved estimated time of 1 hour for interested parties to provide their documentation and any follow-up communication via email. As shown in Table 103, we are not proposing any changes to our currently approved estimate of 15 respondents that would complete this process for the CY 2023 performance period/2025 MIPS payment year. In aggregate, accounting for the increase in time required for a computer systems analyst (or their equivalent) to complete the token request process, we estimate an annual burden of 30 hours (15 vendors × 2 hrs) at a cost of $2,948 (30 hrs × $98.28/hr). As shown in Table 104, using our unchanged currently approved number of respondents (86 FR 65576), the proposed increase in the amount of time required for the OAuth credentialing and token request process results in an adjustment of +15 hours (+15 respondents × 1 hr/respondent) at a cost of +$1,474 (+15 hr × $98.28/hr) from our currently approved burden of 15 hours (15 respondents x 1 hr/respondent) at a cost of $1,474 (15 hrs × $98.28/hr) for the CY 2023 performance period/2025 MIPS payment year. e. ICRs Regarding Quality Data Submission (§§ 414.1318, 414.1325, 414.1335, and 414.1365)(1) BackgroundWe refer readers to the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77502 through 77503 and 82 FR 53908 through 53912), the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (83 FR 60000 through 60003, 84 FR 63121 through 63124, 85 FR 84970 through 84974, 86 FR 65576 through 65588) for our previously finalized estimated burden associated with data submission for the quality performance category. Under our current policies, two groups of clinicians must submit quality data under MIPS: those who submit data as MIPS eligible clinicians, and those who submit data voluntarily but are not subject to MIPS payment adjustments. Clinicians are ineligible for MIPS payment adjustments if they are newly enrolled to Medicare; are QPs; are partial QPs who elect to not participate in MIPS; are not one of the clinician types included in the definition for MIPS eligible clinician; or do not exceed the low-volume threshold as an individual or as a group. (2) Changes and Adjustments to Quality Performance Category RespondentsTo determine which QPs should be excluded from MIPS, we used the Advanced APM payment and patient percentages from the APM Participant List for the third snapshot date for the Start Printed Page 46354 2021 QP Performance period. From this data, we calculated the QP determinations as Pdescribed in the Qualifying APM Participant (QP) definition at § 414.1305 for the CY 2023 performance period/2025 MIPS payment year. Due to data limitations, we could not identify specific clinicians who have not yet enrolled in APMs, but who may become QPs in the future for the CY 2023 performance period/2025 MIPS payment year (and therefore will no longer need to submit data to MIPS); hence, our model may underestimate or overestimate the number of respondents. In the CY 2019 PFS final rule, we finalized limiting the Medicare Part B claims collection type to small practices beginning with the CY 2019 performance period/2021 MIPS payment year and allowing clinicians in small practices to report Medicare Part B claims as a group or as individuals (83 FR 59752). We note that we continue to use CY 2019 performance period/2021 MIPS payment year data to estimate the number of respondents in the CY 2023 PFS proposed rule. There may be an undercount in submissions due to the PHE for COVID-19, because of the automatic extreme and uncontrollable circumstances policy, and application-based policy that allowed clinicians to elect not to submit during the submission period for the CY 2019 performance period/2021 MIPS payment year that we are using to inform our burden estimates. Despite this limitation, we believe the data from the CY 2019 performance period/2021 MIPS payment year is still the best data source available as it most accurately reflects the impacts of policies finalized in previous rules and trends toward increased group reporting. We assume that 100 percent of ACO APM Entities will submit quality data to CMS as required under their models. While we do not believe there is additional reporting for ACO APM entities, consistent with assumptions used in the CY 2021 and CY 2022 PFS final rules (85 FR 84972 and 86 FR 65567), we include all quality data voluntarily submitted by MIPS APM participants at the individual or TIN-level in our respondent estimates. As stated in section V.B.9.a.(4) of this proposed rule, we assume non-ACO APM Entities will participate through traditional MIPS and submit as an individual or group rather than as an entity. To estimate who will be a MIPS APM participant in the CY 2023 performance period/2025 MIPS payment year, we used the Advanced APM payment and patient percentages from the APM Participant List for the final snapshot date for the 2021 QP performance period. We elected to use this data source because the overlap with the data submissions for the CY 2019 performance period/2021 MIPS payment year enabled the exclusion of Partial QPs that elected to not participate in MIPS and required fewer assumptions as to who is a QP or not. Based on this information, if we determine that a MIPS eligible clinician will not be scored as a MIPS APM, then their reporting assumption is based on their reporting as a group or individual for the CY 2019 performance period/2021 MIPS payment year. Our burden estimates for the quality performance category do not include the burden for the quality data that APM Entities submit to fulfill the requirements of their APMs. The associated burden is excluded from this collection of information section but is discussed in the regulatory impact analysis section of this proposed rule because sections 1899(e) and 1115A(d)(3) of the Act (42 U.S.C. 1395jjj(e) and 1315a(d)(3), respectively) state that the Shared Savings Program and the testing, evaluation, and expansion of Innovation Center models tested under section 1115A of the Act (or section 3021 of the Affordable Care Act) are not subject to the PRA.[535] For the CY 2023 performance period/2025 MIPS payment year, respondents will have the option to submit quality performance category data via Medicare Part B claims, direct, and log in and upload submission types. We estimate the burden for collecting data via collection type: Medicare Part B claims, QCDR and MIPS CQMs, and eCQMs. Additionally, we capture the burden for clinicians who choose to submit via these collection types for the quality performance category of MVPs. We believe that, while estimating burden by submission type may be better aligned with the way clinicians participate with the Quality Payment Program, it is more important to reduce confusion and enable greater transparency by maintaining consistency with previous rulemaking. Because MIPS eligible clinicians may submit data for multiple collection types for a single performance category, the estimated numbers of individual clinicians and groups to collect via the various collection types are not mutually exclusive and reflect the occurrence of individual clinicians or groups that collected data via multiple collection types during the CY 2019 performance period/2021 MIPS payment year. We captured the burden of any eligible clinician that may have historically collected via multiple collection types, as we assume they will continue to collect via multiple collection types and that our MIPS scoring methodology will take the highest score where the same measure is submitted via multiple collection types. Table 105 uses methods similar to those described above to estimate the number of clinicians that will submit data as individual clinicians via each collection type in the CY 2023 performance period/2025 MIPS payment year. For the CY 2023 performance period/2025 MIPS payment year, we estimate that approximately 27,006 clinicians will submit data as individuals using the Medicare Part B claims collection type; approximately 37,306 clinicians will submit data as individuals using MIPS CQM and QCDR collection type; and approximately 38,464 clinicians will submit data as individuals using eCQMs collection type. Based on performance data from the CY 2019 performance period/2021 MIPS payment year, these are increases of 1,579, 850, and 2,063 respondents from the currently approved estimates of 25,427, 36,456, and 36,401 for the Medicare Part B claims, MIPS CQM and QCDR, and eCQM collection types, respectively. Start Printed Page 46355 Consistent with the policy finalized in the CY 2018 Quality Payment Program final rule that for MIPS eligible clinicians who collect measures via Medicare Part B claims, MIPS CQM, eCQM, or QCDR collection types and submit more than the required number of measures (82 FR 53735 through 54736), we will score the clinician on the required measures with the highest assigned measure achievement points and thus, the same clinician may be counted as a respondent for more than one collection type. Therefore, our columns in Table 105 are not mutually exclusive. Table 106 provides our estimated counts of groups or virtual groups that will submit quality data on behalf of clinicians for each collection type in the CY 2023 performance periods/2025 MIPS payment year. We assume that clinicians who submitted quality data as groups in the CY 2019 performance period/2021 MIPS payment year will continue to submit quality data either as groups, or virtual groups for the same collection types for the 2023 performance period/2025 MIPS payment years. We refer readers to the CY 2022 PFS final rule (86 FR 65577) on our assumptions related to the use of an alternate collection type for groups that submitted data via the CMS Web Interface collection type for the CY 2019 performance period/2021 MIPS payment year. As shown in Table 106, for the CY 2023 performance period/2025 MIPS payment year we estimate that 10,278 groups and virtual groups will submit data for the MIPS CQM and QCDR collection type and 7,296 groups and virtual groups will submit for eCQM collection types. These are decreases of 156 and 76 respondents from the currently approved estimates of 10,434, and 7,372 for the groups that would submit data using MIPS CQM and QCDR, and eCQM collection types, respectively. As the data does not exist for APM performance pathway or MIPS quality measures for non-ACO APM entities, we assume non-ACO APM Entities will participate through traditional MIPS and base our estimates on submissions received in the CY 2019 performance period/2021 MIPS payment year. The burden associated with the submission of quality performance category data has some limitations. We believe it is difficult to quantify the burden accurately because clinicians and groups may have different processes for integrating quality data submission into their practices' workflows. Moreover, the time needed for a Start Printed Page 46356 clinician to review quality measures and other information, select measures applicable to their patients and the services they furnish, and incorporate the use of quality measures into the practice workflows is expected to vary along with the number of measures that are potentially applicable to a given clinician's practice and by the collection type. For example, clinicians submitting data via the Medicare Part B claims collection type need to integrate the capture of quality data codes for each encounter whereas clinicians submitting via the eCQM collection types may have quality measures automated as part of their EHR implementation. We believe the burden associated with submitting quality measures data will vary depending on the collection type selected by the clinician, group, or third-party. As such, we separately estimated the burden for clinicians, groups, and third parties to submit quality measures data by the collection type used. For the purposes of our burden estimates for the Medicare Part B claims, MIPS CQM and QCDR, and eCQM collection types, we also assume that, on average, each clinician or group will submit 6 quality measures. Additionally, as finalized in the CY 2022 PFS final rule (86 FR 65394 through 65397), group TINs could also choose to participate as subgroups for MVP reporting beginning with the CY 2023 performance period/2025 MIPS payment year. we refer readers to the CY 2022 PFS final rule for additional details on MVP quality reporting requirements (86 FR 65411 through 65412). In terms of the quality measures available for clinicians and groups to report for the CY 2023 performance period/2025 MIPS payment year, we are proposing a measure set of 194 quality measures. The new MIPS quality measures finalized for inclusion in MIPS for the CY 2023 performance period/2025 MIPS payment year and future years are found in Table Group A of Appendix 1; MIPS quality measures with substantive changes can be found in Table Group D of Appendix 1; and MIPS quality measures finalized for removal can be found in Table Group C of Appendix 1. These measures are stratified by collection type in Table 107, as well as proposed counts of new, removed, and substantively changed measures. For the CY 2023 performance period/2025 MIPS payment year, we are proposing a net reduction of 6 quality measures across all collection types compared to the 200 measures finalized for the CY 2022 performance period/2024 MIPS payment year (86 FR 65542). Specifically, as discussed in section IV.A.10.c.(1)(c) of this rule, we are proposing to add 9 new MIPS quality measures, remove 15 MIPS quality measures, partially remove 2 MIPS quality measures that are proposed for removal from traditional MIPS and proposed for retention for use in MVPs, and make substantive updates to 75 MIPS quality measures. We do not anticipate that our provision to remove these measures will increase or decrease the reporting burden on clinicians and groups as respondents generally are still required to submit quality data for 6 measures. We refer readers to section V.B.9.e.(7) of this proposed rule for the proposed change in associated burden related to the provisions introducing MVP and subgroup reporting beginning in the CY 2023 performance period/2025 MIPS payment year. (3) Quality Payment Program Identity Management Application ProcessThis rule is not proposing any new or revised collection of information requirements or burden related to the identity management application process. We are proposing to adjust the number of respondents based on updated data. The proposed requirements and burden will be submitted to OMB under control number 0938-1314 (CMS-10621). Based on historical trends for the number of eligible clinicians, groups, or third parties that register for new accounts, we noticed that we inadvertently underestimated our assumptions in the CY 2022 PFS final rule (86 FR 65582). In order to accurately capture the incremental change in the number of respondents in previous years, we are using a rolling average of the number of respondents that would register for obtaining new accounts. Therefore, we are proposing to adjust our estimates from 3,741 to 6,500 for the number of respondents that would submit their information to obtain new user accounts in the HARP system for the CY 2023 performance period/2025 MIPS payment year. This would result in an increase of 2,759 respondents. We are not proposing to adjust the currently approved estimated time of 1 hour per respondent to obtain a new account. As shown in Table 108, it would take 1 hour at $98.28/hr for a computer systems analyst (or their equivalent) to obtain an account for the Start Printed Page 46357 HARP system. In aggregate we estimate an annual burden of 6,500 hours (6,500 registrations × 1 hr/registration) at a cost of $638,820 (6,500 hrs × $98.28/hr). As shown in Table 109, using the unchanged currently approved hours per respondent burden estimate, the proposed increase of 2,759 respondents from 3,741 to 6,500 for the CY 2023 performance period/2025 MIPS payment year would result in an estimated increase of 2,759 hours (+2.759 respondents × 1hr/respondent) at a cost of $271,155 (2,759 hrs × 98.28/hr). (4) Quality Data Submission by Clinicians: Medicare Part B Claims-Based Collection TypeThis rule is not proposing any new or revised collection of information requirements related to the submission of Medicare Part B claims data for the quality performance category. However, we are proposing to adjust our currently approved burden estimates based on our changes in assumptions for calculating the data. We refer readers to Table 118 of this section for the proposed change in associated burden related to the submission of Medicare Part B claims data for the MVP quality performance category in the CY 2023 performance period/2025 MIPS payment year. The following proposed burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77501 through 77504 and 82 FR 53912), the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60004 through 60005, 84 FR 63124 through 63126, 85 FR 84975 through 84976 and 86 FR 65582 through 65584) for our previously finalized requirements and burden for quality data submission via the Medicare Part B claims collection type. As noted in Table 105, based on data from the CY 2019 performance period/2021 MIPS payment year, we estimate that 27,006 individual clinicians will collect and submit quality data via the Medicare Part B claims collection type. In this rule, we are proposing to adjust the number of Medicare Part B claims respondents from the currently approved estimate of 25,427 to 27,006 (an increase of 1,579). As shown in Table 105, consistent with our currently approved per response time figures, we estimate that the burden of quality data submission using Medicare Part B claims will range from 0.15 hours (9 minutes) for a computer systems analyst at a cost of $14.74 (0.15 hr x $98.28/hr) to 7.2 hours for a computer systems analyst at a cost of $707.61 (7.2 hr x $98.28/hr). We assume that the burden will involve becoming familiar with MIPS quality measure specifications. Consistent with our currently approved per response time estimates, we believe that the start-up cost for a clinician's practice to review measure specifications is 7 hours, consisting of 3 hours at $115.22/hr for a medical and health services manager, 1 hour at $259.98/hr for a physician, 1 hour at $49.86/hr for an LPN, 1 hour at $98.28/hr for a computer systems analyst, and 1 hour at $41.10/hr for a billing and posting clerk. We are not proposing to revise our currently approved per response time estimates. As shown in Table 110, considering both data submission and start-up requirements for our adjusted number of clinicians, the estimated time (per clinician) ranges from a minimum of 7.15 hours (0.15 hr + 7 hr) to a Start Printed Page 46358 maximum of 14.2 hours (7.2 hr + 7 hr). In aggregate, the total annual time for the CY 2023 performance period/2025 MIPS payment year ranges from 193,093 hours (7.15 hr x 27,006 clinicians) to 383,485 hours (14.2 hr x 27,006 clinicians). The estimated annual cost (per clinician) ranges from $809.62 [(0.15 hr x $98.28/hr) + (3 hr x $115.22/hr) + (1 hr x $98.28/hr) + (1 hr x $49.86/hr) + (1 hr x $41.10/hr) + (1 hr x $259.98/hr)] to a maximum of $1,502.49 [(7.2 hr x $98.28/hr) + (3 hr x $115.22/hr) + (1 hr x $98.28/hr) + (1 hr x $49.86/hr) + (1 hr x $41.10/hr) + (1 hr x $259.98/hr)]. The total annual cost for the CY 2023 performance period/2025 MIPS payment year ranges from a minimum of $21,864,598 (27,006 clinicians x $810) to a maximum of $40,576,245 (27,006 clinicians x $1,502.49). As shown in Table 111, using our unchanged currently approved burden per response estimates, the increase in number of respondents from 25,427 to 27,006 results in a total maximum adjustment of 22,422 hours (+1,579 respondents x 14.2 hr/respondent) at a cost of $2,372,432 (+1,579 respondents x $1,502.49/respondent). For purposes of calculating total burden associated with this proposed rule as shown in Tables 132, 133, and 135, only the maximum burden is used. Start Printed Page 46359 (5) Quality Data Submission by Individuals and Groups Using MIPS CQM and QCDR Collection TypesThe following proposed requirements and burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77504 through 77505 and 82 FR 53912 through 53914), the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60005 through 60006, 84 FR 63127 through 63128, 85 FR 84977 through 84979, and 86 FR 65584 through 65586) for our previously finalized requirements and burden for quality data submission via the MIPS CQM and QCDR collection types. We refer readers to Table 118 for the estimated change in associated burden for quality data submission using MIPS CQM and QCDR collection types related to MVP and subgroup reporting in the CY 2023 performance period/2025 MIPS payment year. As noted in Tables 105 and 106, based on data from the CY 2019 performance period/2021 MIPS payment year, for the CY 2023 performance period/2025 MIPS payment year, we assume that 47,584 clinicians (37,306 individuals and 10,278 groups and virtual groups) will submit quality data as individuals or groups using MIPS CQM or QCDR collection types. This is an increase of 850 individuals and a decrease of 156 groups from the estimates of 36,456 individuals and the 10,434 groups provided in the CY 2022 PFS final rule (86 FR 65585). Given that the number of measures required for clinicians and groups is the same, we expect the burden to be the same for each respondent collecting data via MIPS CQM or QCDR, whether the clinician is participating in MIPS as an individual or group. Under the MIPS CQM and QCDR collection types, the individual clinician or group may either submit the quality measures data directly to us, log in and upload a file, or utilize a third-party intermediary to submit the data to us on the clinician's or group's behalf. We estimate that the burden associated with the QCDR collection type is similar to the burden associated with the MIPS CQM collection type; therefore, we discuss the burden for both together below. For MIPS CQM and QCDR collection types, we estimate an additional time for respondents (individual clinicians and groups) to become familiar with MIPS quality measure specifications and, in some cases, specialty measure sets and QCDR measures. Therefore, we believe that the burden for an individual clinician or group to review measure specifications and submit quality data is total of 9 hours at a cost of $982.65 per response. This consists of 3 hours at $98.28/hr for a computer systems analyst (or their equivalent) to submit quality data along with 2 hours at $115.22/hr for a medical and health services manager, 1 hour at $98.28/hr for a computer systems analyst, 1 hour at $49.86/hr for a LPN, 1 hour at $41.10/hr for a billing clerk, and 1 hour at $259.98/hr for a physician to review measure specifications. Additionally, clinicians and groups who do not submit data directly will need to authorize or instruct the qualified registry or QCDR to submit quality measures' results and numerator and denominator data on quality measures to us on their behalf. We estimate that the time and effort associated with authorizing or instructing the quality registry or QCDR to submit this data will be approximately 5 minutes (0.083 hours) at $98.28/hr for a computer systems analyst at a cost of $8.15 (0.083 hr x $98.28/hr). Overall, we estimate 9.083 hrs/response (3 hrs + 2 hrs + 1 hr + 1 hr + 1 hr + 1 hr + 0.083 hrs) at a cost of $982.65/response [(3 hrs × $98.28/hr) + (2 hrs × $115.22/hr) + (1 hr × $259.98/hr) + (1 hr × $98.28/hr) + (1 hr × $49.86/hr) + (1 hr × $41.10/hr) + (0.083 hrs × $98.28/hr)]. As shown in Table 112, For the CY 2023 performance period/2025 MIPS payment year, in aggregate, we estimate a burden of 432,205 hours [9.083 hrs/response × (37,306 clinicians submitting as individuals + 10,278 groups submitting via QCDR or MIPS CQM on behalf of individual clinicians, a total of 47,584 responses)] at a cost of $46,758,418 (47,584 responses × $982.65/response). Start Printed Page 46360 As shown in Table 113, using the unchanged currently approved hours per respondent burden estimate, the increase of 694 respondents from 46,890 to 47,584 for the CY 2023 performance period/2025 MIPS payment year results in an increase of 6,303 hours (+694 respondents × 9.083 hr/respondent) and $681,959 (694 respondents × $982.65/respondent). Start Printed Page 46361 (6) Quality Data Submission by Clinicians and Groups: eCQM Collection TypeThe following proposed requirements and burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2017 Quality Payment Program final rule (81 FR 77505 through 77506), CY 2018 Quality Payment Program final rule (82 FR 53914 through 53915), CY 2019 PFS final rule (83 FR 60006 through 60007), CY 2020 PFS final rule (84 FR 63128 through 63130) and the CY 2021 PFS final rule (85 FR 84979 through 84980) for our previously finalized requirements and burden for quality data submission via the eCQM collection types. For the change in associated burden for quality data submission related to the provisions introducing MVP and subgroup reporting beginning in the CY 2023 performance period/2025 MIPS payment year, we refer readers to Table 118 of this section. Based on CY 2019 performance period/2021 MIPS payment year data, for the CY 2023 performance period/2025 MIPS payment year, we assume that 45,760 clinicians (38,464 individual clinicians and 7,296 groups and virtual groups) would submit quality data using the eCQM collection type. This is an increase of 2,063 individuals and a decrease of 76 groups from the estimates of 36,401 individuals and 7,372 groups provided in the CY 2021 PFS final rule (85 FR 84979). We assume the burden to be the same for each respondent using the eCQM collection type, whether the clinician is participating in MIPS as an individual or group. Under the eCQM collection type, the individual clinician or group may either submit the quality measures data directly to us from their eCQM, log in and upload a file, or utilize a third-party intermediary to derive data from their CEHRT and submit it to us on the clinician's or group's behalf. To prepare for the eCQM collection type, the clinician or group must review the quality measures on which we will be accepting MIPS data extracted from eCQMs, select the appropriate quality measures, extract the necessary clinical data from their CEHRT, and submit the necessary data to a QCDR/qualified registry or use a health IT vendor to submit the data on behalf of the clinician or group. We assume the burden for collecting quality measures data via eCQM is similar for clinicians and groups who submit their data directly to us from their CEHRT and clinicians and groups who use a health IT vendor to submit the data on their behalf. This includes extracting the necessary clinical data from their CEHRT and submitting the necessary data to a QCDR/qualified registry. We estimate that it will take no more than 2 hours at $98.28/hr for a computer systems analyst to submit the actual data file. The burden will also involve becoming familiar with MIPS quality measure specifications. In this regard, we estimate it will take 6 hours for a clinician or group to review measure specifications. Of that time, we estimate 2 hours at $115.22/hr for a medical and health services manager, 1 hour at $259.98/hr for a physician, 1 hour at $98.28/hr for a computer systems analyst, 1 hour at $49.86/hr for an LPN, and 1 hour at $41.10/hr for a billing clerk. Overall, we estimate a cost of $876.22/response [(2 hr × $98.28/hr) + (2 hr × $115.22/hr) + (1 hr × $259.98/hr) + (1 hr × $98.28/hr) + (1 hr × $49.86/hr) + (1 hr × $41.10/hr)]. As shown in Table 114, For the CY 2023 performance period/2025 MIPS payment year, in aggregate, we estimate a burden of 366,080 hours [8 hr × 45,760 (38,464 clinicians + 7,296 groups and virtual groups)] at a cost of $40,095,827 (45,760 responses × $876.22/response). Start Printed Page 46362 As shown in Table 115, using the unchanged currently approved hours per respondent burden estimate, the proposed increase of 1,987 respondents from 43,773 to 45,760 for the CY 2023 performance period/2025 MIPS payment year results in an increase of 15,896 hours (+1,987 respondents × 8 hr/respondent) at a cost of $1,741,049 (+1,987 respondents × $876.22/respondent). (7) ICRs Regarding Burden for MVP ReportingThe proposed requirements and burden associated with the implementation of MVPs and subgroups will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). (a) Burden for MVP Reporting RequirementsWe refer readers to the CY 2022 PFS final rule (86 FR 65588 through 65592) for our previously finalized burden and requirements for submission of data for the MVP quality performance category. In the CY 2022 PFS final rule, we finalized an option for clinicians choosing to report MVPs to participate Start Printed Page 46363 through subgroups beginning with the CY 2023 performance period/2025 MIPS payment year (86 FR 65392 through 65394). We refer readers to the CY 2022 PFS final rule for our previously finalized assumptions on the estimated number of clinicians participating as subgroups in the CY 2023 performance period/2025 MIPS payment year (86 FR 65589). For the ICRs related to MVP participants, we continue to use the MIPS submission data from the CY 2019 performance period/2021 MIPS payment year. In Appendix 3: MVP Inventory of this rule, we propose to revise 6 of the 7 MVPs finalized in Appendix 3: MVP Inventory of the CY 2022 PFS final rule (86 FR 65998 through 66031). Specifically, these revisions are based on the proposed removal of certain improvement activities in section IV.A.10.c.(3)(b)(ii) of this rule, the addition of other relevant existing quality measures for MVP participants to select from and the proposed addition of the ONC direct review attestation requirement in the Promoting Interoperability performance category to all previously finalized MVPs. Additionally, we propose 5 new MVPs for the CY 2023 performance period/2025 MIPS payment year. If the proposed 5 new MVPs are finalized, MVP participants would have a total of 12 MVPs available for the CY 2023 performance period/2025 MIPS payment year. Due to the availability of new MVPs and addition of relevant quality measures to existing MVPs, we expect an increase in the number of MVP participants. Therefore, we estimate that 12 percent of the clinicians would participate in MVP reporting in the CY 2023 performance period/2025 MIPS payment year. This is an increase of 2 percentage points from the currently approved estimate of 10 percent in the CY 2022 PFS final rule (86 FR 65588 through 65589). We assume that the changes to the existing MVPs and the addition of new MVPs would not impact the currently approved number of subgroups. We expect that clinician participation in subgroups will be relatively low for the CY 2023 performance period/2025 MIPS payment year due the voluntary subgroup reporting option and the additional burden involved for groups to organize clinicians into subgroups. Therefore, we are not proposing any adjustments to our previously finalized assumption in the CY 2022 PFS final rule (86 FR 65589) of 20 subgroups that would participate in MVP reporting. In section IV.A.8.e.(4)(b) of this rule, we propose to modify § 414.1365(d)(3)(i)(A)( 1) to read that subgroups are scored on each selected population health measure based on their affiliated group score, if available, and that if the subgroup's affiliated group score is not available, each such measure is excluded from the subgroup's total measure achievement points and total available measure achievement points. We also propose to add § 414.1365(d)(3)(i)(B)( 1) so that subgroups are scored on each selected outcomes-based administrative claims measure based on their affiliated group score, if available, and that if the subgroup's affiliated group score is not available, each such measure will receive zero measure achievement points. We assume that these proposals are related to the subgroup scoring of administrative claim measures and do not impact clinician participation in subgroups. Furthermore, clinicians do not submit data for the administrative claims' measures and hence, there is no associated burden relevant to these measures for clinicians participating as subgroups. Therefore, we are not proposing any adjustments to our previously finalized assumptions for subgroup reporting burden of the MVP quality performance category in the CY 2022 PFS final rule (86 FR 65592). Additionally, in section IV.A.8.e.(4)(c) of this rule, we propose at § 414.1318(b)(1) that we will not assign a score for a subgroup that registers and does not submit data for the applicable performance period. We also propose to make conforming changes at § 414.1318(b) to state that, except as provided under § 414.1317(b) and paragraph (b)(1) of this section, each MIPS eligible clinician in the subgroup receives a final score based on the subgroup's combined performance assessment. We assume that subgroups that register for MVP reporting intend to submit data for the measures and activities in an MVP. These proposed policies are meant to clarify the scoring for subgroups in instances when a subgroup does not submit data as originally intended when registering as a subgroup. Therefore, we are not proposing any adjustments to our previously finalized assumptions for subgroup reporting burden of the MVP quality performance category in the CY 2022 PFS final rule (86 FR 65592). (i) Burden for MVP Registration: Individuals, Groups and APM EntitiesWe refer readers to the CY 2022 PFS final rule (86 FR 65589 through 65590) for our previously finalized burden relevant to MVP registration for clinicians participating as an individual and/or group for MVP reporting. As shown in Table 116, consistent with our previously finalized assumptions in the CY 2022 PFS final rule (86 FR 65590), we estimate that the registration process for clinicians choosing to submit MIPS data for the measures and the activities in an MVP would require 0.25 hours of a computer systems analyst's time for the CY 2023 performance period/2025 MIPS payment year. We assume that the staff involved in the MVP registration process will mainly be computer systems analysts or their equivalent, who have an average labor cost of $98.28/hour. As discussed above, based on data from the CY 2019 performance period/2021 MIPS payment year, the proposed changes to existing MVPs and the addition of new MVPs, we estimate that approximately 12 percent of the clinicians that currently participate in MIPS would submit data for the measures and activities in an MVP. For the CY 2023 performance period/2025 MIPS payment year, we assume that we would receive a total of 16,432 submissions for the measures and activities included in MVPs. This total includes our estimate of 20 subgroup reporters that would also be reporting MVPs in addition to MVP reporters who currently participate in traditional MIPS. Therefore, we assume that the total number of individual clinicians, groups, subgroups and APM Entities to complete the MVP registration process is 16,432. As shown in Table 116, we estimate that it would take 4,108 hours (16,432 respondents × 0.25 hr/respondent) at a cost of $403,734 (4,108 hrs × 98.28/hr) for individual clinicians, groups and APM Entities to register for MVPs in the CY 2023 performance period/2025 MIPS payment year. Start Printed Page 46364 As shown in Table 117, for the CY 2023 performance period/2025 MIPS payment year, the proposed adjustment in the number of respondents expected to register for MVP reporting from 12,917 to 16,432 results in an increase of 3,515 respondents. In aggregate, when combined with the unchanged hourly burden per respondent, this would result in an increase of 879 hours (+3,515 respondents × 0.25 hr/respondent) at a cost of $86,388 (879 hrs × 98.28/hr). (ii) Burden for Subgroup RegistrationWe previously established at § 414.1365(b) a registration process for clinicians who choose to report MVPs through a subgroup. We refer readers to the CY 2022 PFS final rule for our previously finalized burden relevant to subgroup registration for clinicians participating in MVP reporting (86 FR 65590). In section IV.A.8.e.(2) of this rule, we propose to modify the definition of a single specialty group at § 414.1305 to state that single specialty group means a group that consists of one specialty type as determined by CMS using Medicare Part B claims. We also propose to modify the definition of a multispecialty group at § 414.1305 to state that multispecialty group means a group that consists of two or more specialty types as determined by CMS using Medicare Part B claims. We believe that these definitions would help groups understand their specialty determination. However, we are not proposing any adjustments to the subgroups burden associated with these proposals because we believe that these definitions would not impact the utilization of subgroups by groups and hence, would not change the way groups choose to organize clinicians in subgroups. In section IV.A.8.e.(3)(b) of this rule, we propose that as part of the subgroup registration process, in addition to the previously established registration requirements, group TINs must provide a description of each subgroup that is registered. Under this proposed policy, we would identify some key scenarios for subgroups to select from that we expect might reflect a typical subgroup, but also wish to offer an opportunity for group TINs to describe how they constructed their subgroups by providing a narrative in a text—only field, if the options we provide do not correctly describe the subgroup. We assume that the burden associated with choosing a key scenario would minimize the time required for subgroups to provide a narrative description. Additionally, we anticipate the narratives to be short descriptions of the nature of a group practice and appropriately reflect the subgroup composition. Therefore, we are not proposing any adjustments in the burden for subgroup registration because we assume that the narrative requirement would not add significant burden to the currently approved half an hour for subgroup registration in the CY 2022 PFS final rule (86 FR 65590). We refer readers to section IV.A.8.e.(3)(b) of this rule for examples of the subgroup narrative description. In section IV.A.8.f.(3)(d) of this rule, we are proposing to add at § 414.1318(a)(4) that CMS will apply the low-volume threshold criteria for a subgroup as described under § 414.1318(a)(1) using information from the initial 12-month segment of the applicable MIPS determination period. Additionally, we propose to make conforming changes at § 414.1318(a)(1) to state that, except as provided under paragraph (a)(2) of this section and subject to (a)(4) of this section, for a MIPS payment year, determinations of meeting the low-volume threshold criteria and special status for a subgroup is determined at the group level in accordance with §§ 414.1305 and Start Printed Page 46365 414.1310. We assume that these proposals would provide clarification for groups to identify their eligibility to form subgroups and also ensure that an individual eligible clinician or group will continue to be identified as such for the applicable MIPS payment year regardless of the results of the second segment of the MIPS determination period. This proposal does not change the application of low-volume threshold and special status as described under § 414.1318(a)(1) for clinicians in subgroups. Therefore, we are not proposing any adjustments to the currently approved burden for subgroup registration. In section IV.A.8.e.(3)(c) of this rule, we propose at § 414.1318(a)(3) that an individual eligible clinician, as represented by a TIN-NPI combination may register for no more than one subgroup within a group's TIN. We assume that the proposal would limit the number of subgroups that a clinician could participate under a TIN and would not result in additional burden for clinicians to participate as subgroups. Therefore, we are not proposing any adjustments to the currently approved burden for subgroup registration. Therefore, we are not prosing any changes to our previously finalized assumptions for subgroup registration burden. The burden relevant to subgroup registration requirement is currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not proposing any changes to the ICR for subgroup registration under that control number. Similar to our assumptions in the CY 2022 PFS final rule, we continue to capture the burden associated with subgroup quality reporting in the ICR for MVP quality performance category submission. The burden associated with subgroup submissions for Promoting Interoperability and improvement activities is included in the relevant ICRs in sections V.B.9.g.(3) and V.B.9.i. of this rule. (iii) Burden for MVP Quality Performance Category SubmissionIn the CY 2022 PFS final rule (86 FR 65411 through 65415), we previously finalized the reporting requirements for the MVP quality performance category at § 414.1365(c)(1)(i). As discussed in section IV.A.8.b. of this rule, we are not proposing new requirements to submit data for the quality performance category of MVPs. Therefore, we are not proposing any changes to our currently approved hourly burden per respondent estimates for submitting the MVP quality performance category data. As described above in this section of the proposed rule, we estimate that 12 percent of the clinicians who participated in MIPS for the CY 2019 performance period/2021 MIPS payment year would submit data for the quality performance category of MVP in the CY 2023 performance period/2025 MIPS payment year. We also estimate that there would be 20 subgroups reporters in the CY 2023 performance period/2025 MIPS payment year. As shown in Table 118, we estimate that 6,240 clinicians and 10 subgroups would submit data using eCQMs collection type; 6,849 clinicians and 10 subgroups would submit data using MIPS CQM and QCDR collection type; and 3,683 clinicians and 0 subgroups would submit data for the MVP quality performance category using the Medicare Part B claims collection type. For the CY 2023 performance period/2025 MIPS payment year, using our unchanged hourly burden per respondent estimates for the clinicians and subgroups submitting data for the MVP quality performance category, we estimate a burden of 33,125 hours [5.3 hr × 6,250 (6,240 +10) respondents] at a cost of $3,627,750 (6,250 respondents × 580.44/respondent) for the eCQM collection type, 38,799 hours [5.97 hr × 6,499 (6,489 +10)] at a cost of $4,200,239 (6,499 respondents × 646.29/respondent) for the MIPS CQM and QCDR collection type, and 34,768 hours (9.44 hr × 3,683 clinicians) at a cost of $3,678,102 (3,863 respondents × 998.67/respondent) for the Medicare Part B claims collection type. Start Printed Page 46366 Table 119 illustrates the proposed changes in estimated burden for clinicians who would submit the MVP quality performance category utilizing the eCQM, MIPS CQM and QCDR, and claims collection types in the CY 2023 performance period/2025 MIPS payment year. In aggregate, when combined with the unchanged hourly burden per respondent, the increase in 3,515 respondents that would submit data for the MVP quality performance category would result in an increase of 7,303 hours at a cost of $799,845 for the eCQM collection type, an increase of 7,636 hours at a cost of $826,605 for the CQM and QCDR collection type, and an increase of 8,080 hours at a cost of $856,859 for the claims collection type. Start Printed Page 46367 (8) Beneficiary Responses to CAHPS for MIPS SurveyThis rule is not proposing any new or revised collection of information requirements or burden related to the CAHPS for MIPS survey. The CAHPS for MIPS survey requirements and burden are currently approved by OMB under control number 0938-1222 (CMS-10450). Consequently, we are not proposing any changes to the CAHPS for MIPS Survey process under that control number. (9) Group Registration for CAHPS for MIPS SurveyThis rule is not proposing any new or revised collection of information requirements or burden related to the group registration for the CAHPS for MIPS Survey. The CAHPS for MIPS survey requirements and burden are currently approved by OMB under control number 0938-1222 (CMS-10450). Consequently, we are not proposing any changes to the CAHPS for MIPS Survey registration process under that control number. f. ICRs Regarding the Call for MIPS Quality MeasuresThis rule is not proposing any new or revised collection of information requirements or burden related to the call for MIPS quality measures. The requirements and the associated burden are currently approved under OMB control number 0938-1314 (CMS-10621). Consequently, we are not proposing any changes to the call for MIPS quality measures process under that control number. g. ICRs Regarding Promoting Interoperability Data (§§ 414.1375 and 414.1380)(1) BackgroundFor the CY 2023 performance period/2025 MIPS payment year, clinicians and groups can submit Promoting Interoperability data through direct, log in and upload, or log in and attest submission types. With the exception of submitters who elect to use the log in and attest submission type for the Promoting Interoperability performance category, which is not available for the quality performance category, we anticipate that individuals and groups will use the same data submission type for both of these performance categories and that the clinicians, practice managers, and computer systems analysts involved in supporting the quality data submission will also support the Promoting Interoperability data submission process. The following burden estimates show only incremental hours required above and beyond the time already accounted for in the quality data submission process. Although this analysis assesses burden by performance category and submission type, we emphasize that MIPS is a consolidated program and submission analysis, and decisions are expected to be made for the program as a whole. (2) Reweighting Applications for Promoting Interoperability and Other Performance CategoriesThe proposed requirements and burden associated with this rule's data submission will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2018 Quality Payment Program final rule (82 FR 53918 through 53919), and the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60011 through 60012, 84 FR 63134 through 63135, 85 FR 84984 through 84985, and 86 FR 65596 through 65598) for our previously finalized requirements and burden for reweighting applications for Promoting Interoperability and other performance categories. As established in the CY 2017 and CY 2018 Quality Payment Program final rules, MIPS eligible clinicians who meet the criteria for a significant hardship or other type of exception may submit an application requesting a zero percent weighting for the Promoting Interoperability, quality, cost, and/or improvement activities performance categories under specific circumstances (81 FR 77240 through 77243, 82 FR 53680 through 53686, and 82 FR 53783 through 53785). Respondents who apply for a reweighting of the quality, cost, and/or improvement activities performance categories have the option of applying for reweighting of the Promoting Interoperability performance category on the same online form. We assume that respondents applying for a reweighting of the Promoting Interoperability performance category due to extreme and uncontrollable circumstances will also request a reweighting of at least one of the other performance categories simultaneously and not submit multiple reweighting applications. In section IV.A.10.c.(4)(m)(i) of this rule, we are proposing not to continue the reweighting policy at § 414.1380(c)(2)(i)(A)( 4)( ii) to assign a weight of zero to the Promoting Interoperability performance category in the MIPS final score for NPs, PAs, CRNAs, and CNSs for the CY 2023 performance period/2025 MIPS payment year. If we adopt this proposal as final policy, some of these types of clinicians who are automatically assigned a weight of zero percent for the Promoting Interoperability performance category under our current policy may choose to submit an application for reweighting the Promoting Interoperability performance category to zero percent due to a significant hardship or as a result of a decertification of an EHR. Based on historically low participation trends for NPs, PAs, CRNAs, and CNSs that Start Printed Page 46368 submitted data individually for the Promoting Interoperability performance category for prior performance periods, we are unable to estimate how many of these clinicians would be applying for reweighting the Promoting Interoperability performance category to zero percent. Therefore, we are not proposing any adjustments to the number of respondents submitting reweighting applications. In section IV.A.10.c.(4)(m)(ii) of this rule, we are proposing to continue the existing policy of reweighting the Promoting Interoperability performance category for physical therapists, occupational therapists, qualified speech-language pathologist, qualified audiologists, clinical psychologists, and registered dieticians or nutrition professionals only for the CY 2023 performance period/2025 MIPS payment year and to revise § 414.1380(c)(2)(i)(A)( 4)(i) to reflect the proposal. We are also proposing to continue the existing policy of reweighting the Promoting Interoperability performance category for clinical social workers for the CY 2023 performance period/2025 MIPS payment year and to revise § 414.1380(c)(2)(i)(A)( 4)( iii) to reflect the proposal. We are not proposing any adjustments to the number of respondents submitting reweighting applications due to these proposals because it does not change the existing reweighting policy for these clinician types participating in MIPS in the CY 2023 performance period/2025 MIPS payment year. Table 120 summarizes the burden for clinicians to apply for reweighting of the Promoting Interoperability performance category to zero percent due to a significant hardship or as a result of a decertification of an EHR. Based on the number of reweighting applications received by March 31, 2022 for the CY 2021 performance period/2023 MIPS payment year, we estimate that we would receive a total of 31,135 reweighting applications for the CY 2023 performance period/2025 MIPS payment year. Out of the 31,135, we estimate that 13,480 respondents (eligible clinicians or groups) will submit a request to reweight the Promoting Interoperability performance category to zero percent due to extreme and uncontrollable circumstances, insufficient internet connectivity, lack of control over the availability of CEHRT, or as a result of a decertification of an EHR. We estimate that the remaining 17,655 respondents will submit a request to reweight one or more of the quality, cost, Promoting Interoperability, or improvement activities performance categories due to an extreme or uncontrollable circumstance. As discussed in section V.B.9.a.(4) of this rule, we assume ACO APM Entities will submit data through the APP and non-ACO APM Entities will participate through traditional MIPS, thereby submitting as an individual, group, or at the APM Entity level. Based on the actual number of APM Entities that submitted reweighting applications for the CY 2021 performance period/2023 MIPS payment year, we estimate that 20 APM Entities will submit an extreme and uncontrollable circumstances exception application for the CY 2023 performance period/2024 MIPS payment year. This is a decrease of 10 from the currently approved estimate of 30 APM entities that would submit a reweighting application. Combined with our aforementioned estimate of 31,135 eligible clinicians and groups, the total estimated number of respondents expected to submit applications for reweighting of the Promoting Interoperability and other performance categories for the CY 2023 performance period/2025 MIPS payment year is 31,155. This proposed adjustment results in a decrease of 11,672 respondents compared to our currently approved estimate of 42,827 respondents (86 FR 65597). This decrease is based on the actual number of reweighting applications submitted for the CY 2021 performance period/2023 MIPS payment year. Similar to the data used to estimate the number of respondents in the CY 2021 PFS final rule, our respondent estimate includes a significant number of applications submitted as a result of a data issue CMS was made aware of and is specific to a single third-party intermediary. While we do not anticipate similar data issues to occur in each performance period, we do believe future similar incidents may occur and are electing to use this data without adjustment to reflect this belief. We want to note that our respondent estimate also includes the reweighting applications submitted during the extended period ending March 31, 2022, due to the PHE for COVID-19. Consistent with our assumptions in the CY 2022 PFS final rule (86 FR 65596 through 65598), we continue to estimate it will take 0.25 hours for a computer system analyst to complete and submit the application. As shown in Table 120, we estimate an annual burden of 7,789 hours (31,155 applications × 0.25 hr/application) and $765,503 (7,789 hours × $98.28/hr). The proposed adjustment in the estimated number of respondents, from 42,827 to 31,155 respondents, results in a decrease of 11,672 respondents. In aggregate, using the unchanged currently approved hourly burden per Start Printed Page 46369 response estimate, as shown in Table 121, the decrease in 11,672 respondents would result in a decrease of 2,918 hours (−11,672 respondents × 0.25 hr/respondent) at a cost of $286,781 (−2,918 hrs × $98.28/hr) for the CY 2023 performance period/2025 MIPS payment year. (3) Submitting Promoting Interoperability DataThe proposed requirements and burden associated with this rule's data submission will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 77509 through 77511, 82 FR 53919 through 53920), and the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60013 through 60014, 84 FR 63135 through 63137, 85 FR 84985 through 84987, 86 FR 65598 through 65600) for our previously finalized requirements and burden for submission of data for the Promoting Interoperability performance category. In section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, we are proposing to require MIPS eligible clinicians to report the Query of PDMP measure (which requires reporting a “yes/no” response) for the Promoting Interoperability performance category. If this proposal is finalized, we are proposing two exclusions beginning with the performance period in CY 2023: (1) Any MIPS eligible clinician who is unable to electronically prescribe Schedule II opioids and Schedule III and IV drugs in accordance with applicable law during the performance period, and. (2) Any MIPS eligible clinician who writes fewer than 100 permissible prescriptions during the performance period. Due to lack of sufficient data regarding the number of clinicians who voluntarily submitted data for optional measures in the Promoting Interoperability performance category, we have consistently been unable to estimate the associated burden for the reporting of such measures. Therefore, we are not proposing to adjust our currently approved time required for clinicians to submit data for the Promoting Interoperability performance category because we are unable to account for any change in burden due to the proposed change to require the currently optional Query of PDMP measure. In section IV.A.10.c.(4)(e) of this rule, we are proposing to add an additional measure through which a MIPS eligible clinician could earn credit for the Health Information Exchange Objective by connecting to an entity that connects to a QHIN or connecting directly to a QHIN. Specifically, we are proposing to add the following new measure to the Health Information Exchange Objective beginning with the performance period in CY 2023: Enabling Exchange Under TEFCA measure. We propose MIPS eligible clinicians would have three reporting options for the Health Information Exchange Objective: (1) report on both the Support Electronic Referral Loops by Sending Health Information measure (or the exclusion, if applicable) and the Support Electronic Referral Loops by Receiving and Reconciling Health Information measure (or the exclusion, if applicable); (2) report on the HIE Bi-Directional Exchange measure; or (3) report on the proposed Enabling Exchange Under TEFCA measure. We believe that given the alignment between the Enabling Exchange under TEFCA measure and the existing HIE Bi-Directional exchange measure, adding this measure offers clinicians more opportunities to earn credit for the Health Information Exchange Objective. Because the proposed addition of Enabling Exchange Under TEFCA measure is optional for the Health Information Exchange Objective, we are unable to estimate the number of clinicians that would report this measure. Therefore, we are not proposing to adjust our currently approved time required for clinicians to submit data for the Promoting Interoperability performance category because we are unable to account for any change in burden due to the proposed change. In section IV.A.10.c.(4)(f)(ii) of this rule, we propose revisions to the three active engagement options. Specifically, we propose to consolidate current options 1 and 2 into one option beginning with the performance period in CY 2023. Additionally, for the Public Health and Clinical Data Exchange Objective, in addition to submitting responses for the required measures and any optional measures a MIPS eligible clinician chooses to report, we propose to require MIPS eligible clinicians to submit their level of active engagement, either Pre-production and Validation or Validated Data Production (as proposed in section IV.A.10.c.(4)(f)(ii)(C) of this proposed rule), for each measure they report beginning with the performance period in CY 2023. If the proposed requirement for MIPS eligible clinicians to submit their level of active engagement with each measure is finalized, we estimate that it would add an additional one minute to the currently approved estimated time of 2.69 hours, resulting in a total estimated time of 2.71 hours, for clinicians to submit data for the Promoting Interoperability performance category. In section IV.A.10.c.(4)(f)(ii)(D) of this rule, we also propose that beginning with the performance period in CY 2023, that MIPS eligible clinicians may spend only one performance period at the Pre-production and Validation level of active engagement per measure, and that they must progress to the Validated Data Production level in the next performance period for which they Start Printed Page 46370 report a particular measure. We refer readers to sections IV.A.10.c.4.(d) and IV.A.10.c.(4)(g) of this rule for additional information on proposed measure descriptions and changes to scoring methodologies in the Promoting Interoperability performance category. As shown in Table 122, based on data from the CY 2019 performance period/2021 MIPS payment year, we estimate that a total of 54,770 respondents consisting of 43,117 individual MIPS eligible clinicians, 11,633 groups and virtual groups and 20 subgroups would submit Promoting Interoperability data in the CY 2023 performance period/2025 MIPS payment year. We assume that MIPS eligible clinicians previously scored under the APM scoring standard, as described in the CY 2020 PFS final rule, will continue to submit Promoting Interoperability data (84 FR 63006) in a similar way through the APP. As a result, we do not anticipate any change in burden for APM Participants submitting data for the Promoting Interoperability performance category. In section IV.A.10.c.(5)(b) of this rule, we are proposing to introduce a voluntary reporting option for APM Entities to report the Promoting Interoperability performance category at the APM Entity level beginning with the CY 2023 performance period/2025 MIPS payment year. Because the proposed reporting of the Promoting Interoperability performance category is voluntary, we are unable to estimate the number of APM Entities that would submit data on behalf of their clinicians for this category. Therefore, we assume that each MIPS eligible clinician in an APM Entity reports data for the Promoting Interoperability performance category through either their group TIN or individual reporting. Sections 1899 and 1115A of the Act (42 U.S.C. 1395jjj and 42 U.S.C. 1315a, respectively) state that the Shared Savings Program and the testing, evaluation, and expansion of Innovation Center models are not subject to the PRA. However, in the CY 2019 PFS final rule, we established that MIPS eligible clinicians who participate in the Shared Savings Program are no longer limited to reporting for the Promoting Interoperability performance category through their ACO participant TIN (83 FR 59822 through 59823). Burden estimates for this proposed rule assume group TIN-level reporting as we believe this is the most reasonable assumption for the Shared Savings Program, which requires that ACOs include full TINs as ACO participants. As shown in Table 123, accounting for the change in hourly burden per respondent due to the proposed requirement for clinicians to submit their level of active engagement for the Public Health and Clinical Data Exchange Objective, the proposed increase in the number of respondents from 51,667 to 54,770 would result in a total burden of 148,427 hours (54,770 respondents × 2.71 incremental hours for a computer analyst's time above and beyond the physician, medical and health services manager, and computer system's analyst time required to submit quality data) and $14,587,406 (148,427 hrs × $98.28/hr)). As shown in Table 124, using our unchanged hourly burden per respondent estimate, the proposed increase in the number of respondents results in an increase of 9,443 hours (+3,103 respondents × 2.71 hrs + 51,667 Start Printed Page 46371 × 0.02 hrs) at a cost of $928,058 (+9,443 hours × $98.28/hour). h. ICRs Regarding the Nomination of Promoting Interoperability (PI) MeasuresThis rule is not proposing any new or revised collection of information requirements or burden related to the nomination of Promoting Interoperability measures. The requirements and burden are currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not proposing any changes to the process for nomination of Promoting Interoperability measures under that control number. i. ICR Regarding Improvement Activities Submission (§§ 414.1305, 414.1355, 414.1360, and 414.1365)The proposed requirements and burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). In section IV.A.10.c.(3)(b)(ii) of this rule, we are proposing changes to the improvement activities Inventory for the CY 2023 performance period/2025 MIPS payment year and future years as follows: adding 4 new improvement activities; modifying 5 existing improvement activities; and removing 6 previously adopted improvement activities. We do not believe the changes to the improvement activities inventory will impact the estimated time required for interested parties to submit information, because MIPS eligible clinicians are still required to submit the same number of activities and the estimated time per response time for each activity is uniform. Therefore, we are not proposing to adjust our currently estimated time of 5 minutes or 0.083 hours (per response) for improvement activities submission. We are proposing to adjust our currently approved burden estimates based on more recent data. As represented in Table 125, based on data from the CY 2019 performance period/2021 MIPS payment year, we estimate that a total of 96,980 respondents consisting of 78,239 individual clinicians, 17,721 groups and 20 subgroups will submit improvement activities during the CY 2023 performance period/2025 MIPS payment year. This proposed adjustment represents an increase of 15,398 respondents (14,394 individuals, 4 groups and 0 subgroups) from the currently approved estimate of 81,582 respondents (63,845 individuals and 17,717 groups, and 20 subgroups) in the CY 2022 PFS final rule (86 FR 65603). As discussed in sections V.B.9.e.(2) and V.B.9.g.(3) of this proposed rule regarding our estimate of clinicians and groups submitting data for the quality and Promoting Interoperability performance categories, we are proposing to update our estimates for the number of clinicians and groups that will submit improvement activities data based on projections of the number of eligible clinicians that were not QPs or participating in an ACO in the CY 2019 performance period/2021 MIPS payment year but will be QPs in the CY 2023 performance period/2025 MIPS payment year, and will therefore not be required to submit improvement activities data. Start Printed Page 46372 Consistent with the CY 2022 PFS final rule, we continue to estimate that the time required per response per individual or group is 5 minutes or 0.083 hours for a computer system analyst at a labor rate of $98.28/hr to submit by logging in and manually attesting that certain activities were performed in the form and manner specified by CMS with a set of authenticated credentials (86 FR 65603). As shown in Table 126, we estimate an annual burden of 8,049 hours (96,980 responses × 0.083 hr) at a cost of $791,056 (8,049 hrs × $98.28/hr)) for the CY 2023 performance period/2025 MIPS payment year. As shown in Table 127, using our unchanged currently approved per respondent burden estimate, the proposed increase in the number of respondents results in an increase of 1,278 hours (+15,398 respondents × 0.083 hr/respondent) at a cost of $125,602 (1,278 hrs × $98.28/hr) for the CY 2023 performance period/2025 MIPS payment year. Start Printed Page 46373 j. ICRs Regarding the Nomination of Improvement Activities (§ 414.1360)This rule is not proposing any new or revised collection of information requirements or burden related to the nomination of improvement activities. The requirements and burden are currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not proposing any changes to the nomination of improvement activities under that control number. k. Nomination of MVPsThe proposed requirements and burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). We refer readers to the CY 2021 PFS and CY 2022 PFS final rules (85 FR 84990 through 84991 and 86 FR 65605) for our previously finalized requirements and burden for collection of information relevant to nomination of MVPs for inclusion in the Quality Payment Program. In section IV.A.8.a. of this rule, we propose updates to the previously finalized policies for the MVP development and maintenance process in the CY 2021 and 2022 PFS final rules (85 FR 84849 through 84856 and 86 FR 65410). Specifically, we propose to modify the MVP development process such that we would evaluate a submitted candidate MVP through the MVP development process, and if we determine it is “ready” for feedback, we would post a draft version of the submitted candidate MVP on the Quality Payment Program website ( https://qpp.cms.gov/) and solicit feedback for a 30-day period. Interested parties and general public would have the opportunity to submit feedback on the candidate MVP for CMS's consideration through an email inbox. We would review the feedback received, and determine if any changes should be made to the candidate MVP prior to potentially including the MVP in a notice of proposed rulemaking. If we determined changes should be made to the candidate MVP, we would not notify the interested party who originally submitted the candidate MVP for CMS consideration in advance of the rulemaking process. We also propose to modify the MVP maintenance process such that interested parties and the general public would be able to submit their recommendations for potential revisions to established MVPs on a rolling basis throughout the year. We would then review the submitted recommendations and determine whether any are potentially feasible and appropriate. If we identify any submitted recommendations that are potentially feasible and appropriate, we would host a public facing webinar, open to interested parties and the general public through which they may offer their feedback on the potential revisions we have identified. We would publish details related to the timing and registration process for the webinar through our Quality Payment Program Listserv. If we decide to make any revisions to an established MVP based on the recommendations submitted, we would adopt such revisions through notice and comment rulemaking. We anticipate that these proposed changes do not require additional steps being added to the information collection relevant to the MVP nomination process described in the CY 2021 PFS final rule (85 FR 84990 through 84991). Therefore, we are not making any changes to the currently approved estimated time of 12 hours (86 FR 65605) for interested parties to submit their MVP candidates utilizing a standard template. Additionally, we refer readers to section VI.E.16.e.(2)(a) of this proposed rule where we discuss our impact analysis for these proposals. In this rule, we are proposing to adjust the number of respondents submitting MVP nominations from 25 to 20 based on more recent data. This proposed adjustment would result in a decrease of 5 from our currently approved estimate of 25 in the CY 2022 PFS final rule (86 FR 65605). As shown in Table 128, for the CY 2023 performance period/2025 MIPS payment year, we estimate that we would receive 20 MVP nominations and the estimated time required per respondent would be 12 hours. This would result in an estimated annual burden of 240 hours (20 nominations × 12 hr/nomination) at a cost of $41,550 (20 × [(7.2 hr × $115.22/hr) + (4.8 hr × $259.97/hr)]). Start Printed Page 46374 As shown in Table 129, using our unchanged currently approved burden per respondent estimate, the proposed decrease in the number of respondents submitting MVP nominations results in a total annual adjustment of −60 hours (−5 respondents × 12 hr/nomination) at a cost of −$10,387 (−5 × [(7.2 hr × $115.22/hr) + (4.8 hr × $259.97/hr)]) for the CY 2023 performance period/2025 MIPS payment year. l. ICRs Regarding the Cost Performance Category (§ 414.1350)The cost performance category relies on administrative claims data. The Medicare Parts A and B claims submission process (OMB control number 0938-1197; CMS-1500 and CMS-1490S) is used to collect data on cost measures from MIPS eligible clinicians. MIPS eligible clinicians are not required to provide any documentation by CD or hardcopy. Moreover, the policies in this rule do not result in the need to add or revise or delete any claims data fields. Consequently, we are not proposing any changes to this information collection under that control number. m. ICRs Regarding Partial QP Elections (§§ 414.1310(b) and 414.1430)This rule is not proposing any new or revised collection of information requirements related to the Partial QP Elections to participate in MIPS as a MIPS eligible clinician. However, we propose to adjust our currently approved burden estimates based on updated projections for the CY 2023 performance period/2025 MIPS payment year. The proposed adjusted burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). As shown in Table 130, based on our predictive QP analysis for the 2023 QP performance period/2025 MIPS payment year, which accounts for historical response rates in the CY 2021 performance period/2023 MIPS payment year, we are proposing to revise our estimate that a total of 287 respondents (156 APM Entities and 131 individual eligible clinicians representing approximately 7,182 Partial QPs) would make the election to participate as a Partial QP in MIPS. This is an increase of 37 from the 250 elections that are currently approved by OMB under the aforementioned control number. We continue to estimate it will take the APM Entity representative or eligible clinician 15 minutes (0.25 hrs) to make this election. In aggregate, we are proposing to revise our estimated annual burden to 72 hours (287 respondents × 0.25 hrs/election) and $7,076 (72 hrs × $98.28/hr). Start Printed Page 46375 As shown in Table 131, using our unchanged currently approved per respondent burden estimate (86 FR 65605), we propose that the increase in the number of Partial QP elections results in an adjustment of 9 hours (+37 respondents × 0.25 hr/election) at a cost of +$884 (+9 hr × $98.28/hr) for the CY 2023 performance period/2025 MIPS payment year. n. ICRs Regarding Other Payer Advanced APM Determinations: Payer-Initiated Process (§ 414.1445) and Eligible Clinician-Initiated Process (§ 414.1445)The following burden will be submitted to OMB for approval under control number 0938-1314 (CMS-10621). (1) Payer-Initiated Process (§ 414.1445)This rule is not proposing any new or revised collection of information requirements related to the Payer-Initiated Process. The requirements and burden associated with this information collection are currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not making any changes to the Payer- Initiated process under that control number. (2) Eligible Clinician-Initiated Process (§ 414.1445)This rule is not proposing any new or revised collection of information requirements or burden related to the Eligible Clinician-Initiated Process. The requirements and burden associated with this information collection are currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not making any changes to the Eligible Clinician-Initiated Process under that control number. (3) Submission of Data for QP Determinations Under the All-Payer Combination Option (§ 414.1440)This rule is not proposing any new or revised collection of information requirements related to the Submission of Data for QP Determinations under the All-Payer Combination Option. The requirements and burden for the All-Payer Combination option are currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not making any changes under that control number. o. ICRs Regarding Voluntary Participants Election To Opt-Out of Performance Data Display on Compare Tools (§ 414.1395)This rule is not proposing any new or revised collection of information requirements related to the election by voluntary participants to opt-out of public reporting on Compare Tools. The requirements and burden associated with this information collection are currently approved by OMB under control number 0938-1314 (CMS-10621). Consequently, we are not proposing any changes to the election of voluntary participants to opt-out of performance data display on Compare Tools under that control number. p. Summary of Annual Quality Payment Program Burden EstimatesTable 132 summarizes this proposed rule's total burden estimates for the Quality Payment Program for the CY 2023 performance period/2025 MIPS payment year. In the CY 2022 PFS final rule, the total estimated burden for the CY 2023 performance period/2025 MIPS payment year was 1,383,049 hours at a cost of $139,501,770 (86 FR 65613). Accounting for updated wage rates and the subset of all Quality Payment Program ICRs discussed in this rule compared to the CY 2022 PFS final rule, the total estimated annual burden of continuing the policies and information collections set forth in the CY 2022 PFS final rule into the CY 2023 performance period/2025 MIPS payment year is 1,386,649 hours at a cost of $147,977,762. These represent an increase of 3,600 hours and an increase of $8,475,992. To understand the burden implications of the policies in Start Printed Page 46376 this rule, we provide an estimate of the total burden associated with continuing the policies and information collections set forth in the CY 2022 PFS final rule into the CY 2023 performance period/2025 MIPS payment year. This burden estimate of 1,476,903 hours at a cost of $157,603,546 reflects the availability of more accurate data to account for all potential respondents and submissions across all the performance categories and more accurately reflect the exclusion of QPs from all MIPS performance categories, an increase of 90,254 hours and $9,625,784. This burden estimate is higher than the burden approved for information collection related to the CY 2022 PFS final rule due to updated data and assumptions. Our total burden estimate for the CY 2023 performance period/2025 MIPS payment year is 1,465,864 hours and $156,389,613 which represents an increase of 79,215 hours and $8,411,851 from the CY 2022 PFS final rule. The difference of −11,039 hours (79,215 hours-90,254 hours) and −$1,213,933 ($8,411,851-$9,625,784) between this estimate and the total burden shown in Table 132 is the decrease in burden associated with impacts of the policies for the CY 2023 performance period/2025 MIPS payment year. Start Printed Page 46377 Start Printed Page 46378 Table 134 provides the reasons for proposed changes in the estimated burden for information collections in the Quality Payment Program segment of this rule. We have divided the reasons for our proposed change in burden into those related to proposed policies and those related to proposed adjustments in burden continued from the CY 2022 PFS final rule policies that reflect updated data and revised methods. Start Printed Page 46379 Start Printed Page 46380 C. Summary of Annual Burden Estimates for ChangesD. Submission of CommentsWe have submitted a copy of this rule to OMB for review of the rule's information collection requirements and burden. The requirements are not effective until they have been approved by OMB. To obtain copies of the supporting statement and any related forms for the Start Printed Page 46381 collections previously discussed, please visit CMS's website at PaperworkReductionActof1995/PRAListing.html, or call the Reports Clearance Office at (410) 786-1326. If you wish to comment, please submit your comments electronically as specified in the DATES and ADDRESSES sections of this proposed rule and identify the rule (CMS-1770-P) and where applicable the ICR's CFR citation, CMS ID number, and OMB control number. VI. Response to CommentsBecause of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. VII. Regulatory Impact AnalysisA. Statement of NeedIn this proposed rule, we are proposing to make payment and policy changes under the Medicare PFS and required statutory changes under the Consolidated Appropriations Act, 2021 (CAA, 2021); sections 301, 302, 303, 304, and 305 under the Consolidated Appropriations Act, 2022 (CAA, 2022); and sections 2003 and 2005 of the SUPPORT for Patients and Communities Act of 2018, section 90004 of the Infrastructure Investment and Jobs Act, and section 4 of the Protecting Medicare and American Farmers from Sequester Cuts Act. . Our proposed policies in this rule specifically address: 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, the relative value of services, and changes in the statute; improvements to the Medicare Shared Savings Program (Shared Savings Program) requirements that promote health equity and strengthen financial incentives for participation; updates to the Quality Payment Program; updates to the Medicare coverage of opioid use disorder services furnished by opioid treatment programs; updates to certain Medicare provider enrollment policies; updates to 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); and updates to the Medicare Ground Ambulance Data Collection System. The proposed policies reflect CMS's stewardship of the Medicare program and overarching policy objectives for ensuring equitable beneficiary access to appropriate and quality medical care. 1. Statutory Provisionsa. Extension of Certain Medicare Telehealth Flexibilities, Under Section 1834(m) of the Act, as Amended by the Consolidated Appropriations Act, 2022Section II.D.1.e. of this proposed rule implements sections 301, 302, 304, and 305, of the Consolidated Appropriations Act, 2022, which extended the geographic restrictions (section 301), extended the temporary expansion of practitioner types who are eligible to furnish Medicare telehealth (section 302), delayed the in-person requirements under Medicare for mental health services furnished through telehealth under the PFS (section 304), and extended audio-only flexibilities for certain telehealth services that would otherwise not be available via telehealth (section 305) after the expiration of the PHE to remain on the Medicare Telehealth Services List for a 151-day period beginning on the first day after the end of the public health emergency (PHE) for COVID-19. This proposal is necessary to fulfill the statutory requirement to implement this extension until the 152nd day after the end of the PHE for COVID-19. b. Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs Payable Under Medicare Part B To Provide Refunds With Respect to Discarded AmountsSection III.A. of this proposed rule implements section 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117-9, November 15, 2021) which requires drug manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. These proposals are necessary to fulfill the statutory requirement to implement this policy effective January 1, 2023 and reduce unnecessary Medicare spending for discarded drug. c. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)Section III.C.3. of this proposed rule implements sections 303 and 304 of the Consolidated Appropriations Act, 2022. Section 303 of the CAA, 2022 amended section 1834(m)(8) of the Act to temporarily continue payment for telehealth services furnished by FQHCs and RHCs for the 151-day period beginning on the first day after the end of the COVID-19 PHE using the methodology established for telehealth services furnished by FQHCs and RHCs during the PHE, which, in accordance with section 1834(m)(8)(B) of the Act, is based on payment rates that are similar to the national average payment rates for comparable telehealth services under the PFS. Section 304 of the CAA, 2022 delays the in-person requirements under Medicare for mental health services furnished through telehealth under the PFS and for mental health visits furnished by RHCs and FQHCs via telecommunications technology for a 151-day period beginning on the first day after the end of the public health emergency (PHE) for COVID-19. These proposals are necessary to fulfill these statutory requirements. We also note in section III.C.3. of this proposed rule we discuss implementation of sections 301 and 305 of the CAA, 2022 that would apply to telehealth services (those that are not mental health visits) furnished by RHCs and FQHCs. That is, section 301 of the CAA, 2022 extended the geographic restrictions and section 305 of the CAA, 2022 extended audio-only flexibilities for certain telehealth services that would otherwise not be available via telehealth. d. Clinical Laboratory Fee Schedule—Revisions Consistent With Recent Statutory ChangesSection III.B.5. of this rule proposes to make conforming regulations text changes for CLFS data reporting requirements due to the enactment of Protecting Medicare and American Farmers from Sequester Cuts Act (S. 610). By statute, certain clinical laboratories are periodically required to submit private payor rates for certain kinds of lab tests. For Clinical Diagnostic Laboratory Tests (CDLTs) that are not Advanced Diagnostic Laboratory Tests (ADLTs), the Protecting Medicare and American Farmers from Sequester Cuts Act (S. 610) delayed the next data reporting period by one year. Instead of taking place from January 1, 2022 through March 31, 2022, data reporting will now take place from January 1, 2023 through March 31, 2023, based on the original data collection period of January 1, 2019 through June 30, 2019. Data reporting for these tests then resumes on a 3-year cycle (2026, 2029, etc.). Additionally, the statutory phase-in reduction provisions indicate for CYs 2023 through 2025, payment may not be reduced by more than 15 percent as compared to the amount established for the preceding year. Start Printed Page 46382 e. 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)In this rule, we are proposing changes to the electronic prescribing for controlled substances (EPCS) requirement specified in section 2003 of the SUPPORT Act. Previously finalized policies did not include actions for non-compliance after the 2023 year. Additionally, previously finalized policies for statutory exclusions may not have properly identified prescribers that are small prescribers during the compliance period and may have misidentified prescribers in locations with a recognized emergency. The proposals define action for non-compliance for electronic prescribing of controlled substances for the 2024 year and refine policies to better identify prescribers who qualify for the small practice and recognized emergency exceptions to the EPCS requirement. f. Medicare Ground Ambulance Data Collection SystemSection 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. In this proposed rule, we are proposing a series of changes to the Medicare Ground Ambulance Data Collection System including the proposal to update § 414.626(d)(1) and (e)(2) to give us the necessary flexibility to specify how ground ambulance organizations should submit the hardship exemption requests and informal review requests, including to our web-based portal once that portal is operational, and proposed revisions to the Medicare Ground Ambulance Data Collection Instrument. The changes and clarifications aim to reduce burden on respondents, improve data quality, or both. g. Quality Payment ProgramThis proposed rule is also necessary to make changes to the Quality Payment Program to move the Quality Payment Program forward to focus more on measurement efforts, refine how clinicians would be able to participate in a more meaningful way through the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs), and encourage participation in Advanced Alternative Payment Models (APMs). Authorized by MACRA, the Quality Payment Program is an incentive program that includes two participation tracks, 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. Currently, reporting for MIPS is not required to be coordinated across performance categories. These policies are intended to promote better quality reporting to improve patient health outcomes by coordinating reporting for MIPS across performance categories, and make changes to scoring that will provide a better picture of clinicians' performance. 2. Discretionary Provisionsa. RHCs and FQHCsIn section III.C.2. of this proposed rule, we are proposing to include chronic pain management (CPM) services in the general care management HCPCS code G0511 when these services are provided by RHCs and FQHCs. Since HCPCS code GYYY1 would be valued using a crosswalk to the PCM CPT code 99424, which is currently one of the CPT codes that comprise HCPCS code G0511, we propose no change to the average used to calculate the G0511 payment rate. In addition, in section III.C.2. of this proposed rule we discuss the new coding and payment for general behavioral health integration (BHI) services (HCPCS code GBHI1). We explain that since clinical psychologists (CPs) and clinical social workers (CSWs) are considered practitioners that can provide services in RHCs/FQHCs, we acknowledge when CPs and CSWs provide the services described in HCPCS code GBHI1 in an RHC or FQHC, they can bill HCPCS code G0511. These proposals are necessary in that we evaluate coding proposals in this rule and their applicability to RHCs and FQHCs. Section III.C.4. of this proposed rule proposes to provide discussion and clarification regarding the use of short-period cost reports vs 12-consecutive month cost reports to establish the payment limit for specified provider-based RHCs. This proposal is necessary to accurately reflect the costs of providing RHC services and will establish a more accurate base from which the payment limits will be upgraded going forward. b. Clinical Laboratory Fee Schedule (CLFS) Specimen Collection and Travel AllowanceSection III.B.6. of this rule proposes to clarify and codify the CLFS specimen collection and travel allowance payment policies. In general, section 1833(h)(3) of the Act requires the Secretary to pay a nominal fee for specimen collection for laboratory testing and a fee to cover transportation and personnel expenses for trained personnel to collect specimens from homebound patients and inpatients (not in a hospital). CMS' long-standing instructions regarding the statutory requirements for CLFS specimen collection and travel allowance are described in Medicare Claims Processing manual guidance. OIG and other interested parties have expressed concerns regarding inconsistent MAC implementation of the payment policies as well as unclear or conflicting guidance to providers related to the CLFS travel allowance. In the CY 2022 PFS final rule we solicited comments regarding these two payment policies; commenters supported clarification to the existing policy and also made suggestions regarding possible refinements. Describing and codifying the payment policies related to CLFS specimen collection and travel allowance are necessary to clarify existing policy, address concerns expressed by interested parties, and reduce administrative burden. c. Modifications Related to Medicare Coverage for Opioid Use Disorder (OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)In section III.F. of this proposed rule, we explain that because of the inconsistencies in the voluntarily reported ASP data for orally-administered methadone, which reflects data from a small subset of methadone manufacturers, we do not believe this voluntarily reported ASP data for orally administered methadone currently provides a reliable source for pricing the methadone codes. We previously issued an interim final rule with comment period to establish a limited exception to the methodology for determining the payment amount for the drug component of an episode of care under the OTP benefit in order to freeze the payment amount for methadone furnished during an episode of care in CY 2022 at the payment amount that was determined for CY 2021. For CY 2023 and subsequent years, we are proposing to revise our methodology for pricing methadone under the OTP benefit, specifically, the drug component of the methadone weekly bundle and the add-on code for take-home supplies of methadone, so that it would not rely on voluntarily-submitted ASP data. We believe this proposal Start Printed Page 46383 would stabilize the payment amount for methadone dispensed by OTPs during an episode of care and therefore maintain access to treatment with methadone in the OTP setting for Medicare beneficiaries. Additionally, in section III.F. of this proposed rule, we are proposing to modify the payment rate for the non-drug component of the bundled payment for an episode of care to base the rate for individual therapy on a crosswalk code describing a longer duration of psychotherapy compared to the current crosswalk code. We believe this proposal is needed in order to more accurately reflect the resource costs involved with furnishing therapy in the OTP setting. d. Medicare Part B Payment for Preventive Vaccine Administration ServicesSections III.H.2. and 3. of this proposed rule discuss proposals that implement policies impacting the payment amount for administration of preventive vaccines paid under the Part B vaccine benefit. Section III.H.4. of this proposed rule proposes to clarify the timing of payment policies for COVID-19 vaccines and COVID-19 monoclonal antibody products. These proposals are necessary to provide stable payment for preventive vaccine administration to allow predictability for providers and suppliers to rely on for building and sustaining robust vaccination programs. e. Medical Necessity and Documentation Requirements for Nonemergency, Scheduled, Repetitive Ambulance ServicesWe propose to modify nonemergency, repetitive, scheduled ambulance policy at § 410.40(e)(2)(ii) by clarifying that (1) the physician certification statement and additional documentation must provide detailed explanations, that are consistent with the beneficiary's current medical condition, that explains the beneficiary's need for transport by an ambulance; and (2) that coverage includes observation or other services rendered by qualified ambulance personnel. Existing regulations at § 410.40(e)(2) are interpreted too narrowly by some interested parties, excluding beneficiaries in need of monitoring. This proposed language clarifies the intent of existing regulatory language by explicitly stating that beneficiaries who may not be in need of tangible services, but otherwise are in need of monitoring, qualify for this limited ambulance benefit. This is not a statutorily-mandated provision but addresses a longstanding ambiguity potentially affecting vulnerable populations. f. Expansion of Coverage for Colorectal Cancer Screening and Reducing BarriersIn CY 2019, the last year for which incidence data are available, colorectal cancer (CRC) accounted for the 4th highest rate of new cancer cases and 4th highest rate of cancer deaths in the United States.[536] The Center for Disease Control and Prevention (CDC) advises, “Colorectal cancer almost always develops from precancerous polyps (abnormal growths) in the colon or rectum. Screening tests can find precancerous polyps, so that they can be removed before they turn into cancer. Screening tests can also find colorectal cancer early, when treatment works best. Regular screening, beginning at age 45, is the key to preventing colorectal cancer and finding it early.” [537] This proposed rule would expand coverage for colorectal cancer screening tests by reducing the minimum age payment limitation for certain tests from 50 to 45 years of age. In addition, we propose to expand the regulatory definition of CRC screening tests to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based CRC screening test returns a positive result. Our proposals would update Medicare coverage and payment policies to align with our new understanding of CRC screening, the latest recommendations from the U.S. Preventive Services Task Force and recommendations from professional societies and other appropriate organizations. We propose to expand coverage of colorectal cancer screening tests by exercising our authority under sections 1834(n) and 1861(pp)(1)(D) of the Act. We believe these proposals would expand access to quality care and improve health outcomes through prevention, early detection, more effective treatment and reduced mortality. Moreover, it would directly advance health equity by promoting access and removing barriers for much needed cancer prevention and early detection within rural communities and communities of color that are especially impacted by the incidence of CRC. g. Removal of Selected National Coverage DeterminationsCMS periodically identifies and proposes to remove 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 and services that are used infrequently by beneficiaries. Since the CY 2021 PFS final rule (85 FR 84472), we have used notice and comment rulemaking to obtain public comment on removing outdated NCDs, replacing the prior subregulatory administrative process used on two occasions in 2013 and 2015. Eliminating an NCD that provides national coverage for items and services means that the item or service will no longer be automatically, nationally 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). As described in section III.G. of this proposed rule, we are proposing to remove NCD 160.22 Ambulatory EEG Monitoring (06/12/1984), because the NCD contains outdated language that is inconsistent with, and contrary to current standards of care. We believe that allowing local contractor discretion to make coverage decision for this service better serves the needs of the Medicare program and its beneficiaries. We estimate there would be de minimis change to 2023 payments, compared to 2021 because this is a long-established service for which the MACs already have LCDs and guidance articles. Therefore, we believe removing the outdated NCD would allow MACs to update local coverage guidance for this established diagnostic test, but would not result in significant changes to utilization or payments. h. Medicare Shared Savings ProgramAs we seek to advance the overall value-based care strategy of growth, alignment, and equity, we are proposing modifications to the Medicare Shared Savings Program to increase program participation by supporting organizations new to value-based care and shared savings, especially for organizations serving underserved populations, and providing greater flexibility in the progression to performance-based risk, allowing these organizations more time to redesign their care processes to be successful under risk arrangements. As part of this effort, we are proposing advance investment payments to new, low-revenue ACOs that are inexperienced with performance-based risk Medicare ACO initiatives. To address the social needs of people with Medicare, these payments would increase when more people who are dually eligible and/or who live in areas with high deprivation (measured by the area deprivation index (ADI)) are attributed to the ACO. We are also building on the existing Shared Savings Program benchmarking Start Printed Page 46384 methodology by proposing modifications to strengthen financial incentives for long term participation by reducing the impact of ACOs' performance on their benchmarks, to address the impact of ACO market penetration on regional expenditures used to adjust and update benchmarks, and to strengthen the business case for participation for ACOs serving high-risk and high dually eligible populations, which would help sustain participation and grow the program. Additionally, we are proposing modifications to the benchmarking methodology to mitigate bias in regional expenditure calculations that benefits ACOs electing prospective assignment. We are also proposing changes to the quality reporting and the quality performance requirements to support the transition of ACOs to all payer quality measure reporting. These proposals include implementing a health equity adjustment to an ACO's MIPS quality performance category score to recognize high performing ACOs serving a high proportion of underserved beneficiaries. Finally, we are proposing changes that are important for improved operations of the Shared Savings Program, including policies to reduce ACO administrative burden while maintaining program integrity. i. Provider Enrollment and DMEPOS Conditions of PaymentThis proposed rule is also needed to make regulatory enhancements to our provider enrollment policies and to our DMEPOS conditions of payments. These provisions focus on, but are not limited to: (1) expanding the bases for denying or revoking a provider's or supplier's Medicare enrollment; (2) subjecting a greater number of providers and suppliers, such as skilled nursing facilities, to the highest level of screening, which includes fingerprinting all 5 percent or greater owners of these providers and suppliers; and (3) denying payment to DMEPOS suppliers that are not appropriately licensed. These changes are necessary to help ensure that payments are made only to qualified providers and suppliers and that owners of these entities are carefully screened. As explained in section III.J. of this proposed rule, we believe that fulfilling both of these objectives would assist in protecting the Trust Funds and Medicare beneficiaries. j. Proposal To Revise HCPCS Level II Coding Procedures for Wound Care Management ProductsThe HCPCS is a standardized coding system used to identify particular items and services on claims submitted to Medicare, Medicaid, and other health insurance programs in a consistent and orderly manner. The HCPCS is divided into two principal subsystems, referred to as HCPCS Level I and HCPCS Level II. The HCPCS Level I code set is comprised of Current Procedural Terminology (CPT®) codes, which are owned and maintained by the American Medical Association. The HCPCS Level II code set is used primarily to identify items, services, supplies, and equipment that are not identified by CPT® codes. CMS updates and maintains the HCPCS Level II code set on a periodic and routine basis. One of the categories of items and supplies that are typically described by HCPCS Level II codes are wound care management products, which are regulated by the Food and Drug Administration. In order to provide a more uniform and permanent approach to coding for wound care management products, we are making five proposals in this proposed rule: (1) that the assignment of A codes to all wound care management products (that are not regulated by FDA as drugs or biological products that would otherwise be eligible for separate payment under section 1847A of the Act) would continue with respect to products for which a HCPCS Level II code is requested for the first time, as well as for wound care management products to which we previously assigned a Q code; (2) to discontinue all existing Q codes for wound care management products; (3) to, prior to the assignment of an A code, require products with an existing Q code that were described by the applicant as a 361 HCT/P to submit a HCPCS Level II re-application within 12 months of the effective date of the final rule (that is, January 1, 2024); (4) to require a recommendation letter from the FDA's TRG to be submitted as part of the HCPCS Level II application for all wound care management products described by the applicant as a 361 HCT/P, regardless if it is a first time application or re-application for a product with an existing Q code; and (5) to evaluate HCPCS Level II coding applications for all 361 HCT/P wound care management products through our biannual coding cycles for non-drugs and non-biological products, rather than on a quarterly basis, beginning January 1, 2024. These proposals align with our proposal in section II.J. of this proposed rule that all wound care management products (that are not regulated by FDA as drugs or biological products that would otherwise be eligible for separate payment under section 1847A of the Act) would be covered under section 1861(s)(2)(A) of the Act as incident to supplies that are commonly furnished in the physician office setting. B. Overall ImpactWe examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (February 2, 2013), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)). Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). An RIA must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We estimated, as discussed in this section, that the PFS provisions included in this proposed rule will redistribute more than $100 million in 1 year. Therefore, we estimate that this rulemaking is “economically significant” as measured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we prepared an RIA that, to the best of our ability, presents the costs and benefits of the rulemaking. The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals, practitioners and most other providers and suppliers are small entities, either by nonprofit status or by having annual revenues that qualify for small business status under the Small Business Administration standards. (For details, see the SBA's website at http://www.sba.gov/content/table-small-business-size-standards (refer to the 620000 series)). Individuals and States are not included in the definition of a small entity. The RFA requires that we analyze regulatory options for small businesses and other entities. We prepare a regulatory flexibility analysis unless we certify that a rule would not have a significant economic impact on a Start Printed Page 46385 substantial number of small entities. The analysis must include a justification concerning the reason action is being taken, the kinds and number of small entities the rule affects, and an explanation of any meaningful options that achieve the objectives with less significant adverse economic impact on the small entities. Approximately 95 percent of practitioners, other providers, and suppliers are considered to be small entities, based upon the SBA standards. There are over 1 million physicians, other practitioners, and medical suppliers that receive Medicare payment under the PFS. Because many of the affected entities are small entities, the analysis and discussion provided in this section, as well as elsewhere in this proposed rule is intended to comply with the RFA requirements regarding significant impact on a substantial number of small entities. In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. Medicare does not pay rural hospitals for their services under the PFS; rather, the PFS pays for physicians' services, which can be furnished by physicians and NPPs in a variety of settings, including rural hospitals. We did not prepare an analysis for section 1102(b) of the Act because we determined, and the Secretary certified, that this proposed rule will not have a significant impact on the operations of a substantial number of small rural hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits on State, local, or tribal governments or on the private sector before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2022, that threshold is approximately $165 million. This proposed rule will impose no mandates on State, local, or tribal governments or on the private sector. Executive Order 13132 establishes certain requirements that an agency must meet when it issues a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has federalism implications. Since this proposed rule does not impose any costs on State or local governments, the requirements of Executive Order 13132 are not applicable. We prepared the following analysis, which together with the information provided in the rest of this preamble, meets all assessment requirements. The analysis explains the rationale for and purposes of this proposed rule; details the costs and benefits of the rule; analyzes alternatives; and presents the measures we will use to minimize the burden on small entities. As indicated elsewhere in this proposed rule, we discussed a variety of changes to our regulations, payments, or payment policies to ensure that our payment systems reflect changes in medical practice and the relative value of services, and to implement provisions of the statute. We provide information for each of the proposed policy changes in the relevant sections of this proposed rule. We are unaware of any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule. The relevant sections of this proposed rule contain a description of significant alternatives if applicable. C. Changes in Relative Value Unit (RVU) Impacts1. Resource-Based Work, PE, and MP RVUsSection 1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases in RVUs may not cause the amount of Medicare Part B 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 budget neutrality. Our estimates of changes in Medicare expenditures for PFS services compared payment rates for CY 2022 with payment rates for CY 2023 using CY 2021 Medicare utilization. The payment impacts described in this proposed rule reflect averages by specialty based on Medicare utilization. The payment impact for an individual practitioner could vary from the average and will depend on the mix of services they furnish. The average percentage change in total revenues will be less than the impact displayed here because practitioners and other entities generally furnish services to both Medicare and non-Medicare patients. In addition, practitioners and other entities may receive substantial Medicare revenues for services under other Medicare payment systems. For instance, independent laboratories receive approximately 83 percent of their Medicare revenues from clinical laboratory services that are paid under the Clinical Laboratory Fee Schedule (CLFS). The PFS update adjustment factor for CY 2023, as specified in section 1848(d)(19) of the Act, is 0.00 percent before applying other adjustments. In addition, the Protecting Medicare and American Farmers from Sequester Cuts Act provided a 3.00 percent increase in PFS payment amounts for services furnished on or after January 1, 2022, and before January 1, 2023 and required that the increase shall not be taken into account in determining PFS payment rates for subsequent years. The expiration of this 3.00 percent increase in payment amounts will result in the CY 2023 conversion factor being calculated as though the 3.00 percent increase for the CY 2022 conversion factor had never been applied. To calculate the CY 2023 PFS conversion factor (CF), we took the CY 2022 conversion factor without the 1-year 3.00 percent increase provided by the CAA and multiplied it by the BN adjustment required as described in the preceding paragraphs. We estimate the CY 2023 PFS CF to be 33.0775 which reflects the BN adjustment under section 1848(c)(2)(B)(ii)(II) of the Act, the 0.00 percent update adjustment factor specified under section 1848(d)(19) of the Act, and the expiration of the 3.00 percent increase for services furnished in CY 2022, as provided in the CAA. We estimate the CY 2022 anesthesia CF to be 20.7191 which reflects the same overall PFS adjustments with the addition of anesthesia-specific PE and MP adjustments. Start Printed Page 46386 Table 138 shows the payment impact of the policies contained in this proposed rule on PFS services. To the extent that there are year-to-year changes in the volume and mix of services provided by practitioners, the actual impact on total Medicare revenues will be different from those shown in Table 138 (CY 2022 PFS Estimated Impact on Total Allowed Charges by Specialty). The following is an explanation of the information represented in Table 138.
Start Printed Page 46387 Start Printed Page 46388 We have received requests from interested parties for CMS to provide more granular information that separates the specialty-specific impacts by site of service. These interested parties have presented high-level information to CMS suggesting that Medicare payment policies are directly responsible for the consolidation of privately owned physician practices and free standing supplier facilities into larger health systems. Their concerns highlight a need to update the information under the PFS to account for current trends in the delivery of health care, especially concerning independent versus facility-based practices. In response to interested party feedback, we have recently improved our current suite of public use files (PUFs) by including a new file that shows estimated specialty payment impacts at a more granular level, specifically by showing ranges of impact for practitioners within a specialty. This file is available on the CMS website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For this rulemaking cycle, we are providing an additional impact table that includes a facility/non-facility breakout of payment changes. The following is an explanation of the information represented in Table 139.
Start Printed Page 46389 Start Printed Page 46390 Start Printed Page 46391 Start Printed Page 46392 Start Printed Page 46393 2. CY 2023 PFS Impact Discussiona. Changes in RVUsThe most widespread specialty impacts of the RVU changes are generally related to the changes to RVUs for specific services resulting from the misvalued code initiative, including RVUs for new and revised codes. The estimated impacts for some specialties, including infectious disease, internal medicine, geriatrics, diagnostic testing facility, and physical medicine reflect increases relative to other physician specialties. These increases can largely be attributed to the revaluation of the other E/M services and/or the second year transition to updated clinical labor pricing. The services that make up these specialties rely primarily on E/M services or on clinical labor for their practice expense costs. These increases are also due to increases in value for particular services after considering the recommendations from the American Medical Association's (AMA) Relative Value Scale Update Committee (RUC) and CMS review, and increased payments resulting from updates to supply and equipment pricing. The estimated impacts for several specialties, including clinical social workers, clinical psychologists, radiology and interventional radiology, vascular surgery, and nuclear medicine, reflect decreases in payments relative to payment to other physician specialties which are largely the result of the redistributive effects of the revaluation of other E/M services and/or the second year transition to updated clinical labor pricing. The services that make up these specialties were also negatively affected by updated malpractice premium data for CY 2023, or rely primarily on supply/equipment items for their practice expense costs and therefore were affected negatively by the transition to updated clinical labor pricing under budget neutrality. These decreases are also due to the revaluation of individual procedures based on reviews, including consideration of Start Printed Page 46394 AMA RUC review and recommendations, as well as decreases resulting from the continued phase-in implementation of the previously finalized updates to supply and equipment pricing. The estimated impacts also reflect decreases due to continued implementation of previously finalized code-level reductions that are being phased in over several years. For independent laboratories, it is important to note that these entities receive approximately 83 percent of their Medicare revenues from services that are paid under the CLFS. We often receive comments regarding the changes in RVUs displayed on the specialty impact table (Table 138), including comments received in response to the valuations. We remind interested parties that although the estimated impacts are displayed at the specialty level, typically the changes are driven by the valuation of a relatively small number of new and/or potentially misvalued codes. The percentage changes in Table 138 are based upon aggregate estimated PFS allowed charges summed across all services furnished by physicians, practitioners, and suppliers within a specialty to arrive at the total allowed charges for the specialty, and compared to the same summed total from the previous calendar year. 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. To illustrate how impacts can vary within specialties, we created a public use file that models the expected percentage change in total RVUs per practitioner. Using CY 2021 utilization data, Total RVUs change between −1 percent and 1 percent for more than 45 percent of practitioners, representing more than 44 percent of the changes in Total RVUs for all practitioners, with variation by specialty. Specialties, such as chiropractic, hand surgery, ophthalmology, optometry, and orthopedic surgery, exhibit little variation in changes in total RVUs per practitioner. For these specialties, more than 90 percent of these practitioners will experience a change in Total RVUs between −1 percent and 1 percent. The specific service mix within a specialty may vary by practitioner, so individual practitioners may experience different changes in total RVUs. For example, Table 138 (CY 2022 PFS Estimated Impact on Total Allowed Charges by Specialty) indicates a 5 percent increase in RVUs for the infectious disease specialty as a whole, however, only 36 percent of infectious disease specialty practitioners—representing over 51 percent of Total RVUs for the specialty—would experience a 5 percent or more increase in Total RVUs. Meanwhile, nearly 12 percent of infectious disease specialty practitioners would experience 1 percent or more decreases in Total RVUs, and these practitioners account for about 6 percent of Total RVUs for this specialty. We also note the code level RVU changes are available in the Addendum B public use file that we make available with each rule. Many interested parties have requested that CMS maintain the 3.00 percent increase in PFS payment amounts that was specified in the Protecting Medicare and American Farmers from Sequester Cuts Act for services furnished during CY 2022. We remind readers that this increase was provided through a time-limited amendment to the statute, which CMS does not have legal authority to alter. The expiration of this 3.00 percent increase in payment amounts will result in the CY 2023 conversion factor being calculated as though the 3.00 percent increase for the CY 2022 conversion factor had never been applied. Several interested parties have requested clarification regarding whether the specialty impacts displayed in Table 138 reflected the expiration of the 3.00 percent CAA provision for CY 2023. We can clarify for the commenters that the specialty impacts displayed in Table 138 reflect changes that take place within the pool of total RVUs. The specialty impacts table therefore includes any changes in spending which result from finalized policies within BN (such as the revaluation of other E/M codes in CY 2023 or the clinical labor pricing update in CY 2022) but does not include any changes in spending which result from finalized policies that are not subject to BN adjustment, and therefore, have a neutral impact across all specialties. The expiration of the 3.00 percent CAA provision for CY 2023 is a statutory change that takes place outside of BN, and therefore, is not captured in the specialty impacts displayed in Table 138. b. ImpactColumn F of Table 138 displays the estimated CY 2023 impact on total allowed charges, by specialty, of all the RVU changes. A table showing the estimated impact of all of the changes on total payments for selected high volume procedures is available under “downloads” on the CY 2023 PFS proposed rule website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. We selected these procedures for sake of illustration from among the procedures most commonly furnished by a broad spectrum of specialties. The change in both facility rates and the nonfacility rates are shown. For an explanation of facility and nonfacility PE, we refer readers to Addendum A on the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. D. Changes Related to Telehealth ServicesIn last year's final rule, we discussed various flexibilities that would expire at the end of the PHE. Further, we clarified certain policies that were initially implemented as temporary policies, and subsequently made permanent by provisions of the CAA, 2021 that amended section 1834(m) of the Act (refer to 86 FR 65055-65063). Also, we note that the CAA, 2022 includes provisions that further amend section 1834(m) of the Act. For a detailed discussion of our implementation of the CAA, 2022 provisions refer to section II.B of this proposed rule. Following the expiration of the PHE for COVID-19, Medicare telehealth will see changes occur in a number of areas. CMS implemented many temporary policy changes during the PHE to facilitate continued safe access to care during the pandemic, and that those changes will end with the expiration of the PHE ends or, in the case of some policies, after 151 days following the end of the PHE as specified in the relevant sections of the CAA, 2022. Following the expiration of the flexibilities put in place during the PHE for COVID-19, the statutory and regulatory restrictions on payment for Medicare telehealth services under section 1834(m) of the Act and our regulations at §§ 410.78 and 414.65 will apply once again. Start Printed Page 46395 For most Medicare telehealth services, payment will be made only when furnished by certain types of physicians and practitioners to patients located in specified types of medical settings (originating sites) located in mostly rural areas, and only when the service is furnished using audio and video equipment permitting two-way, real-time interactive communication between the patient and furnishing practitioner. There are limited exceptions to these restrictions that allow Medicare telehealth services to be furnished without geographic limitations, to patients in their homes, and in some cases using audio-only technology, when the services are for the diagnosis, evaluation, or treatment of a mental health disorder (including a substance use disorder (SUD), including opioid misuse). There are also limited statutory exceptions for home dialysis monthly ESRD-related visits and for services for purposes of diagnosis, evaluation or treatment of symptoms of an acute stroke, to allow Medicare telehealth services to be furnished without geographic limitations, and to patients in their homes or certain other locations. As such, after the expiration of the flexibilities put in place during the PHE, we expect a significant reduction in the volume of Medicare telehealth services overall, and a corresponding reduction in aggregate spending for Medicare telehealth services. We further expect that many of the services that have been furnished via telehealth during the PHE will return to in-person settings. However, because the provisions of the CAA, 2021 and CAA, 2022 required permanent changes to remove previous restrictions on the use of telehealth for the diagnosis, evaluation or treatment of a mental health disorder (including a substance use disorder (SUD), including opioid use disorder), we anticipate that volume and spending for Medicare telehealth mental health services will increase from pre-pandemic levels coming years. In this proposed rule, we propose to continue including on the Medicare Telehealth Services List, either permanently or temporarily through the end of CY 2023, many of the services added to the list during the PHE. However, after the expiration of the flexibilities put in place during the PHE, payment for Medicare telehealth services will be subject to the statutory and regulatory limitations described previously in this section of the RIA. Compared to overall utilization of these services during the PHE, we do not expect new significant overall growth in Medicare telehealth services by aggregate volume. Further, we estimate that the proposed addition of telehealth services added to the Medicare Telehealth Services List will have a negligible impact on PFS expenditures. We are also proposing to implement provisions of the CAA, 2022 that extend the application of certain Medicare telehealth flexibilities for an additional 151 days after the end of the PHE for COVID-19, including allowing Medicare telehealth services to be furnished to patients located anywhere within the U.S.; allowing the extended scope of eligible telehealth practitioners to include occupational therapists, physical therapists, speech-language pathologists, and audiologists; extending payment for telehealth services furnished by FQHCs and RHCs; and delaying the requirement that there be an in-person visit with the physician or practitioner within 6 months before an initial mental health telehealth service. We anticipate that these proposals will result in continued utilization of Medicare telehealth services during the remainder of the PHE and the immediate subsequent 151 days at levels comparable to observed utilization of these services thus far during the PHE for COVID-19. Regarding our proposal to retain on the Medicare Telehealth Services List until the end of CY 2023 the services that we added to the list on a temporary Category 3 basis, we believe our proposals would provide clarity to interested parties, but will have a negligible impact on PFS expenditures. For example, outside the circumstances and flexibilities available during the PHE, services that are permanently included on the Medicare Telehealth Services List are furnished via telehealth, on average, less than 0.1 percent of the time they are reported.538 The statutory and regulatory requirements for payment of Medicare telehealth services that apply outside the circumstances of the PHE have limited increases in utilization. E. Other Provisions of the Regulation1. Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs Payable Under Medicare Part B To Provide Refunds With Respect to Discarded AmountsSection 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117-9, November 15, 2021) amended section 1847A of the Act to require manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug. The refund amount is the payment limit for the drug, multiplied by the amount of discarded drug that exceeds an applicable percentage, which is required to be at least 10 percent, of total charges (subject to certain exclusions) for the drug in a given calendar quarter. In section III.A of this proposed rule, we are proposing implementation of this provision including: how discarded amounts of drugs are determined; a definition of which drugs are subject to refunds (and exclusions); when and how often CMS will notify manufacturers of refunds; when and how often payment of refunds from manufacturers to CMS is required; refund calculation methodology; a dispute resolution process; and enforcement provisions. To estimate anticipated quarterly refund amounts due from manufacturers, we analyzed JW modifier data from 2020 as if the data represented dates of service on or after the effective date of section 90004 of the Infrastructure Act (that is, January 1, 2023).[539] Overall in the 2020 calendar year, Medicare paid nearly $720 million for discarded amounts of drugs from a single-dose container or single-use package paid under Part B. In that year, there were 39 billing and payment codes with 10 percent or more discarded units based on JW modifier data. Of these, 8 would not meet the proposed definition of refundable single-dose container or single-use package drug in section 1847A(h)(8) of the Act because they are multiple source drug codes; 5 would be excluded from the proposed definition of refundable single-dose container or single-use package drug (as specified in section 1847A(h)(8)(B) of the Act) because they are identified as radiopharmaceuticals or imaging agents in FDA-approved labeling. After these exclusions, there were 26 billing and payment codes that would meet the proposed definition of refundable single-dose container or single-use package drug and have 10 percent or more discarded units. We estimated refund amounts as described in section 1847A(h)(3) of the Act were calculated based on this data by subtracting the percent units discarded by 10 percent (the applicable percentage). Then, we multiplied that percentage by the CY 2020 total allow amount to estimate the annual refund for a given billing and payment code. The quarterly refund was estimated by dividing the annual estimate by 4. Based Start Printed Page 46396 on this data, there would be approximately $141 million dollars in refunds due from manufacturers for the calendar year of 2020 ($35.4 million dollars each calendar quarter). See Table 140. There are several limitations to this analysis that could substantially affect the total quarterly refund. Since new drugs are continually being approved, this estimate does not consider newer drugs that would meet the definition of refundable single-dose container or single-use package drug on or after the effective date of January 1, 2023. Since section 1847A(h)(8)(B)(iii) of the Act excludes drugs approved by FDA on or after November 15, 2021 and for which payment has been made under Part B for fewer than 18 months from this definition, we would expect impact on refund amounts after the 18-month exclusion has ended if the drug otherwise meets the definition. Other substantial changes to this estimate may occur if a billing and payment code no longer meets this definition. For example, if a generic version of one of these drugs is marketed, the billing and payment code would become a multiple source drug code and would no longer meet the definition of refundable single-dose container or single-use package drug. Subsequently, the manufacturers would not be responsible for refunds under this provision. There may be changes in the percent discarded units for a given refundable single-dose container or single-use package drug if the manufacturer introduces additional vial sizes or modifies the vial size to reduce the amount discarded. Lastly, since data from the CMS website only includes billing and payment codes on Start Printed Page 46397 the ASP drug pricing file [540] and implementation of section 90004 of the Infrastructure Act would not be restricted to billing and payment codes included on the file, there may be other applicable data that was not assessed as part of this estimate. a. Impacts Related to the Proposed Dispute Resolution ProcessAs described in section V.B.1. of this proposed rule, the information collection requirements, we estimate the annual burden per respondent/recordkeeper to be 40 hours. If we anticipate no more than 10 disputes per year, the total annual reporting and/or recordkeeping burden would be 400 hours (10 error reports per year × 40 hours per respondent). We estimate an annual cost of this burden to be $15,800 ($39.50/hour × 400 hours). 2. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)In section III.C.2. of this proposed rule, we are proposing to include chronic pain management services in the general care management HCPCS code G0511 when these services are provided by RHCs and FQHCs. Since HCPCS code GYYY1 would be valued using a crosswalk to the PCM CPT code 99424, which is currently one of the CPT codes that comprise HCPCS code G0511, we propose no change to the average used to calculate the G0511 payment rate. In addition, in section III.C.2. of this proposed rule we discuss the new coding and payment for general behavioral health integration services (HCPCS code GBHI1). We explain that since clinical psychologists (CPs) and clinical social workers (CSWs) are considered practitioners that can provide services in RHCs/FQHCs, we acknowledge when CPs and CSWs provide the services described in HCPCS code GBHI1 in an RHC or FQHC, they can bill HCPCS code G0511. In terms of estimated impacts to the Medicare program, expanding use of General Care Management HCPCS code G0511 to include chronic pain management services (GYYY1) and behavioral health integration services (GBHI1) for RHCs and FQHCs would have a negligible impact on Medicare spending because these services are already included. In section III.C.4. of this proposed rule, we provide a discussion and clarification regarding the use of short-period cost reports vs 12-consecutive month cost reports to establish the payment limit for specified provider-based RHCs in accordance with section 1833(f)(3)(A) of the Act. We believe this clarification would have negligible impact on Medicare spending. 3. Clinical Laboratory Fee ScheduleIn section III.B. of this proposed rule, we discuss statutory revisions to the data reporting period and phase-in of payment reductions under the CLFS. In accordance with section 4(b) of the Protecting Medicare and American Farmers from Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, enacted December 10, 2021), we are proposing to make certain conforming changes to the data reporting and payment requirements in our regulations at 42 CFR part 414, subpart G. Specifically, for CDLTs that are not ADLTs, we are proposing to update certain definitions and revise § 414.504(a)(1) to indicate that initially, data reporting begins January 1, 2017 and is required every 3 years beginning January 2023. The PMAFSCA delays the next data reporting period under the CLFS for CDLTs that are not ADLTs by 1 year, that is, it requires the next data reporting period for these tests to take place during the period of January 1, 2023 through March 31, 2023. Subsequently, the next private payor rate-based CLFS update for these tests would be effective January 1, 2024 instead of January 1, 2023. In addition, we are proposing to make conforming changes to our requirements for the phase-in of payment reductions to reflect the PMAFSCA amendments. Specifically, we are proposing to revise § 414.507(d) to indicate that for CY 2022, payment may not be reduced by more than 0.0 percent as compared to the amount established for CY 2021, and for CYs 2023 through 2025, payment may not be reduced by more than 15 percent as compared to the amount established for the preceding year. We recognize that private payor rates for CDLTs paid on the CLFS and the volumes paid at each rate for each test, which are used to determine the weighted medians of private payor rates for the CLFS payment rates, have changed since the first data collection period (January 1, 2016 through June 30, 2016) and data reporting period (January 1, 2017 through March 31, 2017). In addition, as discussed in section III.A. of this proposed rule, in the CY 2019 PFS final rule (83 FR 59671 through 59676), we amended the definition of applicable laboratory to include hospital outreach laboratories that bill Medicare Part B using the CMS-1450 14x Type of Bill. As such, the PMAFSCA amendments to the data reporting period will delay using updated private payor rate data to set revised CLFS payment rates for CDLTs that are not ADLTs. Due to the unforeseen changes in private payor rates due to potential shifts in market-based pricing for laboratory tests and the unpredictable nature of test volumes and their impact on calculating updated CLFS payment rates based on the weighted median of private payor rates, it is uncertain whether the delay in data reporting would result in a measurable budgetary impact. In other words, in order to assess the impact of delayed reporting and subsequent implementation of updated CLFS rates, we would need to calculate weighted medians of private payor rates based on new data and compare the revised rates to the current rates. As such, we believe that we will only know the impact of the delay in data reporting after collecting actual updated applicable information from applicable laboratories, and calculating the updated CLFS rates. With regard to the proposed conforming changes to our requirements for the phase-in of payment reductions, we note that for CYs 2023 through 2025, payment may not be reduced by more than 15 percent as compared to the amount established for the preceding year. Based on data reported in the 2017 data collection period, we estimate 14.8 percent (191) of tests on the CLFS may receive the full 15 percent phase-in reduction in CY2023. 4. Expansion of Coverage for Colorectal Cancer Screening and Reducing BarriersIn section III.D. of this proposed rule, we propose to expand CRC screening test coverage by modifying coverage and payment limitations of certain CRC screening tests to begin at age 45 instead of 50. An updated modeling study that accompanied the May 2021 updated USPSTF CRC screening recommendation found that the most efficient strategy for CRC screening began for individuals at 45 years of age. The expected benefits include longer life and fewer new cases and total deaths from colorectal cancer.[541] We considered the comparatively small population of traditional Medicare enrollees in the affected age group. The CMS website reports that total Medicare beneficiary enrollment in Part A and/or Part B aged 45-54 years in CY 2020 Start Printed Page 46398 totaled only 1,956,634, whereas total Medicare beneficiary enrollment in Part A and/or Part B of all ages totaled 62,840,267.[542] In addition, we propose to expand CRC screening test coverage to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based CRC screening test returns a positive result. We anticipate the impact of beneficiary cost sharing no longer being applicable to the follow-on screening colonoscopy would be balanced, in part or in whole, by the benefits and savings of additional beneficiaries choosing a less expensive and non-invasive stool-based test as their first step in the CRC screening process. We anticipate that both proposals would result in some additional service utilization, but we also anticipate the additional utilization to be balanced, in part or in whole, by benefits and savings resulting from increased prevention, early detection (allowing for less invasive and more effective treatment) and reduced mortality. We do not anticipate expanding CRC screening test coverage (in accordance with recommendations by the USPSTF and in consultation with other appropriate organizations described earlier in our proposal) to result in a significant impact on the Medicare program. An internal analysis by the CMS Office of the Actuary of CY 2019 Medicare FFS CRC screening test claims confirmed our understanding that our proposals would not likely result in a significant impact on the Medicare program. Regarding our proposal to expand CRC screening test coverage by modifying coverage and payment limitations of certain CRC screening tests to begin at age 45 instead of 50, we calculated CY 2019 FFS CRC screening test spending and utilization for patients between 45 and 55 years old, estimated CY 2019 Medicare FFS member months by age, and assumed that current colorectal screening test utilization for 45-49 year old patients would increase on a per enrollee basis to that of patients between 50-55. We estimated the impact from additional utilization to be approximately $5 million in additional spending. Regarding our proposal to expand CRC screening test coverage to include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based CRC screening test returns a positive result, we matched CY 2019 FFS colonoscopy claims to Cologuard usage claims, identified colonoscopy claims as screening or diagnostic, assumed that all diagnostic colonoscopy claims with a prior Cologuard test had a positive test result, and calculated the applicable beneficiary cost sharing for those claims. We estimated the impact from additional utilization to be approximately $5 million in additional spending. 5. Removal of Selected National Coverage Determinations (NCDs)We are proposing to remove one older NCD that no longer contains clinically pertinent and current information. Generally, proactively removing obsolete or unnecessary NCDs removes barriers to innovation and reduces burden for interested parties and CMS. NCDs generally fall into one of two impact categories. First, eliminating an NCD for items and services that were previously nationally covered means that the item or service will no longer be automatically nationally covered by Medicare. Instead, the coverage determinations for those items and services will be made by Medicare Administrative Contractors (MACs). Second, if the previous national coverage determination barred coverage for an item or service under title XVIII, MACs would now be able to cover the item or service if the MAC determines that such action is appropriate under the statute. We believe that allowing local contractor flexibility in these cases better serves the needs of the Medicare program and its beneficiaries since we believe the future utilization for items and services within this policy will be limited, affecting less than one percent of the Medicare FFS population. By proposing to remove NCD 160.22 Ambulatory EEG Monitoring, we are proposing to go from positive national coverage to local coverage by the MACs. Claims data for 2021 shows that for the 20 CPT/HCPCS codes associated with this NCD, CMS paid 167,242 Medicare FFS claims for approximately 78,267 unique beneficiaries totaling CMS payments of $48,702,876.00. We estimate there will be de minimis change to 2023 payments, compared to 2021 because this is a long-established service for which the MACs already have LCDs and guidance articles. The NCD contains outdated language that is inconsistent with, and contrary to current standards of care. Therefore, we believe removing the outdated NCD will allow MACs to update local coverage guidance for this established diagnostic test, but would not result in significant changes to utilization or payments. 6. Modifications Related to Medicare Coverage for Opioid Use Disorder (OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)As discussed in section III.F of this proposed rule, for CY 2023 and subsequent years, we are proposing to revise our methodology for pricing the drug component of the methadone weekly bundle and the add-on code for take-home supplies of methadone. Under this proposal, we would base the payment amount for the drug component of HCPCS codes G2067 and G2078 for CY 2023 and subsequent years on the payment amount for methadone in CY 2021 and update this amount annually to account for inflation using the PPI for Pharmaceuticals for Human Use (Prescription). We propose to update the methadone payment amount for CY 2023 based on the projected increase in the PPI for Pharmaceuticals for Human Use (Prescription) to reflect the forecasted price growth for prescription drugs for the 2-year period from CY 2021 to 2022 and from CY 2022 to 2023. Because we froze the payment amount for methadone at the 2021 amount for CY 2022, we propose to account for the inflation for both CY 2022 and CY 2023 in setting the payment rate for CY 2023. Based on the 2022 Q1 forecast from IHS Global Inc. (IGI) the proposed CY 2023 methadone payment amount would be $39.29, which is the CY 2022 payment amount of $37.38 increased by a projected 5.1 percent growth in the PPI for Pharmaceuticals for Human Use (Prescription) from CY 2021 to CY 2023 ($37.38 * 1.051 = $39.29). IGI is a nationally recognized economic and financial forecasting firm that contracts with CMS to forecast various price proxies used in the CMS market baskets. Additionally, we are proposing that if more recent data become subsequently available (for example, a more recent estimate of the PPI), we would use such data in the final rule to determine the final CY 2023 methadone payment amount. For subsequent years, we are proposing to continue to update this rate annually using the PPI for Pharmaceuticals for Human Use (Prescription). Overall, CMS estimates that the impact of our proposal to revise the OTP methadone pricing methodology would increase Medicare spending by roughly $2.5 million in CY 2023. This estimate is based on actual utilization of the OTP benefit by Medicare beneficiaries under Part B through CY 2021. The estimate does not reflect any additional utilization that may occur in CY 2023. Start Printed Page 46399 Additionally, as discussed in section III.F of this proposed rule, we are proposing to modify the payment rate for the non-drug component of the bundled payment for an episode of care to base the rate for individual therapy on a crosswalk to CPT code 90834 ( Psychotherapy, 45 minutes with patient), instead of a crosswalk to CPT code 90832 ( Psychotherapy, 30 minutes with patient), as is our current policy. We believe CPT code 90834 most closely corresponds to a 50-minute therapy session, which interested parties have indicated is the typical amount of therapy received by patients in the first few months of treatment at an OTP. In the CY 2020 PFS final rule (84 FR 62658), we stated that we based the rate for individual therapy in the bundled payment on the 2019 non-facility payment rate for CPT code 90832, which was $68.47. Therefore, to change the rate for individual therapy, we are proposing to substitute the 2019 rate for CPT code 90832 included in the non-drug component of each of the bundled payments for an episode of care with the 2019 PFS non-facility payment rate for CPT code 90834, which was $91.18, to determine an adjusted payment rate for CY 2020 for the non-drug component of each applicable HCPCS code. As described in § 410.67(d)(4)(iii), we would then apply the Medicare Economic Index (MEI) updates for 2021, 2022, and 2023 to these adjusted payment rates to determine the CY 2023 payment amounts for the non-drug component of the bundled payments for an episode of care. CMS anticipates that the proposed increase to the bundled rates to reflect longer individual therapy sessions would result in an increase of $25.93 to the non-drug component of the weekly bundled payments for HCPCS codes G2067 through G2075 from CY 2022 to 2023. Based on utilization data from Medicare beneficiaries under the OTP benefit through CY 2021, the estimated impact of this policy is an increase in Medicare spending of approximately $27 million in CY 2023. This estimate does not reflect any additional utilization that may occur during CY 2023. Additionally, as discussed in section III.F. of this proposed rule, we are proposing to allow the OTP intake add-on code to be furnished via two-way audio-video communications technology when billed for the initiation of treatment with buprenorphine, to the extent that the use of audio-video telecommunications technology to initiate treatment with buprenorphine is authorized by DEA and SAMHSA at the time the service is furnished. We are also proposing to permit the use of audio-only communication technology to initiate treatment with buprenorphine in cases where audio-video technology is not available to the beneficiary. We believe the Part B cost impact of the proposed flexibilities for the use of telecommunications policies will be minimal because, we do not expect that this provision will increase the frequency at which medically necessary intake assessments are furnished. 7. Medicare Shared Savings Programa. General ImpactsAs of January 1, 2022, over 11 million people with Medicare receive care from at least one health care provider in one of the 483 ACOs participating in the Medicare Shared Savings Program (Shared Savings Program), the largest value-based payment program in the country. The Shared Savings Program proposed policies advance Medicare's overall value-based care strategy of growth, alignment, and equity, with many proposals overlapping these categories. The proposed policies are designed to reverse recent trends where participation has plateaued in the Shared Savings Program has plateaued, higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks, and access to ACOs appears inequitable as evidenced by data indicating underserved populations are less likely to be assigned to a Shared Savings Program and to encourage growth of ACOs in underserved communities based, in part, on recent observations where the highest earning ACOs had a higher proportion of beneficiaries who were members of racial and ethnic minority communities and included a greater proportion of ESRD, disabled, and aged/dual eligible beneficiaries than the lowest earning ACOs. Stagnation in overall participation in the Shared Savings Program in recent years has coincided with increasing total shared savings outlays, driven by sharply higher shared savings payments to ACOs that were already low spending relative to their region electing to transition to risk in the ENHANCED track. While this type of selection was anticipated in estimating the impacts of the December 2018 final rule (83 FR 67816), it was also assumed that: (1) ACOs making the transition to risk would respond with stronger efforts to improve efficiency, and (2) a broader spectrum of relatively higher-spending ACOs would be influenced by the revised benchmarking methodology to drive down spending for their assigned beneficiaries while participating under the BASIC track glide path in order to ultimately achieve sustainable participation under risk in following agreement periods. The overall increase in shared savings payments to ACOs transitioning to the ENHANCED track appears to be driven largely by favorable regional benchmark adjustments and the ENHANCED track's higher sharing rate, calling into question whether ACOs selecting risk will further improve efficiency or simply be content to collect steady shared savings by maintaining their spending level relative to their region. Meanwhile, ACO Investment Model participants—a subset of Track 1 ACOs that meaningfully outperformed peer ACOs in reducing spending and earning shared savings over the period from 2016 through 2018—have also dropped out at an elevated frequency before even attempting the risk-free portion of the BASIC track glide path. The spending reductions achieved by AIM ACOs were found to be similar regardless of an AIM ACO's decision to continue or exit the program. Superior financial performance during an initial agreement period under a one-sided mode therefore failed to provide sufficient incentive to overcome a pronounced aversion to risk demonstrated by this otherwise-effective subset of ACOs.[543] Without modification, the Shared Savings Program is at high risk of increasing overall Medicare spending over the coming decade. ACOs serving patients with low spending will likely continue to dominate the roster of ACOs making the transition to risk. Shared savings payments to low-spending ACOs will increase alongside a growing disincentive for ACOs to serve higher spending populations for whom potential savings from care management would likely be greater.[544] This selective participation is in response to regional benchmark adjustments that have increased shared savings payments to low spending ACOs and has resulted in higher cost beneficiaries, who have the most need for ACO care management, being increasingly excluded from assignment to ACOs participating in the program. It currently appears very unlikely that selective transition to downside risk under the Start Printed Page 46400 current participation options and financial methodology will drive down spending enough to offset increased shared savings payments to ACOs with favorable regional benchmarks. Furthermore, a growing subset of ACOs that elect prospective beneficiary assignment are finding their regional benchmarks to be artificially inflated because of a systematic bias in calculations based on regional FFS expenditures resulting from comparing expenditures for the ACO's own assigned beneficiary population identified based on the offset assignment window, and expenditures for the assignable population of beneficiaries in the ACO's region identified based on the calendar year assignment window. Therefore, the program's baseline trajectory is now projected to increase net Medicare spending by approximately $4.2 billion over the period from 2024-2034, which spans two 5-year agreement periods for ACOs renewing or entering in 2024 and 2025. Absent proposed changes, the program is projected to violate the statutory requirement that provisions implemented under authority of section 1899(i)(3) of the Act not increase spending. The proposals are designed to increase program participation for new ACOs through advance investment payments to promote health equity and provide ACOs greater choice in the pace of progression to performance-based risk; sustain program participation by reducing the effect of ACO performance on benchmark updates and benchmark rebasing; mitigate the bias in regional expenditure calculations that benefits ACOs electing prospective assignment; strengthen incentives for ACOs serving high risk and high dual populations; improve the risk adjustment methodology to better account for medically complex, high cost beneficiaries while continuing to guard against coding initiatives; increase opportunities for low revenue ACOs in the BASIC track to share in savings by allowing ACOs that do not meet the minimum savings rate (MSR) requirement to share in savings at a lower rate; encourage ACOs to transition more quickly to all-payer quality measure reporting; update the ACO beneficiary assignment methodology; and reduce administrative burden on ACOs. Reducing the cap on negative regional adjustments to high spending ACOs' benchmarks and offering eligible ACOs a shared savings-only BASIC track participation option for a full 5-year agreement period are expected to significantly re-engage participation for ACOs serving higher cost beneficiaries. While we are uncertain how large the group of new and re-entering ACOs would be and whether they would have a similar savings potential as the first implementation of Track 1, other proposed incentives targeted to low revenue (typically physician-led) ACOs, like advance investment payments and paying partial shared savings to low-revenue ACOs with savings under their MSR, as well as adjusting rebased benchmarks for prior savings should improve the incentive for new ACOs to join the program and reduce spending to a greater extent than the incentive provided under Track 1. Table 141 shows the combined benchmark and the relative impact that 2024/2025 renewing and new ACOs are expected to have on average over the two 5-year agreement periods from 2024-2034. The Baseline columns show these projections under current program rules and the Proposed columns show the projections for performance under the proposed rule. b. Impacts for Renewing ACOsRenewing ACOs for the projected two 5-year agreement periods are anticipated at baseline to generate higher net shared savings earnings (2.8 percent of benchmark) than actual reductions in spending on claims (2.7 percent of benchmark). After also accounting for higher physician fee schedule payments to qualifying practitioners (QPs), totaling on average 0.3 percent of benchmark over 10 years, this cohort of ACOs is projected to increase net program spending by 0.4 percent of benchmark on average, or $2.9 billion over 10 years. For existing ACOs, the proposed changes would help retain more of the otherwise shrinking subset of ACOs that serve higher spending populations, would remove the bias favoring benchmarks for ACOs electing prospective assignment, and would marginally improve the incentive for efficiency via the use of a three-way blend of the Accountable Care Prospective Trend (ACPT)/national-regional growth rates to update benchmarks and the prior savings adjustment. As a result, overall savings on claims are projected to increase by a small margin to 2.8 percent of benchmark while average shared savings payments would be reduced to an average of 2.1 percent of benchmark. The total 10-year impact for this cohort would flip from a $2.9 billion cost at baseline (range of $1.4 billion savings to $7.0 billion cost at 10th and 90th percentiles) to a $3.6 billion savings under the proposed changes (range of $10 billion savings to $3 billion cost at the 10th and 90th percentiles). Start Printed Page 46401 c. Impacts for New ACOs and Re-Entering ACOsAt baseline without the proposed changes, the cohort of new ACOs and re-entering ACOs starting in 2024 would be relatively small (only $11 billion in annual benchmark) and skewed toward ACOs serving beneficiary populations that are already low cost at baseline. Shared savings payments to this group would also be elevated by the bias inflating benchmarks for ACOs electing prospective assignment. At baseline this cohort would increase net program spending by an estimated 1.2 percent of benchmark or $1.3 billion over 10 years (ranging from an increase of $0.5 to $2.0 billion at the 10th and 90th percentiles). Alternatively, under the proposed changes, the cohort of new and re-entering participation starting in 2024 is estimated to increase to $44 billion in combined benchmark per year. An anticipated influx of low revenue physician-led ACOs serving higher cost patients is expected to allow this cohort to produce significantly greater savings on claims (2.7 percent of benchmark) than would be paid out in shared savings (1.0 percent of benchmark) because these ACOs would be starting with lower relative benchmarks than existing low-spending ACOs and they would predominantly be paid under the lower 40 percent sharing rate offered in the BASIC track's one-sided models. After accounting for slightly higher physician fee schedule payments to QPs and a nominal net cost of advance investment payments, this cohort is projected to reduce net program spending about 1.6 percent of benchmark or $6.8 billion over a 10-year period (net savings range from $3.2 billion to $11 billion at the 90th and 10th percentiles). Average gross savings for this cohort (2.7 percent of benchmark) are projected to roughly match average gross savings for renewing ACOs (2.8 percent of benchmark) despite being less-experienced and heavily concentrated in the BASIC track because they are both serving higher-spending patients presenting greater savings opportunities and because they are anticipated to predominantly include low-revenue ACOs for whom sharing-only incentives are relatively strong despite not being pushed toward risk in their first agreement period. As a percentage of benchmark, these projected gross savings rates are consistent with the savings range estimated for historical performance for the Shared Savings Program detailed in Regulatory Impact Analysis for the December 2018 final rule (83 FR 68047 through 68050) and would represent modest progression from the 1.3 to 2 percent savings estimated by MEDPAC using an “intent to treat” approach for evaluating performance through 2016, which was dominated by participation in Track 1.[545] d. Annual Combined Impacts 2023-2034As described in Table 142, relative to baseline projections, the combined cohort entering or renewing for agreement periods beginning in 2024 and 2025 is projected to add roughly $50 billion in annual benchmark, reduce claims costs by $15.5 billion, and on net increase aggregate shared savings payments by about $650 million. The proposed rule changes are estimated to reduce overall program spending by $14.8 billion over 12 years relative to the $4.2 billion cost anticipated for the trajectory of the program at baseline, or $10.6 billion in absolute terms relative to a baseline without a Shared Savings Program in FFS Medicare. Approximately 80 percent of advance investment payments are anticipated to be recovered from shared savings payments by the middle of the second agreement period; the estimate shows $40 million in outstanding advance investment payments by the end of the projection period after an initial $210 million in initial funding. Approximately $60 million in net savings for 2023 is projected for retaining existing higher-spending ACOs that would have otherwise dropped out if not offered the ability to remain in one-sided risk for the remainder of their current agreement period. More importantly, the Shared Savings Program would increase participation from ACOs serving higher-spending beneficiaries by reducing the negative regional adjustment cap and creating a sharing-only option covering an entire agreement period plus the first 2 years of the succeeding agreement period for eligible ACOs. Advance investment payments and partial shared savings payments for certain ACOs in the BASIC track with savings below their MSR would only marginally increase payments to ACOs while increasing overall program savings by drawing new participation from low revenue ACOs (typically physician-led ACOs), the type that performed well under Track 1. Including a prior savings adjustment as part of benchmark rebasing would broaden the incentive for ACOs to drive down spending over multiple agreement periods by mitigating the ratchet effect for high-spending ACOs, for ACOs in competitive markets with collectively low trend, and for ACOs under prospective assignment that may be concerned about the proposal to remove the favorable bias in regional benchmark calculations. Modifications to the quality scoring system through adding a sliding scale approach to determining shared savings and offering bonus points to higher performing ACOs with a high proportion of underserved populations may increase shared savings payments marginally overall depending on how ACOs may otherwise have progressed in future years against what is still a relatively new quality rubric. The proposed changes are estimated to reduce overall program spending by $14.8 billion over 12 years relative to the $4.2 billion cost anticipated for the trajectory of the program at baseline, or $10.6 billion in absolute terms relative to a baseline without a Shared Savings Program in FFS Medicare. The impact estimate ranges from a reduction of $8.2 billion to a reduction of $21.4 billion at the 10th and 90th percentiles. Start Printed Page 46402 e. Discussion of Key Proposals and Related AssumptionsThe stochastic model and associated assumptions previously described in the December 2018 final rule (83 FR 67816) were updated to produce this estimate. The model continues to assume that high-revenue ACOs are on average only 50 percent as effective as low-revenue ACOs at reducing spending because high-revenue ACOs include a more comprehensive mix of hospitals and other providers and suppliers for whom the incentive to potentially share in a fraction of savings from preventing utilization is weak compared to the immediate revenue from utilization—an expectation that has been supported by evaluation of actual program performance.[546] Updates included accounting for the current mix of participating ACOs in constructing the potential ACOs making up the renewing cohort and considering the population of exiting ACOs to build a sample of higher spending populations that may be added to the program under the proposals that are expected to boost interest in the program from potential ACOs associated with average and higher spending populations. New low-revenue ACOs were assumed to always prefer the extended glidepath unless they expected a regional benchmark at least 3 percent higher than baseline spending, in which case a one-third probability was assigned for the entrant to opt for higher potential earnings under Level E of the BASIC track. The model was also updated to first decrease the baseline savings potential for existing and new ACOs under the current program rules by about 25 to 50 percent (to better match emerging actual performance from selective low-spending ACO participation) which was then scaled up for estimating the proposed impacts to account for new incentives driven mainly by the ACPT and prior savings adjustment, taking the form of a 0 to 50 percent increase in gross savings for low and average spending ACOs and a zero to 100 percent increase for new ACOs serving markedly high spending populations at baseline (at least 10 percent higher than their regional average benchmark spending level). The resulting savings ranges produced by the modeled participation are supported by the proximity to previous estimates of program savings under more balanced participation in Track 1, as noted previously in this section. Savings are expected to increase because of the many new features that would improve the incentive for ACOs to drive down spending over multiple agreement periods. Below is a further discussion of these factors. Introducing a prospective 5-year growth rate to be blended with the existing retrospective benchmark trend would help address the so-called `rural glitch' complaint from ACOs and other interested parties and should at least marginally improve the incentive for ACOs to reduce spending, in particular when multiple ACOs are present in the same market and collectively driving down regional spending. The proposal that interested parties have floated for mitigating ACO effects on their region—effectively removing ACO assigned beneficiaries from the regional calculation—has multiple problems that would increase program spending. It would amplify the benefit to ACOs for selecting lower cost patients and avoiding higher needs groups, it would Start Printed Page 46403 drive market consolidation, and it would still fail to mitigate the cited problem for cases where multiple ACOs work in combination to drive down regional spending. Furthermore, it would increase program spending to such a degree that compliance with the requirements of section 1899(i)(3) of the Act, to use other payment models, would be violated. We acknowledge a potential elevated risk; however, that uncertainty around external conditions related to the end of the PHE for COVID-19 and economic conditions like emerging inflation could cause a prospective trend to differ materially from actual program-wide growth in per capita spending. Blending the ACPT as one-third of the overall update helps lower the risk that projection error would create problems with appropriateness of spending targets. Risk-bearing ACOs would have extra protection against exposure to ACPT projection error because they would be held harmless on the downside if the new method would charge them more in losses than the prior retrospective trend method. Modeling indicates this safeguard would reduce shared losses owed by ACOs by about $100 million over 10 years, but the net impact of this provision is likely to save several times that amount by retaining ACOs that would have otherwise dropped out of the program. The most important factor returning the program to net savings is attracting more ACOs into the BASIC track that serve higher spending populations, particularly low revenue physician-led ACOs for whom a 40 percent sharing rate is a strong incentive for efficiency even absent downside risk. The most important provision for growing this participation is the proposal to allow ACOs to stay sharing only (that is, Level A or Level B of the BASIC track) for a full 5-year agreement period. Advance investment payments and partial shared savings payments for savings under the MSR would help to increase the share of these new ACOs that are low revenue. These exclusive provisions for low revenue ACOs are estimated to drive $3 billion in net savings over the projection period notwithstanding marginal increases in shared savings outlays. This analysis highlights that the savings gained from increasing participation from this type of ACO would greatly exceed the marginal increase in program outlays from paying partial shared savings under the MSR and advance investment payments, as combined incentive payments (consisting mainly of shared savings payments combined with slightly higher payments to clinicians achieving QP status) to new and reentering ACOs are only projected to reach about 1.1 percent of benchmark over the projection period in return for savings on benefits of 2.7 percent (as detailed in Table 141). Another key proposal for improving the financial impact of the program is establishing a separate ratebook to calculate county-level expenditures for ACOs selecting prospective assignment using an assignable population of beneficiaries that is identified based on the offset assignment window. This proposal would remove a bias that would otherwise artificially boost benchmarks and thereby account for $3.7 billion of the total savings projected above. Most existing ACOs currently benefiting from this bias would still expect to receive favorable regional adjustments at rebasing despite removal of the bias. The proposal to adjust benchmarks for prior savings would help restore a positive benchmark adjustment for the subset of ACOs for whom removal of the prospective assignment bias would minimize their regional adjustments at rebasing. However, because the prior savings adjustment would only be applied if it produced a higher adjustment than the regional benchmark adjustment, it would not further increase benchmarks for ACOs already benefiting from the existing regional adjustment. Modifications to the quality scoring system through the proposal to add a sliding scale approach to determining shared savings for ACOs to allow for payment of scaled shared savings and the proposal to award health equity bonus points to ACOs that perform well on at least one or more measures while serving a high proportion of duals or beneficiaries in areas with high Area Deprivation Index scores may increase shared savings payments marginally overall depending on how ACOs may otherwise have progressed in future years against what is still a relatively new quality rubric. The costs of adding these new methods for improving scores and paying scaled shared savings are projected to add about $1.3 billion in program spending over 10 years. Other proposals related to assignment and risk adjustment are expected to have relatively nominal financial impacts on the program. f. Compliance With Requirements of Section 1899(i)(3) of the ActCertain policies, including both existing policies and the proposed new policies described in this proposed rule, rely upon the authority granted in section 1899(i)(3) of the Act to use other payment models that the Secretary determines will improve the quality and efficiency of items and services furnished under the Medicare program, and that do not result in program expenditures greater than those that would result under the statutory payment model. The following proposals require the use of our authority under section 1899(i) of the Act: allowing for advance investment payments; the proposed modifications to the loss sharing rate under the ENHANCED track to allow for a sliding scale based on an alternative quality performance standard; use of the ACPT/national-regional three-way blended benchmark update factor; expanding the criteria for certain low revenue ACOs participating in the BASIC track to qualify for shared savings in the event the ACO does not meet the MSR as required under section 1899(d)(1)(B)(i) of the Act; and exclusion of the proposed new supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals from the determination of Medicare Parts A and B expenditures used in certain financial calculations under the Shared Savings Program. These proposed changes to our payment methodology are expected to improve the quality and efficiency of care and are not expected to result in a situation in which the payment methodology under the Shared Savings Program, including all policies adopted under the authority of section 1899(i) of the Act, results in more spending under the program than would have resulted under the statutory payment methodology in section 1899(d) of the Act. A comparison was constructed between the projected impact of the payment methodology that incorporates all proposed changes and a hypothetical baseline payment methodology that excludes the policies that require section 1899(i)(3) of the Act authority. The hypothetical baseline was assumed to be limited to a 50 percent upside-only track rebased every three years but including adjustments allowed under section 1899(d)(1)(B)(ii) of the Act including the up to 50 percent weight used in calculating the regional adjustment to the ACO's rebased historical benchmark (capped on the upside or downside as detailed in this proposed rule) and the prior savings adjustment if producing a higher benchmark (also as detailed in this proposed rule). The stochastic model and associated assumptions described previously in this section were adapted to reflect a marginally reduced participation from low-revenue ACOs Start Printed Page 46404 because the hypothetical baseline would lack advance investment payments and partial shared savings payments for certain BASIC track ACOs with savings under their MSR. Such analysis estimated approximately $4.9 billion greater average net program savings under the alternative payment model (with the modifications proposed in this proposed rule) that includes all policies that require the authority of section 1899(i)(3) of Act than would be expected under the hypothetical baseline in total over the 2023 to 2034 projection period. Participation in performance-based risk in the ENHANCED track and the higher levels of the BASIC track is assumed to improve the incentive for ACOs to increase the efficiency of care for beneficiaries (similar to the assumptions used in the modeling of the impacts, described previously). Such added savings are partly offset by lower participation associated with the requirement to transition to performance-based risk. Despite the higher maximum sharing rate of 75 percent in the ENHANCED track under the alternative payment model that includes all policies adopted under section 1899(i)(3) of the Act, relative to the 50 percent maximum sharing rate assumed for the single one-sided risk track under the hypothetical baseline, shared savings payments are expected to be reduced relative to the hypothetical baseline because of lower expected participation resulting from the eventual requirement to transition to risk in the second agreement period under the BASIC track and generally more accurate benchmarks due to the incorporation of regional factors into the calculation of benchmark updates for all ACOs. We will reexamine this projection in the future to ensure that the requirement under section 1899(i)(3)(B) of the Act that an alternative payment model not result in additional program expenditures continues to be satisfied. In the event that we later determine that the payment model that includes policies established under section 1899(i)(3) of the Act no longer meets this requirement, we would undertake additional notice and comment rulemaking to make adjustments to the payment model to assure continued compliance with the statutory requirements. 8. Medicare Part B Payment for Preventive Vaccine Administration ServicesIn section III.H.2.c of this proposed rule, for CY 2023 we are proposing to annually adjust the payment amount for administration of preventive vaccines to reflect geographic locality cost differences. That is, we propose to use the Geographic Adjustment Factor (GAF) described in § 414.26 to adjust the payment to reflect the costs of administering preventive vaccines in each of the PFS fee schedule areas. Additionally, in section III.H.2.d of this proposed rule, for CY 2023 we are proposing to annually update the payment amount for the administration of preventive vaccines based upon the Medicare Economic Index (MEI). In section III.H.3.c. of this proposed rule, we are proposing to continue the additional payment of $35.50 when a COVID-19 vaccine is administered in a beneficiary's home under the certain circumstances. Further, we are proposing to adjust and update the $35.50 by the GAF and MEI as we proposed for the preventive vaccine administration services. The estimated impact of the proposal to update the payment amount for the administration of preventive vaccines based upon the proposed MEI (3.8%) in CY 2023 is an increase in spending of roughly $40 million. Approximately $30 million of the increase is for administration of the COVID-19 vaccine and the remaining $10 million is for the other preventive vaccines. Regarding the proposal to adjust the payment amount for the administration of preventive vaccines by the GAF and the proposal to continue the additional payment for at-home COVID-19 vaccinations, these would have a negligible impact on Medicare spending. 9. Medical Necessity and Documentation Requirements for Nonemergency, Scheduled, Repetitive Ambulance ServicesIn section III.I. of this proposed rule, we propose to clarify § 410.40(e)(2)(ii) by reorganizing existing language and stating that the PCS and additional documentation from the beneficiary's medical record may be used to support a claim that transportation by ground ambulance is required. We are also clarifying that the PCS and additional documentation must provide detailed explanations, that are consistent with the beneficiary's current medical condition, that explains the beneficiary's need for transport by an ambulance. Finally, we are clarifying that coverage includes observation or other services rendered by qualified ambulance personnel. While we believe that clarification of the regulatory provisions is needed and would be well received by interested parties, we do not believe that these clarifications would have any substantive monetary or impact the amount of time needed submit claims. We believe the primary benefit of the clarification would be for providers and suppliers in preparing and submitting claims. It is feasible the clarification could result in fewer claims being denied. However, hypothetically, these denials are likely a small subset of the ambulance claim denials and those denied for technical PCS issues are likely appealed and overturned. 10. Medicare Provider and Supplier Enrollment Changes—Provider Enrollmenta. Expansion of Revocation ReasonsAs explained in section III.J. of this proposed rule, we propose changes to two of our existing revocation reasons:
We believe these two changes would result in an increase in the number of revocations that CMS imposes. However, we believe this number would be rather small. We currently impose only a limited number of revocations under §§ 424.535(a)(2) and (a)(3). Accordingly, since our expansion of these revocation reasons would be fairly modest, we do not foresee more than a very slight increase in revocations thereunder. Table 143 outlines the number of revocations we estimate would ensue under our proposed revocation expansions. These numbers only account for additional revocations stemming from our changes: Start Printed Page 46405 Internal CMS data indicates that the average provider/supplier that would be affected by these regulatory expansions receives roughly $50,000 in Medicare payments each year. (We used a similar $50,000 annual payment estimate for our provider enrollment provisions in the CY 2022 PFS final rule) (86 FR 64995)). Providers/suppliers revoked under our proposed revocation expansions would thus not receive these payments. Hence, multiplying our $50,000 estimate by the revocation totals in Table 143 results in a projected transfer from these providers/suppliers to the Federal Government of $500,000 ($50,000 × 10 revocations). b. Expansion of Fingerprinting RequirementsWe propose the following three revisions to § 424.518:
These proposed changes would result in an increase in the annual number of providers and suppliers that must furnish fingerprints for their 5 percent or greater direct or indirect owners. Based on existing enrollment statistics and our experience, we project that: (1) 29,726 providers and suppliers per year would be required to submit the fingerprints of their owners (new or existing) pursuant to these changes; and (2) 29,726 owners would annually be fingerprinted (or one owner per provider/supplier, which is roughly consistent with prior estimates). Consistent with previous burden estimates we have made regarding fingerprinting, we estimate that it would take each owner approximately 2 hours to be fingerprinted. According to the most recent BLS wage data for May 2021, the mean hourly wage for the general category of “Top Executives” (the most appropriate BLS category for owners) is $57.94. With fringe benefits and overhead, the figure is $115.88. This would result in an estimated annual burden involving our proposed changes to § 424.518 of 59,452 hours at a cost of $6,889,298. c. DME Payment DenialsWe are also proposing to add a new DMEPOS condition of payment to § 424.57(b). It would require the DMEPOS supplier to be in compliance with all conditions of payment in § 424.57(b), as well as with the licensure requirements of § 424.57(c)(1)(ii)(A), at the time the item or service is furnished in order to receive payment. Based on data collected from our experience with the scenario our proposed change seeks to remedy, we project 6,100 claim denials per month associated with our proposal involving $1.3 million in denied/unpaid claims. Over a 12-month period, this results in 73,200 claim denials and $15.6 million in unpaid claims, the latter constituting our estimated annual transfer to the federal government. We welcome comments on this estimate. 11. State Options for Implementing Medicaid Provider Enrollment Affiliation ProvisionWe do not anticipate any additional costs or savings associated with our proposed revision to § 455.107(b), for the latter merely involves giving the states somewhat greater flexibility in executing the provisions of § 455.107. 12. 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)In section III.M. of this proposed rule, we are proposing to extend the existing compliance action of sending letters to non-compliant prescribers from the CY 2023 EPCS program implementation year (January 1, 2023 through December 31, 2023) to the CY 2024 year (January 1, 2024 through December 31, 2024). Additionally, effective January 1, 2023, we are proposing to change the year from which PDE data is used from the preceding year to the current evaluated year when CMS determines whether a prescriber qualified for an exception based on the number of Part D controlled substance prescriptions (§ 423.160(a)(5)(ii)). We are also proposing to determine whether a prescriber qualifies for the emergency or disaster exception (§ 423.160(a)(5)(iii)) based on the prescriber's valid address in PECOS (Medicare Provider Enrollment, Chain, and Ownership System), instead of the NCPDP Pharmacy Database address, and for prescribers who are not enrolled or do not have a valid PECOS address, we are proposing to use the address in the National Plan and Provider Enumeration System (NPPES) data. We understand that with continuing the compliance action of sending letters to non-compliant prescribers for another year, some prescribers may delay EPCS implementation, but we also believe that our education and outreach with these prescribers during this additional year may help increase adoption. We do not anticipate these proposals to have any incremental impact on the cost or time associated with prescriber compliance of the electronic prescribing for controlled substances requirement or the cost to interested parties. However, we acknowledge there will be a delay in compliance enforcement by an additional year. We seek comment on our impact assumptions. 13. Medicare Ground Ambulance Data Collection SystemIn section III.K. of this proposed rule, we propose a series of changes to the Medicare Ground Ambulance Data Collection System including the proposal to update § 414.626(d)(1) and (e)(2) to give us the necessary flexibility to specify how ground ambulance organizations should submit the hardship exemption requests and informal review requests, including to our web-based portal once that portal is operational, and proposed revisions to Start Printed Page 46406 the Medicare Ground Ambulance Data Collection Instrument. The changes and clarifications aim to reduce burden on respondents, improve data quality, or both. We group our proposed changes and clarifications into four broad categories: editorial changes for clarity and consistency; updates to reflect the web-based system; clarifications responding to feedback from interested parties questions and testing and typos and technical corrections. While we believe that these changes and clarifications will be well received by the ground ambulance interested parties, we do not believe that these changes would have any substantive impact on the cost or time associated with completing the Medicare Ground Ambulance Data Collection Instrument. We note that the overall length of the Medicare Ground Ambulance Data Collection Instrument would be the same as previously finalized (84 FR 62888) with these changes. Additionally, some of the instructions which we propose to add are intended to improve clarity and may therefore reduce the time the ground ambulance organizations spend addressing the questions. 14. HCPCS Level II Coding for Wound Care Management ProductsWe are proposing several changes to our policies for skin substitute products. Specifically, we are soliciting feedback on our key objectives related to skin substitute policies, proposing to change the terminology of skin substitutes to more accurately reflect how clinicians use these products, and to treat and pay for these products under section 1861(s)(2)(A) of the Act as incident to supplies the PFS beginning on Jan 1, 2024. Our estimates related to revising the benefit category to incident to supplies will be contained in the CY 2024 PFS rulemaking. Additionally, in section III.N. of this proposed rule, we are proposing to revise our HCPCS coding procedures, the impacts related to these proposals are in section III.N. The financial impact of this proposal will be largely contingent on the prices the MACs set for these products. 15. Effects of Proposals for Medicare Part A and B Payment for DentalIn section II.L.2. of this proposed rule, we are: (1) proposing to clarify our interpretation of section 1862(a)(12) of the Act, and clarify and codify certain of our current Medicare FFS payment policies for medically necessary dental services; (2) proposing and seeking comment on payment for other dental services, such as dental examinations, including necessary treatment, performed as part of a comprehensive workup and certain diagnostic and treatment services prior to organ transplant surgery, or prior to cardiac valve replacement or valvuloplasty procedures, that are similarly inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services; and (3) requesting comments on other types of clinical scenarios where the dental services may be inextricably linked to, and substantially related and integral to the clinical success of, other covered medical services. If finalized, we do not believe the proposed codification of current payment policy would result in a significant payment impact because it would be a continuation of existing Medicare payment policy. If we were to finalize the payment for an oral or dental examination, including necessary treatment, performed as part of a comprehensive workup prior to organ transplant surgery, or prior to cardiac valve replacement or valvuloplasty procedures, we do not anticipate any significant increase in utilization or payment impact for additional dental services given the historically low utilization of organ transplant, cardiac valve replacement and valvuloplasty surgeries. To complete this analysis, and to ensure that we captured dental services that occurred prior to the covered medical service that occurred within CY 2019, we pulled claims data for which Medicare made payment for dental services from June 1, 2018 through December 31, 2019. This allowed us to capture any dental services that were furnished prior to 90 days of a covered medical service. Further, we believe that the use of these claims data would be more representative of future utilization patterns given the COVID-19 PHE. Based on this analysis, we estimated that there were roughly 200,000 additional services where Medicare could provide payment for dental services prior to organ transplants, cardiac valve replacement or valvuloplasty surgeries. Based on claims data from this time period, Medicare provided payment for dental services for 186 patients with an average cost of care of roughly $525 per person. The majority of these claims were for tooth extraction in patients undergoing radiation treatment of the mouth as opposed to transplant patients, and the range in costs was from $33 to $5,711 per patient. Based on a review of claims data for our existing payment policies and our review of current utilization for beneficiaries, we estimated that effective rate of coverage of current utilization was less than 0.2 percent. We then used this utilization ratio to estimate projected payments for dental exams and treatments prior to organ transplants, cardiac valve replacement or valvuloplasty surgeries. Given current utilization of organ transplants, cardiac valve replacement or valvuloplasty procedures, current utilization and payment for dental exams and treatments, we are projecting an estimated cost of this proposal at approximately $65 million or roughly 0.07 percent of Medicare PFS expenditures. Therefore, we do not anticipate a significant payment impact for these proposals. We note, however, that if we were to finalize, as discussed in section II.L.2.c.(i) of this proposed rule, payment in other clinical scenarios for dental services inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services, we may adjust this estimate. We further note that we have requested public comment on alternative ways to estimate the expected utilization and volume of these services under the proposal discussed further in section II.2.c. of this proposed rule. 16. Updates to the Quality Payment ProgramIn this section, we estimate the overall and incremental impacts due to the Quality Payment Program policies proposed in this rule. We estimate participation, final scores, and payment adjustment for clinicians participating through traditional MIPS, MVPs, and the APM. We also present the incremental impacts to the number of expected QPs and associated APM Incentive Payments that result from our proposed policies relative to a baseline model that reflects the status quo in the absence of any modifications to the previously finalized policies. a. Overall MIPS Modeling Approach and Data Assessment(1) Updating the MIPS ModelWe created two MIPS RIA models: a baseline and proposed policies RIA model. The aim of the baseline model is to reflect participation, final scores, and payment adjustments for the CY 2023 performance period/2025 MIPS payment year based on previously finalized policies for the CY 2023 performance period/CY 2025 MIPS payment year. Examples of previously finalized policies are an increase in the APM qualified participants threshold Start Printed Page 46407 and the removal of the additional MIPS payment adjustment for exceptional performance and additional performance threshold. The proposed policies model builds off the baseline model and incorporates the MIPS policy proposals for the CY 2023 MIPS performance period/2025 MIPS payment year included in this rule. The aim of the proposed policies model is to estimate the incremental impacts of the proposed policies in this proposed rule. There were two major updates to the modeling approach used in this RIA. First, we changed the MIPS modeling tool that we used in order to incorporate the same scoring engine as the one used to determine actual MIPS payment adjustments. We generally applied the same assumptions as our previous RIA analyses, but this update ensures that the clinician population and final scores in our model align as much as possible with actual MIPS scoring and minimizes differences between projections and policy implementation. It should be noted, data limitations and assumptions which may impact model results still remain and are described below. Second, we modeled participation, scoring, and payment adjustments for the MIPS Value Pathways (MVPs). The CY 2023 performance period/2025 MIPS payment year is the first year where clinicians can voluntarily submit MVPs. Although we are modeling MVPs, we are not modeling subgroup reporting. A more detailed discussion of the approach used to model MVPs can be found in section VII.E.16.d.(2) of this RIA. (2) Assessing Which Data To Use To Estimate Future MIPS PerformanceThis RIA uses the 2019 MIPS performance period submissions that were used for the CY 2022 PFS final rule RIA (86 FR 65617 through 65660). We discussed in the 2022 PFS final rule (86 FR 65637), how we assessed the use of 2020 performance period submissions and why we believed the 2019 performance period submissions would be a better data source, for the purposes of estimating future performance for the entire population of MIPS eligible clinicians. The submissions for the 2021 MIPS performance period were not available in time to assess whether the data can be used to predict future performance. For the final rule, we will evaluate whether it is appropriate to use the 2021 performance period data and whether adjustments would need to be made if CY 2021 performance category submissions data were used. For these reasons, we again used CY 2019 data to estimate the MIPS eligible clinician population and their associated final scores for the CY 2023 MIPS performance period/CY 2025 MIPS payment year. b. Estimated APM Incentive Payments to QPs in Advanced APMs and Other Payer Advanced APMsFor payment years from 2019 through 2024, through the Medicare Option, eligible clinicians who have a sufficient percentage of their Medicare Part B payments for covered professional services or Medicare patients through Advanced APMs will be QPs in the applicable QP Performance Period for a year and the corresponding payment year. These QPs will receive a lump-sum APM Incentive Payment equal to 5 percent of their estimated aggregate paid amounts for Medicare covered professional services furnished during the calendar year immediately preceding the payment year. Beginning in payment year 2021, in addition to the Medicare Option, eligible clinicians may become QPs through the All-Payer Combination Option. The All-Payer Combination Option allows eligible clinicians to become QPs by meeting the QP payment amount or patient count threshold through a pair of calculations that assess a combination of both Medicare Part B covered professional services furnished or patients through Advanced APMs and services furnished or patients through Other Payer Advanced APMs. Eligible clinicians who become QPs for a year are not subject to MIPS reporting requirements and payment adjustments. Eligible clinicians who do not become QPs but meet a lower threshold to become Partial QPs for the year, may elect to report to MIPS and, if they elect to report, would then be scored under MIPS and receive a MIPS payment adjustment. Partial QPs are not eligible to receive the APM Incentive Payment. If an eligible clinician does not attain either QP or Partial QP status, and does not meet any another exemption category, the eligible clinician would be subject to the MIPS reporting requirements and would receive the corresponding MIPS payment adjustment. Beginning in payment year 2026, the update to the PFS CF for services that are furnished by clinicians who achieve QP status for a year is 0.75 percent, while the update to the PFS CF for services that are furnished by clinicians who do not achieve QP status for a year is 0.25 percent. In addition, MIPS eligible clinicians would receive positive, neutral, or negative MIPS payment adjustments to payment for their Part B covered professional services in a payment year based on performance during a prior performance period. We incorporated this change into our baseline eligibility determination. In addition, the thresholds to achieve QP status beginning in the 2023 QP Performance Period will increase to 75 percent for payment amount, and 50 percent for patient count. Overall, we estimate that for the 2023 QP Performance Period between 144,700 and 186,000 eligible clinicians would become QPs, and therefore be excluded from MIPS. In section VII.F.17.a. of this proposed rule, we projected the number of eligible clinicians that would be QPs, and thus excluded from MIPS, using several sources of information. First, the projections are anchored in the most recently available public information on Advanced APMs. The projections reflect Advanced APMs that would be operating during the 2023 QP Performance Period, as well as some Advanced APMs anticipated to be operational during the 2023 QP Performance Period. The projections also reflect an estimated number of eligible clinicians that would attain QP status through the All-Payer Combination Option. The following APMs are expected to be Advanced APMs for the 2023 QP Performance Period:
We used the Participation Lists and Affiliated Practitioner Lists, as applicable, (see 81 FR 77444 through 77445 for information on the APM Participant Lists and QP determinations) on the 2021 third snapshot participation file to estimate the number of QPs, total Part B paid amounts for covered professional services, and the aggregate total of APM Incentive Payments for the 2023 QP Performance Period. We examined the extent to which Advanced APM Start Printed Page 46408 participants would meet the QP Thresholds of having at least 75 percent of their Part B covered professional services or at least 50 percent of their Medicare beneficiaries furnished Part B covered professional services through the APM Entity. c. Estimated Number of Clinicians Eligible for MIPS for the CY 2023 Performance Period/2025 MIPS Payment Year(1) Clinicians Included in the Model Prior To Applying the Low-Volume Threshold ExclusionFor the baseline and proposed policies models, we generally used the same eligibility files, assumptions, and rules as described in the CY 2022 PFS final rule (86 FR 65639 through 65642), with the following updates:
We are not proposing any modifications to eligibility, therefore our eligibility assumptions apply to both the baseline and proposed policies models. Our analysis resulted in 1.6 million clinicians who had PFS claims from October 1, 2018 to September 30, 2019 as well as additional clinicians associated with a group who had at least one PFS claim from October 1, 2019 through December 31, 2019. (2) Estimation of MIPS Eligible Clinicians After Applying Assumptions Related To Applying the Low-Volume Threshold ExclusionThe low-volume threshold policy may be applied at the individual (TIN/NPI) or group (TIN) levels based on how data are submitted to MIPS. A clinician or group that exceeds at least one, but not all three low-volume threshold criteria may become MIPS eligible by electing to opt-in and subsequently submitting data to MIPS, thereby getting measured on performance and receiving a MIPS payment adjustment. We describe below the estimated MIPS eligibility status and the associated PFS allowed charges of clinicians in the initial population of 1.6 million clinicians for the proposed policies model. We applied the same assumptions presented in the CY 2022 PFS final rule RIA (86 FR 65617 through 65660) to apply the low-volume threshold and to determine whether clinicians participate as a group, virtual group, APM entity, or as individuals. Table 144 summarizes our eligibility estimates for the proposed policies model. We identify approximately 198,250 clinicians as having “required eligibility.” These clinicians will be MIPS eligible because they exceed the low volume threshold as individuals and are not otherwise excluded. These clinicians may ultimately choose to participate in MIPS as an individual, group, virtual group or APM entity or to not participate. Regardless of participation method, these clinicians will be considered MIPS eligible. We estimate approximately 646,749 MIPS eligible clinicians as having “group eligibility” in Table 144. These clinicians belong to a group or virtual group that meets the low-volume threshold and submits to MIPS. If they were not associated with the group or virtual group submission, these clinicians would not be eligible for MIPS. Finally, we estimate about 10,933 clinicians will be eligible through “opt-in eligibility” through the “opt-in” policy for a total MIPS eligible clinician population of approximately 865,116. This leads to an associated $6.8 billion allowed PFS charges estimated to be included in the CY 2023 performance period/2025 MIPS payment year. Start Printed Page 46409 Furthermore, we estimate there would be approximately 424,752 clinicians who are not MIPS eligible, but could be if the clinician or their group elects to opt-in. We describe this group as “Potentially MIPS eligible” in Table 144. These clinicians would be included as MIPS eligible in the unlikely scenario in which all group practices elect to submit data as a group, or clinicians in a group that does not submit are eligible to opt-into MIPS individually and choose to do so. This assumption is important because it quantifies the maximum number of MIPS eligible clinicians. When this unlikely scenario is modeled, we estimate the MIPS eligible clinician population could be as high as 1,280,868 clinicians. Finally, we estimate approximately 107,995 clinicians would not be MIPS eligible because they and their group are below the low-volume threshold on all three criteria and another approximately 207,477 would not be MIPS eligible because they are categorically excluded regardless of volume or submission activity. Eligibility among many clinicians is contingent on submission to MIPS as a group, virtual group or election to opt-in, therefore we will not know the number of MIPS eligible clinicians who submit until the submission period for the 2023 MIPS performance period is closed. For the remaining analysis, we use the estimated population of 865,116 MIPS eligible clinicians described above. Start Printed Page 46410 d. Estimated Impacts on Payments to MIPS Eligible Clinicians for the CY 2023 Performance Period/2025 MIPS Payment Year(1) Summary of Approach for MVPs, Traditional MIPS and APM Performance PathwayIn sections IV.A.3.a. through IV.A.3.F. of this proposed rule, we present several provisions which impact the measures and activities that impact the performance category scores, final score calculation, and the MIPS payment adjustment. We discuss these changes in more detail in section VII.E.16.d.(3) of this RIA as we describe our methodology to estimate MIPS payments for the CY 2023 performance period/2025 MIPS payment year. We then present the impact of the overall proposed policies on the CY 2023 performance period/2025 MIPS payment year and then compare select metrics to the baseline model, which only incorporates previously finalized policies for the CY 2023 performance period/2025 MIPS payment year. By comparing the baseline model to the proposed policies model, we are able to estimate the incremental impact of the proposed policies for the CY 2023 performance period/2025 MIPS payment year. The payment impact for a MIPS eligible clinician is based on the clinician's final score, and MIPS eligible clinicians can participate as an individual, group, virtual group, APM Entity, clinicians participating in MIPS through the APM Performance Pathway or through an MVP in the four MIPS performance categories: quality, cost, improvement activities, and Promoting Interoperability. MIPS APM participants can participate in the APP as an individual, group, virtual group, APM Entity but are only scored on three MIPS performance categories: quality, improvement activities, and Promoting Interoperability. As discussed in section VII.E.16.a.(2) of this RIA, we generally used the most recently available submissions data from the Quality Payment Program, however, due to the automatic extreme and uncontrollable policy applied in the CY 2020 performance period, for the purposes of this RIA we used data submitted for the CY 2019 MIPS performance period. In the final rule, when data from the CY 2021 performance period will be available, we will revisit this decision. The average percentage change in total revenues that clinicians earn is less than the impact displayed here because MIPS eligible clinicians generally furnish services to both Medicare and non-Medicare patients; this program does not impact payment from non-Medicare patients. In addition, MIPS eligible clinicians may receive Medicare revenues for services under other Medicare payment systems, such as the Medicare Federally Qualified Health Center Prospective Payment System, that would not be affected by MIPS payment adjustment factors. (2) Methodology To Assess Impact for MIPS Value PathwaysIn the 2022 PFS final rule (86 FR 65394 through 65397), we finalized policies at § 414.1365 for implementing MVPs beginning in the CY 2023 MIPS performance period/2025 MIPS payment year. In updating our MIPS RIA model, we have made some assumptions for both the baseline and proposed policies model to simulate MVP participants and their MVP final score which are described in the following sections. (a) MVP Participant AssumptionsAt § 414.1365(b), we require MVP Participants (which can be a group, individual, subgroup or APM entity) to register prior to submitting an MVP. As we do not yet have information on who will register, we assume for purposes of this model, that MVP Participants are individual clinicians or groups that currently submit at least 4 quality measures that are in an MVP. For these MVP Participants, we calculate both an MVP and a traditional MIPS score and take the highest score consistent with the scoring hierarchy as finalized in the CY 2022 PFS final rule 86 FR 65537). For the baseline model, we looked for the quality measures finalized for MVPs in the 2022 PFS final rule (86 FR 65441 through 65443):
For the proposed policies model, we incorporate the proposed quality measure revisions for the above MVPs and use the quality measures to model scores for the new MVPs as proposed in Appendix X of this proposed rule:
Our MVP Participant assumptions have limitations: we are not incorporating subgroups due to lack of data, not all of the assumed participants may elect to register for an MVP, and we may have additional clinicians or groups register for an MVP. However, we believe this is a reasonable approach to simulate the impact of MVPs and we seek comment on this assumption. (b) MVP Scoring Methods and AssumptionsWe simulate an MVP score using the same data sources as we did for traditional MIPS. We scored according to rules finalized in § 414.1365(d) and § 414.1365(e) using the MVP reporting requirements listed in § 414.1365(c) with one exception. We did not restrict the improvement activities to the activities listed in the MVP inventory. We believed this would lower our estimated MVP score as clinicians and groups were not required to select from a limited inventory in the 2019 MIPS performance period (upon which our model is based.) Therefore, we scored any improvement activities the MVP Participants submitted in 2019 as if those improvement activities are in the MVP inventory. (3) Methodology To Assess Impact For Traditional MIPSTo estimate the impact of MIPS policies on MIPS eligible clinicians, we generally used the CY 2019 MIPS performance period submissions data, including data submitted for the quality, improvement activities, and Promoting Interoperability performance categories. We supplemented this information with the most recent data available for CAHPS for MIPS and CAHPS for ACOs, testing data for the revised total per capita cost measure and Medicare Spending Per Beneficiary (MSPB) clinician measures which were finalized in the CY 2020 PFS final rule (84 FR 62969 through 62977), testing data for the new episode cost measures, administrative claims data for the new quality performance category measures, and other data sets. We calculated a hypothetical final score for the CY 2023 performance period/2025 MIPS payment year for the baseline and proposed policies scoring models for each MIPS eligible clinician using score estimates for quality, cost, Promoting Interoperability, and improvement activities performance categories, where Start Printed Page 46411 each are described in detail in the following sections. (a) Methodology To Estimate the Quality Performance Category ScoreWe estimated the quality performance category score using a methodology like the one described in the CY 2022 PFS final rule (86 FR 65642 through 65643) for the baseline and proposed policies RIA models for the CY 2023 MIPS performance period/2025 MIPS payment year. To create the baseline policies RIA model, which does not reflect the proposed policies for the CY 2023 performance period/2025 MIPS payment year, we made the following modifications to the CY 2022 PFS final rule finalized policies model to reflect the previously finalized quality performance category policies for the CY 2023 performance period/2025 MIPS payment year:
For the proposed policies model, we made the following modifications to the baseline model to reflect the newly proposed quality performance category policies for the CY 2023 MIPS performance period/2025 MIPS payment year:
(b) Methodology To Estimate the Cost Performance Category ScoreWe estimated the cost performance category score using a similar methodology described in the CY 2022 PFS final rule (86 FR 65643) for the baseline and the proposed policies RIA models described in this section. The baseline policies RIA model used the same methodology as the finalized policies model in the CY 2022 PFS final rule (86 FR 65643) since there are no previously finalized cost performance category policies that will apply beginning with the CY 2023 MIPS performance period. In section IV.A.10.c.(2)(b) of this proposed rule, we are proposing to revise the operational list of care episode and patient condition groups and codes by adding the Medicare Spending Per Beneficiary (MSPB) clinician cost measure as a care episode group. This recategorization of the MSPB measure does not affect the scoring of the cost performance category. Additionally, in section IV.A.10.d.(1)(c)(i) of this proposed rule, we are proposing to establish a maximum cost improvement score of 1 percentage point out of 100 percentage points available for the cost performance category starting with the CY 2022 performance period/2024 MIPS payment year. Due to data limitations, we do not have multiple years of cost measures to model improvement scoring. Therefore, we did not make any modifications between the proposed policies and baseline model for the cost performance category scoring. (c) Methodology To Estimate the Facility-Based Measurement ScoringFor the baseline model, we estimated the facility-based score using the scoring policies finalized in the CY 2018 Quality Payment Program final rule (82 FR 53763) and the methodology described in the CY 2020 PFS final rule (84 FR 63169) incorporating the change to the facility-based scoring hierarchy described in the CY 2022 PFS final rule (86 FR 65526 through 65527). In our proposed policies model, we included two changes to facility-based scoring: Start Printed Page 46412
(d) Methodology To Estimate the Promoting Interoperability Performance Category ScoreFor the baseline RIA model, we used the CY 2019 MIPS Promoting Interoperability performance period submissions data to estimate CY 2023 MIPS performance for the Promoting Interoperability performance category. We did not make modifications to the Promoting Interoperability performance category baseline RIA model beyond what we finalized in the CY 2022 final rule (86 FR 64996). For the proposed rule model, we considered the following policy proposals as potential modifications to the baseline RIA model:
Due to limitations in our scoring engine-based model, we are unable to fully incorporate all of these changes into the proposed policies model. We incorporated into the model the modification to the scoring methodology for the Promoting Interoperability performance category and the removal of the automatic reweighting of NPs, PAs, CRNAs, and CNSs. We continue to use the scores for the e-Prescribing measure in the model as we only have data for the optional Query of PDMP measure. Due to the high submission rate for the optional measure and the expansion of the availability of PDMPs in all 50 States and several localities, we anticipate that clinicians who do not currently submit this newly required measure would now submit the measure or submit one of the associated exclusions. Because we lack CY 2019 MIPS submissions data for the Enabling Exchange Under TEFCA measure and the Health Information Exchange Bi-Directional exchange measure, previously finalized to be required beginning with the CY 2021 performance period, we only used past reporting on the existing Health Information Exchange Objective measures to estimate CY 2023 Promoting Interoperability performance for the proposed rule model. This may result in underestimating the Promoting Interoperability performance category scores if clinicians chose to report the bi-directional exchange measure for the CY 2021 performance period. (e) Methodology To Estimate the Improvement Activities Performance Category ScoreFor the baseline model, we modeled the improvement activities performance category score based on CY 2019 MIPS performance period data and APM participation identified in section IV.A.10.d.(1)(c)(i) of this proposed rule. For clinicians and groups not participating in a MIPS APM, we used their CY 2019 improvement activities score. We did not model the policy finalized in the CY 2020 performance period (84 FR 62980) to require a minimum threshold of 50 percent of clinicians in a group to complete an improvement activity for the group to receive credit since we did not have data to determine the proportion of clinicians in a group that completed the improvement activity. We continued to apply the methodology described in the CY 2020 PFS final rule (84 FR 63170) to assign an improvement activities performance category score. For the APM participants identified in section VII.F.17.c.(1) of this proposed rule, we assigned an improvement activity performance category score of 100 percent. (f) Methodology To Estimate the Complex Patient Bonus PointsFor the baseline and proposed policies RIA model, we used the previously established method to calculate the complex patient bonus as described in the CY 2022 PFS final rule (86 FR 64996). We calculated and applied the separate risk indicator complex patient bonus components methodology with a single overall cap described at section IV.A.10.d.(2).(a) of this proposed rule. In section IV.A.10.d.(2)(a)(ii) of this proposed rule, we propose to allow facility based clinicians to receive a complex patient bonus. We incorporated this change in our RIA policies model. (g) Methodology To Estimate the Final ScoreWe did not propose any changes for how we calculated the MIPS final score. Our baseline and proposed policies RIA models assigned a final score for each TIN/NPI by multiplying each estimated performance category score by the corresponding performance category weight, adding the products together, multiplying the sum by 100 points, adding the complex patient bonus, and capping at 100 points. For the baseline policies RIA model, we applied the performance category weights and redistribution weights finalized in the CY 2022 PFS final rule (86 FR 65519 through 65524). For both models, after adding any applicable bonus for complex patients, we reset any final scores that exceeded 100 points to equal 100 points. For MIPS eligible clinicians who were assigned a weight of zero percent for any performance category, we redistributed the weights according to § 414.1380(c). (h) Methodology To Estimate the MIPS Payment AdjustmentFor the baseline and proposed policies RIA models, we applied the hierarchy as finalized in the CY 2022 PFS final rule (86 FR 65536 through 65537) to determine which final score should be used for the payment adjustment for each MIPS eligible clinician when more than one final score is available. We then calculated the parameters of an exchange function in accordance with the statutory requirements related to the linear sliding scale, budget neutrality, and minimum and maximum adjustment percentages. For the baseline model, we applied the performance threshold finalized in Start Printed Page 46413 the 2022 PFS final rule (86 FR 65527) of 75 points finalized at § 414.1405. For the proposed policies model, we applied the performance threshold of 75 points proposed in section IV.A.10.e.(2) of this proposed rule. We used these resulting parameters to estimate the positive or negative MIPS payment adjustment based on the estimated final score and the allowed charges for covered professional services furnished by the MIPS eligible clinician. (4) Impact of Payments by Practice SizeWe noticed minimal changes to the mean and median final score between our baseline and proposed policies model. In our baseline model, the mean and median final scores are 73.63 and 77.48, respectively. In the proposed policies model, the mean final score is 73.57 and the median final score is 77.52. Because these mean and median final scores are so close to our performance threshold of 75, many clinicians are only slightly above or slightly below the performance threshold. For instance, in the proposed policies model, 284,000 clinicians have a final score between 70 and 80 points. We recognize that, because many scores are clustered around the performance threshold of 75, any variation in scoring or submissions data such as the presence of submission data for the Trusted Exchange Framework and Common Agreement (TEFCA) measure and the Health Information Exchange bi-directional exchange measures, discussed in section VII.E.16.d.(3)(d) of this RIA, can have a significant impact on the proportion of clinicians receiving a positive or a negative payment adjustment. Between the baseline and proposed policies model we observe a slight difference in the percentage and distribution of clinicians receiving a negative payment adjustment. Overall, we project 66.5 percent of engaged clinicians [547] would receive a positive or neutral adjustment in our proposed policies model up from 62 percent in the baseline model. We observe a slight difference in payment adjustments by practice size. Note that in the CY 2021 PFS final rule we did not report the solo clinician's category. This category, which encompasses 21,955 clinicians, has a slightly larger share receiving a negative payment adjustment compared to other practice sizes. We note an increase in the percentage of clinicians receiving a positive or neutral payment adjustment between the baseline and proposed policies model for all practice sizes except for large practices where we see a slight decrease. Because many clinicians scores are close to the performance threshold, many of these clinician's payment adjustments are fairly small and many negative adjustments are much lower in magnitude than the statutory maximum negative adjustment of 9 percent. In our proposed policies model, we project a payment adjustment of negative 9 percent for clinicians with a score of 18 points or below and we project only 3,481 clinicians would receive a score of 18 points or below and thus be subject to the maximum negative payment adjustment. In our baseline model, the average positive payment adjustment among engaged clinicians is 2.50 percent and the average negative payment adjustment is −1.68 percent. In our proposed policies model, the average positive payment adjustment among engaged clinicians is 2.49 percent and the average negative payment adjustment among engaged clinicians is −1.64 percent. Only 6.84 percent of clinicians receive a score of less than 50 points and therefore a negative payment adjustment of more than 3 percent. Because there is only a slight difference in the proportion of clinicians receiving a negative payment adjustment between the proposed policies and baseline model, we anticipate only a modest change in the amount of funds redistributed due to budget neutrality (from $1 billion to $998 million) and a modest change in the maximum positive payment adjustment from 6.8 percent in the baseline to 6.9 percent in the proposed policies model, however, we recognize that a modest change in final scores could influence the amount of funds available for redistribution. These findings and proposed policies reflect movement away from the transition policies implemented during the early years of MIPS and how MIPS is focusing on value rather than primarily on engagement. However, a large proportion of those who are non-engaged, or not submitting data to MIPS, are clinicians in small practices. Among those who we estimate would not engage with MIPS, 79.8 percent are in small practices (16,614 out of 20,810 clinicians who do not engage). We intend to continue working with interested parties to improve engagement in MIPS among clinicians in small practices. We want to highlight we are using 2019 MIPS performance period submissions data to simulate a CY 2023 MIPS performance period final score, and it is likely that there will be changes that we cannot account for at this time. It should also be noted that the estimated number of clinicians who do not submit data to MIPS may be an overestimate of non-engagement in MIPS for the CY 2023 performance period/2025 MIPS payment year. This is because the PHE for COVID-19 may have resulted in fewer clinicians submitting data to MIPS or more clinicians electing to apply for the extreme and uncontrollable circumstances policies due to the PHE for COVID-19 for the CY 2019 MIPS performance period. Therefore, engagement levels in MIPS for the CY 2023 performance period/2025 MIPS payment year may differ from these reported estimates. We also note this participation data is generally based off participation for the CY 2019 performance period/2021 MIPS payment year, which is associated with a performance threshold of 30 points, and that participation may change since the proposed performance threshold is 75 points. Finally, the combined impact of negative and positive adjustments as a percent of allowed charges among those that do not submit data to MIPS was not the maximum negative payment adjustment of 9 percent possible because some MIPS eligible clinicians that do not submit data to MIPS receive a non-zero score for the cost performance category, which utilizes administrative claims data and does not require separate data submission to MIPS. Start Printed Page 46414 Start Printed Page 46415 e. Additional Impacts From Outside Payment Adjustments(1) Burden OverallIn addition to policies affecting the payment adjustments, we are proposing several policies that have an impact on burden in the CY 2023 performance period/2025 MIPS payment year. In section VII.E.16.e. of this proposed rule, we outline estimates of the costs of data collection that includes both the effect of proposed policy updates and adjustments due to the use of updated data sources. For each proposal included in this regulation which impacts our estimate of collection burden, the incremental burden for each is summarized in Table 147. We also provide proposed additional burden discussions that we are not able to quantify. Start Printed Page 46416 (2) Additional Impacts to Clinicians(a) MVP Maintenance and Development ProcessIn section IV.A.8.a. of this rule, we propose updates to the previously finalized policies for the MVP development and maintenance process in the CY 2021 and 2022 PFS final rules (85 FR 84849 through 84856 and 86 FR 65410). Specifically, we propose to modify the MVP development process such that we would evaluate a submitted candidate MVP through the MVP development process and if we determine it is “ready” for feedback, we would post a draft version of the MVP on the Quality Payment Program website ( https://qpp.cms.gov/) and solicit feedback for a 30-day period. Interested parties and the general public would have the opportunity to submit feedback on the candidate MVP for CMS's consideration through an email inbox. We would review the feedback received, and determine if any changes should be made to the candidate MVP prior to potentially including the MVP in a notice of proposed rulemaking. If we determine changes should be made to the candidate MVP, we would not notify the interested party who originally submitted the candidate MVP for CMS consideration in advance of the rulemaking process. We also propose that beginning with the CY 2023 performance period/2025 MIPS payment year, to modify the MVP maintenance process such that interested parties and the general public would be able to submit their recommendations for potential revisions to established MVPs on a rolling basis throughout the year. We would then review the submitted recommendations and determine whether any are potentially feasible and appropriate. If we identify any submitted recommendations that are potentially feasible and appropriate, we would host a public facing webinar, open to interested parties and the general public, through which they may offer their feedback on the potential revisions we have identified. We would publish details related to the timing and Start Printed Page 46417 registration process for the webinar through our Quality Payment Program Listserv. We acknowledge that there is administrative burden associated with the monitoring and review of the candidate MVPs. However, we are unable to estimate the impact of these proposals and quantify the number of interested parties and members of the general public that would review and submit their feedback for a candidate MVP. Similarly, we are uncertain on the number of interested parties and members of the general public that would submit their recommendations for potential revisions to established MVPs for an applicable performance period and if CMS would be hosting a public webinar based on the review of the recommendations. In summary, we are unable to quantify the impact associated with the proposed changes to the MVP development and maintenance process. (b) Subgroup RegistrationIn section IV.A.8.e.(3) of this rule, we propose that as part of the subgroup registration process, in addition to the previously established registration requirements, group TINs must provide a description of each subgroup that is registered. Under this proposed policy, we would identify some key scenarios for subgroups to select from that we expect might reflect a typical subgroup, but also wish to offer an opportunity for group TINs to describe how they constructed their subgroups by providing a narrative in a text-only field, if the options we provide do not correctly describe the subgroup. We recognize that there may be additional burden associated with the proposed description requirement for subgroup registration. However, we assume that the burden associated with choosing a key scenario would minimize the time required for subgroups to provide a narrative description. Additionally, we anticipate the narratives to be short descriptions of the nature of a group practice and appropriately reflect the subgroup composition. We are unable to quantify the additional impact for the proposed subgroup description requirement. (c) Impact on Third Party IntermediariesIn section IV.A.10.g.(3)(a) of this rule, we propose to revise the corrective action plan (CAP) requirement at § 414.1400(e)(1)(i)(B) to address the impact to any affected parties, as appropriate. We also propose to add § 414.1400(e)(1)(i)(E) to require the detailed communication plan for communicating the issues that contributed to the non-compliance and the impact to any affected parties, as appropriate. We anticipate administrative burden associated with the proposed requirement for third party intermediaries to submit a detailed communication plan. Because of the relatively low number (fewer than 10 per year historically) of CAPs that we anticipate receiving from QCDRs for the CY 2023 performance period/2025 MIPS payment year, we are unable to quantify the burden associated with the development of a communication plan for third party intermediaries. (d) Compare Tools: Public ReportingIn section IV.A.10.h.(1) of this rule, we propose to identify clinicians who perform telehealth services using Place of Service Code 02 (indicating telehealth) on paid physician & ancillary service (that is, carrier) claims, or modifier 95 appended on paid claims. Additionally, we propose publicly reporting Medicare procedural utilization data on the Compare tool clinician and group profile pages in a way that is understandable to patients and caregivers, based on user testing, and helps them make healthcare decisions. We would begin publicly reporting procedural utilization data no earlier than CY 2023. We will use a 12-month lookback period and bi-monthly data refresh frequency, as technically feasible. While the Compare tool proposals do not increase the burden of collections, we note that the PRA package may require relevant modification to reflect the Compare tool's new uses and public display. (e) Administrative Claims MeasureAs discussed in appendix 1, we are proposing to add one new administrative claims quality measure beginning in the CY 2023 performance period/2025 MIPS payment year and for future performance periods: Risk-standardized Acute Cardiovascular-Related Hospital Admission Rates for Patients with Heart Failure under the Merit-based Incentive Payment System. We acknowledge there are administrative burdens and related financial costs associated with each administrative claims measure that clinicians, groups, and organizations may choose to monitor. However, because these costs can vary significantly due to organizational size, number of administrative claims measures being reported, volume of clinicians reporting each measure, and the specific methods employed to improve performance, we are unable to provide an estimate of the financial impact each clinician, group, or organization may experience. In summary, we are acknowledging that while there are no data submission requirements per § 414.1325(a)(2)(i) for administrative claim measures, there may be associated costs for clinicians and group practices to monitor new administrative claim measures; however, we are unable to quantify that impact. (f) Modifications to the Improvement Activities InventoryAs discussed in section IV.A.10.b of this proposed rule, we are proposing changes to the improvement activities inventory for the CY 2023 performance period/2025 MIPS payment year and future years as follows: adding four new improvement activities; modifying five existing improvement activities; and removing six previously adopted improvement activities. We refer readers to Appendix 2 of this proposed rule for further details. We do not believe these proposed changes to the inventory will significantly impact time or financial burden on interested parties because MIPS eligible clinicians are still required to submit the same number of activities and the per response time for each activity is uniform. We recognize that different activities may require differing amount of time to complete, but for the purposes of the COI, we focus on the amount of time it takes to submit the associated information into the system. We do not expect these proposed changes to the inventory to affect our currently approved information collection burden estimates in terms of neither the number of estimated respondents nor the burden per response. We anticipate most clinicians performing improvement activities, to comply with existing MIPS policies, would continue to perform the same activities under the policies in this proposed rule because previously finalized improvement activities continue to apply for the current and future years unless otherwise modified per rulemaking (82 FR 54175). Most of the improvement activities in the Inventory remain unchanged for the CY 2023 MIPS performance period. g. Assumptions & LimitationsIn section VII.E.16.d.(4) of this RIA we noted the limitation that, because many scores are clustered near the performance threshold of 75 points, minor variations in clinicians final scores relative to our estimations could have significant impacts on the proportion of clinicians receiving a positive or negative payment adjustment. In addition to this limitation, we note several other Start Printed Page 46418 limitations to our estimates of clinicians' MIPS eligibility and participation, negative MIPS payment adjustments, and positive payment adjustments for the CY 2023 performance period/2025 MIPS payment year. Due to the PHE for COVID-19, we are aware that there may be changes in health care delivery and billing patterns that will impact results for the CY 2023 performance period/2025 MIPS payment year that we are not able to model with our historic data sources. The scoring model results presented in this proposed rule assume that CY 2019 Quality Payment Program data submissions and performance are representative of CY 2023 Quality Payment Program data submissions and performance. The estimated performance for the CY 2023 performance period/2025 MIPS payment year using CY 2019 Quality Payment Program data may be underestimated because the performance threshold to avoid a negative payment adjustment for the CY 2019 performance period/2021 MIPS payment year was significantly lower (30 out of 100 points) than the proposed performance threshold for the CY 2023 performance period/2025 MIPS payment year (75 out of 100). We anticipate clinicians may submit more performance categories to meet the higher performance threshold to avoid a negative payment adjustment. In our MIPS eligible clinician assumptions, we assumed that clinicians who elected to opt-in in the CY 2019 Quality Payment Program and submitted data would continue to elect to opt-in in the CY 2023 performance period/2025 MIPS payment year. It is difficult to predict whether clinicians will elect to opt-in to participate in MIPS with the proposed policies. There are additional limitations to our estimates In addition to the limitations described throughout the methodology sections: (1) to the extent that there are year-to-year changes in the data submission, volume and mix of services provided by MIPS eligible clinicians, the actual impact on total Medicare revenues will be different from those shown in Table 144 and (2) our data for the cost performance category does not overlap with CY 2019 so we may not be capturing performance for all clinicians. Due to the limitations described, there is considerable uncertainty around our estimates that is difficult to quantify. F. Alternatives ConsideredThis proposed rule contains a range of policies, including some provisions related to specific statutory provisions. The preceding preamble provides descriptions of the statutory provisions that are addressed, identifies those policies when we propose to exercise agency discretion, presents rationale for our policies and, where relevant, alternatives that were considered. For purposes of the payment impact on PFS services of the policies contained in this proposed rule, we present above the estimated impact on total allowed charges by specialty. 1. Alternatives Considered for Adjusting RVUs To Match PE Share of the Medicare Economic Index (MEI)As discussed in section II.B. of this proposed rule, “(5) PE RVU Methodology,” Steps 3, 10, and 18, and “3. Adjusting RVUs To Match PE Share of the Medicare Economic Index (MEI)”, we hold the work RVUs constant and adjust the PE RVUs, MP RVUs, and CF to produce the appropriate balance in RVUs among the PFS components and payment rates for individual services, that is, that the total RVUs on the PFS are proportioned to approximately 51 percent work RVUs, 45 percent PE RVUs, and 4 percent MP RVUs. As the Medicare Economic Index (MEI) cost shares are updated, we typically propose to modify steps 3 and 10 described in section II.B. of this proposed rule to adjust the aggregate pools of PE costs (direct PE in step 3 and indirect PE in step 10) in proportion to the change in the PE share in the rebased and revised MEI cost share weights, as previously described in the CY 2014 PFS final rule (78 FR 74236 and 74237), and to recalibrate the relativity adjustment that we apply in step 18 described in section II.B. of this proposed rule. The most recent recalibration was done for the CY 2014 RVUs, when the MEI was last updated. As an alternative to adjusting the aggregate pools of direct and indirect PE costs and using a relativity adjustment based on the current CY 2014 MEI update, we considered using the proposed rebased and revised MEI cost share weights for CY 2023, as discussed in detail in section II.M. of this proposed rule, for purposes of adjusting the RVUs to match PE share of the MEI for CY 2023. We considered using the rebased and revised cost share weights to adjust the aggregate pools of PE RVUs and the relativity adjustment to reflect more recent data, shifting over a 4 year transition to reach the proportions of work, PE, and MP, as proposed in section II.M. of this proposed rule. Table 148 illustrates specialty-specific impacts for the proposed rule if we were to use the proposed rebased and revised MEI cost share weights to adjust the RVUs to match the PE share of the MEI. Column C represents specialty level impacts of our proposals for CY 2023 without the recalibration of RVU proportions based on the proposed rebased and revised MEI cost share weights, shown for comparison to the alternatives considered (same impacts as shown in Table 139). Column E represents the specialty level impacts of our proposals for CY 2023 with Year 1 of a 4-year phased in recalibration of RVU proportions based on the proposed rebased and revised MEI cost share weights. Column F represents the specialty level impacts of our proposals for CY 2023 with the recalibration of RVU proportions based on the proposed rebased and revised MEI cost share weights, without a 4-year phase in, but rather, a full implementation for CY 2023. Start Printed Page 46419 Start Printed Page 46420 Start Printed Page 46421 Start Printed Page 46422 Start Printed Page 46423 The majority of specialties would experience shifts of 1 percent or greater if we used the proposed rebased and revised MEI cost share weights, as opposed to the current weights, displayed in Table 148, for proportioning work, PE, and MP RVUs. Several specialties shifted by greater than 3 percent, particularly the specialties with relatively higher PE costs, which are mostly realizing a positive shift, or relatively higher physician work costs, which are realizing a negative shift. As shown in Column F, the shifts are amplified, both negatively and positively, when use of the proposed rebased and revised MEI cost share weights is not phased in over several years; therefore, we did not consider this a viable alternative for consideration. We note that there are significant shifts in specialty level payments if we used the proposed rebased and revised MEI cost share weights, some of which counter other CY 2023 proposals (that is, changes to Evaluation and Management (E/M) services, chronic pain management, and behavioral health services). We have proposed to delay the adjustments to allow public comment and finalization of the proposed rebased and revised MEI, and to maintain use of the current MEI cost share weights while presenting the information in section II.M. of this proposed rule and the specialty level impacts in Table 148. We are also soliciting comment on the use of a transition to phase in use of the proposed rebased and revised MEI cost share weights, if and as finalized, for potential future rulemaking. Because there are significant proposed methodological and data source changes to the MEI for CY 2023 and significant time has elapsed since the last rebasing and revision of the MEI, we believe it is important to allow public comment and finalization of the proposed MEI changes based on the review of public comment before we incorporate the updated MEI into PFS ratesetting, and we believe this is consistent with our efforts to balance payment stability and predictability with incorporating new data through more routine updates. Similarly, we are proposing to delay the implementation of the proposed rebased and revised MEI for use in the PE geographic practice cost index (GPCI) to allow public comment and finalization of the proposed MEI changes based on the review of public comment before we incorporate the updated MEI into the PE GPCIs. Start Printed Page 46424 2. Alternatives Considered for the Practice Expense (PE) Geographic Practice Cost Index (GPCI)As discussed in section II.G. of this proposed rule, we use the MEI cost share weights to weight the four components of the PE GPCI: employee compensation, the office rent, purchased services, and medical equipment, supplies, and other miscellaneous expenses. As the MEI cost shares are updated, we have historically updated the GPCI cost share weights to make them consistent with the most recent update to the MEI. Instead, we are proposing to maintain the use of the current 2006-based MEI cost share weights for the CY 2023 proposed GPCIs, allowing interested parties the opportunity to review and comment on, and for us to respond to comments and finalize, the proposed rebased and revised MEI cost share weights. Because there are significant proposed methodological and data source changes to the MEI for CY 2023 and significant time has elapsed since the last rebasing and revision of the MEI, we believe it is important to allow public comment and finalization of the proposed MEI changes based on the review of public comment before we incorporate the updated MEI into the PE GPCI. As an alternative to using the current 2006-based cost share weights, we considered using the proposed rebased and revised Medicare Economic Index (MEI) cost share weights for CY 2023, as discussed in detail in section II.M. of this proposed rule for purposes of weighting the four components of the CY 2023 PE GPCI. Specifically, within the four components of the PE GPCI, we considered proposing to update the employee compensation component from 16.553 percent to 24.716 percent, the office rent component from 10.223 percent to 5.893 percent, the purchased services component from 8.095 percent to 13.914 percent, and the medical equipment, supplies, and other miscellaneous expense component from 9.968 percent to 6.819 percent, as shown in Table 149. The use of the proposed rebased and revised MEI cost share weights only impacts the PE GPCI. When the PE GPCI was calculated using the proposed rebased and revised MEI cost share weights, 10 of the 112 PE GPCI values remained the same compared to the calculated PE GPCI using the current 2006-based MEI cost share weights. Three of the 112 PE GPCI values differed by ±0.001 and 68 of the 112 PE GPCI values differ less than or equal to ±0.009. Therefore, the proposal to maintain the use of the current 2006-based MEI cost share weights has little to no effect on over 70 percent of the localities' PE GPCIs. Of the remaining 31 localities with a difference of greater than ±0.009 between the proposed PE GPCI and the alternative considered, 10 realize an increased PE GPCI when the current 2006-based MEI cost share weights were used, ranging from an increase of 0.010 to 0.012, as compared to the PE GPCI if the proposed rebased and revised MEI cost share weights were incorporated. The remaining 21 localities realize a decrease in PE GPCI when the current 2006-based MEI cost share weights were used, ranging from a decrease of 0.010 to 0.028. We note that we are seeking comment in section II.G. of this proposed rule on the proposal to maintain the use of the current 2006-based MEI cost share weights and postpone the implementation of the proposed rebased and revised MEI cost share weights for consideration through potential future rulemaking. See Alternate Addenda D and E to this proposed rule for the CY 2023 GPCIs and summarized GAFs if the rebased and revised MEI cost share weights proposed in section II.M. of this proposed rule, were incorporated to weight the proposed CY 2023 PE GPCIs (for comparison to Addenda D and E with the proposal to maintain the current 2006-based MEI cost share weights for the PE GPCIs). Because the PE GPCIs factor into the GAF equation, we created an Alternate Addendum D to show the recalculated GAFs if the rebased and revised MEI cost share weights were incorporated to weight the CY 2023 PE GPCIs as well. These alternative addenda are available on the CMS website under the supporting documents section of the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We note that only the PE GPCI and GAF values differ between Addenda D and E, and Alternate Addenda D and E, as the proposed rebased and revised cost share weights do not impact the work or MP GPCIs. 3. Alternatives Considered Related to Payment for E/M ServicesIn developing our policies for other E/M visits effective January 1, 2023, we considered a number of alternatives. For reasons discussed in our E/M policy section (section II.F. of this proposed rule) we considered several refinements for the RUC-recommended work RVUs for several of the codes in the families based on survey time changes to include Hospital Inpatient or Observation Care, Nursing Facility visits, and Home or Residence Services. We proposed to accept the RUC recommendations for the work RVUs because we believe they are more accurate values. For some of these codes the overall times changed and the RUC recommended work RVUs accurately reflect changes based on changes in the times for the service. For Start Printed Page 46425 some of the codes, changes were noted in the total time and intra-service times which was reflected in the intra-time and total time ratios that led to an increase. Given our interest in maintaining continuity in the overall code set, we are proposing to accept the RUC recommendations for the work time values and work RVUs for these codes and are seeking public comment on our concerns for specific codes. We considered adopting the CPT coding for prolonged services as an alternative but after thoughtful consideration we are proposing to develop Medicare-specific coding (three G-codes, one per setting) to avoid potentially substantial overpayment, provide administrative simplification, enable CMS to determine how much time is being spent with patients using claims data, and facilitate program integrity. Allowing for CMS to determine how much time is being spent with patients using claims data is important for future valuation of services on the PFS, and for program integrity. If we proposed to merely accept the CPT prolonged service coding changes, we would not be able to identify the time spent with patients in the claims data alone, because we might not know which primary service is the companion code to the prolonged service code(s) due to the wide service timespan (for prolonged services without direct patient contact) and non-specific care settings within the prolonged CPT code descriptors. We considered two options in coming to our proposal. First, we considered using the descriptor time plus 15 minutes which would allow for prolonged services to be reportable once the practitioner spends 15 additional? minutes beyond the ceiling time of the primary service. Or, our second option was to use total time plus 15 minutes allowing for prolonged services to be reportable once the practitioner spends 15 additional minutes beyond the total time of the primary service. Both of these options would allow for time to be counted on any day within the survey period with no frequency limit. However, we decided to take the same approach we did for the office/outpatient E/M visits by proposing Medicare specific coding (GXXX1 through GXXX3) for prolonged services for other E/Ms. We proposed to value the G codes similarly to the parallel CPT codes, and require total time to be met before prolonged time starts. Reporting this way, through the use of a G code for each of the specified code families, allows for administrative simplicity and payment accuracy. 4. Alternatives Considered Related to Proposal To Allow Audiologists To Furnish Diagnostic Tests, as Appropriate Without a Physician OrderAs discussed in section II.K. of this proposed rule, interested parties have told us that our regulatory requirement for a physician or NPP order for diagnostic audiology services may be impeding access to audiologists. More recently they have requested that we eliminate the treating physician (or NPP) order requirement for the diagnostic hearing and balance assessment services furnished by audiologists—via notice and comment rulemaking—to enable greater access to these services. As we also discussed in section II.K. of the proposed rule, we are concerned that direct access of audiologists' services, that is the removal of the order requirement for these hearing and balance services furnished by audiologists, might lead to payment for services that are not medically necessary because the results are not being used by a treating physician or NPP in the management of the patient's medical condition. Nonetheless, after careful consideration of the interested parties' requests, we have proposed to amend the regulation at § 410.32(a)(4) to remove the order requirement for certain audiology services furnished personally by an audiologist once per beneficiary per 12-month period for non-acute hearing conditions. We also propose to create HCPCS code GAUDX ( Audiology service(s) furnished personally by an audiologist without a physician/NPP order for non-acute hearing assessment unrelated to disequilibrium or hearing aids or examinations for the purpose of prescribing, fitting, or changing hearing aids; may be performed on an annual basis) to describe audiology services furnished without the order of a treating physician or practitioner. When developing our proposed policy, we considered adding audiologists to § 410.32(a)(2), under the provision that permits nonphysician practitioners to order diagnostic tests. However, unlike audiologists, the practitioners identified in this provision are all required to accept payment on an assignment-related basis under section 1842(b)(18)(C) of the Act and must accept the Medicare payment amount as payment in full. Medicare payment for audiology services provided by audiologists who do not accept assignment would result in higher out-of-pocket expense (that is, the balance billed amount) than if they did accept assignment. In addition, Medicare Part B does not recognize audiologists to treat or manage patients, unlike PAs, NPs or CNSs who may bill for E/M services, and for whom Medicare Part B covers services and supplies incident to their own professional services as provided in the regulation at § 410.26. Rather, because audiology services furnished by audiologists include only diagnostic hearing and balance assessment services, we concluded that adding audiologists with the NPPs listed in § 410.32(a)(2) was inappropriate. We also considered alternatively removing the requirement for the order of a treating physician or practitioner for audiology services without the annual limitation. However, we had concerns about the possibility of overutilization of HCPCS code GAUDX if the results of audiology testing are not used by a treating clinician to manage the patient's medical condition. Additionally, we do not have the ability to predict the behavioral response of audiologists to removal of order requirements. Therefore, we believe that adding an annual limitation would serve to address some of our concerns of overutilization. To monitor for the appropriate use of HCPCS code GAUDX, we will establish system edits through our usual change management process to ensure that GAUDX is only paid once every 12 months per each beneficiary. This will also help address program integrity concerns about audiologists billing GAUDX more frequently, furnishing services that are not reasonable or necessary for the treatment of the beneficiary's illness or injury, or billing more than one unit of GAUDX on a claim. Finally, because we are concerned about beneficiaries with acute onset conditions that require immediate medical intervention, and the potential loss of valuable time for medical intervention if the patient sees an audiologist first, we are limiting the direct access to audiology services to non-acute hearing conditions and conditions for which patients' experience disequilibrium symptomology. To help address these safety concerns about direct access to audiologists, we want to stress the importance that such hearing conditions with a rapid onset and balance conditions with disequilibrium symptoms are to be referred directly to the primary care physician, ENT or other physician or NPP treating the beneficiary. Start Printed Page 46426 5. Alternatives Related to Proposals for Medicare Part A and B Payment for Dental Services and Request for InformationAs explained in this proposed rule, we believe there are instances where the medical services necessary for treating the individual's underlying medical condition and clinical status may require the performance of certain dental or oral health services. In these instances, we believe that the dental and oral health services are not in connection with the care, treatment, filling, removal or replacement of teeth or structures directly supporting teeth, and instead are inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services such that the dental or oral health services are not subject to the statutory payment preclusion under section 1862(a)(12) of the Act. We also believe that there are circumstances where the dental or oral health services are in connection with the care, treatment, filling, removal or replacement of teeth or structures directly supporting teeth, and are not inextricably linked to the clinical success of an otherwise covered medical service such that Medicare payment for the dental or oral health services is precluded by section 1862(a)(12) of the Act. And we believe that there may circumstances where, because of the patient's underlying medical condition and clinical status or because the severity of the dental procedure, the patient requires hospitalization to receive services in connection with the care, treatment, filling, removal or replacement of teeth or structures directly supporting teeth such that payment could be made under Medicare Part A for inpatient hospital services in connection with the dental or oral health services under the exception provided under section 1886(a)(12) of the Act. In section II.L.2. of this proposed rule, we are: (1) proposing to clarify our interpretation of section 1862(a)(12) of the Act, and clarify and codify certain of our current Medicare FFS payment policies for medically necessary dental services; (2) proposing and seeking comment on payment for other dental services, such as dental examinations, including necessary treatment, performed as part of a comprehensive workup prior to organ transplant surgery, or prior to cardiac valve replacement or valvuloplasty procedures, that are similarly inextricably linked to, and substantially related and integral to the clinical success of, certain other covered medical services; (3) requesting comments on other types of clinical scenarios where the dental services may be inextricably linked and substantially related and integral to the clinical success of other covered medical services; (4) requesting comments on the potential establishment of a process to identify for our consideration and review submissions of additional dental services that are inextricably linked and substantially related and integral to the clinical success of other covered medical services; (5) requesting comment on other potentially impacted policies;, and (6) requesting comment on potential future payment models for dental and oral health care services. We note that we are open to considering and finalizing payment under Medicare Parts A and B for dental services under additional circumstances to those for which payment is already made under our current policy or for which we are specifically proposing to make payment beginning in CY 2023. Specifically, we would consider finalizing Medicare Part A and Part B payment for dental services if there are other circumstances in which such dental services are so integral to other medically necessary services that they are not in connection with the care, treatment, filling, removal or replacement of teeth or structures directly supporting teeth; but rather, are inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services. In that case, the dental services would not be subject to the Medicare payment exclusion provided under section 1862(a)(12) of the Act. We considered whether to propose Medicare payment for the performance of other services where a comprehensive dental or oral health exam, and potential treatment, might be considered a standard of care prior to the performance of an otherwise covered medical service, such as before certain treatment of head and neck cancers, such as radiation therapy with or without chemotherapy, before the initiation of medically necessary immunosuppressant therapy, such as those used during cancer treatments, prior to joint replacement surgery (such as total hip and knee arthroplasty surgery). However, we decided not to specifically propose payment in these circumstances because we believe more clinical data is necessary to determine whether the dental services would be inextricably linked to, and substantially related and integral to the clinical success of, these medically necessary services. We welcome public comments on all of these alternatives discussed, including whether Medicare payment should be specified for other types of services where the dental services may be so inextricably linked to the clinical success of an otherwise covered medical service that they are not in connection with the care, treatment, filling, removal or replacement of teeth or structures directly supporting the teeth. We welcome public comments on these alternatives and others, which we may consider finalizing in the CY 2023 PFS final rule, or through future rulemaking after considering the comments received. In section II.L.2.c.(ii) of this proposed rule, we seek comment on the potential establishment of a process to accept, review and consider additional clinical scenarios where payment may be permitted under Medicare Part A and Part B for certain additional dental services. We note that we considered establishing categorical clinical criteria and review process for submissions in order to consider whether these dental services are inextricably linked to an otherwise covered medical service, and therefore not subject to the Medicare payment exclusion provided under section 1862(a)(12) of the Act. However, we decided not to establish specific review criteria at this time because we believed a more open-ended clinical review process was preferable as we began to carefully consider payment policies for dental services in light of our longstanding interpretation of section 1862(a)(12) of the Act. We seek comment on alternative approaches to reviewing these submissions if we finalize the proposed process, such as outlining the specific types of medical literature needed to support the inclusion of services for Medicare FFS payment purposes, or legal and clinical analysis needed to consider whether the services do or do not fall within the statutory exclusion for dental services under section 1862(a)(12) of the Act based on our proposed interpretation within this proposed rule. We welcome public comments on these alternatives and others, which we may consider finalizing in the CY 2023 PFS final rule or future rulemaking after considering the comments received. If we were to finalize a change in the CY 2023 PFS rulemaking to expand the types of dental services for which payment can be made under Medicare Parts A and B, we remain open to adjusting any finalized policy through future rulemaking, and conducting further impact analysis while also providing an opportunity for public comment on such analysis. Start Printed Page 46427 6. Alternatives Considered Related to Medicare Shared Savings ProgramOne purpose of the proposed prior savings adjustment is to mitigate the rebasing ratchet effect on an ACO's benchmark in order to improve the incentive for higher spending ACOs to reduce spending in advance of eventual rebasing and to encourage their renewal for successive agreement periods. It remains a possibility, however, that even with this provision, higher spending ACOs that are effective in reducing spending may eventually drop out of the Shared Savings Program absent the opportunity to participate in a one-sided model in the succeeding agreement period. While we project only 1 to 5 percent of new ACOs dropping out before the end of their first agreement period, the dropout rate could reach as high as 30 percent during the second agreement period. Signaling that risk will eventually be mandatory could prevent the formation of low-revenue ACOs for whom a sharing-only incentive has proven to be effective. We considered an alternative in which low revenue ACOs would be permitted to participate in a one-sided model for a second full agreement period and estimate it would further increase program savings by at least $1 billion because it would increase retention for the type of ACO that has favorably responded to a moderate upside-only incentive in the past. This additional savings would result from (1) about a 60 percent reduction in the projected dropout rate by the end of the second agreement period for new and re-entering ACOs and (2) an assumed incremental increase in the share of ACOs that would form as low revenue (a type that is assumed to be more effective at reducing spending). This alternative estimate is likely conservative, as the savings impact could be significantly greater if such signaling regarding the second agreement period were to prove to be a key factor motivating a significant increase in the overall number of ACOs that enter a first agreement period under the Shared Savings Program (instead of just the proportion that form as low revenue versus high revenue). Commenters may support also adding guardrails for calculating shared savings by limiting the difference the ACPT may be allowed to show (in either direction) from actual national assignable trend. Setting a prospective symmetric threshold for correcting extreme projection error would automatically correct for bias in either direction and prevent the need for CMS to address pressure to correct projection error on an ad hoc basis. Public pressure to correct for projection error would be strongest in situations where actual growth eclipses the ACPT by a significant margin. If CMS were assumed to only update the ACPT in years where such pressures were magnified because a change would favor ACOs, this impact estimate would show $1.3 billion in additional spending over 10 years. This estimate presumes that CMS would limit deviation in ACPT from actual national trend to no more than 2 percent in years where the ACPT understates national trend. The cost of such policy to asymmetrically correct for unfavorable projection error would grow if the threshold for making such adjustments were assumed to move lower than 2 percent. 7. Alternatives Considered for the Quality Payment ProgramFor purposes of the payment impact on the Quality Payment Program, we view the performance threshold as a critical factor affecting the distribution of payment adjustments. We ran separate proposed policies RIA models based on the actual mean for the CY 2019 performance period/2021 MIPS payment year and the CY 2020 performance period/2022 MIPS payment year with a performance threshold of 86 and 89, respectively which are potential values that may be used for the performance threshold for CY 2023 performance period/2025 MIPS payment year. The models have the same mean and median final score as our proposed policies RIA model since the performance threshold does not change the final score. In the iteration with a performance threshold of 86, 82.3 percent of MIPS eligible clinicians would receive a negative payment adjustment among those that submit data. In the model with a performance threshold of 89 points, 89.1 percent of MIPS eligible clinicians would receive a negative payment adjustment among those that submit data. We report the findings for the baseline RIA model which describes the impact for the CY 2023 MIPS performance period/2025 MIPS payment year if this proposed regulation did not exist. The baseline RIA model has a mean final score of 73.63 and median final score of 77.48. We estimate that $1 billion would be redistributed through budget neutrality. There would be a maximum payment adjustment of 6.8 percent after considering the MIPS payment adjustment. In addition, 39.4 percent of MIPS eligible clinicians would receive a negative payment adjustment among those that submit data. G. Impact on Beneficiaries1. Shared Savings Program ProvisionsAs noted previously, a number of changes in this proposed rule collectively aim to increase participation in a more sustainable way for ACOs serving medically complex, high cost beneficiaries. The proposed policies are designed to reverse recent trends where growth has plateaued in the Shared Savings Program, higher spending populations are increasingly underrepresented in the program since the change to regionally-adjusted benchmarks, and access to ACOs appears inequitable as evidenced by data indicating that Black (or African American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries are less likely to be assigned to a Shared Savings Program ACO than their Non-Hispanic White counterparts, and to encourage growth of ACOs in underserved communities. ACOs have been found to perform better on certain patient-experience and performance measures than physician groups participating in the MIPS. In addition, ACOs have consistently demonstrated their ability to improve quality with 64 percent of ACOs participating during both 2019 and 2020 receiving Quality Improvement Reward points with the majority of ACOs showing the greatest improvement in the Preventive Health domain. Increased participation in the Shared Savings Program will extend ACO care coordination and quality improvement to segments of the beneficiary population that potentially have more to benefit from care management, and would stave off the risk apparent in the current trajectory of the Shared Savings Program where ACO participants and ACO providers/suppliers may feel pressure to avoid engaging with beneficiaries in high needs communities in order to avoid assignment of high cost beneficiaries to their ACO and to improve their performance relative to a regional expenditures. In combination with proposed new participation options that are expected attract a mix of new participants, targeted proposals such as using an offset factor to reduce the negative regional adjustment for ACOs serving high risk and high dual populations, aim to increase the reach of ACO care coordination to more beneficiaries with high needs. 2. Quality Payment ProgramThere are several changes in this proposed rule that are expected to have a positive effect on beneficiaries. In general, we believe that many of these changes, including the MVP and Start Printed Page 46428 subgroup proposals, if finalized, will lead to meaningful feedback to beneficiaries on the type and scope of care provided by clinicians. Additionally, beneficiaries could use the publicly reported information on clinician performance in subgroups to identify and choose clinicians in multispecialty groups relevant to their care needs. Consequently, we anticipate this will improve the quality and value of care provided to Medicare beneficiaries. For example, several of the proposed new quality measures include patient-reported outcome-based measures, which may be used to help patients make more informed decisions about treatment options. Patient-reported outcome-based measures provide information on a patient's health status from the patient's point of view and may also provide valuable insights on factors such as quality of life, functional status, and overall disease experience, which may not otherwise be available through routine clinical data collection. Patient-reported outcome-based measured are factors frequently of interest to patients when making decisions about treatment. H. Estimating Regulatory Familiarization CostsIf regulations impose administrative costs on private entities, such as the time needed to read and interpret this rule, we should estimate the cost associated with regulatory review. Due to the uncertainty involved with accurately quantifying the number of entities that will review the rule, we assumed that the total number of unique commenters on this year's rule will be the number of reviewers of last year's rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this rule. It is possible that not all commenters will review this year's rule in detail, and it is also possible that some reviewers will choose not to comment on the rule. For these reasons we thought that the number of commenters will be a fair estimate of the number of reviewers of last year's rule. We also recognized that different types of entities are in many cases affected by mutually exclusive sections of this rule, and therefore for the purposes of our estimate we assume that each reviewer reads approximately 50 percent of the rule. Using the wage information from the BLS for medical and health service managers (Code 11-9111), we estimate that the cost of reviewing this rule is $115.22 per hour, including overhead and fringe benefits https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average reading speed, we estimate that it will take approximately 8.0 hours for the staff to review half of this rule. For each facility that reviews the rule, the estimated cost is $921.76 (8.0 hours × $115.22). Therefore, we estimated that the total cost of reviewing this regulation is $32,657,957 ($931.35 × 35,430 reviewers on last year's proposed rule). I. Accounting StatementAs required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Tables 150 through 152 (Accounting Statements), we have prepared an accounting statement. This estimate includes growth in incurred benefits from CY 2021 to CY 2022 based on the FY 2022 President's Budget baseline. Start Printed Page 46429 J. ConclusionThe analysis in the previous sections, together with the remainder of this preamble, provided an initial Regulatory Flexibility Analysis. The previous analysis, together with the preceding portion of this preamble, provides an RIA. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services, approved this document on June 21, 2022. Start List of Subjects List of Subjects42 CFR Part 405
42 CFR Part 410
42 CFR Part 411
42 CFR Part 414
42 CFR Part 415
42 CFR Part 423
42 CFR Part 424
42 CFR Part 425
42 CFR Part 455
End List of Subjects For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR chapter IV as set forth below: PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLEDStart Amendment Part 1. The authority citation for part 405 continues to read as follows: End Amendment Part 42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k). End Authority Start Amendment Part 2. Section 405.2463 is amended by revising paragraph (b)(3) introductory text to read as follows: End Amendment Part What constitutes a visit. * * * * * (b) * * * (3) Visit—Mental health. A mental health visit is a face-to-face encounter or an encounter furnished using interactive, real-time, audio and video telecommunications technology or audio-only interactions in cases where the patient is not capable of, or does not consent to, the use of video technology for the purposes of diagnosis, evaluation or treatment of a mental health disorder, including an in-person mental health service, beginning 152 days after the end of the COVID-19 public health emergency, 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, unless, for a particular 12-month period, 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, between an RHC or FQHC patient and one of the following: * * * * * Start Amendment Part 3. Section 405.2469 is amended by revising paragraph (d) to read as follows: End Amendment Part FQHC supplemental payments. * * * * * (d) Per visit supplemental payment. A supplemental payment required under this section is made to the FQHC when a covered face-to-face encounter or an encounter furnished using interactive, real-time, audio and video telecommunications technology or audio-only interactions in cases where beneficiaries do not wish to use or do not have access to devices that permit Start Printed Page 46430 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. Additionally, beginning 152 days after the end of the COVID-19 public health emergency, 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, unless, for a particular 12-month period, 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. Start Part PART 410—SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITSEnd Part Start Amendment Part 4. The authority citation for part 410 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd. End Authority Start Amendment Part 5. Amend § 410.10 by revising paragraphs (l) and (p) to read as follows— End Amendment Part Medical and other health services: Included services. * * * * * (l) Pneumococcal, influenza, and COVID-19 vaccines and their administration. * * * * * (p) Hepatitis B vaccine and its administration, as defined in § 410.63(a) of this subchapter. * * * * * Start Amendment Part 6. Amend § 410.26 by revising paragraph (b)(5) to read as follows: End Amendment Part Services and supplies incident to a physician's professional services: Conditions. * * * * * (b) * * * (5) In general, services and supplies must be furnished under the direct supervision of the physician (or other practitioner). Designated care management services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided incident to the services of a physician (or other practitioner). Behavioral health services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided by auxiliary personnel incident to the services of a physician (or other practitioner). The physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) who is treating the patient more broadly. However, only the supervising physician (or other practitioner) may bill Medicare for incident to services. * * * * * Start Amendment Part 7. Amend § 410.32 by adding paragraph (a)(4), as follows: End Amendment Part 2 Diagnostic x-ray tests, diagnostic laboratory test, and other diagnostic tests: Conditions. (a) * * * (4) Application to audiologists. Except as otherwise provided in this paragraph, audiologists may personally furnish diagnostic audiology tests for a patient once per patient per 12-month period without an order from the physician or nonphysician practitioner treating the patient. Such diagnostic audiology tests can be for non-acute hearing conditions, but may not include audiology services that are related to disequilibrium, or hearing aids or examinations for the purpose of prescribing, fitting, or changing hearing aids that are outlined at § 411.15(d). Audiology services furnished without an order from the treating physician or practitioner are billed using a code CMS designates for this purpose. * * * * * Start Amendment Part 8. Amend § 410.37— End Amendment Part Start Amendment Part a. In paragraph (c)(1), by removing the phrase “under age 50” and adding in its place the phrase “under age 45”; End Amendment Part Start Amendment Part b. In paragraph (c)(2), by removing the phrase “individual 50 years of age” and adding in its place the phrase “individual 45 years of age”; End Amendment Part Start Amendment Part c. In paragraph (e)(1), by removing the phrase “under age 50” and adding in its place the phrase “under age 45”; End Amendment Part Start Amendment Part d. In paragraph (e)(2), by removing the phrase “individual 50 years of age” and adding in its place the phrase “individual 45 years of age”; End Amendment Part Start Amendment Part e. In paragraph (i)(1), by removing the phrase “individual age 50” and adding in its place the phrase “individual age 45”; and End Amendment Part Start Amendment Part f. By adding paragraph (k). End Amendment Part The addition reads as follows: Colorectal cancer screening tests: Conditions for and limitations on coverage. * * * * * (k) A complete colorectal cancer screening. Effective January 1, 2023, colorectal cancer screening tests include a follow-on screening colonoscopy after a Medicare covered non-invasive stool-based colorectal cancer screening test returns a positive result. The frequency limitations described for screening colonoscopy in paragraph (g) of this section shall not apply in the instance of a follow-on screening colonoscopy test described in this paragraph. Start Amendment Part 9. Amend § 410.40 by revising paragraph (e)(2)(ii) to read as follows: End Amendment Part Coverage of ambulance services. * * * * * (e) * * * (2) * * * (ii) In all cases, the provider or supplier must keep appropriate documentation on file and, upon request, present it to CMS. The ambulance service must meet all program coverage criteria including vehicle and staffing requirements. While a signed physician certification statement (PCS), does not alone demonstrate that transportation by ground ambulance was medically necessary, the PCS and additional documentation from the beneficiary's medical record may be used to support a claim that transportation by ground ambulance is medically necessary. The PCS and additional documentation must provide detailed explanations, that are consistent with the beneficiary's current medical condition, that explains the beneficiary's need for transport by an ambulance, as described at § 410.41(a), that includes observation or other services rendered by qualified ambulance personnel, as described in § 410.41(b). * * * * * Start Amendment Part 10. Amend § 410.57 by— End Amendment Part Start Amendment Part a. Revising the section heading and paragraph (a); and End Amendment Part Start Amendment Part b. Adding paragraph (d). End Amendment Part The revisions and addition read as follows: Preventive vaccines. (a) Medicare Part B pays for the pneumococcal vaccine and its administration. * * * * * (d) Medicare Part B pays for the Hepatitis B vaccine and its administration, as defined in § 410.63(a). Start Amendment Part 11. Amend § 410.63 in the introductory text by removing the phrase “vaccines (see § 405.310 of this chapter)” and adding in its place the phrase “vaccines (see § 411.15 of this chapter)”. End Amendment Part Start Printed Page 46431 Start Amendment Part 12. Amend § 410.67 by— End Amendment Part Start Amendment Part a. Revising paragraphs (b)(6) and (d)(2)(i)(B)( 2); End Amendment Part Start Amendment Part b. Adding paragraph (d)(2)(iv); and End Amendment Part Start Amendment Part c. Revising paragraph (d)(4)(ii). End Amendment Part The revisions and addition read as follows: Medicare coverage and payment of Opioid use disorder treatment services furnished by Opioid treatment programs. * * * * * (b) * * * (6) Intake activities, including initial medical examination services required under § 8.12(f)(2) of this title and initial assessment services required under § 8.12(f)(4) of this title. Services to initiate treatment with buprenorphine may be furnished via two-way interactive audio-video communication technology, as clinically appropriate, and in compliance with all applicable requirements. In cases where audio-video communications technology is not available to the beneficiary, services to initiate treatment with buprenorphine may be furnished using audio-only telephone calls if all other applicable requirements are met. * * * * * (d) * * * (2) * * * (i) * * * (B) * * * ( 2) For CY 2022, the payment amount for methadone is the payment amount determined under paragraph (d)(2)(i)(B)( 1) of this section for methadone in CY 2021. For CY 2023 and subsequent years, the payment amount for methadone will be based on the payment amount determined under paragraph (d)(2)(i)(B)( 1) of this section for methadone in CY 2021 and updated by the PPI for Pharmaceuticals for Human Use (Prescription). * * * * * (iv) Increased level of psychotherapy. For CY 2023 and subsequent years, the payment for the non-drug component of the bundled payment for an episode of care under paragraph (d)(2) of this section is adjusted to reflect the CY 2019 Medicare physician fee schedule non-facility rate for psychotherapy, 45 minutes with patient. * * * * * (4) * * * (ii) The payment amounts for the non-drug component of the bundled payment for an episode of care, the adjustments for counseling or therapy, intake activities, periodic assessments, and the non-drug component of the adjustment for take-home supplies of opioid antagonist medications will be geographically adjusted using the Geographic Adjustment Factor described in § 414.26 of this subchapter. For purposes of this adjustment, OUD treatment services that are furnished via an OTP mobile unit will be treated as if they were furnished at the physical location of the OTP registered with the Drug Enforcement Administration (DEA) and certified by SAMHSA. * * * * * Start Amendment Part 13. Amend § 410.78 in paragraph (b)(3)(xiv), by removing the phrase “the first day” and adding in its place the phrase “the day that is the 152nd day”. End Amendment Part Start Amendment Part 14. Amend § 410.152— End Amendment Part Start Amendment Part a. By revising paragraph (h); End Amendment Part Start Amendment Part b. In paragraph (l)(1), by removing the phrase “(as specified in paragraph (h) of this section)”. End Amendment Part The revision reads as follows: Amounts of payment. * * * * * (h) Amount of payment: Preventive vaccine administration. For the administration of the preventive vaccines described in paragraph (l)(1) of this section, as furnished by providers described in §§ 409.100 and 410.150 of this subchapter, Medicare Part B pays the following amounts, except as otherwise provided under this subchapter: (1) Effective January 1, 2022, for administration of an influenza, hepatitis B or pneumococcal vaccine, $30 per dose. (2) Effective January 1, 2022, for administration of a COVID-19 vaccine, $40 per dose. (3) For services furnished on or after January 1 of the year following the year in which the Secretary ends the Emergency Use Authorization for drugs and biologicals issued pursuant to section 564 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb-3), for administration of a COVID-19 vaccine, an amount equal to the amount that would be paid for the administration of a preventive vaccine described in paragraph (h)(1). (4) The payment amount for the administration of a preventive vaccine described in paragraphs (h)(1) through (3) of this section is adjusted to reflect geographic cost variations: (i) For services furnished before January 1, 2023, using the Geographic Practice Cost Indices (GPCIs) established for the year, as described in section 1848(e)(1) of the Act and §§ 414.2 and 414.26 of this subchapter. (ii) For services furnished on or after January 1, 2023, using the Geographic Adjustment Factor (GAF) established for the year as described in section 1848(e)(2) of the Act and §§ 414.2 and 414.26 of this subchapter. (5) The payment amount for administration of a preventive vaccine described in paragraphs (h)(1) through (3) of this section is updated annually using the percentage change in the Medicare Economic Index (MEI) as described in section 1842(i)(3) of the Act and § 405.504(d) of this subchapter. * * * * * Start Part PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENTEnd Part Start Amendment Part 15. The authority citation for part 411 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, and 1395nn. End Authority Start Amendment Part 16. Section 411.15 is amended by revising paragraph (i) to read as follows: End Amendment Part Particular services excluded from coverage. * * * * * (i) Dental services.— (1) Basic rule. Dental services in connection with the care, treatment, filling, removal, or replacement of teeth, or structures directly supporting the teeth, (2) Exception. Except for inpatient hospital services in connection with such dental procedures when hospitalization is required because of— (i) The individual's underlying medical condition and clinical status; or (ii) The severity of the dental procedures.[1] (3) Inapplicability. (i) Dental services that are inextricably linked to, and substantially related and integral to the clinical success of, a certain covered medical service are not excluded; payment may be made under Medicare Part A and B for services furnished in the inpatient or outpatient setting. Such services include, but are not limited to: (A) Dental or oral examination performed as part of a comprehensive workup in either the inpatient or outpatient setting prior to Medicare-covered organ transplant, cardiac valve replacement, or valvuloplasty procedures; and, medically necessary diagnostic and treatment services to eliminate an oral or dental infection prior to the organ transplant, cardiac valve replacement, or valvuloplasty procedure. (B) The reconstruction of a dental ridge performed as a result of and at the same time as the surgical removal of a tumor. Start Printed Page 46432 (C) The wiring or immobilization of teeth in connection with the reduction of a jaw fracture. (D) The extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease. (E) Dental splints only when used in conjunction with covered treatment of a covered medical condition. (ii) Ancillary services and other supplies furnished incident to covered dental services are not excluded, and Medicare payment may be made under Part A or Part B, as applicable, whether the service is performed in the inpatient or outpatient setting, including, but not limited to the administration of anesthesia, diagnostic x-rays, use of operating room, and other related procedures. * * * * * Start Part PART 414—PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICESEnd Part Start Amendment Part 17. The authority citation for part 414 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302, 1395hh, and 1395rr(b)(l). End Authority Start Amendment Part 18. Amend § 414.502 by revising the definitions of “Data collection period” and “Data reporting period” to read as follows: End Amendment Part Definitions. * * * * * Data collection period is the 6 months from January 1 through June 30 during which applicable information is collected and that precedes the data reporting period, except that for the data reporting period of January 1, 2023 through March 31, 2023, the data collection period is January 1, 2019 through June 30, 2019. Data reporting period is the 3-month period, January 1 through March 31, during which a reporting entity reports applicable information to CMS and that follows the preceding data collection period, except that for the data collection period of January 1, 2019 through June 30, 2019, the data reporting period is January 1, 2023 through March 31, 2023. * * * * * Start Amendment Part 19. Amend § 414.504 in paragraph (a)(1) by removing the reference “January 1, 2022” and adding in its place the reference “January 1, 2023”. End Amendment Part Start Amendment Part 20. Amend § 414.507 by— End Amendment Part Start Amendment Part a. Revising paragraph (d) introductory text and paragraph (d)(5); End Amendment Part Start Amendment Part b. Adding paragraph (d)(8); and End Amendment Part Start Amendment Part c. Removing paragraph (f). End Amendment Part Start Amendment Part d. Redesignating paragraphs (g) and (h) as paragraphs (f) and (g), respectively. End Amendment Part The revisions and addition read as follows: Payment for clinical diagnostic laboratory tests. * * * * * (d) Phase-in of payment reductions. For years 2018 through 2025, the payment rates established under this section for each CDLT that is not a new ADLT or new CDLT, may not be reduced by more than the following amounts for— * * * * * (5) 2022—0.0 percent of the payment rate established in 2021. * * * * * (8) 2025—15 percent of the payment rate established in 2024. * * * * * Start Amendment Part 21. Section § 414.523 is added to subpart G to read as follows: End Amendment Part Payment for laboratory specimen collection fee and travel allowance. (a) Specimen collection fee and travel allowance. In addition to the payment amounts provided under this subpart for CDLTs, new CDLTs, and new ADLTs, CMS pays a specimen collection fee, as set forth in paragraph (a)(1) of this section, and a travel allowance, as set forth in paragraph (a)(2) of this section. (1) Payment for specimen collection. Except as provided in paragraph (a)(1)(iv) of this section, CMS pays $3 for all specimens collected in one patient encounter, where the specimen(s) is: (i) Used to perform a CDLT paid under this subpart G; (ii) Collected by a trained technician from a Medicare beneficiary who is— (A) Homebound as described in 42 CFR 424.22(a)(1)(ii). (B) A non-hospital inpatient, but only when no qualified personnel are available at the facility to collect the specimen; (iii) Of the following type— (A) Blood specimen collected through venipuncture. (B) A urine sample collected by catheterization. (iv) Beginning April 1, 2014, for a specimen collected from a Medicare beneficiary in a skilled nursing facility or on behalf of a home health agency, the specimen collection fee otherwise paid under paragraph (a)(1) of this section is increased by $2. (2) Payment for travel allowance —(i) General requirement. CMS pays a travel allowance, as calculated under paragraph (a)(2)(iii) of this section, where the specimen is one for which a specimen collection fee is paid under paragraph (a)(1) of this section. (ii) Travel allowance basis. CMS pays a travel allowance on the following bases: (A) Flat-rate travel allowance. The flat-rate travel allowance applies when the trained technician travels 20 eligible miles or less (calculated in accordance with paragraph (a)(2)(iii)(A) of this section) to and from one location for specimen collection from one or more Medicare beneficiaries; or (B) Per-mile travel allowance. The per-mile travel allowance applies when: ( 1) The trained technician travels more than 20 eligible miles (calculated in accordance with paragraph (a)(2)(iii)(A) of this section) to and from one location for specimen collection from one or more Medicare beneficiaries; or ( 2) The trained technician travels to more than one location for specimen collection from more than one Medicare beneficiary. (iii) Travel allowance amount —(A) Eligible miles. Eligible miles begin at the laboratory and end at the laboratory where the trained technician returns the specimen(s) for testing. Eligible miles do not include miles traveled for any purpose unrelated to specimen collection as specified in paragraph (a)(1) of this section, such as collecting specimens from non-Medicare beneficiaries or for personal reasons. (B) Travel allowance mileage rate. The travel allowance mileage rate is equal to the IRS standard mileage rate plus an amount to cover expenses for a trained technician equal to the most recent median hourly wage for phlebotomists, as published by the United States Bureau of Labor Statistics, divided by 40 to represent an average miles-per-hour driving speed. (C) Travel allowance amount calculation. ( 1) For the flat-rate travel allowance basis specified in paragraph (a)(2)(ii)(A) of this section, the travel allowance amount is the travel allowance mileage rate specified in paragraph (a)(2)(iii)(B) of this section multiplied by ten, divided by the number of beneficiaries for whom a specimen collection fee is paid under paragraph (a)(1) of this section. ( 2) For the per-mile travel allowance basis specified in paragraph (a)(2)(ii)(B) of this section, the travel allowance amount is the number of eligible miles multiplied by the travel allowance mileage rate specified in paragraph (a)(2)(iii)(B) of this section, divided by the number of beneficiaries for whom a specimen collection fee is paid under paragraph (a)(1) of this section. Start Printed Page 46433 (b) [Reserved] Start Amendment Part 22. Amend § 414.626— End Amendment Part Start Amendment Part a. In paragraph (d)(1) introductory text, by removing the phrase “must submit a request form (accessed on the Ambulances Services Center website ( https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html) to CMS” and adding in its place the phrase “must submit a request to CMS, in the form and manner specified by CMS,”; and End Amendment Part Start Amendment Part b. In paragraph (e)(2) introductory text, by removing the phrase “by submitting all of the following information:” and adding in its place the phrase “by submitting a request to CMS, in the form and manner specified by CMS, that includes all of the following information:”. End Amendment Part Start Amendment Part 23. Amend § 414.707 in paragraph (a)(2)(iii), by removing the phrase “(as determined by the Secretary)” and adding in its place the phrase “(as defined in § 410.63(a) of this subchapter).” End Amendment Part Start Amendment Part 24. Amend § 414.902 by adding the definition of “Refundable single-dose container or single-use package drug” in alphabetical order to read as follows: End Amendment Part Definitions. * * * * * Refundable single-dose container or single-use package drug means a single source drug or biological or a biosimilar biological product for which payment is made under this part and that is furnished from a single-dose container or single-use package based on FDA-approved labeling or product information. The term “refundable single-dose container or single-use package drug” excludes— (1) A drug that is a therapeutic radiopharmaceutical, a diagnostic radiopharmaceutical, or an imaging agent as identified in the drug's FDA-approved labeling. (2) A drug for which the FDA-approved labeling for any National Drug Code assigned to a billing and payment code of such drug requires filtration during the drug preparation process, prior to dilution and administration and that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process. (3) A drug approved or licensed by the FDA on or after November 15, 2021, until the last day of the sixth full quarter for which the drug has been marketed (as reported to CMS) for the first National Drug Code assigned to the billing and payment code of such drug. * * * * * Start Amendment Part 25. Amend 414.904 in paragraph (e)(1), by removing the phrase “(as determined by the Secretary)” and adding in its place the phrase “(as defined in § 410.63(a) of this subchapter).” End Amendment Part Start Amendment Part 26. Section § 414.940 is added to subpart K to read as follows: End Amendment Part Refund for certain discarded single-dose container or single-use package drugs. (a) Provision of information to manufacturers —(1) In general. For each calendar quarter beginning on or after January 1, 2023, CMS reports to each manufacturer (as defined in § 414.802) of a refundable single-dose container or single-use package drug the following for the calendar quarter: (i) Information on the total number of billing units of the billing and payment code of such drug, if any, that were discarded during such quarter, as determined by the JW modifier (or any successor modifier that includes the same data). (ii) The refund amount that the manufacturer is liable for pursuant to paragraph (a)(3) of this section. (iii) For purposes of this section, the term billing unit means the identifiable quantity associated with a billing and payment code, as established by CMS. (2) Exclusion of units of packaged drugs. The total number of billing units of the billing and payment code of a refundable single-dose container or single-use package drug of a manufacturer furnished during a calendar quarter for purposes of paragraph (a)(1) of this section, and the determination of the estimated total allowed charges for the drug in the quarter for purposes of paragraph (c)(2) of this section, shall not include such units that are packaged into the payment amount for an item or service and are not separately payable. (3) Reports. Reports are sent once annually in the following manner: (i) For 2023, the report is sent no later than October 1 of that year and includes only the first calendar quarter of 2023. (ii) Beginning in 2024 and for all subsequent years, the report is sent no later than October 1 of the given year and includes the second, third, and fourth calendar quarters of the prior year and the first calendar quarter of the current year. (iii) Beginning in 2024 and for all subsequent years, the report includes new information (as described in paragraph (a)(1)(i) of this section) for the second, third, and fourth calendar quarter of the year that is 2 years prior and the first calendar quarter of the prior year that was not reflected in the previous year's report. (b) Manufacturer requirement. For each calendar quarter beginning on or after January 1, 2023, the manufacturer of a refundable single-dose container or single-use package drug shall, for such drug, pay a refund that is equal to the amount determined in accordance with paragraph (c) of this section for such drug for such quarter. (1) Refund amounts that the manufacturer is liable for pursuant to this paragraph are paid in 12-month intervals no later than December 31 of the year in which the report was sent to the manufacturer, in a manner specified by CMS. (2) Amounts paid as refunds pursuant to this paragraph shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of the Act. (c) Refund amount. The amount of the refund specified in this paragraph is, with respect to a refundable single-dose container or single-use package drug of a manufacturer assigned to a billing and payment code for a calendar quarter beginning on or after January 1, 2023, an amount equal to the estimated amount (if any) by which— (1) The product of: (i) The total number of units of the billing and payment code for such drug that were discarded during such quarter; and (ii) The amount of payment determined for such drug or biological under this section for such quarter. (2) Exceeds an amount equal to the applicable percentage of the estimated total allowed charges for such drug for the quarter. (3) For purposes of paragraph (c)(1)(ii) of this section, the term “applicable percentage” means 10 percent. (d) Dispute resolution. Each manufacturer has an opportunity to dispute information in the report described in paragraph (a) of this section by submitting an error report as described in this paragraph. (1) Error report information. To assert that there have been one or more errors in the report, a manufacturer must submit a dispute with each asserted error and provide the following information— (i) Manufacturer name and address; (ii) The name, telephone number, and email address of one or more employees or representatives of the manufacturer. (iii) For a mathematical calculation error, the specific calculation element(s) Start Printed Page 46434 that the manufacturer disputes and its proposed corrected calculation; (iv) For any other asserted error, an explanation of the nature of the error, how the error affects the refund calculation, an explanation of why the manufacturer believes that an error occurred, the proposed correction to the error, and an explanation of why CMS should use the proposed corrected data. (2) Form, manner, and timing of submission. Each manufacturer asserting an error must submit its error report(s), in the form and manner specified by CMS, within 30-days after the issuance of the report. (e) Enforcement. (1) Manufacturer audits. Each manufacturer of a refundable single-dose container or single-use package drug that is required to provide a refund under this subsection shall be subject to periodic audit with respect to such drug and such refunds. (2) Civil money penalty. The Secretary shall impose a civil money penalty on a manufacturer of a refundable single-dose container or single-use package drug who has failed to comply with the requirement under paragraph (b) of this section for such drug for a calendar quarter in an amount equal to the sum of— (i) The amount that the manufacturer would have paid under such paragraph with respect to such drug for such quarter; and (ii) 25 percent of such amount. Start Amendment Part 27. Section § 414.1305 is amended by— End Amendment Part Start Amendment Part a. Adding the definition of “Facility-based group”; End Amendment Part Start Amendment Part b. Revising the definitions of “Facility-based MIPS eligible clinician”, “High priority measure”, “Multispecialty group”, “Single specialty group”, and “Third party intermediary” to read as follows: End Amendment Part Definitions. * * * * * Facility-based group means a group that CMS determines meets the criteria specified in § 414.1380(e)(2)(ii). Facility-based MIPS eligible clinician means an individual MIPS eligible clinician who CMS determines meets the criteria specified in § 414.1380(e)(2)(i). * * * * * High priority measure means an outcome (including intermediate-outcome and patient-reported outcome), appropriate use, patient safety, efficiency, patient experience, care coordination, opioid, or health equity-related quality measure. * * * * * Multispecialty group means a group as defined at § 414.1305 that consists of two or more specialty types as determined by CMS using Medicare Part B claims. * * * * * Single specialty group means a group as defined at § 414.1305 that consists of one specialty type as determined by CMS using Medicare Part B claims. * * * * * Third party intermediary means an entity that CMS has approved under § 414.1400 to submit data on behalf of a MIPS eligible clinician, group, virtual group, subgroup, or APM Entity for one or more of the quality, improvement activities, and Promoting Interoperability performance categories. * * * * * Start Amendment Part 28. Amend § 414.1318 by— End Amendment Part Start Amendment Part a. Revising paragraph (a)(1); End Amendment Part Start Amendment Part b. Adding paragraphs (a)(3) and (4); and End Amendment Part Start Amendment Part c. Revising paragraphs (b) and (c)(2). End Amendment Part The revisions and addition read as follows: Subgroups. (a) * * * (1) General. Except as provided under paragraph (a)(2) of this section and subject to paragraph (a)(4) of this section, for a MIPS payment year, determinations of meeting the low-volume threshold criteria and special status for a subgroup is determined at the group level in accordance with §§ 414.1305 and 414.1310. * * * * * (3) Single subgroup per eligible clinician. An individual eligible clinician (as represented by a TIN-NPI combination) may register for no more than one subgroup within a group's TIN. (4) Subgroup determination period. CMS will apply the low-volume threshold criteria for a subgroup as described under paragraph (a)(1) of this section using information from the initial 12-month segment of the applicable MIPS determination period. (b) Final score. Except as provided under § 414.1317(b) and paragraph (b)(1) of this section, each MIPS eligible clinician in the subgroup receives a final score based on the subgroup's combined performance. (1) CMS will not assign a final score for a subgroup that registers and does not submit data as a subgroup for the applicable performance period. (2) [Reserved] (c) * * * (2) Individual eligible clinicians that elect to participate in MIPS as a subgroup will have their performance assessed at the subgroup level across all the MIPS performance categories based on an MVP in accordance with § 414.1365. Subgroups that are MVP Participants must adhere to an election process described in § 414.1365(b). Start Amendment Part 29. Amend § 414.1340 by adding paragraphs (a)(4) and (b)(4) to read as follows: End Amendment Part Data completeness criteria for the quality performance category. (a) * * * (4) At least 75 percent of the MIPS eligible clinician or group's patients that meet the measure's denominator criteria, regardless of payer for MIPS payment years 2026 and 2027. * * * * * (b) * * * (4) At least 75 percent of the applicable Medicare Part B patients seen during the performance period to which the measure applies for MIPS payment years 2026 and 2027. * * * * * Start Amendment Part 30. Amend § 414.1365 by— End Amendment Part Start Amendment Part a. Adding paragraphs (b)(2)(iii); End Amendment Part Start Amendment Part b. Revising paragraph (d)(3)(i)(A)( 1); End Amendment Part Start Amendment Part c. Adding paragraph (d)(3)(i)(B)( 1); End Amendment Part Start Amendment Part d. Reserving paragraph (d)(3)(i)(B)( 2); End Amendment Part Start Amendment Part e. Adding paragraph (d)(3)(ii)(A); and End Amendment Part Start Amendment Part f. Reserving paragraph (d)(3)(ii)(B). End Amendment Part The additions and revisions read as follows: MIPS Value Pathways. * * * * * (b) * * * (2) * * * (iii) TINs must provide a description of each subgroup that is registered. * * * * * (d) * * * (3) * * * (i) * * * (A) * * * ( 1) A subgroup is scored on each selected population health measure based on its affiliated group score, if available. If the subgroup's affiliated group score is not available, each such measure is excluded from the subgroup's total measure achievement points and total available measure achievement points. * * * * * (B) * * * ( 1) A subgroup is scored on each selected outcomes-based administrative claims measure based on its affiliated group score, if available. If the subgroup's affiliated group score is not available, each such measure will receive zero measure achievement points. ( 2) [Reserved] (ii) * * * (A) A subgroup is scored on each cost measure included in the MVP that it Start Printed Page 46435 selects and reports based on its affiliated group score for each such measure, if available. If the subgroup's affiliated group score is not available for a measure, the measure is excluded from the subgroup's total measure achievement points and total available measure achievement points, as described under § 414.1380(b)(2)(i) through (v). (B) [Reserved] * * * * * Start Amendment Part 31. Amend § 414.1380 by— End Amendment Part Start Amendment Part a. Adding paragraph (b)(1)(ii)(D); and End Amendment Part Start Amendment Part b. Revising paragraphs (b)(2)(iv)(E), (b)(4)(ii)(B) and (C), (c)(2)(i)(A)( 4)( i) and ( iii), (c)(3) introductory text, (e)(2) introductory text, (e)(2)(ii), (e)(4), (e)(5)(i) and (ii), (e)(6)(iv) and (v), and (e)(6)(vi)(A) and (B). End Amendment Part The addition and revisions read as follow: Scoring. * * * * * (b) * * * (1) * * * (ii) * * * (D) Beginning with the CY 2023 performance period/2025 MIPS payment year, CMS will calculate a benchmark for an administrative claims quality measure using the performance on the measures during the current performance period. * * * * * (2) * * * (iv) * * * (E) The maximum cost improvement score for the 2020, 2021, 2022, and 2023 MIPS payment years is zero percentage points. The maximum cost improvement score beginning with the 2024 MIPS payment year is 1 percentage point. * * * * * (4) * * * (ii) * * * (B) For the 2019 performance period/2021 MIPS payment year through the 2022 performance period/2024 MIPS payment year, each required measure is worth 10, 20, or 40 points, as specified by CMS. For the 2023 performance period/2025 MIPS payment year and subsequent years, each required measure is worth 10, 15, 25 or 30 points, as specified by CMS. (C) For the 2019 performance period/2021 MIPS payment year through the 2022 performance period/2024 MIPS payment year, each optional measure is worth five or ten bonus points, as specified by CMS. For the 2023 performance period/2025 MIPS payment year and subsequent years, each optional measure is worth five bonus points, as specified by CMS. (c) * * * (2) * * * (i) * * * (A) * * * ( 4) * * * ( i) For the 2021 through 2025 MIPS payment years, the MIPS eligible clinician is a physical therapist, occupational therapist, clinical psychologist, qualified audiologist, qualified speech-language pathologist, or a registered dietitian or nutrition professional. In the event that a MIPS eligible clinician submits data for the Promoting Interoperability performance category, the scoring weight specified in paragraph (c)(1) of this section will be applied and its weight will not be redistributed. * * * * * ( iii) For the 2024 through 2025 MIPS payment years, the MIPS eligible clinician is a clinical social worker. In the event that a MIPS eligible clinician submits data for the Promoting Interoperability performance category, the scoring weight specified in paragraph (c)(1) of this section will be applied and its weight will not be redistributed. * * * * * (3) Complex patient bonus. For the CY 2020, 2021, 2022, and 2023 MIPS payment years and associated performance periods, provided that a MIPS eligible clinician, group, virtual group or APM Entity submits data for at least one MIPS performance category for the applicable performance period for the MIPS payment year, a complex patient bonus will be added to the final score for the MIPS payment year, as stated in paragraphs (c)(3)(i) through (iv) of this section. For the CY 2022 MIPS performance period/CY 2024 MIPS payment year, provided that a MIPS eligible clinician, group, subgroup, virtual group or APM Entity submits data for at least one MIPS performance category for the applicable performance period for the MIPS payment year, a complex patient bonus will be added to the final score for the MIPS payment year, if applicable, as described in paragraphs (c)(3)(v) through (viii) of this section. Beginning with the CY 2023 MIPS performance period/CY 2025 MIPS payment year, provided that a MIPS eligible clinician, group, subgroup, virtual group or APM Entity submits data for at least one MIPS performance category for the applicable performance period for the MIPS payment year, or is a facility-based MIPS eligible clinician, a complex patient bonus will be added to the final score for the MIPS payment year, if applicable, as described in paragraphs (c)(3)(v) through (viii) of this section. * * * * * (e) * * * (2) Eligibility for facility-based measurement. A MIPS eligible clinician is eligible for facility-based measurement for a MIPS payment year if CMS determines the MIPS eligible clinician to be facility-based as an individual clinician or as part of a group, or beginning with the 2023 performance period/2025 MIPS payment year, a virtual group, as follows: * * * * * (ii) Facility-based MIPS eligible group determination. A facility-based MIPS eligible group is a group in which 75 percent or more of its eligible clinician NPIs billing under the group's TIN meet the requirements under paragraph (e)(2)(i) of this section. * * * * * (4) Data submission for facility-based measurement. There are no data submission requirements for a MIPS eligible individual clinician to be scored under facility-based measurement. A MIPS eligible group must submit data in the improvement activities or Promoting Interoperability performance categories in order to be scored as a facility-based MIPS eligible group. (5) * * * (i) A facility-based MIPS eligible clinician is scored with facility-based measurement using the score derived from the value-based purchasing score for the facility at which the clinician provided services to the most Medicare beneficiaries during the period the claims are drawn from in paragraph (e)(2) of this section. If there is an equal number of Medicare beneficiaries treated at more than one facility, the value-based purchasing score for the highest scoring facility is used. (ii) A facility-based MIPS eligible group is scored with facility-based measurement using the score derived from the value-based purchasing score for the facility at which the plurality of clinicians identified as facility-based would have had their score determined under paragraph (e)(5)(i) of this section. (6) * * * (iv) Quality. The quality performance category score is established by determining the percentile performance of the facility in the value-based purchasing program for the specified year as described in paragraph (e)(1) of this section and awarding a score associated with that same percentile performance in the MIPS quality performance category score for those MIPS-eligible clinicians who are not Start Printed Page 46436 eligible to be scored using facility-based measurement for the MIPS payment year. A MIPS eligible clinician or group receiving a facility-based performance score will not earn improvement points based on prior performance in the MIPS quality performance category. (v) Cost. The cost performance category score is established by determining the percentile performance of the facility in the value-based purchasing program for the specified year as described in paragraph (e)(1) of this section and awarding a score associated with that same percentile performance in the MIPS cost performance category score for those MIPS eligible clinicians who are not eligible to be scored using facility-based measurement for the MIPS payment year. A MIPS eligible clinician or MIPS eligible group receiving a facility-based performance score will not earn improvement points based on prior performance in the MIPS cost performance category. * * * * * (vi) * * * (A) For the CY 2019 MIPS performance period/2021 MIPS payment year, through the CY 2021 MIPS performance period/2023 MIPS payment year, a MIPS eligible clinician or group receives a higher combined MIPS quality and cost performance category score through another MIPS submission. (B) Beginning with the CY 2022 MIPS performance period/2024 MIPS payment year, a MIPS eligible clinician or group receives a higher MIPS final score through another MIPS submission. Start Amendment Part 32. Amend § 414.1400 by— End Amendment Part Start Amendment Part a. Revising paragraphs (b)(4)(i)(B), (b)(4)(iii)(A)( 3), and (e)(1)(i)(B); End Amendment Part Start Amendment Part b. Adding paragraphs (e)(1)(i)(E); End Amendment Part Start Amendment Part c. Revising paragraph (e)(2) introductory text and (e)(3); End Amendment Part Start Amendment Part d. Adding paragraph (e)(5); and End Amendment Part Start Amendment Part e. Revising paragraph (f)(1). End Amendment Part The revisions and additions read as follows: Third party intermediaries. * * * * * (b) * * * (4) * * * (i) * * * (B) For a QCDR measure, the entity must submit for CMS approval measure specifications including: Name/title of measure, NQF number (if NQF—endorsed), descriptions of the denominator, numerator, and when applicable, denominator exceptions, denominator exclusions, risk adjustment variables, and risk adjustment algorithms. In addition, no later than 15 calendar days following CMS posting of all approved specifications for a QCDR measure, the entity must publicly post the CMS-approved measure specifications for the QCDR measure (including the CMS- assigned QCDR measure ID) and provide CMS with a link to where this information is posted. * * * * * (iii) * * * (A) * * * ( 3) Beginning with the CY 2022 performance period/2024 MIPS payment year, CMS may approve a QCDR measure only if the QCDR measure meets face validity. Beginning with the CY 2024 performance period/2026 MIPS payment year, a QCDR measure approved for a previous performance year must be fully developed and tested, with complete testing results at the clinician level, prior to self-nomination. * * * * * (e) * * * (1) * * * (i) * * * (B) The impact to individual clinicians, groups, virtual groups, subgroups, or APM Entities, regardless of whether they are participating in the program because they are MIPS eligible, voluntarily participating, or opting in to participating in the MIPS program, and any QCDRs that were granted licenses to the measures of a QCDR upon which a CAP has been imposed. * * * * * (E) The communication plan for communicating the impact to the parties identified in paragraph (e)(1)(i)(B) of this section. (2) CMS may immediately or with advance notice terminate a third party intermediary for one or more of the following reasons: * * * * * (3) A data submission that contains data inaccuracies affecting the third party intermediary's total clinicians may lead to remedial action/termination of the third party intermediary for future program year(s) based on CMS discretion. * * * * * (5) Beginning with the CY 2024 performance period/2026 MIPS payment year, a QCDR or qualified registry that submits a participation plan as required under paragraph (b)(3)(viii) of this section, but does not submit MIPS data for the applicable performance period for which they self-nominated under paragraph (b)(3)(viii) of this section, will be terminated. (f) * * * (1) The entity must make available to CMS the contact information of each MIPS eligible clinician, group, virtual group, subgroup, or APM Entity on behalf of whom it submits data. The contact information must include, at a minimum, the MIPS eligible clinician, group, virtual group, subgroup, or APM Entity phone number, address, and, if available, email. * * * * * Start Amendment Part 33. Amend § 414.1405 by revising paragraph (b)(9) to read as follows: End Amendment Part Payment. * * * * * (b) * * * (9) Pursuant to the methodology established at paragraph (g) of this section: (i) The performance threshold for the 2024 MIPS payment year is 75 points. The prior period used to determine the performance threshold is the 2019 MIPS payment year. (ii) The performance threshold for the 2025 MIPS payment year is 75 points. The prior period used to determine the performance threshold is the 2019 MIPS payment year. * * * * * Start Amendment Part 34. Amend § 414.1415 by— End Amendment Part Start Amendment Part a. Revising paragraphs (b)(3), End Amendment Part Start Amendment Part b. Adding paragraph (b)(4); and End Amendment Part Start Amendment Part c. Revising paragraphs (c)(3)(i)(A) and (c)(7). End Amendment Part The revisions and addition read as follows: Advanced APM criteria. * * * * * (b) * * * (3) The quality measures upon which an Advanced APM bases the payment in paragraph (b)(1) of this section must include at least one 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. Beginning January 1, 2020, the included outcome measure must satisfy the criteria in paragraph (b)(2) of this section. (4) A single quality measure that meets the criteria under both paragraphs (b)(2) and (3) of this section may be used to satisfy the requirements of paragraph (b)(1) of this section. (c) * * * (3) * * * (i) * * * (A) For QP Performance Periods beginning in 2023, 8 percent of the average estimated total Medicare Parts A and B revenue of all providers and suppliers in participating APM Entities; or * * * * * Start Printed Page 46437 (7) Medical Home Model 50 eligible clinician limit. Beginning in the 2023 QP Performance Period, notwithstanding paragraphs (c)(2) and (4) of this section, if an APM Entity participating in a Medical Home Model is comprised of more than 50 eligible clinicians, as determined by that APM Entity's Participation List on any of the three QP determination dates (March 31, June 30, and August 31 of the QP Performance Period), the requirements of paragraphs (c)(1) and (3) of this section apply. Start Amendment Part 35. Amend § 414.1420 by— End Amendment Part Start Amendment Part a. Revising paragraph (c)(3)(ii); End Amendment Part Start Amendment Part b. Adding paragraph (c)(4); and End Amendment Part Start Amendment Part c. Revising paragraphs (d)(3)(i) and (d)(8). End Amendment Part The revisions and addition read as follows: Other payer advanced APM criteria. * * * * * (c) * * * (3) * * * (ii) For QP Performance Periods on or after January 1, 2020, use at least one measure that is an outcome measure and meets the criteria in paragraph (c)(2)(ii) of this section if there is such an applicable outcome measure on the MIPS quality measure list. (4) A single quality measure that meets the criteria under both paragraphs (c)(2) and (3) of this section may be used to satisfy the requirements of paragraph (c)(1) of this section. (d) * * * (3) * * * (i) For QP Performance Periods beginning in 2023, 8 percent of the total combined revenues from the payer to providers and other entities under the payment arrangement if financial risk is expressly defined in terms of revenue; or, 3 percent of the expected expenditures for which an APM Entity is responsible under the payment arrangement. * * * * * (8) Aligned Other Payer Medical Home Model and Medicaid Medical Home Model 50 eligible clinician limit. Beginning with the 2023 QP Performance Period, notwithstanding paragraphs (d)(2) and (4) of this section, if an APM Entity participating in an Aligned Other Payer Medical Home Model or Medicaid Medical Home Model is comprised of 50 or more eligible clinicians is comprised of more than 50 eligible clinicians, as determined by the information submitted for any of the three QP determination dates (March 31, June 30, and August 31 of the QP Performance Period) as specified in § 414.1440(e), the requirements of paragraphs (d)(1) and (3) of this section apply. Start Amendment Part 36. Amend § 414.1430 by— End Amendment Part Start Amendment Part a. Revising paragraphs (a)(2)(iii); End Amendment Part Start Amendment Part b. Removing the second paragraph (a)(3)(ii); End Amendment Part Start Amendment Part c. Adding paragraphs (a)(3)(iii) and (iv); End Amendment Part Start Amendment Part d. Revising paragraph (a)(4)(iii); End Amendment Part Start Amendment Part e. Adding paragraph (a)(4)(iv); and End Amendment Part Start Amendment Part f. Revising paragraphs (b)(3)(i)(A) and (B), and (b)(4)(i)(A) and (B). End Amendment Part The revisions and additions read as follows: Qualifying APM participant determination: QP and partial QP thresholds. (a) * * * (2) * * * (iii) 2023 and 2024: 40 percent. * * * * * (3) * * * (iii) 2023 and 2024: 35 percent. (iv) 2025 and later: 50 percent. (4) * * * (iii) 2023 and 2024: 25 percent. (iv) 2025 and later: 35 percent. (b) * * * (3) * * * (i) * * * (A) 2021 through 2024: 35 percent. (B) 2025 and later: 50 percent. * * * * * (4) * * * (i) * * * (A) 2021 through 2024: 25 percent. (B) 2025 and later: 35 percent. * * * * * Start Amendment Part 37. Amend § 414.1440 by revising paragraph (e)(2) to read as follows: End Amendment Part Qualifying APM participant determination: All-payer combination option. * * * * * (e) * * * (2) To request a QP determination under the All-Payer Combination Option, for each payment arrangement submitted as set forth in paragraph (e)(1) of this section, the APM Entity or eligible clinician must include: (i) The amount of revenue for services furnished through the payment arrangement, the total revenue received from all payers except those excluded as provided in paragraph (a)(2) of this section, the number of patients furnished any service through the arrangement, and the total number of patients furnished any services, except those excluded as provided in paragraph (a)(2) of this section; and (ii) In the case of an APM Entity or eligible clinician requesting a QP determination under either a Medicaid Medical Home Model or Aligned Other Payer Medical Home Model pursuant to the criteria in § 414.1420, information specified by CMS for purposes of compliance with the 50 eligible clinician limit specified at § 414.1420(d)(8). * * * * * Start Amendment Part 38. Amend § 414.1450(c)(8) by removing the reference “November 1” and adding in its place the reference “September 1”. End Amendment Part Start Part PART 415—SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS, SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN CERTAIN SETTINGSEnd Part Start Amendment Part 39. The authority for part 415 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302 and 1395hh. End Authority Start Amendment Part 40. Amend § 415.140 by redesignating this section from subpart D to subpart C in numerical order. End Amendment Part Start Amendment Part 41. Amend § 415.140(a) in the definition of “Substantive portion” by removing the reference “2022” and adding in its place the reference “2022 and 2023”. End Amendment Part Start Part PART 423—VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFITEnd Part Start Amendment Part 42. The authority citation for part 423 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh. End Authority Start Amendment Part 43. Amend § 423.160 by revising paragraphs (a)(5)(ii) and (iii) to read as follows: End Amendment Part Standards for electronic prescribing. (a) * * * (5) * * * (ii) Prescriber issues 100 or fewer controlled substance prescriptions for Part D drugs per calendar year as determined using CMS claims data with dates of service as of December 31st of the current year. (iii) Prescriber has an address in PECOS in the geographic area of an emergency or disaster declared by a Federal, State, or local government entity. If a prescriber does not have an address in PECOS, prescriber has an address in NPPES in the geographic area of an emergency or disaster declared by a Federal, State, or local government entity. * * * * * Start Part Start Printed Page 46438 PART 424—CONDITIONS FOR MEDICARE PAYMENTEnd Part Start Amendment Part 44. The authority for part 424 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302 and 1395hh. End Authority Start Amendment Part 45. Amend § 424.57 by adding paragraph (b)(6) to read as follows: End Amendment Part Special payment rules for items furnished by DMEPOS suppliers and issuance of DMEPOS supplier billing privileges. * * * * * (b) * * * (6) The supplier is in compliance with all conditions of payment in paragraph (b) of this section, as well as with paragraph (c)(1)(ii)(A) of this section, at the time the item or service is furnished. * * * * * Start Amendment Part 46. Amend § 424.502 by adding the definitions of “Director”, “Managing organization” and “Officer” in alphabetical order to read as follows: End Amendment Part Definitions. * * * * * Director means a director of a corporation, regardless of whether the provider or supplier is a non-profit entity. This includes any member of the corporation's governing body irrespective of the precise title of either the board or the member. * * * * * Managing organization means an entity that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the provider or supplier, either under contract or through some other arrangement. * * * * * Officer means an officer of a corporation, regardless of whether the provider or supplier is a non-profit entity. * * * * * Start Amendment Part 47. Amend § 424.518 by— End Amendment Part Start Amendment Part a. Revising the introductory text; End Amendment Part Start Amendment Part b. Removing paragraph (a)(1)(xviii); End Amendment Part Start Amendment Part c. Adding paragraphs (b)(1)(xiv); End Amendment Part Start Amendment Part d. Revising paragraph (c)(1) introductory text; and End Amendment Part Start Amendment Part e. Adding paragraphs (c)(1)(v) and (vi), and (c)(4). End Amendment Part The revision and additions read as follows: Screening levels for Medicare providers and suppliers. A Medicare contractor is required to screen all initial applications, revalidation applications, change of ownership applications pursuant to 42 CFR 489.18, applications to add a new practice location, and applications to report any new owner (regardless of ownership percentage) pursuant to a change of information or other enrollment transaction under title 42, based on a CMS assessment of risk and assignment to a level of “limited,” “moderate,” or “high.” * * * * * (b) * * * (1) * * * (xiv) Revalidating skilled nursing facilities (SNFs) * * * * * (c) * * * (1) High categorical risk: Provider and supplier categories. CMS has designated the following provider and supplier types as “high” categorical risk: * * * * * (v) Prospective (newly enrolling) skilled nursing facilities (SNFs). (vi) Enrolled OTPs that have not been fully and continuously certified by SAMHSA since October 23, 2018, DMEPOS suppliers, MDPP suppliers, HHAs, and SNFs that are submitting a change of ownership application pursuant to 42 CFR 489.18 or reporting any new owner (regardless of ownership percentage) pursuant to a change of information or other enrollment transaction under title 42. * * * * * (4) Any screening level adjustment under paragraph (c)(3) of this section also applies to all other enrolled and prospective providers and suppliers that have the same legal business name and tax identification number as the provider or supplier for which the screening level under paragraph (c)(3) of this section was originally raised. * * * * * Start Amendment Part 48. Amend § 424.530 by— End Amendment Part Start Amendment Part a. Revising paragraph (a)(2) and paragraph (a)(3) introductory text; End Amendment Part Start Amendment Part b. Adding paragraph (a)(3)(iii); and End Amendment Part Start Amendment Part c. Revising paragraph (c). End Amendment Part The revisions and addition read as follows: Denial of enrollment in the Medicare program. (a) * * * (2)(i) Provider or supplier conduct. The provider or supplier, or any owner, managing employee, managing organization, officer, director, authorized or delegated official, medical director, supervising physician, or other health care or administrative or management services personnel furnishing services payable by a federal health care program, of the provider or supplier is— (A) Excluded from the Medicare, Medicaid, and any other Federal health care program, as defined in § 1001.2 of this chapter, in accordance with section 1128, 1128A, 1156, 1842, 1862, 1867 or 1892 of the Act. (B) Debarred, suspended, or otherwise excluded from participating in any other Federal procurement or nonprocurement activity in accordance with section 2455 of the Federal Acquisition Streamlining Act (FASA). (ii) The individuals and organizations identified in paragraph (a)(2)(i) of this section include, but are not limited to, W-2 employees and contracted individuals and organizations of the provider or supplier. (3) Felonies. The provider, supplier, or any owner, managing employee, managing organization, officer, or director of the provider or supplier was, within the preceding 10 years, convicted (as that term is defined in 42 CFR 1001.2) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries. * * * * * (iii) The individuals and organizations identified in paragraph (a)(3) of this section include, but are not limited to, W-2 employees and contracted individuals and organizations of the provider or supplier. * * * * * (c) Reversal of denial. If the denial was due to adverse activity (sanction, exclusion, debt, felony) of an owner, managing employee, managing organization, officer, director, an authorized or delegated official, medical director, supervising physician, or other health care personnel of the provider or supplier furnishing Medicare reimbursable services, the denial may be reversed if the provider or supplier terminates and submits proof that it has terminated its business relationship with that individual or organization within 30 days of the denial notification. * * * * * Start Amendment Part 49. Amend § 424.535 by— End Amendment Part Start Amendment Part a. Revising paragraphs (a)(2) and (a)(3)(i); End Amendment Part Start Amendment Part b. Adding paragraph (a)(3)(iv); and End Amendment Part Start Amendment Part c. Revising paragraphs (a)(12)(ii) and (e). End Amendment Part The revisions and addition read as follows: Revocation of enrollment in the Medicare program. (a) * * * (2)(i) Provider or supplier conduct. The provider or supplier, or any owner, managing employee, managing organization, officer, director, authorized or delegated official, medical Start Printed Page 46439 director, supervising physician, or other health care or administrative or management services personnel furnishing services payable by a federal health care program, of the provider or supplier is— (A) Excluded from the Medicare, Medicaid, and any other Federal health care program, as defined in § 1001.2 of this chapter, in accordance with section 1128, 1128A, 1156, 1842, 1862, 1867 or 1892 of the Act. (B) Debarred, suspended, or otherwise excluded from participating in any other Federal procurement or nonprocurement activity in accordance with section 2455 of the Federal Acquisition Streamlining Act (FASA). (ii) The individuals and organizations identified in paragraph (a)(2)(i) of this section include, but are not limited to, W-2 employees and contracted individuals and organizations of the provider or supplier. (3) * * * (i) The provider, supplier, or any owner, managing employee, managing organization, officer, or director of the provider or supplier was, within the preceding 10 years, convicted (as that term is defined in 42 CFR 1001.2) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries. * * * * * (iv) The individuals and organizations identified in paragraph (a)(3) of this section include, but are not limited to, W-2 employees and contracted individuals and organizations of the provider or supplier. * * * * * (12) * * * (ii) Medicare may not revoke unless and until a provider or supplier has exhausted all applicable appeal rights or the timeframe for filing an appeal has expired without the provider or supplier filing an appeal. * * * * * (e) Reversal of revocation. If the revocation was due to adverse activity (sanction, exclusion, or felony) against the provider's or supplier's owner, managing employee, managing organization, officer, director, authorized or delegated official, medical director, supervising physician, or other health care or administrative or management services personnel furnishing services payable by a Federal health care program, 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. * * * * * Start Part PART 425—MEDICARE SHARED SAVINGS PROGRAMEnd Part Start Amendment Part 50. The authority citation for part 425 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302, 1306, 1395hh, and 1395jjj. End Authority Start Amendment Part 51. Amend § 425.20 by— End Amendment Part Start Amendment Part a. In paragraph (2) of the definition of “Experienced with performance-based risk Medicare ACO initiatives” by removing the phrase “prior to the agreement start date”; End Amendment Part Start Amendment Part b. In paragraph (2) of the definition of “Inexperienced with performance-based risk Medicare ACO initiatives” by removing the phrase “prior to the agreement start date” End Amendment Part Start Amendment Part c. Revising paragraph (1)(i) in the definition of “Performance-based risk Medicare ACO initiative”;. End Amendment Part Start Amendment Part d. Redesignating paragraphs (1)(ii) and (1)(iii) as paragraphs (1)(iii) and (1)(iv), respectively; in the definition of “Performance-based risk Medicare ACO initiative” by and End Amendment Part Start Amendment Part e. Adding paragraph (1)(ii) in the definition of “Performance-based risk Medicare ACO initiative”. End Amendment Part Definitions. * * * * * Performance-based risk Medicare ACO initiative * * * * * (1) * * * (i) For performance years beginning prior to January 1, 2023, BASIC track (Levels A through E). (ii) For performance years beginning January 1, 2023 and in subsequent years, BASIC track (Levels C through E). * * * * * Start Amendment Part 52. Amend § 425.100 by— End Amendment Part Start Amendment Part a. Revising paragraph (b)(1); and End Amendment Part Start Amendment Part b. Adding paragraph (d). End Amendment Part The revision and addition read as follows: General. * * * * * (b) * * * (1) The ACO meets or exceeds the applicable minimum savings rate established under §§ 425.604, 425.605 (except as provided under § 425.605(h)), 425.606, 425.609, or 425.610. * * * * * (d) An ACO is eligible to receive advance investment payments if it meets the criteria under § 425.630(b). Start Amendment Part 53. Amend § 425.204(g) by removing the references “§ 425.601, § 425.602, or § 425.603” and adding in its place the references “§§ 425.601, 425.602, 425.603, or 425.652”. End Amendment Part Start Amendment Part 54. Amend § 425.224(a)(4) by removing the phrase “, or a one-sided model of the BASIC track's glide path (Level A or Level B),”. End Amendment Part Start Amendment Part 55. Amend § 425.302 by adding paragraph (a)(3)(iv) to read as follows: End Amendment Part Program requirements for data submission and certifications. (a) * * * (3) * * * (iv) That the ACO has moved all advance investment payments received during that performance year into a designated advance investment payments account established under § 425.630(e) and the advance investment payments have been dispersed only for allowable uses. * * * * * Start Amendment Part 56. Amend § 425.308 by adding paragraph (b)(8) to read as follows: End Amendment Part Public reporting and transparency. * * * * * (b) * * * (8) Information, updated annually about the ACO's use of advance investment payments under § 425.630, for each performance year, including the following: (i) The ACO's spend plan. (ii) The total amount of any advance investment payments received from CMS. (iii) An itemization of how advance investment payments were spent during the year, including expenditure categories, the dollar amounts spent on the various categories, any changes to the spend plan submitted under § 425.630(d), and such other information as may be specified by CMS. * * * * * Start Amendment Part 57. Section 425.310 is revised to read as follows: End Amendment Part Marketing requirements. (a) R equirements. Marketing materials and activities must: (1) Use template language developed by CMS, if available. (2) Not be used in a discriminatory manner or for discriminatory purposes. (3) Comply with § 425.304 regarding beneficiary incentives. (4) Not be materially inaccurate or misleading. (b) Monitoring. (1) CMS may request the submission of marketing materials Start Printed Page 46440 and activities at any time. If CMS determines that the marketing materials and activities do not comply with the requirements of paragraph (a) of this section, CMS will issue written notice of disapproval to the ACO. (2) The ACO shall discontinue, and require its ACO participants, ACO providers/suppliers, and other individuals or entities performing functions or services related to ACO activities to discontinue, use of any marketing materials or activities disapproved by CMS. (c) Sanctions. Failure to comply with this section will subject the ACO to the penalties set forth in § 425.216, termination under § 425.218, or both. Start Amendment Part 58. Amend § 425.312 by revising paragraph (a)(2) to read as follows: End Amendment Part Beneficiary notifications. (a) * * * (2) Notification of the information specified in paragraph (a)(1) of this section must be carried out through the following methods: (i) By an ACO participant posting signs in all of its facilities. (ii) By an ACO participant making standardized written notices available upon request in all settings in which beneficiaries receive primary care services. (iii) In the case of an ACO that has selected preliminary prospective assignment with retrospective reconciliation, by the ACO or ACO participant providing each fee-for-service beneficiary with a standardized written notice at least once during an agreement period in the form and manner specified by CMS. The standardized written notice must be furnished to all fee-for-service beneficiaries prior to or at the first primary care service visit during the first performance year in which the beneficiary receives a primary care service from an ACO participant. (iv) In the case of an ACO that has selected prospective assignment, by the ACO or ACO participant providing each prospectively assigned beneficiary with a standardized written notice at least once during an agreement period in the form and manner specified by CMS. The standardized written notice must be furnished during the performance year for which the beneficiary is prospectively assigned to the ACO. (v) Following the provision of the standardized written notice to a beneficiary, as specified in paragraphs (a)(2)(iii) and (iv) of this section, the ACO or ACO participant must provide a verbal or written follow-up communication to the beneficiary. (A) The follow-up communication must occur no later than the earlier of the beneficiary's next primary care service visit or 180 days from the date the standardized written notice was provided. (B) The ACO must retain a record of all beneficiaries receiving the follow-up communication, and the form and manner in which the communication was made available to the beneficiary. The ACO must make these records available to CMS upon request. * * * * * Start Amendment Part 59. Amend § 425.316 by adding paragraph (e) to read as follows: End Amendment Part Monitoring of ACOs. * * * * * (e) Monitoring ACO eligibility for advance investment payments. (1) CMS monitors an ACO that receives advance investment payments pursuant to § 425.630 for changes in its ACO participants that may cause the ACO to no longer meet the standards specified in § 425.630(b)(3) and (4). (2) If CMS determines that an ACO receiving advance investment payments is experienced with performance-based risk Medicare ACO initiatives or is a high revenue ACO, CMS— (i) Will cease payment of advance investment payments, starting the quarter after the ACO became experienced with performance-based risk Medicare ACO initiatives or became a high revenue ACO. (ii) May take compliance action as specified in §§ 425.216 and 425.218. (3) If an ACO remains an ACO experienced with performance-based risk Medicare ACO initiatives or a high revenue ACO after a deadline specified by CMS pursuant to compliance action under this section, the ACO must repay all advance investment payments it received. CMS will provide written notification to the ACO of the amount due and the ACO must pay such amount no later than 90 days after the receipt of such notification. Start Amendment Part 60. Amend § 425.400 by— End Amendment Part Start Amendment Part a. Revising paragraph (c)(1)(vi) introductory text; and End Amendment Part Start Amendment Part b. Adding paragraph (c)(1)(vii). End Amendment Part The addition and revision read as follows: General. * * * * * (c) * * * (1) * * * (vi) For the performance year starting on January 1, 2022 as follows: * * * * * (vii) For the performance year starting on January 1, 2023, and subsequent performance years as follows: (A) 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). ( 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 this paragraph (c)(1)(vii)). ( 7) 99421, 99422, and 99423 (codes for online digital evaluation and management). ( 8) 99424, 99425, 99426, and 99427 (codes for principal care management services). ( 9) 99437, 99487, 99489, 99490 and 99491 (codes for chronic care management). ( 10) 99439 (code for non-complex chronic care management). ( 11) 99483 (code for assessment of and care planning for patients with cognitive impairment). ( 12) 99484, 99492, 99493 and 99494 (codes for behavioral health integration services). ( 13) 99495 and 99496 (codes for transitional care management services). ( 14) 99497 and 99498 (codes for advance care planning; services identified by these codes furnished in an inpatient setting are excluded). (B) 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 ETA hospitals). ( 7) G0506 (code for chronic care management). ( 8) G2010 (code for the remote evaluation of patient video/images). ( 9) G2012 and G2252 (codes for virtual check-in). Start Printed Page 46441 ( 10) G2058 (code for non-complex chronic care management). ( 11) G2064 and G2065 (codes for principal care management services). ( 12) G2212, GXXX2, and GXXX3 (codes for prolonged office or other outpatient visit for the evaluation and management of a patient). ( 13) G2214 (code for psychiatric collaborative care model). ( 14) GYYY1 and GYYY2 (codes for chronic pain management). (C) Primary care service codes include any CPT code identified by CMS that directly replaces a CPT code specified in paragraph (c)(1)(vii)(A) of this section or a HCPCS code specified in paragraph (c)(1)(vii)(B) of this section, 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. * * * * * Start Amendment Part 61. Amend § 425.402 by adding paragraph (f) to read as follows: End Amendment Part Basic assignment methodology. * * * * * (f) For performance year 2023 and subsequent performance years, CMS employs the following process to identify services furnished by FQHCs, RHCs, Method II CAHs, and ETA hospitals for purposes of the beneficiary assignment methodology under this section. (1) Prior to the start of the performance year and periodically during the performance year, CMS will determine the CCNs for all FQHCs, RHCs, Method II CAHs, and ETA hospitals enrolled under the TIN of an ACO participant, including all CCNs with an active enrollment in Medicare and all CCNs with a deactivated enrollment status. (2) CMS uses the CCNs identified in paragraph (f)(1) of this section in determining assignment for the performance year. (3) CMS accounts for changes in CCN enrollment status during the performance year as follows: (i) If a CCN with no prior Medicare claims experience enrolls under the TIN of an ACO participant after the ACO certifies its ACO participant list for a performance year as required under § 425.118(a)(3), CMS will consider services furnished by that CCN in determining beneficiary assignment to the ACO for the applicable performance year for ACOs under preliminary prospective assignment with retrospective reconciliation. (ii) Services furnished by a CCN with a deactivated enrollment status that is enrolled under an ACO participant at the start of a performance year will be considered in determining beneficiary assignment to the ACO for the applicable performance year or benchmark year. (iii) If a CCN enrolled under the TIN of an ACO participant at the start of the performance year enrolls under a different TIN during a performance year, CMS will continue to treat services billed by the CCN as services furnished by the ACO participant it was enrolled under at the start of the performance year for purposes of determining beneficiary assignment to the ACO for the applicable performance year. Start Amendment Part 62. Amend § 425.512— End Amendment Part Start Amendment Part a. In paragraph (a)(4)(i)(A), by removing the phrase “quality performance score” and adding in its place the phrase “health equity adjusted quality performance score”; End Amendment Part Start Amendment Part b. By redesignating paragraph (a)(4)(ii) as paragraph (a)(4)(iii); End Amendment Part Start Amendment Part c. By adding new paragraph (a)(4)(ii); End Amendment Part Start Amendment Part d. Revising newly redesignated paragraph (a)(4)(iii); End Amendment Part Start Amendment Part e. By revising paragraph (a)(5)(i); End Amendment Part Start Amendment Part f. By redesignating paragraph (a)(5)(ii) as paragraph (a)(5)(iii); End Amendment Part Start Amendment Part g. By adding new paragraph (a)(5)(ii); End Amendment Part Start Amendment Part h. By revising newly redesignated paragraph (a)(5)(iii); End Amendment Part Start Amendment Part i. By adding paragraph (a)(6); End Amendment Part Start Amendment Part j. By redesignating paragraph (b) as paragraph (c); End Amendment Part Start Amendment Part k. By adding new paragraph (b); End Amendment Part Start Amendment Part l. In newly redesignated paragraph (c)(2) introductory text, by removing the reference “paragraph (b)(1) of this section” and adding in its place the reference “paragraph (c)(1) of this section”; and End Amendment Part Start Amendment Part m. By revising newly redesignated paragraph (c)(3). End Amendment Part The revisions and additions read as follows: Determining the ACO quality performance standard for performance years beginning on or after January 1, 2021. (a) * * * (4) * * * (ii) For performance year 2023, CMS designates an alternative quality performance standard for an ACO that does not meet the criteria described in paragraphs (a)(2) or (a)(4)(i) of this section, but reports quality data via the APP established under § 414.1367 of this subchapter according to the method of submission established by CMS 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. (iii) 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 will not meet the quality performance standard or the alternative quality performance standard. * * * * * (5) * * * (i) Except as specified in paragraph (a)(2) of this section, CMS designates the quality performance standard as the ACO reporting quality data via the APP established under § 414.1367 of this subchapter, according to the method of submission established by CMS and the following: (A) For performance year 2024— ( 1) Achieving a health equity adjusted 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, or ( 2) If the ACO reports the three eCQMs/MIPS CQMs in the APP measure set, meeting the data completeness requirement at § 414.1340 of this subchapter and the case minimum requirement at § 414.1380 of this subchapter for all three eCQMs/MIPS CQMs, achieving 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 40th percentile of the performance benchmark on at least one of the remaining five measures in the APP measure set. (B) For performance year 2025 and subsequent years—Achieving a health equity adjusted 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. (ii) CMS designates an alternative quality performance standard for an ACO that does not meet the criteria described in paragraphs (a)(2) or (a)(5)(i) of this section, but reports quality data via the APP established under § 414.1367 of this subchapter according to the method of submission established by CMS 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. (iii) An ACO will not meet the quality performance standard or the alternative quality performance standard if: Start Printed Page 46442 (A) For performance year 2024, the 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. (B) For performance year 2025 and subsequent years, the ACO does not report any of the three eCQMs/MIPS CQMs and does not administer a CAHPS for MIPS survey under the APP. (6) For performance years 2022, 2023, and 2024, CMS designates a performance benchmark and minimum attainment level for each CMS Web Interface measure and establishes a point scale for the measure as described in § 425.502(b). (b) Calculation of ACO's health equity adjusted quality performance score for performance year 2023 and subsequent performance years. (1) For an ACO that reports the three eCQMs/MIPS CQMs in the APP measure set, meeting the data completeness requirement at § 414.1340 of this subchapter for all three eCQMs/MIPS CQMs, and administers the CAHPS for MIPS survey, CMS calculates the ACO's health equity adjusted quality performance score as the sum of the ACO's MIPS Quality performance category score for all measures in the APP measure set and the ACO's health equity adjustment bonus points calculated in accordance with paragraph (b)(2) of this section. The sum of these values may not exceed 100 percent. (2) CMS calculates the ACO's health equity adjustment bonus points as follows: (i) For each measure in the APP measure set, CMS groups an ACO's performance into the top, middle, or bottom third of ACO measure performers by reporting mechanism. (ii) CMS assigns values to the ACO for its performance on each measure as follows: (A) Values of four, two, or zero for each measure for which the ACO's performance places it in the top, middle, or bottom third of ACO measure performers, respectively. (B) Values of zero for each measure that CMS does not evaluate because the ACO does not meet the case minimum or the minimum sample size for the measure. (iii) CMS sums the values assigned to the ACO according to paragraph (b)(2)(ii) of this section, to calculate the ACO's measure performance scaler. (iv) CMS calculates an underserved multiplier for the ACO. (A) CMS determines the proportion ranging from zero to one of the ACO's assigned beneficiary population for the performance year that is considered underserved based on the higher value of either the proportion of the ACO's assigned beneficiaries residing in a census block group with an Area Deprivation Index national percentile rank of at least 85 or the proportion of the ACO's assigned beneficiaries that are dually eligible for Medicare and Medicaid. (B) If the proportion determined in accordance with paragraph (b)(2)(iv)(A) of this section is lower than 20 percent, the ACO is ineligible for health equity adjustment bonus points. (v) Except as specified in paragraph (b)(2)(iv)(B) of this section, CMS calculates the ACO's health equity adjustment bonus points as the product of the measure performance scaler determined under paragraph (b)(2)(iii) of this section and the underserved multiplier determined under paragraph (b)(2)(iv) of this section. If the product of these values is greater than 10, the value of the ACO's health equity adjustment bonus points is set equal to 10. (3) The ACO's health equity adjusted quality performance score, determined in accordance with paragraphs (b)(1) and (b)(2) of this section, is used as follows: (i) In determining whether the ACO meets the quality performance standard as specified under paragraphs (a)(4)(i)(A), (a)(5)(i)(A)( 1), and (a)(5)(i)(B) of this section. (ii) In determining the final sharing rate for calculating shared savings payments under the BASIC track in accordance with § 425.605(d), and under the ENHANCED track in accordance with § 425.610(d), for an ACO that meets the alternative quality performance standard by meeting the criteria specified in paragraphs (a)(4)(ii) or (a)(5)(ii) of this section. (iii) In determining the shared loss rate for calculating shared losses under the ENHANCED track in accordance with § 425.610(f), for an ACO that meets the quality performance standard established in paragraphs (a)(2), (a)(4)(i) and (a)(5)(i) of this section or the alternative quality performance standard established in paragraphs (a)(4)(ii) of this section. (iv) In determining the quality performance score for an ACO affected by extreme and uncontrollable circumstances as described in paragraphs (c)(3)(ii) and (iii) of this section. (c) * * * (3) If the ACO reports quality data via the APP and meets data completeness and case minimum requirements: (i) For performance years 2021 and 2022, CMS will use the higher of the ACO's quality performance score or the equivalent of 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. (ii) For performance year 2023, CMS will use the higher of the ACO's health equity adjusted quality performance score or the equivalent of 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. (iii) For performance year 2024 and subsequent performance years, CMS will use the higher of the ACO's health equity adjusted quality performance score or the equivalent of 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. * * * * * Start Amendment Part 63. Amend § 425.600— End Amendment Part Start Amendment Part a. By revising paragraph (a)(4)(i)(B) introductory heading; End Amendment Part Start Amendment Part b. In paragraph (a)(4)(i)(B)( 2)( ii), revise the last sentence. End Amendment Part Start Amendment Part c. In paragraph (a)(4)(i)(B)( 2)( iv), by removing the phrase “For performance year 2023, the ACO is automatically advanced to the level of the BASIC track's glide path to which the ACO would have automatically advanced absent the election to maintain its participation level for performance year 2022” and adding in its place the phrase “Except as provided in paragraph (a)(4)(i)(B)( 2)( vi) of this section, for performance year 2023, the ACO is automatically advanced to the level of the BASIC track's glide path to which the ACO would have automatically advanced absent the election to maintain its participation level for performance year 2022”; End Amendment Part Start Amendment Part d. By adding paragraphs (a)(4)(i)(B)( 2)( vi) and ( vii), and (a)(4)(i)(C); End Amendment Part Start Amendment Part e. In paragraph (a)(4)(ii), by removing the reference “paragraph (d) of this section” and adding in its place the references “paragraph (d) or paragraph (g)(2) of this section, as applicable”; End Amendment Part Start Amendment Part f. In paragraph (d) introductory text, by removing the phrase “beginning on July 1, 2019, and in subsequent years” and adding in its place the phrase “beginning on or after July 1, 2019, and before January 1, 2024”; End Amendment Part Start Amendment Part g. By revising paragraph (e) introductory text; Start Printed Page 46443 End Amendment Part Start Amendment Part h. In paragraph (f)(4)(ii), by removing the reference “§ 425.601(f)” and adding in its place the references “§§ 425.601(f), and 425.656(d)”; End Amendment Part Start Amendment Part i. In paragraph (f)(4)(iii), by removing the reference “§ 425.601(e)” and adding in its place the references “§§ 425.601(e), and 425.652(c)(2)”; and End Amendment Part Start Amendment Part j. By adding paragraphs (g) and (h). End Amendment Part The revisions and additions read as follows: Selection of risk model. (a) * * * (4) * * * (i) * * * (B) Glide path progression for agreement periods beginning on or after July 1, 2019 and before January 1, 2024. * * * * * ( 2) * * * ( ii) * * * In the case of an ACO that elects to remain in Level B for an additional performance year pursuant to the second sentence of paragraph (a)(4)(i)(B)( 2)( ii) of this section, and except as provided in paragraph (a)(4)(i)(B)(2)( vi) of this section, the ACO is automatically advanced to Level E under paragraph (a)(4)(i)(A)( 5) of this section at the start of performance year 4 (or performance year 5 in the case of ACOs entering an agreement period beginning on July 1, 2019). * * * * * ( vi) For performance year 2023, an ACO in Level A under paragraph (a)(4)(i)(A)( 1) of this section or in Level B under paragraph (a)(4)(i)(A)( 2) of this section may elect to remain in the same level of the BASIC track's glide path in which it participated during performance year 2022, for the remainder of the agreement period, unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). If the ACO does not elect to remain under Level A or Level B, for performance year 2023, the ACO is automatically advanced to the next level of the BASIC track's glide path to which the ACO would have automatically advanced absent any election to maintain its participation level for performance year 2022 under paragraph (a)(4)(i)(B)( 2)( iv) of this section and, if applicable, the election to maintain its participation level for performance year 2021 under paragraph (a)(4)(i)(B)( 2)( iii) of this section, unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). A voluntary election by an ACO under this paragraph must be made in the form and manner and by a deadline established by CMS. ( vii) For performance year 2024, an ACO with an agreement period beginning January 1, 2023 in Level A under paragraph (a)(4)(i)(A)( 1) of this section or in Level B under paragraph (a)(4)(i)(A)( 2) of this section may elect to remain in the same level of the BASIC track's glide path in which it participated during performance year 2023, for the remainder of the agreement period, unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). If the ACO does not elect to remain under Level A or Level B, for performance year 2024, the ACO is automatically advanced to the next level of the BASIC track's glide path, unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). A voluntary election by an ACO under this paragraph must be made in the form and manner and by a deadline established by CMS. * * * * * (C) Glide path progression for agreement periods beginning on or after January 1, 2024. ( 1) Level of glide path entry. An ACO eligible to enter the BASIC track's glide path as determined under paragraph (g)(1) of this section may elect to enter its agreement period at any of the levels of risk and potential reward available under paragraphs (a)(4)(i)(A)( 1) through ( 5) of this section. ( 2) Automatic advancement. An ACO is automatically advanced to the next level of the BASIC track's glide path at the start of each subsequent performance year of the agreement period, if a higher level of risk and potential reward is available under the BASIC track, except as follows: ( i) The ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). ( ii) The ACO elects to maintain its level of participation as provided in paragraph (a)(4)(i)(C)( 3) of this section. ( iii) The ACO is automatically advanced to Level E pursuant to paragraph (h)(2)(i) of this section. ( 3) Election to remain under a one-sided model. An eligible ACO that enters the BASIC track's glide path at Level A under paragraph (a)(4)(i)(A)( 1) of this section and is currently at Level A may elect to remain in Level A under paragraph (a)(4)(i)(A)( 1) of this section for all subsequent performance years of the agreement period. ( i) To be eligible to participate under Level A of the BASIC track as described in this paragraph, the ACO must meet the following requirements: the ACO is participating in its first agreement period under the BASIC track under paragraph (a)(4) of this section, and is not participating in an agreement period under the BASIC track as a renewing ACO (as defined at § 425.20) or a re-entering ACO (as defined in § 425.20) that previously participated in the BASIC track's glide path under paragraph (a)(4) of this section; and the ACO is inexperienced with performance-based risk Medicare ACO initiatives (as defined in § 425.20). ( ii) A voluntary election by an ACO under this paragraph (a)(4)(i)(C)( 3) must be made in the form and manner and by a deadline established by CMS. ( iii) The ACO's election to remain in Level A applies for the entirety of the agreement period, unless the ACO elects to transition to a higher level of risk and potential reward within the BASIC track's glide path as provided in § 425.226(a)(2)(i). ( 4) Prior to entering performance-based risk, an ACO must meet all requirements to participate under performance-based risk, including establishing an adequate repayment mechanism as specified under § 425.204(f) and selecting a MSR/MLR from the options specified under § 425.605(b). ( 5) If the ACO fails to meet the requirements to participate under performance-based risk under paragraph (a)(4)(i)(C)( 4) of this section, the agreement is terminated. ( 6) If, in accordance with § 425.226(a)(2)(i), the ACO elects to transition to a higher level of risk and reward available under paragraphs (a)(4)(i)(A)( 3) through ( 5) of this section, then the automatic transition to levels of higher risk and reward specified in paragraph (a)(4)(i)(C)( 2) of this section applies to all subsequent performance years of the agreement period. * * * * * (e) For performance years beginning on or after July 1, 2019 and before January 1, 2024, CMS monitors low revenue ACOs identified as experienced with performance-based risk Medicare ACO initiatives, during an agreement period in the BASIC track, for changes in the revenue of ACO participants that would cause the ACO to be considered a high revenue ACO and ineligible for participation in the BASIC track. If the ACO meets the definition of a high revenue ACO (as specified in § 425.20)— * * * * * (g) For agreement periods beginning on or after January 1, 2024, CMS Start Printed Page 46444 determines an ACO's eligibility for the Shared Savings Program participation options specified in paragraph (a) of this section as follows: (1) If an ACO is determined to be inexperienced with performance-based risk Medicare ACO initiatives, the ACO may enter either the BASIC track's glide path at any of the levels of risk and potential reward under paragraphs (a)(4)(i)(A)( 1) through ( 5) of this section, or the ENHANCED track under paragraph (a)(3) of this section. (i) An ACO that is inexperienced with performance-based risk Medicare ACO initiatives may participate under the BASIC track's glide path for a maximum of two agreement periods, as specified in paragraph (a)(4)(i)(C) of this section. (ii) An ACO that enters an agreement under the BASIC track's glide path at either Level A under paragraph (a)(4)(i)(A)( 1) of this section or Level B under paragraph (a)(4)(i)(A)( 2) of this section is deemed to have completed one agreement under the BASIC track's glide path and is only eligible to enter a second agreement under the BASIC track's glide path if the ACO continues to meet the definition of inexperienced with performance-based risk Medicare ACO initiatives and satisfies either of the following: (A) The ACO is the same legal entity as a current or previous ACO that previously entered into a participation agreement for participation in the BASIC track's glide path only one time. (B) For a new ACO identified as a re-entering ACO, the ACO in which the majority of the new ACO's participants were participating previously entered into a participation agreement for participation in the BASIC track's glide path only one time. (iii) An ACO that is determined to be inexperienced with performance-based risk Medicare ACO initiatives but is not eligible to enter the BASIC track's glide path as specified in paragraph (a)(4)(i)(C) of this section may enter either the BASIC track Level E under paragraph (a)(4)(i)(A)( 5) of this section for all performance years of the agreement period, or the ENHANCED track under paragraph (a)(3) of this section. (2) If an ACO is determined to be experienced with performance-based risk Medicare ACO initiatives, the ACO may enter either the BASIC track Level E under paragraph (a)(4)(i)(A)( 5) of this section for all performance years of the agreement period, or the ENHANCED track under paragraph (a)(3) of this section. (h)(1) For performance years beginning on or after January 1, 2024, CMS monitors ACOs identified as inexperienced with performance-based risk Medicare ACO initiatives and participating in the BASIC track under a one-sided model during an agreement period pursuant to an election under paragraph (a)(4)(i)(B)( 2)( vi), paragraph (a)(4)(i)(B)( 2)( vii), or paragraph (a)(4)(i)(C)( 3) of this section for changes to their certified list of ACO participants that would cause the ACO to be considered experienced with performance-based risk Medicare ACO initiatives and ineligible for participation in a one-sided model. (2) If the ACO meets the definition of experienced with performance-based risk Medicare ACO initiatives (under § 425.20)— (i) The ACO is permitted to complete the performance year for which it met the definition of experienced with performance-based risk Medicare ACO initiatives in a one-sided model of the BASIC track, but is ineligible to continue participation in the one-sided model after the end of that performance year if it continues to meet the definition of experienced with performance-based risk Medicare ACO initiatives. The ACO will be automatically advanced to Level E within the BASIC track under paragraph (a)(4)(i)(A)( 5) of this section at the start of the next performance year and will remain in Level E for all subsequent performance years of the agreement period; and (ii) Prior to entering performance-based risk, the ACO must meet all requirements to participate under performance-based risk, including establishing an adequate repayment mechanism as specified under § 425.204(f) and selecting a MSR/MLR from the options specified under § 425.605(b), in accordance with paragraph (a)(4)(i)(B)( 2)( v) of this section or paragraph (a)(4)(i)(C)( 4) of this section, as applicable. If the ACO fails to meet the requirements to participate under performance-based risk, the agreement is terminated in accordance with paragraph (a)(4)(i)(B)( 3) of this section or paragraph (a)(4)(i)(C)( 5) of this section, as applicable. Start Amendment Part 64. Amend § 425.601 by— End Amendment Part Start Amendment Part a. Revising the section heading, and paragraphs (a)(1)(i) and (c)(2)(i); End Amendment Part Start Amendment Part b. Removing paragraph (d)(3); End Amendment Part Start Amendment Part c. In paragraph (f)(5)(ii), by removing the reference “paragraph (f)(4)(i) of this section”, and adding in its place the reference “paragraph (f)(5)(i) of this section”; and End Amendment Part Start Amendment Part d. In paragraph (f)(5)(iv), by removing the references “paragraphs (f)(1) and (2) of this section”, and adding in their place the references “paragraphs (f)(1) through (3) of this section”. End Amendment Part The revisions read as follows: Establishing, adjusting, and updating the benchmark for agreement periods beginning on or after July 1, 2019, and before January 1, 2024. * * * * * (a) * * * (1) * * * (i) This calculation excludes indirect medical education (IME) and disproportionate share hospital (DSH) payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals. * * * * * (c) * * * (2) * * * (i) Excludes IME and DSH payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals; and * * * * * Start Amendment Part 65. Amend § 425.605— End Amendment Part Start Amendment Part a. By revising paragraph (a) introductory text, paragraphs (a)(1)(i) and (ii), paragraph(a)(2) introductory text, and paragraphs (a)(5)(i) and (a)(6); End Amendment Part Start Amendment Part b. By adding paragraph (b)(2)(ii)(E); End Amendment Part Start Amendment Part c. By revising paragraphs (b)(3), and (c)(2); End Amendment Part Start Amendment Part d. In paragraph (d)(1) introductory text, by removing the reference “§ 425.600(d)” and adding in its place the references “§ 425.600(d) or § 425.600(g)”; End Amendment Part Start Amendment Part e. By revising paragraph (d)(1)(i)(A)( 2) introductory heading; End Amendment Part Start Amendment Part f. By adding paragraphs (d)(1)(i)(A)( 3) and ( 4); End Amendment Part Start Amendment Part g. By revising paragraph (d)(1)(i)(B)( 1); End Amendment Part Start Amendment Part h. By revising the paragraph heading of paragraph (d)(1)(ii)(A)( 2); End Amendment Part Start Amendment Part i. By adding paragraphs (d)(1)(ii)(A)( 3) and ( 4); End Amendment Part Start Amendment Part j. By revising paragraph (d)(1)(ii)(B)( 1); End Amendment Part Start Amendment Part k. By revising the paragraph heading of paragraph (d)(1)(iii)(A)( 2); End Amendment Part Start Amendment Part l. By adding paragraphs (d)(1)(iii)(A)( 3) and ( 4); End Amendment Part Start Amendment Part m. By revising paragraph (d)(1)(iii)(B)( 1); End Amendment Part Start Amendment Part n. In paragraph (d)(1)(iii)(D)( 2), by removing the reference “§ 425.601” and adding in its place the references “§ 425.601 or § 425.652”; End Amendment Part Start Amendment Part o. By revising the paragraph heading of paragraph (d)(1)(iv)(A)( 2); End Amendment Part Start Amendment Part p. By adding paragraphs (d)(1)(iv)(A)( 3) and ( 4); End Amendment Part Start Amendment Part q. By revising paragraph (d)(1)(iv)(B)( 1); End Amendment Part Start Amendment Part r. In paragraph (d)(1)(iv)(D)( 2), by removing the reference “§ 425.601” and adding in its place the references “§ 425.601 or § 425.652”; Start Printed Page 46445 End Amendment Part Start Amendment Part s. By revising the paragraph heading of paragraph (d)(1)(v)(A)( 2); End Amendment Part Start Amendment Part t. By adding paragraphs (d)(1)(v)(A)( 3) and ( 4); End Amendment Part Start Amendment Part u. By revising paragraph (d)(1)(v)(B)( 1); End Amendment Part Start Amendment Part v. In paragraph (d)(1)(v)(D)( 2), by removing the reference “§ 425.601” and adding in its place the references “§ 425.601 or § 425.652”; End Amendment Part Start Amendment Part w. In paragraph (d)(2), by removing the reference “§ 425.600(d)” and adding in its place the references “§ 425.600(d) or § 425.600(g)”; and End Amendment Part Start Amendment Part x. By adding paragraph (h). End Amendment Part The revisions and additions read as follows: Calculation of shared savings and losses under the BASIC track. (a) General rules. For each performance year, CMS determines whether the estimated average per capita Medicare Parts A and B fee-for-service expenditures for Medicare fee-for-service beneficiaries assigned to the ACO are above or below the updated benchmark determined under § 425.601 or § 425.652, as applicable. In order to qualify for a shared savings payment under the BASIC track, or to be responsible for sharing losses with CMS, an ACO's average per capita Medicare Parts A and B fee-for-service expenditures for its assigned beneficiary population for the performance year must be below or above the updated benchmark, respectively, by at least the minimum savings or loss rate under paragraph (b) of this section except as provided in paragraph (h) of this section. (1) * * * (i) For agreement periods beginning before January 1, 2024: (A) Positive adjustments in prospective HCC risk scores are subject to a cap of 3 percent. (B) This cap is the maximum increase in risk scores for each agreement period, such that any positive adjustment between BY3 and any performance year in the agreement period cannot be larger than 3 percent. (ii) For agreement periods beginning on January 1, 2024, and in subsequent years: (A) Positive adjustments in prospective HCC risk scores are subject to a cap equal to the ACO's aggregate growth in demographic risk scores between BY3 and the performance year (positive or negative) plus 3 percentage points. (B) The cap described in paragraph (a)(1)(ii)(A) of this section will apply to prospective HCC risk score growth for a population described in paragraph (a)(2) of this section only if the ACO's aggregate growth in prospective HCC risk scores between BY3 and the performance year across all of the populations described in paragraph (a)(2) of this section exceeds this cap. If the cap described in paragraph (a)(1)(ii)(A) of this section is determined to apply, the value of the cap is the maximum increase in risk scores for the applicable performance year, such that any positive adjustment between BY3 and the performance year cannot be larger than the value of the cap for any of the populations described in paragraph (a)(2) of this section. (C) The aggregate growth in demographic risk scores for purposes of paragraph (a)(1)(ii)(A) of this section and the aggregate growth in prospective HCC risk scores for purposes of paragraph (a)(1)(ii)(B) of this section is calculated by taking a weighted average of the growth in demographic risk scores or prospective HCC risk scores, as applicable, across the populations described in paragraph (a)(2) of this section. To calculate aggregate growth in demographic risk scores or prospective HCC risk scores, as applicable, CMS does the following: ( 1) Multiplies the growth in risk scores (expressed as a ratio of the ACO's performance year risk score to the ACO's BY3 risk score) for each population of beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries) by the applicable proportion of total historical benchmark dollars associated with that population. ( 2) Sums the amounts determined in paragraph (a)(1)(ii)(C)( 1) of this section across the populations of beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries). (2) In risk adjusting the benchmark as described in §§ 425.601(a)(10) and 425.652(a)(10), CMS makes separate adjustments for each of the following populations of beneficiaries: * * * * * (5) * * * (i) These calculations exclude indirect medical education (IME) and disproportionate share hospital (DSH) payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals. * * * * * (6) In order to qualify for a shared savings payment, the ACO's average per capita Medicare Parts A and B fee-for-service expenditures for the performance year must be below the applicable updated benchmark by at least the minimum savings rate established for the ACO under paragraph (b) of this section except as provided in paragraph (h) of this section. (b) * * * (2) * * * (ii) * * * (E) Automatic transition from Level A to Level E of the BASIC track's glide path under § 425.600(h)(2). (3) Except as provided in paragraph (h) of this section, in order to qualify for a shared savings payment, an ACO's average per capita Medicare Parts A and B fee-for-service expenditures for its assigned beneficiary population for the performance year must be below its updated benchmark by at least the MSR established for the ACO. * * * * * (c) * * * (2) For performance years beginning on or after January 1, 2021. To qualify for shared savings, an ACO must— (i) Meet either the minimum savings rate requirement established under paragraph (b) of this section, or the criteria described in paragraph (h) of this section; (ii) Meet either the quality performance standard or alternative quality performance standard established under § 425.512; and (iii) Otherwise maintain its eligibility to participate in the Shared Savings Program under this part. (d) * * * (1) * * * (i) * * * (A) * * * ( 2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * ( 3) For the performance year beginning on January 1, 2023. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level A, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(i)(B) of this section). The percentage is as follows: ( i) 40 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i). ( ii) 40 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(4)(ii). ( 4) For performance years beginning on or after January 1, 2024. An ACO Start Printed Page 46446 that meets all the requirements for receiving shared savings payments under the BASIC track, Level A, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(i)(B) of this section). Except as provided in paragraph (h) of this section, the percentage is as follows: ( i) 40 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i). ( ii) 40 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(5)(ii). (B) * * * ( 1) If an ACO qualifies for savings by meeting or exceeding the MSR, or as provided in paragraph (h) of this section, the final sharing rate specified in paragraph (d)(1)(i)(A) of this section applies to an ACO's savings on a first dollar basis. * * * * * (ii) * * * (A) * * * ( 2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * ( 3) For the performance year beginning on January 1, 2023. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level B, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(ii)(B) of this section). The percentage is as follows: ( i) 40 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i). ( ii) 40 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(4)(ii). ( 4) For performance years beginning on or after January 1, 2024. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level B, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(ii)(B) of this section). Except as provided in paragraph (h) of this section, the percentage is as follows: ( i) 40 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i). ( ii) 40 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(5)(ii). (B) * * * ( 1) If an ACO qualifies for savings by meeting or exceeding the MSR, or as provided in paragraph (h) of this section, the final sharing rate specified in paragraph (d)(1)(ii)(A) of this section applies to an ACO's savings on a first dollar basis. * * * * * (iii) * * * (A) * * * (2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * ( 3) For the performance year beginning on January 1, 2023. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level C, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(iii)(B) of this section). The percentage is as follows: ( i) 50 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i). ( ii) 50 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(4)(ii). ( 4) For performance years beginning on or after January 1, 2024. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level C, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(iii)(B) of this section). Except as provided in paragraph (h) of this section, the percentage is as follows: ( i) 50 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i). ( ii) 50 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(5)(ii). (B) * * * ( 1) If an ACO qualifies for savings by meeting or exceeding the MSR, or as provided in paragraph (h) of this section, the final sharing rate specified in paragraph (d)(1)(iii)(A) of this section applies to an ACO's savings on a first dollar basis. * * * * * (iv) * * * (A) * * * ( 2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * ( 3) For the performance year beginning on January 1, 2023. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level D, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(iv)(B) of this section). The percentage is as follows: ( i) 50 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i). ( ii) 50 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(4)(ii). ( 4) For performance years beginning on or after January 1, 2024. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level D, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(iv)(B) of this section). Except as provided in paragraph (h) of this section, the percentage is as follows: ( i) 50 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i). ( ii) 50 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(5)(ii). (B) * * * ( 1) If an ACO qualifies for savings by meeting or exceeding the MSR, or as Start Printed Page 46447 provided in paragraph (h) of this section, the final sharing rate specified in paragraph (d)(1)(iv)(A) of this section applies to an ACO's savings on a first dollar basis. * * * * * (v) * * * (A) * * * ( 2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * ( 3) For the performance year beginning on January 1, 2023. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level E, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(v)(B) of this section). The percentage is as follows: ( i) 50 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i). ( ii) 50 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(4)(ii). ( 4) For performance years beginning on or after January 1, 2024. An ACO that meets all the requirements for receiving shared savings payments under the BASIC track, Level E, receives a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (d)(1)(v)(B) of this section). Except as provided in paragraph (h) of this section, the percentage is as follows: ( i) 50 percent for an ACO that that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i). ( ii) 50 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(5)(ii). (B) * * * ( 1) If an ACO qualifies for savings by meeting or exceeding the MSR, or as provided in paragraph (h) of this section, the final sharing rate specified in paragraph (d)(1)(v)(A) of this section applies to an ACO's savings on a first dollar basis. * * * * * (h) Calculation of shared savings for certain BASIC track ACOs not meeting MSR requirement. An ACO that does not meet the minimum savings rate requirement established under paragraph (b) of this section but meets the other criteria described in paragraphs (c)(2)(ii) and (iii) of this section may qualify for a shared savings payment as provided in this paragraph. (1) To qualify for a shared savings payment under this paragraph, an ACO must meet all of the following criteria: (i) The ACO has average per capita Medicare Parts A and B fee-for-service expenditures for the performance year below the updated benchmark determined under § 425.652. (ii) The ACO is a low revenue ACO as defined in § 425.20 as determined at the time of financial reconciliation for the performance year. (iii) The ACO has at least 5,000 assigned beneficiaries for the relevant performance year as determined at the time of financial reconciliation for the performance year. (iv) The ACO is participating in an agreement period beginning on January 1, 2024, or in subsequent years. (2) The ACO's shared savings payment will be calculated as described in paragraph (d) of this section according to the ACO's applicable level of the BASIC track with the exception that the final sharing rate applied will equal one-half of the applicable percentage described in paragraph (d)(1)(i)(A)( 4), (d)(1)(ii)(A)( 4), (d)(1)(iii)(A)( 4), (d)(1)(iv)(A)( 4), or (d)(1)(v)(A)( 4) of this section. Start Amendment Part 66. Amend § 425.610— End Amendment Part Start Amendment Part a. In paragraph (a) introductory text, by removing the references “§ 425.601, § 425.602 or § 425.603” and adding in its place the references “§ 425.601, § 425.602, § 425.603, or § 425.652”; End Amendment Part Start Amendment Part b. By revising paragraphs (a)(2)(i) and (ii), (a)(3) introductory text, (a)(6)(i) and (d)(2) paragraph heading; End Amendment Part Start Amendment Part c. By adding paragraphs (d)(3) and (4); End Amendment Part Start Amendment Part d. By revising paragraph heading of paragraph (f)(2); End Amendment Part Start Amendment Part e. By adding paragraphs (f)(3) and (4); and End Amendment Part Start Amendment Part f. In paragraph (g), by removing the references “§ 425.601, § 425.602 or § 425.603” and adding in its place the references “§ 425.601, § 425.602, § 425.603 or § 425.652”. End Amendment Part The revisions and additions read as follows: Calculation of shared savings and losses under the ENHANCED track. (a) * * * (2) * * * (i) For agreement periods beginning before January 1, 2024: (A) Positive adjustments in prospective HCC risk scores are subject to a cap of 3 percent. (B) This cap is the maximum increase in risk scores for each agreement period, such that any positive adjustment between BY3 and any performance year in the agreement period cannot be larger than 3 percent. (ii) For agreement periods beginning on January 1, 2024, and in subsequent years: (A) Positive adjustments in prospective HCC risk scores are subject to a cap equal to the ACO's aggregate growth in demographic risk scores between BY3 and the performance year (positive or negative) plus 3 percentage points. (B) The cap described in paragraph (a)(2)(ii)(A) of this section will apply to prospective HCC risk score growth for a population described in paragraph (a)(3) of this section only if the ACO's aggregate growth in prospective HCC risk scores between BY3 and the performance year across all of the populations described in paragraph (a)(3) of this section exceeds this cap. If the cap described in paragraph (a)(2)(ii)(A) of this section is determined to apply, the value of the cap is the maximum increase in risk scores for the applicable performance year, such that any positive adjustment between BY3 and the performance year cannot be larger than the value of the cap for any of the populations described in paragraph (a)(3) of this section. (C) The aggregate growth in demographic risk scores for purposes of paragraph (a)(2)(ii)(A) of this section and the aggregate growth in prospective HCC risk scores for purposes of paragraph (a)(2)(ii)(B) of this section is calculated by taking a weighted average of the growth in demographic risk scores or prospective HCC risk scores, as applicable, across the populations described in paragraph (a)(3) of this section. To calculate aggregate growth in demographic risk scores or prospective HCC risk scores, as applicable, CMS does the following: ( 1) Multiplies the growth in risk scores (expressed as a ratio of the ACO's performance year risk score to the ACO's BY3 risk score) for each population of beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries) by the applicable proportion of total historical benchmark dollars associated with that population. ( 2) Sums the amounts determined in paragraph (a)(2)(ii)(C)( 1) of this section across the populations of beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries). Start Printed Page 46448 (3) In risk adjusting the benchmark as described in §§ 425.601(a)(10), 425.602(a)(9), 425.603(c)(10), and 425.652(a)(10) CMS makes separate adjustments for each of the following populations of beneficiaries: * * * * * (6) * * * (i) These calculations will exclude indirect medical education (IME) and disproportionate share hospital (DSH) payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals. * * * * * (d) * * * (2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * (3) For the performance year beginning on January 1, 2023. An ACO that meets all the requirements for receiving shared savings payments under the ENHANCED track will receive a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (e)(2) of this section). The percentage is as follows: (i) 75 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i). (ii) 75 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(4)(ii). (4) For performance years beginning on or after January 1, 2024. An ACO that meets all the requirements for receiving shared savings payments under the ENHANCED track will receive a shared savings payment equal to a percentage of all the savings under the updated benchmark (up to the performance payment limit described in paragraph (e)(2) of this section). The percentage is as follows: (i) 75 percent for an ACO that meets the quality performance standard by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i). (ii) 75 percent multiplied by the ACO's health equity adjusted quality performance score calculated according to § 425.512(b) for an ACO that meets the alternative quality performance standard by meeting the criteria specified in § 425.512(a)(5)(ii). * * * * * (f) * * * (2) For performance years beginning on January 1, 2021, or January 1, 2022. * * * (3) For the performance year beginning on January 1, 2023. For an ACO that is required to share losses with the Medicare program for expenditures over the updated benchmark, the amount of shared losses is determined as follows: (i) If the ACO meets either the quality performance standard established in § 425.512 applicable for the performance year by meeting the criteria specified in § 425.512(a)(2) or (a)(4)(i), or the alternative quality performance standard established in § 425.512(a)(4)(ii), CMS determines the shared loss rate as follows: (A) Calculate the product of 75 percent and the ACO's health equity adjusted quality performance score calculated according to § 425.512(b). (B) Calculate the shared loss rate as 1 minus the product determined in paragraph (f)(3)(i)(A) of this section. The shared loss rate— ( 1) May not exceed 75 percent; and ( 2) May not be less than 40 percent. (ii) If the ACO fails to meet either the quality performance standard or the alternative quality performance standard established in § 425.512 applicable for the performance year, the shared loss rate is 75 percent. (4) For performance years beginning on or after January 1, 2024. For an ACO that is required to share losses with the Medicare program for expenditures over the updated benchmark, the amount of shared losses is determined as follows: (i) If the ACO meets either the quality performance standard established in § 425.512 applicable for the performance year by meeting the criteria specified in § 425.512(a)(2) or (a)(5)(i), or the alternative quality performance standard established in § 425.512(a)(5)(ii), CMS determines the shared loss rate as follows: (A) Calculate the product of 75 percent and the ACO's health equity adjusted quality performance score calculated according to § 425.512(b). (B) Calculate the shared loss rate as 1 minus the product determined in paragraph (f)(4)(i)(A) of this section. The shared loss rate— ( 1) May not exceed 75 percent; and ( 2) May not be less than 40 percent. (ii) If the ACO fails to meet either the quality performance standard or the alternative quality performance standard established in § 425.512 for the applicable performance year, the shared loss rate is 75 percent. * * * * * Start Amendment Part 67. Amend § 425.611— End Amendment Part Start Amendment Part a. In paragraph (c)(2)(i), by removing the references “§§ 425.601(c) and 425.603(e)” and adding in its place the references “§§ 425.601(c), 425.603(e), and 425.654(a)”; End Amendment Part Start Amendment Part b. In paragraph (c)(2)(ii)(A), by removing the references “§§ 425.601(a)(4), 425.602(a)(4), and 425.603(c)(4)” and adding in its place the references “§§ 425.601(a)(4), 425.602(a)(4), 425.603(c)(4), and 425.652(a)(4)”; End Amendment Part Start Amendment Part c. In paragraph (c)(2)(ii)(B), by removing the references “§§ 425.601(c)(3) and 425.603(e)(3)” and adding in its place the references “§§ 425.601(c)(3), 425.603(e)(3), and 425.654(a)(3)”; End Amendment Part Start Amendment Part d. By revising paragraph (c)(2)(iii); End Amendment Part Start Amendment Part e. In paragraph (c)(2)(v), by removing the reference “§ 425.601(a)(5)(ii)” and adding in its place the references “§§ 425.601(a)(5)(ii) and 425.652(a)(5)(ii)”; End Amendment Part Start Amendment Part f. In paragraph (c)(2)(v), by removing the reference “§ 425.601(b)(2)” and adding in its place the references “§§ 425.601(b)(2) and 425.652(b)(2)(i)”; and End Amendment Part Start Amendment Part g. By revising paragraph (c)(4). End Amendment Part The revisions read as follows: Adjustments to Shared Savings Program calculations to address the COVID-19 pandemic. (c) * * * (2) * * * (iii) Determining national per capita expenditures for Parts A and B services under the original Medicare fee-for-service program for assignable beneficiaries for purposes of capping the regional adjustment to the ACO's historical benchmark according to §§ 425.601(a)(8)(ii)(C) and 425.656(c)(3), and capping the prior savings adjustment according to § 425.652(a)(8)(iv). * * * * * (4) Calculation of total Medicare Parts A and B fee-for-service revenue of ACO participants and total Medicare Parts A and B fee-for-service expenditures for the ACO's assigned beneficiaries for purposes of identifying whether an ACO is a high revenue ACO or low revenue ACO, as defined under § 425.20, determining an ACO's eligibility for participation options according to § 425.600(d), and determining an ACO's eligibility to receive advance investment payments according to § 425.630. * * * * * Start Amendment Part 68. Amend § 425.612 by— End Amendment Part Start Amendment Part a. Revising paragraph (a)(1)(i)(A) introductory text; and End Amendment Part Start Amendment Part b. In paragraph (a)(1)(i)(A)( 1) by removing the phrase “The communication plan” and adding in its place the phrase “A communication plan”. End Amendment Part The revision reads as follows: Start Printed Page 46449 Waivers of payment rules or other Medicare requirements. (a) * * * (1) * * * (i) * * * (A) An attestation that it has established and will make available to CMS upon request the following narratives describing how the ACO plans to implement the waiver: * * * * * Start Amendment Part 69. Section 425.630 is added to subpart G to read as follows: End Amendment Part Option to receive advance investment payments. (a) Purpose. Advance investment payments are intended to encourage low-revenue ACOs that are inexperienced with risk to participate in the Shared Savings Program and to provide additional resources to such ACOs in order to support care improvement for underserved beneficiaries. (b) Eligibility. An ACO is eligible to receive advance investment payments as specified in this section if CMS determines that all of the following criteria are met: (1) The ACO is not a renewing or a re-entering ACO. (2) The ACO has applied to participate in the Shared Savings Program under any level of the BASIC track's glide path and is eligible to participate in the Shared Savings Program. (3) The ACO is inexperienced with performance-based risk Medicare ACO initiatives. (4) The ACO is a low revenue ACO. (c) Application procedure. To obtain a determination regarding whether an ACO may receive advance investment payments, the ACO must submit to CMS complete supplemental information as part of its application to participate in the Shared Savings Program (filed pursuant to § 425.202) in the form and manner and by a deadline specified by CMS. (d) Application contents and review. (1) General. An ACO must submit to CMS supplemental application information sufficient for CMS to determine whether the ACO is eligible to receive advance investment payments. In addition, the ACO must submit a proposed spend plan as part of the supplemental application information. (2) Spend plan. The spend plan must: (i) Describe how the ACO will spend its advance investment payments during the agreement period to build care coordination capabilities (including coordination with community-based organizations, as appropriate), address specific health disparities, and meet other criteria under this section. (ii) Identify the categories of goods and services that will be purchased with advance investment payment funds (including any allowable uses under paragraph (e) of this section), the dollar amounts to be spent on the various categories, and such other information as may be specified by CMS. (iii) State that the ACO has established a separate designated account for the deposit and expenditure of all advance investment payments in accordance with paragraph (e)(4) of this section. (3) CMS review. CMS will review the supplemental application information to determine whether an ACO meets the eligibility criteria and other requirements for advance investment payments and will approve or deny the advance investment payment application accordingly. CMS may review an ACO's spend plan at any time and require the ACO to modify its spend plan to comply with the requirements of this paragraph (d) and paragraph (e) of this section. (e) Use and management of advance investment payments. (1) Allowable uses. An ACO must use an advance investment payment to improve the quality and efficiency of items and services furnished to beneficiaries by investing in increased staffing, health care infrastructure, and the provision of accountable care for underserved beneficiaries, which may include addressing social determinants of health. Expenditures of advance investment payments must comply with the beneficiary incentive provision at § 425.304, paragraph (e)(2) of this section, and all other applicable laws and regulations. (2) Prohibited uses. Advance investment payments may not be used for any expense other than allowable uses under paragraph (e)(1) of this section. In the case of an ACO participating in Level E of the BASIC track, the repayment of any shared losses incurred as specified in a written notice in accordance with § 425.605(e)(2). (3) Duration for spending payments. An ACO may spend an advance investment payment over its entire agreement period. An ACO must repay to CMS any unspent funds remaining at the end of the ACO's agreement period. (4) Segregation of advance investment payments. An ACO must segregate advance investment payments from all other revenues by establishing and maintaining a separate account into which all advance investment payments will be deposited immediately and from which all disbursements of such funds are made only for allowable uses in accordance with this paragraph. (f) Payment methodology. An ACO receives two types of advance investment payments: a one-time payment of $250,000 and quarterly payments calculated pursuant to the methodology defined in paragraph (f)(2) of this section. CMS notifies in writing each ACO of its determination of the amount of advance investment payment. If CMS does not make any advance investment payment, the notice will specify the reason(s) why and inform the ACO of its right to request reconsideration review in accordance with the procedures specified in subpart I of this part. (1) Frequency of payments. An ACO will receive the one-time payment at the beginning of Performance Year 1 of the ACO's agreement period. An ACO will receive quarterly payments each quarter for the first two performance years of the ACO's agreement period. An ACO may receive no more than eight quarterly payments. (2) Quarterly payment amount calculation methodology. CMS does all of the following in determining the quarterly payment amount prior to the start of the quarter. (i) Determines the ACO's assigned beneficiary population. The assigned beneficiaries used in determining the quarterly payment amount are the beneficiaries most recently assigned to the ACO under § 425.400(a)(2) (for an ACO under preliminary prospective assignment with retrospective reconciliation) or § 425.400(a)(3) (for an ACO under prospective assignment), based on the certified ACO participant list for the relevant performance year. (ii) Assigns each beneficiary a risk factors-based score. For each beneficiary in the assigned population identified in paragraph (f)(2)(i) of this section, CMS applies the following requirements in assigning a risk factors-based score: (A) The risk factors-based score will be set to 100 if the beneficiary is dually eligible for Medicare and Medicaid. (B) The risk factors-based score will be set to the Area Deprivation Index national percentile rank matched to the beneficiary's mailing address if the beneficiary is not dually eligible for Medicare and Medicaid and sufficient data is available to match the beneficiary to an Area Deprivation Index national percentile rank. (C) The risk factors-based score will be set to 50 if the beneficiary is not dually eligible for Medicare and Medicaid and sufficient data is not Start Printed Page 46450 available to match the beneficiary to an Area Deprivation Index national percentile rank. (iii) Determines a beneficiary's payment amount. For each beneficiary in the assigned population identified in paragraph (f)(2)(i) of this section, CMS determines the payment amount that corresponds to the beneficiary's risk factors-based score determined in paragraph (f)(2)(ii) of this section. The beneficiary payment amount is as follows:
(iv) Calculates the ACO's quarterly payment amount. The ACO's quarterly payment amount is the sum of the beneficiary payment amounts corresponding to each assigned beneficiary's risk factors-based score, specified in paragraph (f)(2)(iii) of this section, capped at 10,000 beneficiaries. If the ACO has more than 10,000 assigned beneficiaries according to paragraph (f)(2)(i) of this section, CMS will calculate the quarterly payment amount based on the 10,000 assigned beneficiaries with the highest risk factors-based scores determined according to paragraph (f)(2)(ii) of this section. (g) Recoupment and recovery of advance investment payments, and notice of bankruptcy. (1) CMS will recoup advance investment payments made to an ACO from any shared savings the ACO earns until CMS has recouped in full the amount of advance investment payments made to the ACO. For both renewing and re-entering ACOs, CMS will carry forward any remaining balance owed to subsequent performance year(s) in which the ACO achieves shared savings, including in any performance year(s) in a subsequent agreement period. (2) If the amount of shared savings earned by the ACO is revised upward by CMS for any reason, CMS will reduce the redetermined amount of shared savings by the amount of advance investment payments made to the ACO as of the date of the redetermination. If the amount of shared savings earned by the ACO is revised downward by CMS for any reason, the ACO will not receive a refund of any portion of the advance investment payments previously recouped or otherwise repaid. (3) Except as provided for in paragraphs (g)(4) of this section and § 425.316(e)(3), for each performance year, CMS will not recover an amount of advance investment payments greater than the shared savings earned by an ACO in that performance year. (4) If an ACO terminates its participation agreement during the agreement period in which it received an advance investment payment, the ACO must repay all advance investment payments it received. CMS will provide written notification to the ACO of the amount due and the ACO must pay such amount no later than 90 days after the receipt of such notification. (5) In the event of bankruptcy— (i) If an ACO has filed a bankruptcy petition, whether voluntary or involuntary, the ACO must provide written notice of the bankruptcy to CMS and to the U.S. Attorney's Office in the district where the bankruptcy was filed, unless final payment for the agreement period has been made by either CMS or the ACO and all administrative or judicial review proceedings relating to any payments under the Shared Savings Program have been fully and finally resolved. (ii) The notice of bankruptcy must be sent by certified mail no later than 5 days after the petition has been filed and must contain a copy of the filed bankruptcy petition (including its docket number). The notice to CMS must be addressed to the CMS Office of Financial Management at 7500 Security Boulevard, Mailstop C3-01-24, Baltimore, MD 21244 or such other address as may be specified on the CMS website for purposes of receiving such notices. (h) Termination of advance investment payments. (1) General. Except as provided in paragraph (h)(2) of this section, CMS may terminate an ACO's advance investment payments if the ACO- (i) Fails to comply with the requirements of this section; or (ii) Meets any of the grounds for ACO termination set forth in § 425.218(b). (2) Eligibility sanction. CMS will terminate an ACO's advance investment payments in accordance with § 425.316(e) if the ACO no longer meets the eligibility requirements specified in paragraphs (b)(3) and (b)(4) of this section. (3) No pre-termination actions. CMS may immediately terminate an ACO's advance investment payments without taking any of the pre-termination actions set forth in § 425.216. Start Amendment Part 70. Section 425.650 is added to subpart G to read as follows: End Amendment Part Benchmarking methodology. (a) Scope and purpose. The methodology by which CMS establishes, adjusts, updates and resets an ACO's historical benchmark is described within this subpart G. The benchmarking methodology for agreement periods beginning before January 1, 2024, is specified in §§ 425.601, 425.602, and 425.603. The benchmarking methodology for agreement periods beginning on or after January 1, 2024, is specified in §§ 425.652 through 425.660. (b) [Reserved] Start Amendment Part 71. Section 425.652 is added to subpart G to read as follows: End Amendment Part Establishing, adjusting, and updating the benchmark for agreement periods beginning on January 1, 2024, and in subsequent years. (a) Computing per capita Medicare Part A and Part B benchmark expenditures for an ACO's first agreement period. For agreement periods beginning on January 1, 2024, and in subsequent years, in computing an ACO's historical benchmark for its first agreement period under the Shared Savings Program, CMS determines the per capita Parts A and B fee-for-service expenditures for beneficiaries that would have been assigned to the ACO in any of the 3 most recent years prior to the start of the agreement period using the ACO participant TINs identified before the start of the agreement period as required under § 425.118(a) and the beneficiary assignment methodology selected by the ACO for the first performance year of the agreement period as required under § 425.226(a)(1). CMS does all of the following: (1) Calculates the payment amounts included in Parts A and B fee-for-service claims using a 3-month claims run out with a completion factor. (i) This calculation excludes indirect medical education (IME) and disproportionate share hospital (DSH) payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals. (ii) This calculation includes individually beneficiary identifiable final payments made under a Start Printed Page 46451 demonstration, pilot or time limited program. (2) Makes separate expenditure calculations for each of the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries and aged/non-dual eligible Medicare and Medicaid beneficiaries. (3) Adjusts expenditures for changes in severity and case mix using prospective HCC risk scores. (4) Truncates an assigned beneficiary's total annual Parts A and B fee-for-service per capita expenditures at the 99th percentile of national Medicare fee-for-service expenditures for assignable beneficiaries identified for the 12-month calendar year corresponding to each benchmark year in order to minimize variation from catastrophically large claims. (5) Trends forward expenditures for each benchmark year (BY1 and BY2) to the third benchmark year (BY3) dollars using a blend of national and regional growth rates. (i) To trend forward the benchmark, CMS makes separate calculations for expenditure categories for each of the following populations of beneficiaries: (A) ESRD. (B) Disabled. (C) Aged/dual eligible Medicare and Medicaid beneficiaries. (D) Aged/non-dual eligible Medicare and Medicaid beneficiaries. (ii) National growth rates are computed using CMS Office of the Actuary national Medicare expenditure data for each of the years making up the historical benchmark for assignable beneficiaries identified for the 12-month calendar year corresponding to each benchmark year. (iii) Regional growth rates are computed using expenditures for the ACO's regional service area for each of the years making up the historical benchmark as follows: (A) Determine the counties included in the ACO's regional service area based on the ACO's assigned beneficiary population for the relevant benchmark year. (B) Determine the ACO's regional expenditures as specified under § 425.654 of this section. (iv) The national and regional growth rates are blended together by taking a weighted average of the two. The weight applied to the— (A) National growth rate is calculated as the share of assignable beneficiaries in the ACO's regional service area for BY3 that are assigned to the ACO in BY3, as calculated in paragraph (a)(5)(v) of this section; and (B) Regional growth rate is equal to 1 minus the weight applied to the national growth rate. (v) CMS calculates the share of assignable beneficiaries in the ACO's regional service area that are assigned to the ACO by doing all of the following: (A) Calculating the county-level share of assignable beneficiaries that are assigned to the ACO for each county in the ACO's regional service area. The assignable population of beneficiaries is identified for the assignment window corresponding to BY3 that is consistent with the assignment window that applies under the beneficiary assignment methodology selected by the ACO for the performance year according to § 425.400(a)(4)(ii). (B) Weighting the county-level shares according to the ACO's proportion of assigned beneficiaries in the county, determined by the number of the ACO's assigned beneficiaries residing in the county in relation to the ACO's total number of assigned beneficiaries. (C) Aggregating the weighted county-level shares for all counties in the ACO's regional service area. (6) Restates BY1 and BY2 trended and risk adjusted expenditures using BY3 proportions of ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries and aged/non-dual eligible Medicare and Medicaid beneficiaries. (7) Weights each year of the benchmark for an ACO's initial agreement period using the following percentages: (i) BY3 at 60 percent. (ii) BY2 at 30 percent. (iii) BY1 at 10 percent. (8) Adjusts the historical benchmark based on the ACO's regional service area expenditures (as specified under § 425.656), or for savings generated by the ACO, if any, in the 3 most recent years prior to the start of the agreement period, if applicable (as specified under § 425.658), or a combination of these two adjustments. CMS does all of the following to determine the adjustment(s) applied to the historical benchmark: (i) Computes the regional adjustment in accordance with § 425.656 and the prior savings adjustment in accordance with § 425.658. (ii) If an ACO is not eligible to receive a prior savings adjustment under § 425.658(b)(3)(i), the ACO will receive the regional adjustment to its benchmark as described in § 425.656. (iii) If an ACO is eligible to receive a prior savings adjustment, CMS compares the pro-rated positive average per capita savings amount calculated in § 425.658(b)(3)(ii) with the regional adjustment described in § 425.656(c), expressed as a single per capita value by taking a person-year weighted average of the Medicare enrollment type-specific regional adjustment values. (A) If the regional adjustment, expressed as a single value, is negative or zero, calculate the sum of the regional adjustment value and the pro-rated positive average per capita savings amount. ( 1) If the sum is positive, the ACO will receive a prior savings adjustment in place of the negative regional adjustment equal to the lesser of 50 percent of the positive sum and the cap described in paragraph (a)(8)(iv) of this section. The adjustment will be applied as a flat dollar amount to the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. ( 2) If the sum is negative, the ACO will receive a reduced negative regional adjustment amount equal to the negative sum. The adjustment will be applied as a flat dollar amount to the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. (B) If the regional adjustment, expressed as a single value, is positive, the ACO will receive an adjustment to the benchmark equal to the higher of the following: ( 1) The positive regional adjustment amount. The adjustment will be calculated as described in § 425.656(c) and applied separately to the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. ( 2) A prior savings adjustment equal to the lesser of 50 percent of the pro-rated positive average per capita savings amount described in § 425.658(b)(3)(ii) and the cap described in paragraph (a)(8)(iv) of this section. The adjustment will be applied as a flat dollar amount to the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. (iv) The cap on the prior savings adjustment calculated in either paragraph (a)(8)(iii)(A)( 1) or paragraph (a)(8)(iii)(B)( 2) of this section is equal to 5 percent of national per capita expenditures for Parts A and B services under the original Medicare fee-for-service program in BY3 for assignable beneficiaries identified for the 12-month Start Printed Page 46452 calendar year corresponding to BY3 using data from the CMS Office of the Actuary and expressed as single value by taking a person-year weighted average of the Medicare enrollment type-specific values. (9) For the second and each subsequent performance year during the term of the agreement period, the ACO's benchmark is adjusted for the following, as applicable: For the addition and removal of ACO participants or ACO providers/suppliers in accordance with § 425.118(b), for a change to the ACO's beneficiary assignment methodology selection under § 425.226(a)(1), and for a change to the beneficiary assignment methodology specified in subpart E of this part. To adjust the benchmark, CMS does the following: (i) Takes into account the expenditures of beneficiaries who would have been assigned to the ACO in any of the 3 most recent years prior to the start of the agreement period. (ii) Redetermines the regional adjustment amount under § 425.656 according to the ACO's assigned beneficiaries for BY3, and based on the assignable population of beneficiaries identified for the assignment window corresponding to BY3 that is consistent with the assignment window that applies under the beneficiary assignment methodology selected by the ACO for the performance year according to § 425.226(a)(1). (iii) Redetermines the offset factor used in determining the negative regional adjustment amount under § 425.656(c)(4) and (5). (iv) Redetermines the proration factor used in calculating the prior savings adjustment under § 425.658(b)(3)(ii) to account for changes in the ACO's assigned beneficiary population in the benchmark years of the ACO's current agreement period due to the addition and removal of ACO participants or ACO providers/suppliers in accordance with § 425.118(b), a change to the ACO's beneficiary assignment methodology selection under § 425.400(a)(4)(ii), or changes to the beneficiary assignment methodology under subpart E of this part. (v) In accordance with paragraph (a)(8) of this section, CMS redetermines the adjustment to the historical benchmark based on the redetermined regional adjustment (as specified under § 425.656), or the prior savings adjustment (as specified under § 425.658), or a combination of these two adjustments. (10) The historical benchmark is further adjusted at the time of reconciliation for a performance year to account for changes in severity and case mix of the ACO's assigned beneficiary population as described under §§ 425.605(a) and 425.610(a). (b) Updating the benchmark. For all agreement periods beginning on January 1, 2024, and in subsequent years, CMS updates the historical benchmark annually for each year of the agreement period using a three-way blend calculated as a weighted average of a two-way blend of national and regional growth rates determined after the end of each performance year and a fixed projected growth rate determined at the beginning of the ACO's agreement period called the Accountable Care Prospective Trend (ACPT). (1) To update the benchmark, CMS makes separate calculations for expenditure categories for each of the following populations of beneficiaries: (i) ESRD. (ii) Disabled. (iii) Aged/dual eligible Medicare and Medicaid beneficiaries. (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries. (2) CMS computes the two-way blend of national and regional growth rates as follows: (i) Computes national growth rates using CMS Office of the Actuary national Medicare expenditure data for BY3 and the performance year for assignable beneficiaries identified for the 12-month calendar year corresponding to each year. (ii) Computes regional growth rates using expenditures for the ACO's regional service area for BY3 and the performance year, computed as follows: (A) Determine the counties included in the ACO's regional service area based on the ACO's assigned beneficiary population for the year. (B) Determine the ACO's regional expenditures as specified under § 425.654. (iii) The national and regional growth rates are blended together by taking a weighted average of the two. The weight applied to the— (A) National growth rate is calculated as the share of assignable beneficiaries in the ACO's regional service area that are assigned to the ACO for the applicable performance year as specified in paragraph (b)(2)(iv) of this section; and (B) Regional growth rate is equal to 1 minus the weight applied to the national growth rate. (iv) CMS calculates the share of assignable beneficiaries in the ACO's regional service area that are assigned to the ACO by doing all of the following: (A) Calculating the county-level share of assignable beneficiaries that are assigned to the ACO for each county in the ACO's regional service area. The assignable population of beneficiaries is identified for the assignment window corresponding to the performance year that is consistent with the assignment window that applies under the beneficiary assignment methodology selected by the ACO for the performance year according to § 425.400(a)(4)(ii). (B) Weighting the county-level shares according to the ACO's proportion of assigned beneficiaries in the county, determined by the number of the ACO's assigned beneficiaries residing in the county in relation to the ACO's total number of assigned beneficiaries. (C) Aggregating the weighted county-level shares for all counties in the ACO's regional service area. (3) CMS computes the ACPT as described in § 425.660. (4) The two-way blend computed under paragraph (b)(2) of this section and the ACPT are blended together by taking a weighted average of the two. (i) Absent unforeseen circumstances, the weight applied to the components of the blend is as follows— (A) Two-way blend is equal to two-thirds; and (B) ACPT is equal to one-third. (ii) CMS has sole discretion to determine whether an unforeseen circumstance exists that warrants a reduction to the weight of the ACPT and the reduced weight that will apply to the ACPT. (5) If an ACO's average per capita Medicare expenditures for the performance year are above its updated benchmark for the year determined as described in paragraph (b)(4) of this section by at least the MLR or negative MSR established for the ACO, CMS will compute a recalculated updated benchmark using the two-way blend described in paragraph (b)(2) of this section. (i) If the ACO's average per capita Medicare expenditures for the performance year are above the recalculated updated benchmark by a smaller amount than the amount by which they are above the updated benchmark determined as described in paragraph (b)(4) of this section, CMS will use the recalculated updated benchmark to determine the following: (A) The ACO's responsibility for sharing losses with the Medicare program for ACOs in two-sided models as described under §§ 425.605 and 425.610. (B) The ACO's financial performance for purposes of monitoring ACO financial performance as described under § 425.316(d). (ii) If the ACO's average per capita Medicare expenditures for the Start Printed Page 46453 performance year are below the recalculated updated benchmark, the ACO will neither be responsible for sharing losses with the Medicare program nor eligible for sharing in savings. (c) Resetting the benchmark. (1) An ACO's benchmark is reset at the start of each subsequent agreement period. (2) For second or subsequent agreements periods beginning on January 1, 2024, and in subsequent years, CMS establishes, adjusts, and updates the rebased historical benchmark in accordance with paragraphs (a) and (b) of this section except that rather than weighting each year of the benchmark using the percentages provided in paragraph (a)(7) of this section, each benchmark year is weighted equally. Start Amendment Part 72. Section 425.654 is added to subpart G to read as follows: End Amendment Part Calculating county expenditures and regional expenditures. (a) Calculating county expenditures. For agreement periods beginning on January 1, 2024, and in subsequent years, CMS does all of the following to determine risk adjusted county fee-for-service expenditures for use in calculating the ACO's regional fee-for-service expenditures: (1)(i) Determines average county fee-for-service expenditures based on expenditures for the assignable population of beneficiaries in each county in the ACO's regional service area. The assignable population of beneficiaries is identified for the assignment window corresponding to the relevant benchmark or performance year that is consistent with the assignment window that applies under the beneficiary assignment methodology selected by the ACO for the performance year according to § 425.400(a)(4)(ii). (ii) Makes separate expenditure calculations for each of the following populations of beneficiaries: (A) ESRD. (B) Disabled. (C) Aged/dual eligible Medicare and Medicaid beneficiaries. (D) Aged/non-dual eligible Medicare and Medicaid beneficiaries. (2) Calculates assignable beneficiary expenditures using the payment amounts included in Parts A and B fee-for-service claims with dates of service in the 12-month calendar year for the relevant benchmark or performance year, using a 3-month claims run out with a completion factor. The calculation— (i) Excludes IME and DSH payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals; and (ii) Considers individually beneficiary identifiable final payments made under a demonstration, pilot or time limited program. (3) Truncates a beneficiary's total annual Parts A and B fee-for-service per capita expenditures at the 99th percentile of national Medicare fee-for-service expenditures for assignable beneficiaries identified for the 12-month calendar year that corresponds to the relevant benchmark or performance year, in order to minimize variation from catastrophically large claims. (4) Adjusts fee-for-service expenditures for severity and case mix of assignable beneficiaries in the county using prospective HCC risk scores. The calculation is made according to the following populations of beneficiaries: (i) ESRD. (ii) Disabled. (iii) Aged/dual eligible Medicare and Medicaid beneficiaries. (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries. (b) Calculating regional expenditures. For all agreement periods beginning on January 1, 2024, and in subsequent years, CMS calculates an ACO's risk adjusted regional expenditures by: (1) Weighting the risk adjusted county-level fee-for-service expenditures determined under paragraph (a) of this section according to the ACO's proportion of assigned beneficiaries in the county, determined by the number of the ACO's assigned beneficiaries in the applicable population (according to Medicare enrollment type) residing in the county in relation to the ACO's total number of assigned beneficiaries in the applicable population (according to Medicare enrollment type) for the relevant benchmark or performance year for each of the following populations of beneficiaries: (i) ESRD. (ii) Disabled. (iii) Aged/dual eligible Medicare and Medicaid beneficiaries. (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries. (2) Aggregating the values determined under paragraph (b)(1) of this section for each population of beneficiaries (according to Medicare enrollment type) across all counties within the ACO's regional service area. Start Amendment Part 73. Section 425.656 is added to subpart G to read as follows: End Amendment Part Calculating the regional adjustment to the historical benchmark. (a) General. This section describes the methodology for calculating the regional adjustment to the historical benchmark based on the ACO's regional service area expenditures, making separate calculations for the following populations of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. This section applies to regional adjustment calculations for agreement periods beginning on January 1, 2024, and in subsequent years. (b) Calculation of an average per capita expenditure amount for the ACO's regional service area. To compute an average per capita expenditure amount for the ACO's regional service area, CMS does all of the following: (1) Determines the counties included in the ACO's regional service area based on the ACO's BY3 assigned beneficiary population. (2) Determines the ACO's regional expenditures as specified under § 425.654 for BY3. (3) Adjusts for differences in severity and case mix between the ACO's assigned beneficiary population for BY3 and the assignable population of beneficiaries for the ACO's regional service area for BY3. The assignable population of beneficiaries is identified using the assignment window corresponding to BY3 that is consistent with the assignment window that applies under the beneficiary assignment methodology selected by the ACO for the performance year according to § 425.400(a)(4)(ii). (c) Calculation of the adjustment. To calculate the adjustment, CMS does all of the following: (1) Determines the difference between the average per capita amount of expenditures for the ACO's regional service area as specified under paragraph (b)(1) of this section and the average per capita amount of the ACO's historical benchmark determined under § 425.652(a)(1) through (7) and (c)(2), for each of the following populations of beneficiaries: (i) ESRD. (ii) Disabled. (iii) Aged/dual eligible Medicare and Medicaid beneficiaries. (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries. (2) Applies a percentage, as determined in paragraph (d) of this section. (3) Caps the per capita dollar amount for each Medicare enrollment type (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries) calculated under paragraph (c)(2) of this section at a dollar amount equal to a percentage of Start Printed Page 46454 national per capita expenditures for Parts A and B services under the original Medicare fee-for-service program in BY3 for assignable beneficiaries in that enrollment type identified for the 12-month calendar year corresponding to BY3 using data from the CMS Office of the Actuary. The cap is applied as follows: (i) For positive adjustments, the per capita dollar amount for a Medicare enrollment type is capped at 5 percent of the national per capita expenditure amount for the enrollment type for BY3. (ii) For negative adjustments, the per capita dollar amount for a Medicare enrollment type is capped at negative 1.5 percent of the national per capita expenditure amount for the enrollment type for BY3. (4) For negative adjustments, CMS will multiply the regional adjustments calculated in paragraphs (c)(2) or (3) of this section by 1 minus an offset factor equal to the sum of the following— (i) Proportion of the ACO's BY3 assigned beneficiaries that are dual eligible for Medicare and Medicaid; and (ii) The difference between the ACO's weighted average prospective HCC risk score for BY3 taken across the four Medicare enrollment types and 1. (5) The offset factor described in paragraph (c)(4) of this section is subject to a minimum value of zero (representing no offset to the negative regional adjustment) and a maximum value of 1 (representing a full offset to the negative regional adjustment). (d) Phase-in of weights used in regional adjustment calculation. (1) The first time that an ACO's benchmark is adjusted based on the ACO's regional service area expenditures, CMS calculates the regional adjustment as follows: (i) Using 35 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's initial or rebased historical benchmark, if the ACO is determined to have lower spending than the ACO's regional service area. (ii) Using 15 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's initial or rebased historical benchmark, if the ACO is determined to have higher spending than the ACO's regional service area. (2) The second time that an ACO's benchmark is adjusted based on the ACO's regional service area expenditures, CMS calculates the regional adjustment as follows: (i) Using 50 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's rebased historical benchmark if the ACO is determined to have lower spending than the ACO's regional service area. (ii) Using 25 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's rebased historical benchmark if the ACO is determined to have higher spending than the ACO's regional service area. (3) The third time that an ACO's benchmark is adjusted based on the ACO's regional service area expenditures, CMS calculates the regional adjustment as follows: (i) Using 50 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's rebased historical benchmark if the ACO is determined to have lower spending than the ACO's regional service area. (ii) Using 35 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's rebased historical benchmark if the ACO is determined to have higher spending than the ACO's regional service area. (4) The fourth or subsequent time that an ACO's benchmark is adjusted based on the ACO's regional service area expenditures, CMS calculates the regional adjustment to the historical benchmark using 50 percent of the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's rebased historical benchmark. (5) To determine if an ACO has lower or higher spending compared to the ACO's regional service area, CMS does the following: (i) Multiplies the difference between the average per capita amount of expenditures for the ACO's regional service area and the average per capita amount of the ACO's historical benchmark for each population of beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries) as calculated under paragraph (c)(1) of this section by the applicable proportion of the ACO's assigned beneficiary population (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries) for BY3 of the historical benchmark. (ii) Sums the amounts determined in paragraph (d)(5)(i) of this section across the populations of beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare and Medicaid beneficiaries). (iii) If the resulting sum is a net positive value, the ACO is considered to have lower spending compared to the ACO's regional service area. If the resulting sum is a net negative value, the ACO is considered to have higher spending compared to the ACO's regional service area. (iv) If during the term of the agreement period CMS adjusts the ACO's benchmark, as specified in § 425.652(a)(9), CMS redetermines whether the ACO is considered to have lower spending or higher spending compared to the ACO's regional service area for purposes of determining the percentage in paragraphs (d)(1) through (3) of this section used in calculating the regional adjustment. (e) Special rules for determining the weights used in the regional adjustment calculation for a re-entering ACO. For a re-entering ACO whose prior agreement period benchmark was calculated according to § 425.603(c), CMS determines the weight used in the regional adjustment calculation described in paragraphs (b) through (d) of this section by considering the agreement period the ACO is entering into according to § 425.600(f) in combination with either of the following— (1) The weight previously applied to calculate the regional adjustment to the ACO's benchmark under § 425.603(c)(9) in its most recent prior agreement period; or (2) For a new ACO identified as a re-entering ACO, CMS considers the weight previously applied to calculate the regional adjustment to the benchmark under § 425.603(c)(9) in its most recent prior agreement period of the ACO in which the majority of the new ACO's participants were participating previously. Start Amendment Part 74. Section 425.658 is added to subpart G to read as follows: End Amendment Part Calculating the prior savings adjustment to the historical benchmark. (a) General. For agreement periods beginning on January 1, 2024, and in subsequent years, CMS calculates an adjustment to the historical benchmark to account for savings generated in the 3 years prior to the start of the ACO's current agreement period for renewing or re-entering ACOs that were reconciled for one or more performance Start Printed Page 46455 years in the Shared Savings Program during this period. (b) Calculate average per capita savings amount. (1) Calculate total per capita savings or losses for each performance year during the 3 years prior to the start of the ACO's current agreement period. CMS applies the following requirements in determining the amount of per capita savings or losses for each performance year: (i) Per capita savings or losses will be set to zero for a performance year if the ACO was not reconciled for the performance year. (ii) If an ACO generated savings for a performance year but was not eligible to receive a shared savings payment for that year due to noncompliance with the requirements of this part, per capita savings for that year will be set to zero. (iii) For a new ACO identified as re-entering ACO, per capita savings or losses will be determined based on the per capita savings or losses of the ACO in which the majority of the ACO's ACO participants were participating. (2) Take the simple average of the per capita savings or losses calculated in paragraph (b)(1) of this section, including values of zero, if applicable. (3) Determine the ACO's eligibility for the prior savings adjustment as follows: (i) If the average per capita amount computed in paragraph (b)(2) of this section is less than or equal to zero, the ACO is not eligible to receive an adjustment for prior savings. The ACO will receive the regional adjustment to its benchmark as described in § 425.656. (ii) If the average per capita amount computed in paragraph (b)(2) of this section is positive, apply a proration factor to account for any upward growth in the ACO's assigned population in the benchmark years of the ACO's current agreement period as compared to the size of the assigned population when the ACO was reconciled for the corresponding performance years in its prior agreement period. (c) Applicability of the prior savings adjustment. CMS compares the pro-rated average per capita savings amount determined in paragraph (b)(3)(ii) of this section with the regional adjustment described in § 425.656(c), to determine the applicability of the prior savings adjustment, the regional adjustment or a combination of these two adjustments in accordance with § 425.652(a)(8). Start Amendment Part 75. Section 425.660 is added to subpart G to read as follows: End Amendment Part Accountable Care Prospective Trend (ACPT). (a) General. For agreement periods beginning on January 1, 2024, and in subsequent years, CMS incorporates a fixed projected growth rate determined at the beginning of the ACO's agreement period called the Accountable Care Prospective Trend (ACPT) into the blended update factor described in § 425.652(b) when updating an ACO's benchmark for each performance year of the agreement period. (b) Determination of ACPT. An ACPT is a flat dollar amount calculated using one or more annualized growth rates based on national fee-for-service Medicare expenditures projected by the CMS Office of the Actuary. In determining the ACPT for an enrollment type for each performance year, CMS does all of the following: (1) Projects per capita growth in Parts A and B fee-for-service expenditures for benchmark year 3 (BY3) and each performance year of the ACO's agreement period. The calculation— (i) Excludes IME and DSH payments, and the supplemental payment for IHS/Tribal hospitals and Puerto Rico hospitals; and (ii) Makes separate expenditure calculations for each of the following populations of beneficiaries: (A) ESRD. (B) Aged/Disabled. (2) Calculates one or more annualized growth rates for the population of beneficiaries described in paragraph (b)(1)(ii)(A) of this section (the ESRD ACPT) and one or more annualized growth rates for the population of beneficiaries described in paragraph (b)(1)(ii)(B) of this section (the Aged/Disabled ACPT). These annualized growth rates will remain fixed over the ACO's agreement period. The annualized growth rate is an annual rate of growth in projected expenditures during the ACO's 5-year agreement period relative to BY3, calculated as follows— (i) Using a uniform annualized projected rate of growth over each of the 5 performance years of the 5-year agreement period; or (ii) If annualization as specified in paragraph (b)(2)(i) of this section is determined not to reasonably fit the anticipated growth curve, CMS will apply an alternative annualization technique using two or more annualized growth rates reflecting the projected rates of growth during the 5 performance years comprising the 5-year agreement period. (3) For each performance year, multiplies the applicable annualized growth rate described in paragraph (b)(2) of this section by BY3 truncated national per capita fee-for-service Medicare expenditures for assignable beneficiaries for each Medicare enrollment type (ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries) identified for the 12-month calendar year corresponding to BY3 to express the annualized growth rate as a flat dollar amount as follows: (i) The ESRD ACPT is used for the ESRD population. (ii) The Aged/Disabled ACPT is used for the following populations: disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual eligible Medicare and Medicaid beneficiaries. (4) Adjusts the flat dollar amounts described in paragraph (b)(3) of this section for each performance year for differences in severity and case mix between the ACO's BY3 assigned beneficiary population and the national assignable FFS population for each Medicare enrollment type identified for the 12-month calendar year corresponding to BY3. (5) Divides the risk adjusted flat dollar amounts described in paragraph (b)(4) of this section by the ACO's historical benchmark expenditures described in § 425.652(a) for each Medicare enrollment type to calculate the percent increase to be included in the blended update factor described in § 425.652(b)(4). Start Amendment Part 76. Amend § 425.702 by adding paragraph (c)(2)(iii) to read as follows: End Amendment Part Aggregate reports. * * * * * (c) * * * (2) * * * (iii) As an organized health care arrangement (as defined at 45 CFR 160.103), and the request reflects the minimum data necessary for the ACO to conduct health care operations work that falls within the first or second paragraph of the definition of health care operations at 45 CFR 164.501 on behalf of the organized health care arrangement. * * * * * Start Amendment Part 77. Amend § 425.704 by— End Amendment Part Start Amendment Part a. Revising paragraph (b) introductory text; and End Amendment Part Start Amendment Part b. Adding paragraph (b)(3). End Amendment Part The revision and addition read as follows: Beneficiary-identifiable claims data. * * * * * (b) The ACO must certify that it is requesting claims data about any of the following: * * * * * (3) The patients of the organized health care arrangement (as defined at 45 CFR 160.103) in which the ACO is Start Printed Page 46456 participating with its ACO participants and ACO providers/suppliers, and the request reflects the minimum data necessary for the ACO to conduct health care operations work that falls within the first or second paragraph of the definition of health care operations at 45 CFR 164.501 on behalf of the organized health care arrangement. * * * * * Start Amendment Part 78. Amend § 425.800 in paragraph (a)(4) by removing the references “§§ 425.601, 425.602, 425.603, 425.604, 425.605, 425.606, and 425.610” and adding in its place the references “§§ 425.601, 425.602, 425.603, 425.604, 425.605, 425.606, 425.610, and 425.652”. End Amendment Part Start Part PART 455—PROGRAM INTEGRITY: MEDICAIDEnd Part Start Amendment Part 79. The authority citation for part 455 continues to read as follows: End Amendment Part Start Authority 42 U.S.C. 1302. End Authority Start Amendment Part 80. Amend § 455.107 by revising paragraph (b)(1)(ii) to read as follows: End Amendment Part Disclosure of affiliations. * * * * * (b) * * * (1) * * * (ii) Change of selection. A State may, in consultation with CMS, change its selection after it has been made from the option in paragraph (b)(2)(ii) of this section to that in paragraph (b)(2)(i) of this section. * * * * * Start Signature
Dated: July 1, 2022. Xavier Becerra, Secretary, Department of Health and Human Services. End Signature Note:The following appendices will not appear in the Code of Federal Regulations. APPENDIX 1: MIPS QUALITY MEASURESNote: Except as otherwise noted in this proposed rule, previously finalized measures and specialty measures sets will continue to apply for the CY 2023 performance period/2025 MIPS payment year and future years. In addition, electronic clinical quality measures (eCQMs) that are National Quality Forum (NQF) endorsed are shown in Table A as follows: NQF #/eCQM NQF #. 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BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-04-P BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P BILLING CODE 4120-01-C BILLING CODE 4120-01-P [FR Doc. 2022-14562 Filed 7-7-22; 4:15 pm] BILLING CODE 4120-01-C |
